MBA Student Team Explores Local Meat Industry

Each spring, for their capstone MBA Practicum, teams of second-year students in Isenberg's Full-time MBA Program apply their skill sets in semester-long consulting projects on behalf of business and nonprofit clients. In this spring's practicum, students will conduct extensive research, deploy creative problem solving, and generate extensive reports for high-profile corporations, local businesses, and nonprofit organizations.  For an example of the high-value research generated through the practicum, read below about an MBA team's findings last spring on the local meat industry in Western Massachusetts' Pioneer Valley.

What could possibly motivate three Isenberg MBA students-all vegetarians-to devote their second-year MBA practicum to a business vivisection of the local meat industry in Western Massachusetts' Pioneer Valley? Last May, Ellen Dickenson '13 MBA, Spirit Joseph '13 MBA, and Jonathan Ward '14 MBA/MPP presented their findings and recommendations to the MBA community and the team's client, Community Involved in Sustaining Agriculture (CISA).  CISA strengthens local agriculture through community programs that foster education, research, and sustainability.

"Why study meat?" mused Joseph. "The three of us are advocates of local, sustainable food systems-meat included." Compared with mass-produced food, the locally produced alternative, he noted, requires less transportation, storage, and processing. It is usually fresher and supports local economies and sustainability. "As vegetarians with a locavore bent, we know these benefits first hand," he continued. "But what about meat? Our research confirmed that it takes a back seat to vegetables in most locavore food systems." That is significant, he added, because Americans are avid meat eaters.

"Our research revealed a highly fragmented local industry in the Valley with steep barriers to entry," observed Ward. To legally sell their meat, producers must bring their livestock to USDA-inspected slaughtering and processing facilities. But there is only one practicable slaughterhouse for them in Massachusetts -Adams Farm in the north-central Massachusetts town, Athol. (There are less convenient facilities within a few hours' drive in Canaan, New York; Groton, Massachusetts; and Westminster Station, Vermont.)

Apart from the slaughterhouses, the team identified several post-slaughter, value-added meat processors that create smaller batches of highly differentiated meat products, some that bear producers' private labels. All of those processers, including the frequently used Green Mountain Smokehouse in Windsor, Vermont, are outside Massachusetts, the team noted.

Further Challenges. The team discovered that transporting animals and meat products to and from the slaughterhouses and processors was the responsibility of each producer. Slaughterhouses and processors were scarce and enjoyed a seller's market, in part due to strict USDA regulations.  These included federally mandated documentation, inspection, transportation, labeling, and infrastructure standards for slaughter and processing facilities. The bottom line: federal meat regulations offered few economic incentives for local, small-scale meat farming.  

Recommendations. Following interviews with 30 industry insiders and a focus group with local livestock producers, the team served up three recommendations. First, it urged producers to create a trade association to improve their market leverage, coordination, and best practices.  Among the three recommendations, the trade association, as the industry's future driving force, was important to the other two, the team emphasized.  "And based on our survey," prospects for an association are strong:  80% of the producers supported it," noted Ward.

The team's second recommendation was to create a transportation and logistics service to reduce costs and improve the delivery of animals and meat products. And finally, it advocated setting up a fee-based meat processing service at a local commercial kitchen. That would allow producers to craft cost-effective, small-batch meat products.  

 "We don't expect that locally farmed meat-with its much higher price points-will suddenly become competitive with mass-marketed meat," remarked Joseph. "But that isn't the point. Local meat has its own niche markets, including farm-to-table restaurants, artisanal meat eaters, and locavores. And those markets are growing. The locavore movement is gaining traction-even becoming a way of life-with more and more consumers. We chose our research topic, then, to help a fragmented industry improve its practices and to reach a broader public. With an advocate like CISA, which is considering our recommendations this fall, that industry has an opportunity to take a decisive step forward."