Walmart takes a stake in a rancher-owned beef company
Walmart earlier this week signed an agreement to acquire a minority stake in Sustainable Beef LLC, a rancher-owned company dedicated to producing top-quality Angus beef. Sustainable Beef will ship the majority of what it produces to Walmart’s stores.
The retailer’s investment will enable Sustainable Beef to open a new beef processing facility in North Platte, NE, by late 2024. Ground-breaking on the 500,000-square-foot plant is being planned for next month. The facility is expected to create over 800 new jobs and process more than 1,500 cattle per day when it is fully operational.
The parties are calling the deal a win for ranchers and the beef industry as well as for Walmart and the customers it serves. The retailer will gain representation on Sustainable Beef’s board of directors as part of its investment.
“We are dedicated to providing high-quality, affordable beef to our customers, and an investment in Sustainable Beef LLC will give us even more access to these products,” said Tyler Lehr, senior vice president of merchandising for deli services, meat and seafood, Walmart U.S., said in a company blog. “We know Sustainable Beef LLC has a responsible approach to beef processing, one that includes creating long-term growth for cattle ranchers and family farmers. This investment provides greater visibility into the beef supply chain and complements Walmart’s regeneration commitment to improve grazing management.”
Walmart’s commitment to sourcing beef responsibly is part of a 2016 pledge by CEO Doug McMillon for the retailer to source 20 key commodities more sustainably by 2025.
Sustainable Beef will work with its ranchers and cattle feeders to optimize performance in key supply chain areas, such as grain sourcing and grazing management. The company’s animal care protocols will follow the “Five Freedoms” of animal welfare including access to water and feed, comfortable space to shelter and freedom from disease and pain.
Walmart and Sustainable Beef found common ground on the use of antibiotics. Use and reporting across herds will comply with the retailer’s request for suppliers to implement the American Veterinary Medical Association Judicious Use Principles of Antimicrobials.
DISCUSSION QUESTIONS: Do you expect large grocery retailers to make more direct investments in sourcing agricultural commodities from farmer and rancher groups going forward? Do such deals provide storytelling opportunities for retailers in their marketing to consumers?