Earth to the meatpacking industry: 2021 is coming up, exit the time capsule
The following is a guest post from Phil Kafarakis, who is president emeritus of the Specialty Food Association as well as an international food industry advisor and pundit.
"The men upon the killing beds … would have to loaf around, in a place where the thermometer might be twenty degrees below zero! ... Before the day was over they would become quite chilled through and exhausted, and, when the cattle finally came, so near frozen that to move was an agony…" — Upton Sinclair, "The Jungle" (1905)
About 115 years after Sinclair wrote his exposé of the meatpacking industry, Tyson Foods announced plans to hire 200 new nurses and a chief medical officer to oversee monitoring of COVID-19 in its meat processing plants — a move quickly followed by hiring a new CEO with a Silicon Valley tech background. The shocking discovery of more than 10,000 cases of COVID-19 in Tyson's facilities, along with more than 250 deaths across the industry from the virus, have acted as a catalyst for thoroughgoing change in an industry that was long overdue for it.
Indeed, the wave of necessary change happening throughout the food supply chain began well before the pandemic hit. Consumers had already started to figure out that they didn’t want food that was produced in the inhumane way typified by mass production. Younger consumers especially wanted their food produced differently, and they wanted to know where it came from. COVID-19 came on the heels of this trend, blowing the curtain aside to reveal what was happening inside big meat processing plants. As in so many other industries, whether retail or banking or others, the pandemic accelerated a realization that needed to happen. And now companies have no choice but to invest in it.
Put another way, the food manufacturing industry is finally paying the price for a long stretch of consumers not caring about the provenance of their food, or what happens to it at the processing plant — as long as it reaches them cheaply, in quantity and on time. Consumer apathy about meat and dairy processing since the 1950s — particularly in meat production, as nothing has changed since then — is finally giving way to a new generation of consumers who have started to care.
With the past decade's influx of new, small food manufacturers who brought transparency and ethics to their food manufacturing processes, the ability for big food companies to simply deliver cleanly packaged, inexpensive meat in mass quantities no longer fit the bill. Younger consumers in particular began to demand to know where it came from and how it was processed. If a tiny organic farm could tell them about the cows that produced their yogurt, shouldn't the food giants, who had much more money, be able to tell them the back story on the foods they were selling, and how it was produced? There was real pressure being exerted on the big food companies by small upstart companies who were working more cleanly, fairly and ethically. In short, consumers increasingly chose "small" food over "big" food, showing their preference with their wallets.
Before COVID-19, consumers were calling for change in areas like sustainability and animal welfare. These, along with geopolitical turbulence in trade and tariffs, created supply chain pressure that has been boosted by the mega-disruption of the pandemic. Now the manufacturing process must change, and not just for change’s sake: Lives, not just reputations, are at stake.
While some new technology may have been introduced in food manufacturing, for the most part, meat processing has been done the same way for many decades. It's not pretty, and it's not particularly safe. And now, because they’ve held out so long against making the necessary changes in their supply chain, big processing companies have to accelerate to protect themselves, their employees and their customers in the future. If they don’t shift now, they’re going to have a real problem.
What have they been doing, and what needs to change? As I've said elsewhere, for the last 15 years or so big food companies have only viewed the supply chain through the lens of efficiency and optimization — cost-cutting, in other words. They weren't taking the time to update their equipment, clean it or maintain it in a more proper environment. The prevailing mindset was to run it fast, run it cheap, don’t worry about it, just keep moving. It was all about producing volume, and keeping the business model as lean, efficient and low-cost as possible.
Before the pandemic, this meant gigantic plants and linear processes that have been shown to be not only unhealthy but also dangerous; and it meant paying immigrants, often unauthorized ones, woefully substandard wages to match the substandard conditions. If anything, the emphasis on efficiency was taken to its ultimate end by what I call the 3G Effect: finding profit through cost-cutting rather than the creative reimagining of what could be.
COVID-19 has shone the light on these trends, not least because smaller competitors were keeping up the quality and the integrity of leveraging new, more humane techniques. The pandemic has, at minimum, forced companies to build redundancy into their supply chain — having multiple sources and countries of origin to rely on, as well as backup plans so they don’t get caught short or bring in infected product. Whereas before COVID-19, big food companies were trying to compete with the smaller, innovative companies, suddenly the competitor became the role model: Now it's about not being the cause of consumers or people in their plants dying due to the pandemic.
We’re going to see some intense changes in the supply chain. Prices are going to go up, and there will be some waste built into the system. Many companies will have to consolidate, and the ones that are left will have no choice but to invest in innovation. They will need to bring in higher quality, specialized talent to run the necessary new clean technologies, and they will need to try to repair the longtime damage they’ve inflicted on those people on the floor who have forever been abused. In the restaurant industry, these "essential" workers should see pay hikes from $6 or $8 an hour to $16 or $17 an hour. This shift in the economic model is going to cause all sorts of issues, starting with the cost of food.
In recounting how these plants are going to have to change, the biggest story is that of the personnel. It’s where this piece started — the hundreds of medical staff being brought on site. This sends a message of taking care of the people versus thinking only about the product. There will be a cadre of sophisticated new staff, such as engineers who can run the technology and the equipment. And companies will have to train the foundational workers and pay them decently, not punish them or attempt to suppress or deny their pain.
Of course, there also needs to be a greater focus on regulatory environments, cleaner rooms, technology that keeps things sanitary, clean air and clean water. From the minute products are out of the ground or off the feed lot, the way they’re cared for will have to change, and along with it the way processing plants are laid out. With medical staff in evidence, plants will have to be reconfigured, broken down from huge, monolithic conveyer belts to micro-plants with smaller, safer and specialized areas for processing the food.
Why is this happening, and what does it all mean? There's an ongoing adjustment, a work in progress, in reconnecting supply chains and reconfiguring them to meet these new standards. It has caused chaos in pricing, in availability of products and these new changes are going to radically transform business models. In the short term this will mean continued supply problems, and in some cases chaos. In the longer term these changes will not only improve the supply chain — it will heal the way we eat.
But it’s going to be expensive.
I wonder if we’ve learned our lesson — that doing things the same unsafe and inhumane ways long-term, this is where we’re going to end up. Or, once the technology kicks in and more people get the COVID-19 vaccine, will we just go back to being callous again?