Building sustainable supply chains with Lamar Steiger and Neil Mellers, Ranch2Retail

Beef supply chains have been described as the most dysfunctional and least organised supply chains of everything available in the supermarket. Today we are joined by Lamar Steiger and Neil Mellers from Ranch2Retail who are building connected beef supply chains to improve economic performance of the whole chain and environmental outcomes. Data across all participants is a key component of creating and sharing the extra value. 

It took over 100 conversations before Lamar found a rancher who was interested in rising to the challenge of creating a premium supply chain for Walmart that provided consistent product, reliably at consistent price which give the customer a great beef eating experience across 4600 stores.  Prime Pursuits now supplies about 600 Walmart stores across the SE USA. 

You can listen to our conversation here.

Transcript

Ash Sweeting: 0:04

Welcome to the App Cloud. I'm Anna Tweeting. Based supply chains have been described as the most dysfunctional and least organized supply chains of everything available in the supermarket. Today we are joined by Lamar Steiger and Neil Millard from Ranch to Retail, who are building connected based supply chains to improve the economic performance of the whole chain and environmental outcomes. Data sharing across all participants is a key component of creating and sharing the extra value. Lamar, Neil, thank you very much for joining me today.

SPEAKER_02: 0:40

Thank you for having us.

Ash Sweeting: 0:43

So it's no small task to actually start a new supply chain, Lamar. So do you want to start by giving us a bit of your background and also what motivated you to take on that challenge?

SPEAKER_02: 0:58

Yeah, thank you so much. Thanks for having us on your podcast. We're really delighted to uh to be a part of it. So thank you so much. I originally Ash came from a pretty big ranch in Wyoming. My grandfather had bought that ranch early in the last century and and raised uh with a uh my dad was quite the innovator. He was one of the very first um folks in the United States to use continental breeds of cattle, the ones like Charlet and Cementol and all that came from Europe. He was an early adopter of uh herd improvement data. Uh he was an original member of the American Herd Improvement Federation, is what it was called at that time, which is the grandfather of all the data that the Angus Association and the other associations gathered for data. And uh in the mid-60s, he had quite a serious farm accident, his leg hurt. And so Wyoming winners were tough, and we moved to Arkansas. We bought a ranch and moved a couple hundred Charlie cattle from Wyoming to Arkansas in the Ozark Mountains. I was just in lower elementary school. So my older brothers, Ash, have a lot of fond memories of Wyoming and the romance of it. But my dad said they weren't old enough to really understand how hard the work was at that time, you know, without air conditioner, heated cabs, and tractors and all those kind of things. And so grew up right here in Bentonville. At that time, Walmart was very small. Bentonville was around 5,000 people. And uh and Walmart was just one of many uh of these discount retail stores that were regional. They probably had 20-something stores in 1970 when they went um, when they they they got themselves organized as Walmart Inc. And grew up right here. And I actually married Sherry, uh, my high school sweetheart, who was um her dad was president of Walmart, and kind of the brains behind a lot of the good things that happened at Walmart, like everyday low price and everyday low cost, is the the model that Walmart embraced in the late 70s. It was his idea. He was the the father of the the barcode. He came up with a lot of the um uh or for the idea with uh with a man in the hosiery business for the barcode. And uh and he also connected all the stores by satellite without Mr. Walton's permission, which was is quite a great story, actually. And uh and all these different things that he did to implement at Walmart that really took Walmart from good to great. And uh, and he was he was quite the adopter of technology and ideas, and and one of those was in the late 80s, he really introduced the idea of partnerships with suppliers and vendors that sold to Walmart instead of being adversarial, and uh and so being a product of my father and also for working with my father-in-law on his Angus ranch, which he had besides running Walmart, uh, the two together really are dreamers and they were strategists and big thinkers. And so I think I inherited a lot of that or just picked it up by hanging around them. And so I had some pretty big ideas um by 2014 when Walmart uh asked me to help them with their beef supply chain. And uh maybe I'll pause there. Neil, maybe you would tell a little bit about your background and then we'll bring it all together there from 2014 on.

SPEAKER_00: 4:35

Yeah, Ash, thanks for thanks for having us. I come uh a little bit different background, more from a CPG background, uh Ray Southwest, Missouri, uh went to the University of Arkansas and um always tell Lamar uh met a girl, got a job, start having kids, and it escalates quickly. Um but but this is home now, it's been home for the last 20 years. Um, but kind of grew up in in CPG, actually, uh stocking shelves at at Walmart, uh, which has always kind of served me well is kind of um, you know, we can sit in a room like this or on a in front of a computer on a podcast, right? And and make some decisions that sound good, but then don't make any sense for executing across 4,500 stores. So that experience has always kind of served me well. Uh, took it a little bit of an analytical route, uh, did category management. Uh, what that means for for Walmart is uh drawing modulars, actually setting a assortment strategy for uh lawn and garden category. Um, and then went to work for a family farmer co-op, uh, about 1800 family farmers known as Welches. Uh so sold lots of Welch's uh grape jelly to some big customers, big retail customers, um, and really kind of grew to love, you know, working on behalf of those family farmers was not just about like, hey, did we hit our did we hit our shareholder quarterly earnings? Did we how's our stock price doing? Or like there was a really real story there, right? Of being a co-op. The farmers, you know, owned our business. We we existed only to help them move that product um and work closely with the retailer and have a great partnership there kind of back and forth. So um that was a really fun time just to kind of on both sides, work on behalf of the farmers, and I would say with our retail partners, we got a lot of um great feedback from them as well, and that they really cared. Um they really leaned into kind of the genuine you know story there, back to the family farmers. So um, long story short, started my own brand uh a few years ago. Uh we exited that brand um about a year or two ago, and then uh that started my relationship here at retail.

SPEAKER_02: 6:43

He and his partner started his partner started a water brand.

SPEAKER_00: 6:47

Yeah.

SPEAKER_02: 6:48

And if you know a little bit about uh retail, there are thousands uh different suppliers that have come up with an idea for the better water packaging.

SPEAKER_00: 6:57

Yeah, we could have picked an easier category.

SPEAKER_02: 6:59

And these guys, like they started with the very hardest category that there is to sell into a retailer, and they had quite a bit of success, actually.

SPEAKER_00: 7:06

We did, yeah. And we we really started that probably for a different time, but we started that on the inside of um really selling the brand more than more than the liquid, because when you're selling just water, right? This is gonna be a little different our conversation today, but when you're selling just water, it's it's it's a lot about the branding. And I I mean I could argue that's it's that way some for beef as well. Um, but man, there's a lot of there's a lot of quality and differentiating differentiating attributes that come through in the the beef category, a little different than water. But definitely learned a ton through that process. I came again through big CPG kind of classically trained, and then I had the very humbling experience of going to try to start something from scratch with just a couple folks, and uh, you know, just just a lot, a lot. We were we were celebrating not truckloads of product, but cases or even individual units of product, right, being sold. Um, but learned a ton through there and grateful for kind of that expertise, kind of both sides of that expertise, I think, I think serves me well now.

Ash Sweeting: 8:06

So and you two have been together for how long now?

SPEAKER_02: 8:10

So we we started ranch to retail um about a year ago, I guess, is when we were started visiting with each other and and uh the my partner at Ranch to Retail as a family, the Whaley family, who've done uh services for the Walmart egg supply chain and other retailers' egg supply chain. And and they we've seen it that as we've talked about the beef supply, that uh the perimeter of the store. Yeah, the uh the perimeter is the refrigerated fresh, mainly meat and eggs and a few other things. Yeah, but the perimeter of the store is one of the very last supply chains of those items around the perimeter that are refrigerated that have been a that anybody's really tackled seriously to get those supply chains organized. Neil and I can tell story after story after story that the center part of a retail store or the center part of a grocery store has has items that are very digitalized, they're very precise down to the the one hundredth of a penny in cost. And uh and when a retailer needs thousands of an item, they know exactly when they need them, they know, and maybe it's hundreds of thousands of an item, they know exactly what they need them, they don't know exactly how they're gonna get them, they know exactly their pricing way, way far in advance. But then when you look at the perimeter of the store, and that's uh you know our area that's really interesting, besides the eggs at my partner's company, but it's the beef supply chain. And so the beef supply chain is one of the most dysfunctional and least organized supply chains of everything that that a retailer buys. And and that goes back to 2014, Ash, that I mentioned a minute ago was was that um the CEO of Walmart and I were having dinner, we were having these huge tomahawk stakes, and he said, Why is the USB supply chain the most dysfunctional supply chain of anything Walmart buys? And I was kind of set back as a rancher on my heels. I was like, it can't be the worst. And uh, you know, it might be the worst. And so uh he he and the beef team hired me as a consultant. Uh, and for a decade, I helped the Walmart meat team to um to really take a hard look at how the meat business worked. The first year and a half that they hired me was so much fun, probably two years. Is we just traveled around the country and just sat in front of the best ranchers that I knew, the best feedlot operators that I knew, and just said, hey, the CEO of Walmart wants to know what you think could be a solution to improving the meat supply chain. And and Walmart's huge, you know, it has like 4,600 stores, the company, almost all of those are grocers. Uh, they still have a few just uh general merchandise stores around the country, but most of them have grocery. And when you try to have a consistently good product at a consistent price that gives the customer a great beef eating experience at 4,600 stores, it's really, really difficult when we have 600,000 ranchers in the United States who are all experts, and we all think, me included, we all think that we have it figured out and we know exactly what the best beef is. And and uh and and so it's really, really hard to kind of get those things organized.

SPEAKER_00: 11:45

But it's I'm just adding it's it's worth it, right? Because those those fresh, those categories, those perimeter store categories are are traffic generating for those for those retailers. And it's it's of course about having that really great quality um steak or you know, seafood, chicken, whatever it is, but like having those good perimeter store category product, but it's also about all the other items that are sold with that product, right? You're building baskets, you're bringing traffic in the store. So um while the perimeter store is harder, it's it's absolutely worth it because it's so critical, you know, to those retailers.

Ash Sweeting: 12:18

So um part of my MBA studies was a a fairly comprehensive evaluation of the Australian um pasture-based um beef supply chain. Um so I'm sure there's gonna be some differences being a different country, but I'm sure there's also gonna be a uh a lot of uh similarities. And uh, you know, certain things like the the you've got thousands of ranchers and producers going, there's a concentration definitely of the packing side of things. You've also got the fact that you're selling an animal as a live weight, um, so you have a rather than a construction type of a business model. So, you know, think about a car or something like that, you buy small parts and you build them up into something bigger and then sell the constructed product. Um beef is a destruction. You you buy an animal that's walking on four legs, it's got so many different bits and pieces to it, be that the bones, the the blood, the the different cuts of meat, the skin, um, all the all the the offal, and they all have hugely variable uh values of what they're worth, which are all bouncing up and down because they're all driven by market forces. And then once you get that animal with a single live weight price, you then break it down into components parts and then try and essentially flog off the component parts. You've also got the fact that day to day you don't know what's coming in your um both in terms of volume of qual uh and also quantity of product. So you've got all these different challenges that are very unique to the the beef supply chain. You've also got the fact that uh, you know, um Australian Australian beef producers, there's there's quite a few that are quite independently minded, and from my experience of the US, I I wouldn't say there's great divergence in that space either. So there's a bunch of different personalities and attitudes and and and opinions out there as well, and trying to tie that all together. So I guess where did you start? How do you how do you go about that that process given given all those moving parts?

SPEAKER_02: 14:29

Yeah, so you'd you'd be interested, and I think you know this part of the story, but the CEO that I had the tomahawk with was Greg Foreign. He was the brand new CEO of Walmart US, the U.S. stores, not international and not Sam's Club, but the US stores. And his career, he's uh Kiwi by by birth, but his career has been in the grocery business all throughout Australia and um and uh and New Zealand before Walmart hired him. He was uh he was a number two guy at Woolies. And so his experience in Australia before he came here to the United States was to have somewhat of an organized supply. And I think at that time, and I'm not sure what they do now, but at that time, Woolies had their own buyers buying cattle out of the feedlot and their own their own kind of individual supplies that they knew these cattle came from this ranch and and they were they were they were grassroots enough that they had improved the the meat selection and had done really well at that time with with their meat at Woolies. And so when Walmart hired him, uh he was a very close friend of my father-in-law's, who was the one I mentioned earlier, the retired Walmart executive who had been a consultant for Woolies for years and years. And so when Walmart hired him, the first thing that one of the first things he wanted to address was if Walmart can't win in Fresh, they, you know, they probably can't win because of the traffic driving. And so they have spent the last decade of just improving everything in fresh from having Walmart now owns their own milk, uh, milk bottling facilities. They've they've reached back in the supply chain in beef, of course, but in other fresh supply chains as well, as they've gotten involved enough that they can have a better product than they've ever had before. And it takes a long time to improve your fresh supply. And then it takes even longer, Asher Ash, to get your um to get your uh your customers to even look at it after you've had kind of a not so good reputation. So he hired me to help uh to help introduce his meat team, highly, highly talented meat buyers. They are merchants, merchants, and they know, as you talked about the bits and pieces, they know the value. They know exactly most of that team or a lot of the team have meat science degrees from some of the best meat and science universities in the United States, and they really know the meat. And what they wanted to do was they wanted to have insights into the rest of the supply chain, besides just buying the meat from the big four packing plant companies. His challenge was how do we create our own supply chain so that we can have uh insights into the entirety of the supply chain, including genetics, all the way back. And my suggestion was the only way to do that would be to go to be big enough to go around the big four and not to have uh a contract with any of the big four um packing plant companies in the United States. And so Scott Neal at that time ran the beef business. He's now one of the senior executives at Sprouts uh based out of Phoenix. And Scott and I and some others that were there started looking at how we could do a supply chain. And frankly, we had, I I say now, we had a hundred conversations where people were like, sounds like a great idea, but it can't be done. Like nobody can really do this. And uh and we had one conversation with a rancher in Texas, Bob McLaren. And Bob McLaren is a pretty large Angus breeder down there and and had a uh had a history with McLean uh trucking, and McLean handles fresh, fresh delivery and uh because they have refrigerated trucking trucks uh to Walmart and to other retailers as well, and really, really a brilliant businessman. And and Bob McLaren was the first person that we visited that said, yes, let's do this. And so when I took the meat team on that trip down to Cameron, Texas, I made sure that I brought Greg, the CEO, along on that trip because what I've learned over the years is that if you have two CEOs shake hands, things get done a lot better and a lot faster than they do if you're uh right in the middle of trying to figure that out. And so Greg and Bob shook hands and said, hey, let's figure this out. And it is really hard to figure out, and it's especially hard to be the first, you know, with the first one to do a supply chain at scale. I mean, we're talking Walmart scale, as opposed to, you know, a farm to table supply chain uh, you know, that's just around your local, your local region or whatever. And so so it took several years to do it to work it all out. And we had to find a packing plant company that would cooperate and harvest on a toll instead of owning the cattle. We had to find feedlots that and and backgrounders who were willing to to uh feed uh on the toll instead of owning the cattle and and doing it the model that they had always done before. And and Bob McLaren put together a wonderful team, and the company that he put together for this project is called Prime Pursuits. Warren White had run uh uh Mac 6, MC6 feedlot in uh near Amarillo, Texas for years. He owns a couple of sale barns in Nebraska and is just uh a stand-up, really well-versed guy in all parts of the supply chain up until they hit the back door of a packing plant. And so he was a great partner or is a great partner for Walmart. And uh, and so what they ended up doing after years of negotiation is that Prime Pursuits is a company owned by the McLaren family. Prime Pursuits procures cattle for Walmart, right? They have to be Angus Sired, they have to be upper two-thirds choice, and uh, and then those cattle, Prime Pursuits is responsible for making sure that they get from the ranch of origin to the back door of Creekstone, the packing plant that's in Kansas, and Creekstone harvests all the meat for this uh supply chain. The meat is then sent, uh the subprimals and and grind is then sent to Georgia. And Walmart built their uh well, they remodeled uh AmeriCorps freezer building. They remodeled it into a packaging plant, what we call a case ready plant, to put that that meat in the the trays that Walmart has. Walmart does not have butchers in the stores, and so all that's pre-packaged at the plants, and they have their own plant in Georgia, and now they're building a plant in Kansas as well. They all they almost have it open, I think. Uh so then that meat for the prime pursuits supply chain, then it once packaged, it's labeled as McLaren Farm, and it goes out to, I think they're up to about 600 grocery stores in Florida, Georgia, and that part of the world in the very southeast corner of the United States. And um, so then that that supply chain got up and going, and and uh Walmart then decided to look around for a second supply chain. And so um we got them introduced to the folks up in Nebraska, who are building, and they just opened it up last Monday, a week ago, Monday, the sustainable beef, Nebraska Sustainable Beef Packing Plant, brand new facility that's been built in North Platte, Nebraska. And that supply chain is totally separate than Prime Pursuits, and it's got a different, a little bit different set of specs. And so they're they're trying, uh they're not trying. They launched the second supply chain in scale. And what Neil and I talk about a lot is the first supply chains when you try to get something as disorganized as the American beef industry is, we have these separate silos. The first and second supply chain, you know, those are the hardest. And uh and Walmart has put their uh their their resources and their expertise behind trying to figure out how to force uh a different way of thinking on the American beef supply chain. Yeah.

Ash Sweeting: 23:00

Well, so much there. And first the hats off and congratulations because it's that whole, you know, you ask, I don't know how many you got to before you found Bob down in Texas, and he was the one who said yes. And um It's just that persistence and the you know, getting getting on with it, finding the right partners, and then and then getting getting Scott out there and as you said, the agreement to the handshake between the CEOs as as as that that inflection point, I guess you could call it in terms of let's get this moving. Um what what you know in terms of uh uh I guess the challenges and getting you know the the cow calf, getting the ranchers on board, um do you want to talk us through how that went? What were the what were the hurdles? I know one of the things I'm I'm particularly interested in with all you know with with ag supply chains or food supply chains are generally quite a bit longer and more complex than many other products. And essentially the value is gonna be captured at the consumer, the the final purchase of the product, be it a a food service or restaurant or a consumer taking it home to cook it at home. Um but most of the value is going to be created um in the production process. You know, there's the genetics, there's the early life, um, there's the backgrounding, and then there's the the feeding, and then once you've actually got to the packy, you can only really lose value because you've got the product as good as it's going to be, and you just have to make sure you don't damage it either through um you know poor poor cold chains or or something or or losing shelf life and all that sort of stuff. So how do you link that sharing of value from where it's captured, which is a long, long way, both people-wise and and distance-wise from where it's created?

SPEAKER_02: 24:50

Uh yeah, and and um two things there is there's the people part and there's the technology part for the linking. And and so I think that um Walmart, when they when they put together Prime Pursuits with their partner Bob, is that they knew, and I think that those of us who are pretty thoughtful in this industry are are really uh at a point where we know that ranchers, you know, we talk all this sustainability, which I'm 100% for measuring methane as your company does, and figuring out how to do that. But one of the most the most important sustainable crisis that we have is that for over decades at a time, not one year to the other, that ranchers can actually stay in business. That that that the ups and downs of the the cattle market and the lack of knowing where your cattle are going and being uh frankly, a cow calf guy's kind of a victim of the day that he sells the cattle. And uh, and so I think Walmart is pretty committed to making sure that they pair the pay the ranchers a pretty fair price. And so if you start out with a little bit of a premium to the rancher, then you've got to figure out how to take cost out from the time you pick that animal up uh or it's delivered away from the ranch uh to the background or all the way through to how you get it to the store. And I don't think there's a better company in America, or probably the world, yeah, Neil, yeah, that does a better job of looking at every penny and every half penny and figuring out how to evaluate each step of the supply to try to figure out how to take some cost out of that. And whether that is smarter trucking, you know, or whether that is the better packaging, less waste on the trim, uh, whatever it is, is Walmart has these very bright folks that are just so concentrated on just the the the the most the most um laser focused on it. Laser focused on the most mundane items that I would just kind of go right over. But that's what that's how Walmart was built by figuring out how to take cost out, you know, once you buy that item. And so uh then if you're if you do that, then one of the best cost saving methods is to figure out which animals really do work and feed feed to the uh the upper two-thirds choice and which ones don't work, and and which ones uh have the best consumer uh experience for the eating and all, and then then that's when you start bringing in the data. And so I'm so excited about the commitment that they've made in their partnership with Prime Pursuits, and Prime Pursuits has developed an on-the-farm app uh that they are they are providing to all of the people that sell the meat into Walmart, and then all the data that Walmart can give them from the from the harvest facility, and uh every everything you can think of along the way from dead loss to uh the number of the number of um you know um number of animals or which which animals individually that had the most sickness or were just uh were just problem cattle all the way through, even if they made it to slaughter. You know, there's some of them that just don't do that well. And if we can identify those individually, and that's what Prime Pursuits at Walmart has been able to do, is the sharing of data back and forth across the supply chain. And frankly, Ash, it's shocking to the industry that Walmart would just give this industry back to folks who don't have a long-term commitment to Walmart. I mean, you can you can sell your cattle one year, two years, three years to Prime Pursuits, and the next year somebody offers you one penny more. But if the thought is, is that the Walmart can provide such great help helpful tools to the rancher, the rancher will choose to sell into a into an organized supply chain like Prime Pursuits.

Ash Sweeting: 29:01

In terms of the the premium, there's a lot, lot, a lot there once again, but in terms of the premiums you mentioned, I think there's uh you know speaking to ranchers and and and uh livestock producers, there's there's two sides of that. There's the the actual paying a higher price is a big part of that, and everyone wants to receive a higher price for for what they're selling. But there's also the the de-risking side of things because you know you're investing in, you know, if if you're growing even if you're growing that calf out to a yearling before you sell it, say, just to keep the numbers simple, you know, there's nine months of pregnancy plus a year of of um of growing that animal before you get a return on it. And you're investing in that genetic, what's that, uh seven, nine uh twenty-one months or so? No, nineteen months, no, well, twenty-one months, yes. Um before um before you actually get a return. And if you have some certainty about what price you're gonna get when you or some level of de-risking, that will help you make decisions earlier on. So is that balance between just taking risk out of it um compared to just adding 10% onto whatever the market price part of those discussions, or is it more complex than that?

SPEAKER_00: 30:19

I think uh way I would answer that. I don't know from a de-risking standpoint, but I would uh the word that comes to me is kind of clarity that that that having a key anchor retailer on the end of that supply chain, right? This beef has a destination. Um, we were in a room, um, Candily was Nick and I, Ash, who you've met. We were in a room that that probably Nick and I did not deserve to be in. It was a genetic task force meeting for for cattle, you know, like a lot of really high-level experts in this meeting, and and we kind of came in from just a retailer-consumer kind of perspective side. Um, but they said, hey guys, appreciate you guys being here. Um sometimes it can feel like an echo chamber, right? Like what's the what should the ribeye size be? Or like what's what are these genetic and what what should it be? And we just need the clarity, again, that anchor at the end, the retailer, what they're looking for, more importantly, what the consumer is looking for, and then driving, giving those folks a target, you know, a a goal to hit, um, not only from a genetic side, but even you know, even certain sustainability initiatives. What what does that retailer and what does that consumer really really care for? What are they what are they looking for? And then how do we how do we focus, and maybe that's the de-risking, Ash, a little bit of like how do we focus our efforts on on what what the the ultimate consumer is actually looking for? So I think we've um Lamar talked about the the 99 conversations and Bob being the one. I think more and more what we've seen over the last you know even year is is that that really has been flipped. And we've had you know, we've probably had a hundred plus conversations and we've had one or two, maybe a packer that was like, hey, I don't know if that's the right time for us, but you know, maybe soon. You know, so but like there's there's a realization of like, okay, man, if we if we could focus our efforts, if we could focus, I think you said it a little bit, Ash, of instead of you know each sector maximizing everything that they possibly can, of like, hey, can we focus towards the end goal, right? And then share some of that, some of that value back. Um, so that's where my head went.

SPEAKER_02: 32:27

I I think we're just on the front end of this. And nor and I said it earlier, in order to get something going, Walmart really had to break the mold and pay some premiums and do that. And I I think that that where we need to move to is we need to move to a vertical cooperation where you're agreeing. I what I would like to see is where these ranchers who are the professional ranchers who are growing the kind of beef that people want to buy. And we have we have 10, hundreds of thousands of ranchers in the United States who have 25 head or 40 head, and they they're not paying a lot of attention to this. But there's enough of us that are professional ranchers that want to want to really tune in to this. And I think the mix, as this thing evolves from the original Prime Pursuits, then to the Nebraska sustainable beef, and then what we're doing at Ranch to Retail is trying to put together some supply chains that are uh that are more long-term commitments and not just like, hey, we're gonna bid on your catalog superior because we loved them last year and the year before that, and they really did well for the Pack or for Walmart supply chain, we're gonna bid and do a premium. We really want to want to create an environment where people are like, hey, in the years that are not so good, that you're still gonna pay me a fair price. And perhaps in the years that are really, really good, that I won't hit the top of the market, but over a 10-year period of time, and and other supplies of fresh have done this. I mean, it's not like it's impossible to do. I mean, you can have long-term contracts with apples, you know, you can have long-term contracts with other fresh items that work. And so it's just uh you mentioned it earlier, a lot of the Australian ranchers are pretty single, single-minded. And, you know, one of our greatest traits in the United States is the is this uh, you know, pull yourself up by the bootstraps and force yourself into success. But I I just think that the the volatility is is not sustainable for ranchers in the future. Land land values are so high, it's like if you're gonna have three bad years, why why even do it? Just sell out, you know, and so we don't want that. We want people to make a decent a decent amount of money in all phases of the supply chain every year instead of feast or famine.

SPEAKER_00: 34:55

Yeah, the only thing I'd uh go ahead, Ash.

Ash Sweeting: 34:57

Oh, very much on that. When when I was looking at the the Australian beef supply chain, it was not uncommon for a uh producer, rancher to to book their cattle, their load of cattle, into two or three different packers. And um the day before they'd ring up all three, find out which one had the highest price, and then do a no-show at the at the other two. And then obviously, from that that packers business perspective, when you don't know what you're coming through the door, how many staff do you need? Who how do you pre-sell anything that you don't know when you know having contracts with your customers? Um, and there's all those knock-on effects, which which takes a truckload of value out of the whole supply chain. That's everyone pays uh pays the prices of those inefficiencies because if if your customer isn't making as much money, how can they pay you um a premium because they're they're they're struggling. Um so but there's you know, there is uh uh frequently antagonistic relationships in those, you know, I got the better of him type sort of you know situation. So there's some some ingrained, I guess, you know, cultural things that that can frequently need to be overcome. But I think you know, your approach looks very much like let's find the people who want to participate and let's just run with those people who want to be part of it, and then if the other people change their mind, um they they can come knocking on all our door at at a later stage. Is that is that kind of the approach?

SPEAKER_02: 36:29

Yeah, so you can explain a little bit about our method or what we're doing at ranch to retail in as far as that.

SPEAKER_00: 36:35

Yeah, yeah, I think what we're uh sorry when my head went there too, Ash, is just from uh back to data a little bit, right? Like that's like the the silos of data are getting taller within each segment, right? Like ranchers are collecting more data, feedlots are packers. But like what again, back to the but back to what we're trying to do at Ranch to Retail is with our customers, with key anchor retailers at the end, like give give the supply chain a reason, um, you know, a reason to trust each other, I guess, right? Like a reason for that data to flow, right? It it's it's nice that the silos are getting taller and we are collecting more data, but man, where that really becomes powerful is we start sharing that data forward and back again, right? And we start showing up sharing that carcass data um and some of that health data, some of that feed lot, that that uh feed intake data back into the system. And so, but we we know, like you talked about the dynamics, like that's not really why would they do that, right? And kind of the standard relationship, like what's the next guy gonna do with my data? Um, or what's the previous guy gonna do if he knows these are really good quality cattle, I'm gonna pay more for them next time, right? Like it's gotta be it's gotta be directed toward um having that anchor at the end with a retailer and and hey, this this data system you're gonna benefit from, right? Because we're all working toward that end goal, but then you're gonna see some of that data flow back that we can all learn from. So um, yeah, I guess just to kind of rehash a little bit, like what we're excuse me, what we're focused on range to retail is you know, primarily our our customers will be retailers. Um, that uh Lamar spoke to it a little bit, but um that long-term agreement back to giving that beef a destination and providing providing the clarity up through the supply chain. So um uh Doug, our CEO, says it really well. Like, we're a big believer in and letting experts do what experts do, right? Like, and and like we're we're gonna need a lot of great partners, you know, upstream in the supply chain. And and really, you know, we're focused on, you know, retailers, um, they don't know all the complication that these feedlot guys have to deal with every day, right? And these ranchers, these producers have to deal with every day. They just can't understand, you know, the ins and outs of of what it means to do each of those segments every day. And then same way, right? Like those ranchers, those feedlot guys don't know, you know, setting modulars or promotional assortment strategy and everything, you know, all the things that have to happen on the retail side. Um, we think we can kind of bridge those guys together, and that's what we've been able to kind of do in some other segments. Um, but it's just so important to have you know good partners along the way. Um, and and we know there's gonna be some folks that are perfectly happy to continue kind of you know operating in the beef supply chain as it as it as it uh operates now. But more back to the 99 conversations, like more and more so we feel like um I think because of of what you know Lamar's work on uh with Walmart on Prime Pursuits and then what's now going on with sustainable beef, like there's some momentum, and we really believe there's gonna be you know some more supply chains um coming in the future. Um and you know, with constrained supply, right? Like the if there's a few more big ones, like you're just taking significant chunks of quality out of out of supply. So but that's that's what we're focused on ranch retail, is is again just kind of building to Lamar's point vertically collaborative or more connected these supply chains.

SPEAKER_02: 40:08

Um, Neil, I think also that um Walmart is an anomaly. I mean, it's just so big. Yeah, and we've had retailers that have said, like, hey, this is really interesting, but we don't have a half a billion dollars to invest in the supply chain. And you know, we don't, we don't, we're not in a position where we can build our own case ready plants, yeah, or that we can buy into a packing plant like Walmart has. And and Walmart has that great balance sheet, which gives them a real competitive edge of winning, right? But so but being behind the curtain, I grew up here in Binville. My father-in-law ran, he was a master retailer, but even just getting behind the curtain of the merchants for the that decade that I worked with Walmart really gave me a an in some insights that I didn't have at all being a rancher. And so to Neil's point, I think that other retailers that are not the size of Walmart, you know, that that those retailers can can help have can use us to help bridge all this expertise together. Yeah, you know, Walmart can hire their own their own cowman. They've they've got a wonderful guy, Grant Heenan, who's a really well-versed feedlot cattle guy. Yep, you know, but most retailers are not of a size where they can, they're gonna hire their own cowboy team, you know, that have all this expertise. And and I feel like that, and since I've gotten to be a part of these, I've learned enough that I think we can bridge that and and help help bring all that together for the right, the right retailers.

SPEAKER_00: 41:46

Yeah. Yeah, those retailers are gonna have merchants, right, and buyers, but they can't forward deploy folks, you know, up up through the supply chain like like Walmart has done.

Ash Sweeting: 41:58

So where where do you see things going forward? What's the vision for for the next five, ten, ten years?

SPEAKER_00: 42:07

Yeah, I think uh, I mean, we do believe, yeah, there's there's gonna be more supply chains. We've got this uh, I don't know if you're familiar with it, Ash. We could probably send it to you, but kind of the innovation adoption curve, it's more something you would see in tech, right? But like I think if you remember that in like the chasm, right? Like there's the early adopters, which we would name prime pursuits, sustainable beef, right? And then we're kind of in that chasm into Lamar's point of hey, there's probably not a ton of retailers out there that are ready to go buy a packing plan or buy interest in one or go completely finance one or do something, you know, like what's been done before. But we do believe that curve is coming and that there's there's gonna be more supply chains based on conversations we've had, um, but that those are gonna look a little bit different and those are just gonna look about like um with us working with retailers, them providing supply chain again with that that kind of target and us be able to uh kind of align folks to the ultimate goal. And then if you remember the back end of that innovation adoption curve, we believe like in a few years, um, especially at maybe a major retailer, um, we could get, you know, potentially, this is our view, like leadership saying, hey, meet team, there's been five or six more supply chains now. We're seeing our quality start to decline. Should we have gotten a little bit ahead of this, right? And so we think we think there's a little bit of a little bit of urgency there, especially with uh lowest supply since 52, I think is where we're at now, right? And um, we just believe that that that's probably gonna continue. Um, but there's some interesting dynamics about the industry right now, as as I know you're aware, um, that it's it's really it's really kind of a great time to to be kind of getting ahead of this and and building building supply chains now. So add to that Lamar.

SPEAKER_02: 43:56

You know, and in your area of expertise. with the methane um my i really think that it's gonna be really hard to make substantial uh substantial changes and really grasp what all the implications are for the methane and all of the other sustainable practices that's gonna be really really hard until we can get some connected supply chains because you can have one silo that's just like knocking it out of the park on doing all the right things for the environment for longevity of the the the products viability and all of those things and you can have one of the segments in the beach supply chain that does that so well and it all just evaporates when it's sold to the next part of the supply chain.

Ash Sweeting: 44:48

And so I think a lot of the solutions for sustainable practices and true rigidity um uh benefit at scale are going to require some organized supply chain and some pull through right because what we do now is probably a lot of push right a lot of like hey sustainability like hey maybe this will increase the quality of my of my beef right and let's push some initiatives and see how far we can push that use the milkshake through a straw analogy right but like but like how can we again sorry to go keep going back to it but with with the destination in mind how do we pull through um the things that matter and make make a a real impact or or some progress on sustainability drive do you agree with that that's oh I think I think the the data is is critical and I think the the uh the the example I think of on this is is a sheep example because it's just um a little more illustrative but if you have um you know U's can have singles triplets or twins and if you have a a U that's had triplets the environmental footprint on the the feed intake of that U is spread across three lambs whereas if you've got a U that's got a single you've got one U to one and the footprint of that U to that one lamb. But when you walk into the grocery store and you see the two lamb chops sitting there in the in the um in the fridge you don't know which one came from the single well which one came from the the triplet and they all they look exactly the same but their footprint's going to be possibly you know significantly you know could be double or triple what the other one is and it comes back to feed efficiency it comes back to um so many you know I remember um when I was working for Meat and Livestock Australia I was doing an innovation program there and I was speaking to a a producer on one of the big the big stations up in northern western Australia so this is a hundred thousand five hundred thousand acre type of a place and um or millionacre place and they they walked a mob of two and a half thousand cattle um for about 20 miles and they had some walk over way stations on either side of that that muster and the animals this is in I can the the animals were they lost about 30 kilos on average so that's about 60 pounds on average and initially they thought it was just they were dehydrated then they would get drink some water and they um that weight would go back on but they drank some water and the weight didn't go back on. And when you've got two and a half thousand animals um at 30 kilos and at five dollars a kilo you know that becomes a very very expensive move. And there's a cost to that that those animals will need to put that weight back on. So if you're finishing them there's a you know there's all the emissions and the footprint that comes out of that but once again when that beef gets onto that supermarket shelf um it's sitting next to the one that looks you know red and like beef and all those things next to it. And and how unless there's the data that goes with that um there's one no way for the consumer to know but there's also no way to actually create a premium for the better product because they they look identical. So that whole data pipeline and the sharing of the data um because if one person's got it you know locked up in their own system and doesn't share it you can't create value unless other people have it. So that's such a hugely important part of um of this whole this whole you know process. And back to what you said earlier on and I could not agree with this more that you know sustainability includes financial sustainability includes um social sustainability it you know it's like a tripod um and if you've ever tried to stand a tripod up that doesn't have three legs um you know how difficult that is it all just falls straight over yeah yeah yeah so getting I mean if we're really serious about these with regenerative practices and sustainable practices I think that we need to be convincing the grocers and those of us who are along the line at scale to participate in organized supply chains.

SPEAKER_02: 49:10

And uh and I think you know I'm not sure that we're ever going to get paid for that really but if we really are serious that it's the right thing to do, we're gonna have to figure out how to absorb that into our cost just like everything else that is absorbed into the cost. And you know I know that all these other items that Walmart sells that Walmart has leaned on and other retailers as well have leaned on supply chains to do better by the environment they're not paying more for that item there's just an expectation that you figure out how to integrate the right practices and the right tools into every supply chain in order to do the right thing by the world.

Ash Sweeting: 49:50

But there's a big efficiency piece in that as well because going back to say that Northern Australia or Northern Western Australian advantage um you know if it's going to take you an extra 60 days to put that weight back on that cattle that you just walked for for 20 miles, um you know there's there's a lot of costs associated with that.

SPEAKER_02: 50:12

And obviously you can't necessarily there's it's not I'm not saying for a second that it's it's cheaper or it's it's easier to do because um if those animals are not near where you can get a truck to or something like that to load them or or you know there's there's complexities involved but there's also a lot of efficiencies that and I think that's one thing and this is why this makes so much sense for the us those of us who live in Bentville there are over 1500 consumer product goods companies CPG companies who have offices here and I think if you got them all in a room and you said hey when when when the retailer forces you to do better by the environment to do better by um by by your suppliers but to better have you lost money or made money and the efficiencies that they gain through all that just to your point whether it's 20 pounds or 30 pounds that you have to reload on an animal which is very expensive or whether it's having less wasted space in the carton or in the packaging or get more product into a uh yeah a pallet think about the square than it did before I mean those you make money on that back end.

SPEAKER_00: 51:22

Yeah and I am a I'm a firm believer that that's exactly what will happen in the beef business when we figure out how to get efficient and the efficiency comes from uh our being embracing regenerative practices on that note um some of some of the sustainability uh conversation has become politicized over not just in the last few months but over the last decade or so um and what you said you know you know if it's more efficient there's a lower environmental footprint companies are making more money there there's no innate need for that to become a political hot potato there's there's a lot of win-win wins for everyone so do you think do you think there's a need to put effort into into trying to you know change that conversation so you're creating those win-win wins and and trying to stop the negativity or is that is that kind of too high is that big a challenge I think maybe that may be a symptom of uh and I'm not picking on any company specifically but right like sustainability initiatives even a few years ago was something to be you know let's let's stand up on stage during the shareholders presentation and talk about and I'm not picking on anybody in particular but just right like it it did feel kind of it it could feel kind of fluffy or it could feel like something that they're just going to do for a year. But I think more and more so we've heard this even recently from from a very large retailer of like back to what Lamar said of we're focused on sustainability initiatives that are that are profitable, right? Like it's got to be it's got to be something that makes sense financially so that it's long lasting because this is if this is something that we're signaling and and is is something that it's just not going to last right it's gonna last nine months, 12 months and just kind of a feel good. So I think the more we can communicate those real um and Ash you you have a better take on this I'm sure but like the more we communicate those real um sustainability initiatives like I know some of the stuff you're working on that actually have real benefits you know and and and show some of those benefits I mean the more we can share that data I think I think the better right like and that's like the regenerative ag that that Lamar mentioned I mean there's there's a real kind of grassroots sorry fun there's a that like for for that right like that like like the folks have seen how that has actually really benefited their their land and it's like I'm I'm all in right like this is this is no longer political if I'm seeing the real financial benefits to my to my operation so um yeah um quickly before we go because we're we're getting close to time um is there anything that's needed in terms of technology policy investment um communications anything that that you think is is needed to have you know to help accelerate um the work that you guys are doing?

SPEAKER_02: 54:29

Well I I think that our technology for ag has been very hard to adopt out on the ranch. Connectivity is the changing of that whether it's satellite satellite connectivity or or um or um through antennas or whatever that once we can get that connected the a lot of these tools are out there and and I know it's been frustrating to the the technology folks who have adopted some really great tools for for uh the beach supply chain that have not been adopted but I think that we're on the verge of those things really taking off because of the connectivity not only the connectivity through satellites or whatever but supply chain connectivity when you can do that across the board I think you can solve a lot of the problems uh there's a lot of folks out there and you know we're you we're all going to be all three of us are gonna be at the AgTech conference for livestock in uh Dallas next week and and there's a lot of great ideas out there and a lot of tools that are there and they just have not been able to make it all work because of that if it's just for one segment it's just a taller silo of data and if you're not connected in the supply chain of some way shape or form then you don't benefit from that great technology that's in one segment. So that's my answer there.

Ash Sweeting: 55:50

So and um before we go is there anything you'd like to add that we haven't already discussed this has been so much fun.

SPEAKER_02: 56:01

I just um really appreciate you letting us have some time on your podcast to share our vision and what all that we're up to and so thank you so much Ash yeah appreciate it look forward to seeing you next week Lamar Neal thank you very very much for joining me thanks Ash thank you thank you for listening to the Ashcloud.

Ash Sweeting: 56:22

Please subscribe to Ashcloud if you have enjoyed this podcast where I will continue to discuss food sustainability with guests to bring a deep understanding of the environmental political and cultural challenges facing our society and creative ideas on how to address them.