Startup Profile: A Sustainable Alternative to the World’s Largest Hog Processing Facility
August 29, 2011 | Deanna Krinn
Even in a shaky economy, Farmhand Foods has been a stable source of southern hospitality in North Carolina for small-scale farmers and the customers seeking their pasture-raised, humanely treated and antibiotic and hormone-free livestock products.
Built on their three guiding principles of respect, transparency and partnership, the company got its start as a marketer and distributor of sustainably-raised meat products almost a year ago in a state known for its large industrial farms.
“The world’s largest hog processing facility is down the road,” said Tina Prevatte, CEO and Co-founder of Farmhand Foods. “We wanted to provide an alternative to that.”
The overarching mission of Farmhand Foods is to get more local meats into more local markets. In addition to all meat products being sourced locally, Farmhand Foods only takes on suppliers that uphold sustainable standards that include raising their livestock humanely on pasture without any added hormones or antibiotics. Though the products that the company distributes are not certified organic as a result of a lack of organic grains in North Carolina and the state’s proneness to droughts, Prevatte said that Farmhand Foods’ products have many of the qualities that organic shoppers are seeking.
Solving a problem
Restaurants often incorporate many different meat cuts and products into their menus, and so to obtain the volume and variety of product that they need locally could require maintaining relationships with up to a half a dozen different farmers. A similar problem exists for the farmer: If he has a cow, he has to find a buyer for every different cut of meat from that animal, otherwise waste and financial losses quickly mount. This is where Farmhand Foods steps in to do the leg work for both the buyer and the seller by both helping suppliers find a home for whole animals, thereby eliminating waste, and streamlining the flow of local product to area restaurants and retailers.
“We’re open with farmers about what we’re charging for their product, we share with customers exactly where and who their meat came from,” Prevatte said.
The origin of Farmhand Foods
Prevatte was introduced to the idea for Farmhand Foods while attending the University of North Carolina’s Kenan-Flagler Business School. While there, Prevatte connected with future Co-founder and COO Jennifer Curtis through the Center for Sustainble Enteprise’s CSE Consulting program. They then participated in a business development curriculum at the school called Launching the Venture that resulted in a business plan for their future venture.
With their business plan in hand, they were then incubated by NC Choices, an initiative of the Center for Environmental Farming Systems (CEFS), and were able to obtain grant funding from the W.K. Kellogg Foundation, the NC Rural Center, and the Tobacco Trust Fund. CEFS and these funders recognized the need for a business in North Carolina to help small-scale farmers and meat processors effectively market and distribute their sustainably-raised products.
“It excited me to find a business solution to a rural economic development challenge,” Prevatte said, adding that she also grew up in a rural area of North Carolina.
Farmhand Foods really took off in October 2010 with the inception of the Sausage Wagon, a marketing and community engagement tool to spread the word about Farmhand Foods’ mission as well as to sell delicious, local, and humanely raised sausages ready to eat. The following March, the company began work on the wholesale branch of their business, working directly with farmers to get their meats into local restaurants and retail stores.
According to Prevatte, even in the midst of a nationwide economic downturn Farmhand Foods has been able to grow. The majority of the company’s regular customers are restaurants. The city of Durham, North Carolina in particular has been a bright spot for the company in terms of providing new customers and opportunities. “I swear there’s a new restaurant opening up every week,” Prevatte said of the dining scene there.
Around 20 to 30 restaurants have bought product from Farmhand Foods to date, with around a dozen customers placing orders every week. Though the company continues to grow, Farmhand Foods has not yet reached profitability. Prevatte said the company would have to increase its current volume by three or four times in order to turn a profit and be self-sustaining.
The organization is currently being funded through grants from the North Carolina Rural Center’s Economic Innovation Grants program, the W.K. Kellogg Foundation, and the North Carolina Tobacco Trust Fund. These grants have been vital to Farmhand Foods’ early success. It typically takes several years to completely raise cattle, or several months to raise hogs that are ready for slaughter, so without these start-up grants, the company would not have been able to prove that there is a market for sustainably raised meat and to attract producers to their network. It also wouldn’t have had the chance to build such close relationships with its farmer partners without this capital.
According to Prevatte, for Farmhand Foods to continue to grow and eventually reach profitability, it will need to team up with a retail partner. While working with restaurants has been beneficial, the demand for various cuts of meat fluctuates greatly. Having a retail partnership would help to ensure a consistent home for each cut of beef or pork produced by the local farmers that Farmhand Foods distributes.
“In five years I’d love to have gotten to a place that’s sustaining itself, and where local food, local meat is really making its way into people’s homes,” Prevatte said. But for this young start-up, the future is still a “big question mark.”
“This sector of the food business is all experimental,” Prevatte said. “We’ll be spending a lot of time talking to folks around the country, trying to identify best practices, and to find the most promising ways forward.”
And even with the challenges that Farmhand Foods faces – increasing volume in order to produce a profit while still keeping up with demand – encouragement from the community and their requests for higher quality product has kept the company going.
“People are so excited that someone is trying to make it easier for them to get the meat they want,” Prevatte said. “Folks want to eat out and eat sustainably.”
So despite the economy, customers in a state known for mass, industrial-driven meat production have proven there is a market for beef and pork raised in a healthy and sustainable manner.
“As a start-up business it is easy to get discouraged at times, but when we’re in that place our advisors will give us a reality check and say, ‘You need to step back and look at how well you’re doing in a struggling economy,’” said Prevatte. “That is encouraging because the economy is struggling, and in spite of that we’re doing pretty darn well.”