Author: Joe Fassler | Published: July 25, 2017
Another day, another sign of Amazon’s ambitious plans to shake up the American food system. Reuters reports that on Wednesday, representatives from the e-commerce giant will meet with a small, influential group of ranchers who specialize in organic and grass-fed beef.
It’s a revealing move, and a tantalizing clue about the kind of company Amazon intends to be—if and when its in-progress acquisition of Whole Foods goes through. Amazon likely won’t piggyback off the grocer’s existing infrastructure, not that anyone expected that—it’s not CEO Jeff Bezos’s style to leave well enough alone. But setting up meetings at the producer level can only mean one thing: The company intends to forge new supply chains, finding novel ways to get food from farm to table.
What exactly does Amazon have in mind? That’s hard to say. The process around the meeting has been so secretive that even the ranchers attending the meeting—12 people, according to Reuters—have little idea what’s on the agenda. That’s according to Don Davis, a Texan rancher who sits on the American Grassfed Association’s board of directors.
“I don’t think anybody knows,” he said, when I reached him at home this afternoon. “So far as I know right now, I don’t believe anybody knows the purpose of the meeting, or what’s actually going to be discussed.”
In fact, he initially seemed quite surprised I’d heard about it.
“It was supposed to be a secret meeting—I was told not to discuss it with anybody,” he laughed. “Cat’s out of the bag, huh?”
Davis initially wouldn’t say where the meeting is held, though later he mentioned that a friend of his—who is attending—just got off the plane in Georgia. Our best guess, then, is that it’s taking place at White Oak Pastures in Bluffton, GA, one of the nation’s most celebrated producers of certified grass-fed beef. In March, Reuters reports, Amazon reps paid a visit to White Oak to meet with owner William Harris III—a big figure in the grass-fed movement, and something of a celebrity to people who care about such things. (The New York Times’s Kim Severson, for what it’s worth, has called him the Justin Bieber of the organic movement in the American south.) Harris seems to be a go-between of sorts between Amazon and the grass-fed community generally.
We’ll follow up to find out what we can about what’s on the meeting agenda. But we know enough now to make a few educated guesses.
A quick refresher: In the United States, the vast majority of cattle are raised on grass but sent to feedlots to be “finished”—fattened on corn, and then slaughtered (usually in massive facilities owned by the four big multinational meat packers, who control more than 80 percent of the industry and can process thousands of animals a day). But an ever-larger number of Americans—thanks, in part, to Michael Pollan’s now-famous 2002 profile chronicling the journey of a single feedlot steer, later featured in The Omnivore’s Dilemma—have shown interest in side-stepping the conventional system. Whether they’re animal welfare advocates, environmentalists, or libertarian trustbusters, a significant proportion of Americans want to eat beef from animals who spent their entire lives on grass.
Demand for grass-fed beef is surging. What was once a $5 million niche trade in the late 1990s—think farm stands and farmers’ markets—grew into an estimated $4 billion industry by 2016, according to a landmark 2017 study from the Stone Barns Center for Food and Agriculture in collaboration with the investment consulting firms Armonia LLC, Bonterra Partners, and SLM Partners. The same study pointed out that, based on Nielsen data, sales of labeled fresh grass-fed beef doubled each year between 2012 and 2016, growing from $17 million in sales to $272 million. That’s a breathtaking pace compared to the overall beef market, which the United States Department of Agriculture (USDA) estimates will plod along at 2.3 percent growth in 2018.
Considering all this, getting into grass-fed beef is a very smart move for Amazon. Not just because the feel-good imagery of happy cattle on grass could go along way towards tempering the company’s hard-nosed corporate image. And not just because it’s trying to bulk up its AmazonFresh service with offerings beyond bulk ramen and Chef Boyardee. Amazon’s move toward grass-fed is straight out of the standard tech industry playbook: identify an industry struggling with bottlenecked demand, and use transfomative tech to get people more of what they want.