There are 3 macro-meat dynamics I’ll be following closely as we enter the new year.
(1) Will meat & livestock forge a new economic model?
Will retail shoppers continue paying what they’re paying at the meat case? If so, what does that mean for the traditional high throughput/low cost model of the packers? And if the packers’ model changes, what does that mean for those who supply live animals to packers?
My granddad tells the story of a young farmer in the ’70s who bought a set of feeder cattle. They guy was excited about his new venture, especially since he saw this as a low risk investment – the cattle market had reached a new normal, it was never going back down. To this optimistic young producer, the market had found a new floor. You are cringing, aren’t you? You know how this ends.
Sure enough, not 60 days later and
the market did what the market does, serving a
heaping helping of humble pie.
I can’t imagine what made me think of this story…
(2) Will the packers forge a new operating model?
Tyson recently announced that one of their plants is piloting a 27 hour work week that would allow plant employees to qualify for full time benefits, as a way to attract people. The next day they announced a $1.3B investment in automation.
Changes are afoot in how processing plants do the work of disassembling carcasses.
Are we on the cusp of an infinite consumer market bifurcation?
Remember the ‘beef: it’s whats for dinner’ campaign? It was wildly successful as a mass market campaign in selling the mass category of beef.
But mass categories and mass campaigns are over.
We're in an era of niche, hyper targeted markets and aligned supply chains will allow brand owners to serve certain segments of customers by aligning incentives throughout the entire value chain to meet a specific customer group's objectives. Objectives which are always nuanced, and could even be competing.
Take the retail shopper who wants to purchase grass fed beef because they don’t like the idea of feedlots. Does that same customer also care about methane emissions? Because if that customer were optimizing for lowest methane emissions per steak, they would buy steak from grain finished cattle. How’s that for nuance?!
Brands are going to have to do the (really) hard and messy work of teasing out who actually cares about what attributes, and then aligning their supply chain and marketing accordingly.
My only prediction is that 2022 is going to be a fun year to be in the biz 😎 I’m taking next week off so I’ll meet you back here in the new year. Happy holidays!
My holiday reading:
- The Truth Machine: The Blockchain and the Future of Everything.
- The AI First Company: How to Compete and Win with Artificial Intelligence.
- Wanting: The power of mimetic desire in everyday life. Fair warning, this book is about why we want what we want and it will mess with your mind. It offers a compelling explanation of why we want the toy that the other kid picks up. The idea of mimesis, and how it drives behavior of individuals and markets, is likely to be very relevant over the next decade as the role of animal protein sorts itself out.
Tis the season for…a life retreat.
Last year I wrote about my favorite life hack, an annual life retreat. It still holds:
Hopefully you are sliding into holiday mode and the most troublesome thing on your mind is nailing the ratio of rosemary:thyme:garlic for the prime rib. Me too.
I’m deviating from our normal topics to share one of my favorite end of the year traditions: a Life Retreat. It’s one of the highest life ROI ways to invest a few days, carving out time to step away from daily life to distill my learnings from the year ending and gear up for the year ahead. It’s my best chance to recalibrate day to day life with long term objectives, to pressure test the trajectory I’m on with the trajectory I want to be on.
In my experience, the real keys to crafting a high impact Life Retreat are:
- Take 2-3 days. Any thing less doesn’t allow you to completely separate from day to day life.
- A relaxing setting, for me it’s a mountain range somewhere.
- Really good food + abundant charcuterie. This is critical.
- A good porch view for optimal coffee drinking & contemplation.
- The perfect mix of hiking to clear the mind & reflect, and down time to journal or whiteboard or whatever seems like the best way to mind map.
- Capturing high/lows from the year wrapping up & the lessons/learnings to carry forward & put to work.
- Identify in advance the big questions/topics you want to mentally wrestle down.
- A mix of inspiring & educational books/podcasts.