In the 1950’s my grandparents began growing green chili peppers in the high desert of southeast Arizona with its warm summer days, cool evenings, and dirt ditch irrigation. The limiting factor for pepper market growth was the inconsistency of the heat – a consumer would get a really hot chili one meal and a mild chili the next. That lack of predictability in eating experience was problematic. So in the 1980’s my uncle began working on chili genetics and eventually isolated the heat gene to produce chili varieties with consistently predictable heat levels, whether hot or mild.
Chances are that when you think of green chilis you think of Hatch, New Mexico. Hatch and green chilis have become synonymous. Yet Hatch green chilis are grown from, you guessed it, Arizona seed. But no one knows Curry Farms, the source of 90% of green chili pepper genetics in North America. They know Hatch as the source of all good and perfect pepper flavor.
That’s because chili growers in New Mexico decided about 30 years ago to begin branding peppers, to highlight the region. It worked. This is the power of a marketing strategy to build a brand & differentiate even in a market where differentiation is challenging.
And this “no one downstream from the farmer cares about the genetics source” is s a story that plays out similarly across all segments of ag.
When you buy Coca-Cola with HFCS you don’t know <or care> if that HFCS is from corn grown from DeKalb or Pioneer seed. When you buy chicken in a tray pack you don’t know <or care> whether those are Cobb or Ross genetics. When I buy Wright brand bacon, I don’t know <or care> if that pork is from Topigs or PIC genetics.
Genetics sources have historically been a behind the scenes layer in food production, completely removed from downstream value chain players and the consumer’s sphere of interest or concern.
But, that may be changing in meat & poultry.
Brands have claimed differentiation in production practices (antibiotic free, grass fed, free range, etc), processing, or even breed (Certified Angus). Two examples suggest that specific genetics may be the next branding trend:
- Walmart’s new supply chain, Prime Pursuits is built around 44 Farms Genetics. Not just Angus genetics, but a specific supplier of Angus genetics. Many consumers that don’t know an Angus from a Holstein know Angus because of CAB’s success. This move is Walmart’s bet that consumers who learned to care about buying Angus beef can and will learn to care about buying 44 Farms beef.
- Cook’s Venture, a genetics first business model. Its a D2C chicken upstart built around the company’s own Heritage breed. Whether you agree or disagree with their positioning around slow growing chickens, the premise of a value proposition marketed to consumers that highlights the genetics themselves – not the characteristics of the output of the genetics – is noteworthy.
If genetics is the next claim for branded meat, how does genetic technology fit into the equation? There’s a lot to unpack in that question that we’ll save for another day, but here’s a glimpse at how CRISPR could play a role in scaling genetic brands:
“Otley’s team’s new approach, which they’ve been developing for six years, is to essentially turn a not-so-prize sire into a prize one by altering it genetically. Using the CRISPR-Cas9 gene-editing tool they produced mice, pigs, goats, and cattle that lack the gene NANOS2, which controls male fertility, but not female.
The result is a sterile male that produces no sperm. The team then transplanted sperm-producing stem cells from a donor animal into the sterile animal’s testes. The recipient animal then produced sperm containing only the donor’s genetic information.”
If genetics is the next claim for branded meat, what segment of the value chain is best positioned to drive? Will it be seedstock producer driven or does it have to come from downstream players already in foodservice/retail? What new alignments will this create? I’m guessing the owner of 44 Farms would never have guessed that Walmart would be a business partner yet here we are.
Yet we all know 2 data points do not make a trend and this could be an irrelevant discussion. However, the idea of branding genetics to the consumer is another example of the larger trend of coordinated supply chains as the path to differentiation, higher margin for producers, and higher value for consumers. More on this topic next week with insights directly from the mastermind behind the new Walmart beef supply chain…