Based in Toronto, Ontario, Nancy Matsumoto is a writer and editor who covers sustainable agriculture, food, sake, arts and culture.

The Grassfed Burger Gap

At Market Table Bistro in Lovestville, Virginia, you can order a sustainable, pasture-raised cheeseburger with sautéed onions, herb mayo, cheese, and bacon for $14. At the nearby fast-casual Elevation Burger in Ashburn, Virginia, the standard two-patty organic grassfed burger will set you back about $7. Travel to the closest Hardee’s, in Waynesboro, Pennsylvania, and the double all-natural grassfed burger there will cost you approximately $6.49 or about $4.89 for a single.

The demand for grassfed beef is growing by at least 20 percent a year in the U.S. and the number of restaurants and burger chains serving grassfed and pasture-raised burgers is also growing rapidly. But just how they define and verify the practices behind those terms can be murky business. (We covered some of that here). While some sustainable food advocates find the growth of the entire grassfed industry to be a heartening sign of shifting mass market demand, the grassfed burger market may be growing so quickly that it’s undermining some of the original intention behind the shift.

It’s not surprising that the more expensive burger at Market Table Bistro is the only one sold in a full-service restaurant, nor is it surprising that it’s the one most likely to be locally sourced. But what might surprise you is the source of those less expensive fast-casual grassfed burgers: The meat is most likely shipped in from outside the U.S. Most of the grassfed hamburgers being touted by the likes of Elevation Burger, Hardee’s, and Carl’s Jr. are made from animals that were raised on wide swaths of open land in Australia, New Zealand, or Uruguay.

Meanwhile, most small local farms and ranches are still struggling to find a market for their grassfed, ethically raised hamburger meat at a profit.

We might not expect the 3,000 Hardee’s and Carl’s Jr. across the U.S. to source their grassfed meat from small, local producers (indeed, the chains’ parent company, CKE, buys meat from Australia). But even the much smaller Elevation Burger, a Virginia-based chain that includes 60 restaurants in seven countries, buys most of its organic, grassfed beef from off-shore suppliers, says Michael Berger, founding partner and vice president of Elevation’s supply chain.

“The meet-your-farmer niche is awesome, wonderful,” says Berger. “But we need product on a larger scale. It’s difficult to aggregate their product into our supply stream because our buying volume would have the potential of taking out whole herds.”

“Sourcing is a big consideration for chains of any size,” agrees Brad Haley, chief marketing officer of Carl’s Jr. and Hardee’s. When market research showed that the company’s customer base, especially, as Haley puts it, “the male half of the Millenial population,” wanted so-called “cleaner” food, CKE, the parent company of the two fast food chains, began planning its “all-natural burger.”

But CKE couldn’t find a big enough supply of beef to roll out antibiotic- and hormone-free grassfed burgers at both chains. So Carl’s Jr. debuted the fast food industry’s first “all-natural” burger—sourced entirely from Australia—in December of 2014, and Hardee’s launched its line in May 2015. Both, says Haley, “were among the top burger introductions of the year,” and both are still going strong.

Meanwhile small producers and the companies that distribute their meat have a different problem on their hands: how to sell all the ground beef off of one animal in order to turn a profit.

Moving the Trim

Leland Whitehouse, head of sales for the Brooklyn-based Happy Valley Meat Company, which buys humanely raised whole animals from 20 small family farms in Pennsylvania, then breaks them down and sells them to chefs and restaurants, has seen this challenge first hand.

While prime cuts like tenderloins and sirloins, and even off cuts like tongue, heart, and liver are snapped up by nose-to-tail chefs, explains Whitehouse, it’s harder to get them excited about the trim. Anywhere from a third to half of the animal ends up as ground beef and selling that portion at market price can be a challenge. For this reason, explains White, sustainable pasture-based farmers sometimes end up “selling whole live animals to big companies like Cargill that pay low commodity market prices.”

“If you dump [hamburger] on the commodity market or sell it on the cheap, it’s impossible to make money on beef,” explains New York City whole-animal butcher Jake Dickson. He adds that this conundrum is “really the most difficult thing about running a whole animal butcher shop.” He charges $9.50 a pound for his ground beef, or around twice what commodity ground beef goes for in the grocery store.

Dickson is highly creative in coming up with added-value products designed to move that trim: beef chili, sausages, hot dogs, and Whitehouse says Happy Valley is exploring those options, too.

One of Happy Valley’s buyers, Daniel Holzman, chef-owner of the New York City-based the Meatball Shop, built his business around capitalizing on whole animal suppliers’ excess pork and beef trim. Six years ago, when he launched the Meatball Shop, “using whole animals was very much in the Zeitgeist,” says Holzman. “Our theory was it doesn’t work unless you have a way of utilizing the hind legs (for pigs) and the bottom round and portions of the legs on cows.” In addition to beef from Happy Valley, he gets sustainable pork trim from another Brooklyn-based company, Heritage Foods USA. “I’m just thrilled I can get my hands on the quality of meat I want to use,” Holzman says.

But even with three locations, the Meatball Shop is just one of a select number of businesses buying local and domestic sustainable ground meat. Happy Valley processes about eight to 12 animals a week, in theory enough to fulfill the needs of one Elevation franchise, which Berger says requires up to 10 to 15 animals a month. If Happy Valley shipped to, say, Elevation’s Ashburn, Virginia Elevation franchise, its meat would only have to travel 200 miles instead of 10,000. But it would also cost the chain considerably more. “My little local economy is competing with this massive economy of scale that comes from $8 milion worth of grassfed beef coming in on one boat,” says Whitehouse.

Cows From Down Under

Off-shore grassfed beef has become the go-to for large American chains says, Berger, because a country like Australia “has thousands of acres of uninhabited mass pastureland,” making it the best source for grassfed beef. Countries like New Zealand and to a lesser extent Australia, explains George Faison, partner at Debragga.com, the online store of the Jersey City, New Jersey high-end meat supplier, have been focused and built around grassfed meat for years; in a way, “it is their ‘commodity’ animal,” he adds. Faison, adds that economies of scale make the cost in those countries cheaper, too: “they’re going to processors not with 150 animals a week, but 150 an hour.”

These are also animals whose primary function, at least for American buyers, is to provide ground beef. The highest demand product in international certified organic beef is for 85 percent lean trim, explains Berger, and two of the largest buyers are Costo and Wegman’s. The primal cuts of these animals, he notes, tend to be harder to sell in the U.S. because Americans would find them too lean, too tough, and probably too strongly flavored for their liking.

When national chain restaurants decide to go “natural” (even McDonald’s has vowed to begin purchasing some sustainable beef this year) they need to look abroad, because volume meat producers in the U.S. are still organized around large feed lots and concentrated animal feeding operations (CAFOs) and the commodity practices they are based on.

“The way sustainably produced meat is distributed now is problematic,” explains Chris Hunt, special advisor on food and agriculture for GRACE Communications Foundation. And consolidation in the meat industry is largely to blame. “What happened in the U.S. was an elimination of distribution networks for small-scale farmers over the course of several decades. Now we’re seeing them being re-established, with the kind of cooperative approach like with Happy Valley.”

The Question of Transparency

One major difference between the work of folks like Happy Valley and the large-scale international grassfed beef system is transparency. Berger of Elevation says, “Everything we buy … can be traced back to smaller growers, from 1,000 to 15,000 head, compared to the scale of 70,000 on a [U.S.] feedlot.”

Of Australian beef, Jake Dickson says, “They have a large land base and a very small population so they are massive exporters.” Calling the producers there small farms “is a fantasy,” he adds. How else, he asks, can “export beef traveling 7,000 miles” be significantly cheaper than American grassfed beef?

Indeed 1,000-15,000 cattle operations are still fairly large herds compared to the small-scale grassfed and pasture-based U.S. growers attempting to return to more sustainable ways. And at that scale, as well as the distance, true transparency is a challenge.

Will Harris, a fourth-generation cattleman who runs White Oak Pastures farm in Bluffton, Georgia and is president of the American Grassfed Association says, “It’s very difficult to read a label and tell what the protocol really was. The best way of knowing what you’re getting is to get to know the farmer or at least know something about the farm it came from. That’s hard enough to do in America and it’s even more difficult if it’s thousands of miles away.”

GRACE’s Chris Hunt and Adele Douglass, executive director of the Virginia-based Humane Farm Animal Care, which issues the Certified Humane food label, both also wonder if the large-scale organic beef producers are adequately addressing animal welfare concerns.

Carl’s Jr. and Hardee’s, answers Haley, have contractual requirements regarding feeding and handling of the cattle in their programs with grassfed beef suppliers, which in turn institute those same agreements with their ranchers. They are audited by the third party Australian certification program AsureQuality to verify compliance. And while the inclusion of retired dairy cows in the ground beef supply chain is a well-known practice, Haley responds that the beef in CKE’s all-natural burgers never come from dairy cows.

Shake Shack, the burger behemoth that now operates 86 restaurants worldwide, including 51 in the U.S., has, like Chipotle, been seen as a major force in changing fast food for the better. But while Shake Shack says it only buys meat in the U.S., the chain—like most U.S. meat suppliers and burger chains—is cagey about its supply network.

“All of our butchers source the same all-natural, no-hormone, and no-antibiotic whole muscle Angus beef,” says Laura Enoch, senior marketing manager for Shake Shack. When asked for more specifics, Enoch listed a number of highly reputable domestic suppliers such as Kansas-based Creekstone Farms, but she stopped there, “We believe our supplier base is a trade secret and gives us a competitive advantage.”

Whole animal butchers like Dickson argue that as systems grow it becomes harder for them to maintain humane management and slaughtering practices for both the animals and the workers.

Given the affordability and access to grassfed meat on the scale of Shake Shack, Elevation, or Hardee’s/Carl’s Jr. Hunt says some compromises might be necessary for the time being. “We can’t let the perfect get in the way of the good,” he notes. “The fact that there is huge consumer interest, not just niche, in sustainable meat in particular, is a huge first step to pushing the whole thing forward.”

Even the highly regarded third-party verification organization Animal Welfare Approved has embraced the rise of the fast-food grassfed burger as a good thing. A blog post by the organization greeted Carl’s Jr.’s announcement of its all-natural burger with joy and called the move “a game-changer” with the potential to dislodge “an entrenched and unsustainable beef production.”

But the game doesn’t always change in a linear or straightforward way. As demand continues to grow, so the need for transparency to prevent the rise of “bad actors and greenwashing,” says Hunt. Food safety is also a factor; Chipotle has acknowledged that its recent E.Coli outbreak might have come from Australian beef.

Creekstone Farms—one of Shake Shack’s suppliers—shares the U.S. market with California’s Niman Ranch, which provides antibiotic and hormone-free meat to Chipotle, and both sell to high-end restaurants across the country. They are both also now owned by large corporations: Niman was bought by Perdue in September 2015, and Creekstone is owned by private equity firm Sun Capital Partners, Inc.

Niman Ranch, notes Hunt, has done a very good job at maintaining transparency as it has grown its supply chain. When Perdue purchased the company, it promised not to change any of its production practices. “But there’s always a risk, maybe not right away, that over time,” says Hunt, things could change. “Third-party verification of production standards becomes all the more crucial,” he adds.

Meanwhile, the American grassfed industry waits to step in to supply a growing demand for its product. “The predominance of industrial, grainfed beef production in America is why Carl’s Jr. has initially sourced its grassfed beef from Australia—but it doesn’t have to stay that way,” an AWA spokesperson said on its blog. “We have been waiting for this moment and have pasture-based, grassfed American farmers ready, willing, and eager to supply this growing demand. If this takes off like we hope, it could be a job creator, a market booster, and could turn beef’s carbon footprint completely around.”

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