For Niman Ranch, two definitions of ‘sustainable’

Eve Troeh Oct 27, 2011

For Niman Ranch, two definitions of ‘sustainable’

Eve Troeh Oct 27, 2011

Bob Moon: How do you define “sustainability”? It can have two very distinct meanings in business. The first, as you might expect, is how much good or harm a company is doing to everyday human life and the environment. The second is simply, how long can it keep doing that? In other words, is the business sustainable?

Sometimes, out in the real world, those two goals — being green and making enough green — don’t exactly get along. Marketplace’s Eve Troeh has a case in point, from our Sustainability Desk.

Eve Troeh: Niman Ranch started when Bill Niman raised a few cows on a chunk of northern California coast.

Bill Niman: I guess I’d like to say my business plan was whoever called on the telephone.

Who called? Chefs from around the country — crazy for his marbled meat.

Niman: The focus was really about creating a brand and creating the best tasting, most wholesome and wonderful food, and felt that eventually it would become profitable.

Today, Niman Ranch works with about 700 farmers. It sells beef, pork, lamb, chicken, eggs and prepared foods like bacon and hotdogs. If you see a proper name in front of the word “pork chop” on a menu, it’s likely Niman Ranch.

About four years ago, Bill Niman felt too much tension between sustainability and profitability. He quit, about a year after Jeff Swain became CEO.

Jeff Swain: And I came in with some other investors to help inject capital and give it a chance to become financially sustainable.

Niman Ranch had never turned a profit. Now sales are strong. In fact, the company could sell a lot more meat.

Swain: Demand has outstripped supply for the last three years.

But Swain says the brand’s value comes from its efforts to do good.

Swain: The tenets of our brand: Family farms, sustainable agricultural practices, the highest animal welfare, traceability and never, ever hormones or antibiotics. And that restricts our growth.

Every year, Niman Ranch brings investors, meat distributors, restaurant owners and chefs to one of its Iowa farms. They see how the pigs live: outside, rolling in the dirt.

The vice president of pork, John Peterson, shows them a map with hundreds of pushpins — one for each farm. He explains how Niman Ranch coordinates transportation and processing, and why there might be hiccups in supply.

John Peterson: So I know that it’s very frustrating at times, especially in the summer when we get short on pork. But think about the complexity of that operation, to try and get them all to the right place at the right time, from 500 different farms.

Many of those farmers are only raising pigs at all because of Niman Ranch incentives: 11 cents a pound above the pork commodity market.

At dusk, the city slickers all go for a hay ride. The tractor gets stuck in deep mud.

Man: Send the bus!

I walk back through tall prairie grass with Isaac Mogannam. His family owns a California chain called Burger Meister. He says they’ve had trouble getting Niman Ranch bacon in the past. Supply is secure now, but the family is adding more locations.

Isaac Mogannam: As we grow as a business, not to mention as Niman grows as a model, if they are going to be able to keep up with the demand, are they going to adhere to their husbandry principles?

Some clients wonder if the company principles match their customers’ ever-shifting concerns. A meat distributor asks hog director Mark Lane whether the pig feed comes from genetically modified plants. Lane says, well, 90 percent of corn and soy crops are GMO.

Mark Lane: If we were going to go to a non-GMO product, that would move that production cost quite a bit higher.

Special feed would cost too much. Environmental and financial sustainability collide over issues like these. Companies can’t afford to pursue every best practice. Niman Ranch has had to prioritize.

But the ranch founder, Bill Niman, says his former company has lost distinction.

Niman: I think in terms of comparison to the other natural brands out there, it’s as good. It’s not worse, it’s not better.

He left Niman Ranch because he couldn’t sign off on certain practices, like outsourcing butchering and animal transport. He admits that doing everything in-house was something dear to him that didn’t necessarily add value for most consumers.

Niman: If the consumer in the marketplace is not going to reward you with a premium for this more expensive or controlled production model, then you better be like the other guys.

Bill Niman doesn’t want to be like any other guys.

Niman: This calf was born this morning, probably weighs 65 or 70 pounds, which is ideal.

He’s started a new company called BN Ranch, raising cattle with a new goal.

Niman: To prove that grass-fed can be every bit as good as the best grain-finished beef.

The less corn and soy animals eat, the better it is for the topsoil, he says. I ask if he’s nervous about building this new company.

Niman: Well it needs to grow, and we’re approaching some of the same thoughtful people that funded the startup of Niman Ranch because they know me and they know what I stand for, and they know what we’re doing.

He doesn’t know if he’ll ever get the size or market share or success that Niman Ranch has today. But that’s not his goal. He’s restarted to test the limits of profit and passion.

I’m Eve Troeh for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.