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Provenir is Bringing Butchering to the Farm and Improving Meat Traceability

October 29, 2018

For Provenir CEO and farmer Chris Balazs, bringing an Uber-like service for meat processing to the Australian beef industry would solve many different pain points across the supply chain. It’s also something that’s near and dear to his own struggles.

“As a farmer myself, I hate loading my prized livestock onto the back of a truck. I work so hard to get them in top condition, only to risk losing it all to a bad trip. I always knew that there had to be a better way,” he says. Meat quality can be directly compromised when an animal experiences severe stress before slaughter, including appearance, taste, and texture.

“Mobile processing makes so much sense for farmers, for livestock, and for consumers.”

Australia’s meat industry has undergone a wave of consolidation and constriction in recent years, with farmers finding it harder to access abattoirs. As regulations governing abattoirs and slaughter have become stricter, facilities have moved out of rural areas to major city centers.

“Our research shows that there has been a 78% constriction in access to abattoirs and the actual number of abattoirs within a generation or so,” Balazs explains. “So, the problem we have is that farming occurs in the same place but the animals must be transported further for longer periods of time. With our hub and spoke model, we want to operate in those areas where abattoirs are no longer located within a reasonable distance.”

For the investors in a recent A$1.4 million ($1 million) seed round of funding, the value proposition of Provenir’s on-farm slaughter model was a no-brainer, according to Balazs. With consumers showing an increasing demand for animal welfare, transparency, and knowing where their meat comes from, being able to slaughter on-farm and to record data about the operation was immediately attractive.

As Balazs mentions, transportation can be a stressful endeavor for livestock. The truck ride to the processing facility is often the first time cattle have left the farm where they were born. Many countries have regulations governing conditions during transport that are geared toward making the journey as comfortable as possible.

In fact, rules regarding how long animals can be transported are one of the very few ways that animal welfare is legally protected at the federal level in the US. According to the so-called “28-hour law,” livestock must be offloaded and provided with food, water, and five hours of rest for every 28 hours that they are transported via truck or train. Poultry is exempted from this requirement and there are some additional provisions pertaining to sheep.

Even when transporters comply with these regulations, however, the unfamiliar nature of the experience combined with other factors like extreme heat, confinement with other animals, or unexpected traffic delays can put the animal in a state of stress. Environmental welfare advocates also point to the amount of fuel that’s required to truck large groups of animals over long distances.

For many consumers, the chance to avoid transporting animals several hundred miles to a processing facility is reason enough to support on-farm slaughter. But as any meat scientist or butcher will tell you, signs of stress can have a direct impact on meat quality.

As a carcass cools after slaughter, the energy continues to metabolize in the muscle resulting in the production of lactic acid. This causes the pH of the muscle to drop, which produces the robust red color that consumers are accustomed to seeing in the supermarket and that butchers refer to as bloom.

Animals under duress have depleted energy stores in their muscles at the time of slaughter, which hampers the creation of lactic acid during the carcass’ cooling phase. The meat’s pH level will remain high and the color will remain dark, which is why the meat industry has nicknamed this occurrence as “dark cutters.” The meat can also have an unappealing texture and, in some instances, the flavor may be affected.

Mobile Slaughtering Unit

The company is developing a mobile slaughtering unit that will allow farmers to process their cows on their farms, maintaining the quality of the meat and ensuring the provenance and traceability of the meat.

“Basically we are talking about a really big truck in which animals can be processed on-farm. The quality provenance and animal welfare aspects can be captured on the farm through the mobile slaughtering unit, or MSU,” Balazs explains. “Then, the meat is transported back to a relocatable hub that acts as a butchery where further processing occurs.”

The MSU is also outfitted with technology that will provide participating farmers with a bevy of data about their animals and the butchering process. In Australia, farmers have struggled to obtain good processing data, which they can use to determine whether their farm management practices are bringing the highest yields possible. Provenir’s digital platform will allow farmers to review many of these data points on an animal-by-animal basis.

After the MSU and hub are constructed and deployed for a few months, Provenir hopes to complete a Series A to help it enter the rapid growth phase of the company, which likely includes expanding on-farm butchering to include sheep, a major industry for Australian farmers. This will involve constructing a fleet of MSUs and additional hubs to ramp up its processing volume.

It’s a Partnership, not Just a Product

To source meat for its on-farm butchery, Provenir partners with farmers who meet its stringent criteria, which requires a 100% grass-fed supply and high standards of animal welfare on the farm. Provenir does not source any livestock from feedlots. The company visits each partner farm on a weekly basis where it purchases the farmer’s livestock before completing the slaughter process. After the purchase is complete, the animals are walked from holding pens to the MSU where they are processed using a proprietary methodology.

“We call them partners because it is a different transaction than what has existed before. It’s not a once-off large purchase where we come in and negotiate hard on price. This is a situation where we come back each week, which means we need to respect the farm and the farm needs to respect our processes,” Balazs explains. “If they provide poor cattle, we will be back the next week and we can have a conversation with them. It changes the way that farms interact with processors, too.”

Provenir has developed a retail-ready packaging featuring its brand and a scannable image that will allow consumers to access information about the meat through a smartphone app, including which farm it came from.

“Best of all, we don’t have a large fixed asset that becomes a hungry beast that must be fed at all times because you can’t ever turn it off. In traditional processing facilities, they are chilling those spaces regardless of whether they are one-quarter full or completely full. They have the same fixed asset costs whereas we are a lot more adaptive,” Balazs adds.

The company accounts for additional profit by being able to sell its product as “highest welfare meat” to a growing sector of consumers that are seeking out meat with certain attributes to appease their culinary consciouses like pasture-raised or grass-fed. Provenir is firmly targeting this expanding niche where price is not the prevailing criteria for buyers.

Bringing Butchers to Farms Has Major Challenges

On-farm slaughtering does seem to be a no-brainer for consumers, farmers, and livestock, so why has it taken so long for someone to provide the market with a solution?

Provenir’s diverse founding team is a testament to the many different obstacles that have made mobile slaughter unattainable. The company’s team is composed of a vet, a chef, a farmer, a marketer, and a lawyer. Each skill set has been instrumental in tackling the serious challenges that have prevented the development of a legal mobile slaughtering unit until now, especially when it comes to the legal barriers.

Like the US, Australia’s regulations governing the slaughter and sale of livestock involve both nationwide and state-specific laws. This creates the first layer of complexity, where Provenir must ensure that it complies with the federal requirements as well as each state’s specific laws.

“The similarities between states are roughly 80%, but there are seven different regulatory pathways that you have to navigate. For the most part, livestock needs to be slaughtered at a registered abattoir. Some states specifically talk about vehicles being included in the definition of an abattoir, but the vehicle has to mee tall the same criteria as a fixed or regular abattoir building.”

Packing all of the compliance that applies to a major slaughterhouse to a mobile unit is no small task and explains why it has taken such an interdisciplinary team to create a solution and secure enough capital to bring the MSU to fruition.

Ensuring that the operation can secure sufficient profit has been another challenge. While some have attempted to provide on-farm slaughter as a service instead of a product, Balazs found that it put too many requirements on the farmer to handle or store the meat once slaughter and processing are complete. It also requires the farmer to engage in direct marketing, which involves finding a market and working directly with consumers and restaurants.

Provenir’s decision to purchase the meat and sell under a branded name takes this burden off the farmer while providing them with a steady stream of income as opposed to sporadic income that comes with selling to feedlots or other existing conventional outlets. Provenir also offers its farmer partners a co-branding opportunity by including the farm name on the packaging.

Will Other Beef-Producing Countries Follow Suit with On-Farm Slaughter?

Australian farmers aren’t the first to ruminate about the benefits of on-farm processing. There have been many attempts in the US to create a similar model, but the same regulatory challenges have hampered bringing mobile slaughter to scale. The US Department of Agriculture has published guidance and information about mobile slaughter units, noting that any meat intended for retail sale must be slaughtered at one of its federally-inspected facilities.

Like Australia, the US has also seen a decline in the number of processing facilities throughout its borders. Today, four companies control the processing and sale of about 85% of the American beef, pork, and chicken supply. In 1967, there were nearly 10,000 federally-inspected facilities. As of 2016, there were roughly 1,100. Of those remaining in 2016, about three-quarters of them processed 90% of the meat supply.

As a result, many farmers must transport their animals across hundreds of miles or even across state lines in order to have them processed according to applicable regulations. Slaughtering facilities also feel regulatory pressure, with many facilities being required to adhere to the same measures regardless of whether they process 100 or 10,000 head each day.

As of 2010, the USDA reported nine federally-inspected mobile slaughter units in the US where an assigned inspector must verify that the slaughtering process in the unit happens the exact same way it would at a permanent facility. A 2016 posting from Cooperative Extension System lists 20 MSUs operating in the US, but many of them do not have grants of inspection from the USDA. Unless the state in which they operate provides an exemption or rule to the contrary, meat processed in uninspected facilities cannot be sold to consumers for retail consumption.

Sweden has also seen a strong demand for mobile slaughter, with Swedish firm Hälsingestintans launching a company in December 2014 and recently partnering to launch a unit in France.

“We’ve got farmers who are really starting to look to adapt to a new type of production system that includes digital solutions as ways of improving welfare as well as economic value,” says Balazs. “Our innovation ads to that significantly because it connects the consumer to the farmer directly. Or, as we like to say, it’s paddock to plate.”

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