Small purveyors of meat products could actually benefit from the WHO’s report linking consumption of red meat and processed meat to cancer.
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Apparently not even a cancer scare can spoil America’s lust for bacon.
When the World Health Organization reported last week that meat consumption–in particular eating processed meats like the ever popular bacon–could increase cancer risks, many long-time carnivores gasped. Would Americans curb their diets? Would that then cause specialty vendors to suddenly go belly up? So far it looks like those fears may be premature.
Indeed, some small specialty meat purveyors have noticed a torrid growth in consumer demand for their products this year, and they expect strong growth to continue for the remainder of the year, despite the report.
The hoopla over the health consequences of ingesting processed meats, while no laughing matter, should prove instructive for entrepreneurs of all stripes. It shows that even when statistics seem stacked against you, you can continue to define your market.
Specifically, the WHO, through its International Agency for Research on Cancer, linked eating 50 grams of processed meat daily to an 18 percent increase in the risk for cancer.
That report set off a flurry of angry responses in the meat industry, particularly with the North American Meat Institute, which called the data “old, weak, inconsistent, self-reported,” in a press release that came out on the same day as the WHO report.
Similarly, business owners like Chris Bowler questioned the voracity of the study. “The nature of these correlation studies is misleading and don’t really provide useful information,” says the chief executive and co-founder of Cremenelli Meats, a producer of specialty Italian foods, in Salt Lake City, Utah. Cremenelli is an Inc. 5000 company. “Cured meat has been around for millennia,” Bowler adds.
Bowler adds that Cremenelli, which sources its pork primarily from small, family-owned and operated farms primarily in Iowa, has seen consumer demand for its Calabrese salami, prosciutto cotto, pancetta and capicola go through the roof. Revenue for the 75-person firm has increased 50 percent year over year for the past three years, Bowler says. He adds revenue for 2015 will approach $28 million.
“People want to pay for quality,” Bowler says, adding the WHO study did not factor in additional cancer risks that may stem from consuming factory-produced meats laced with antibiotics, and culled from animals raised in cramped pens.
For evidence that the trend is wider spread, just look at the demand for bacon and other processed pork products in the U.S.
Although the Chicago Mercantile Exchange’s futures market for pork bellies, from which bacon is cut, stopped trading in 2011–largely because bacon production has become a year-round activity–it’s closest facsimile for futures contracts is roaring ahead. That would be the lean hog futures contract on the CME, for whole hog carcasses. Lean hog futures contracts, for December show pork at 58 cents a pound. The price jumps about 30 percent to 75.7 cents a pound for June and July contracts for 2016.
Meanwhile, the spot price for pork bellies reached a yearly high of $1.70 per pound in August 2015, Bloomberg reported. That represents and increase of 174 percent compared to April, 2015.
And who can say why, but really big bacon consumption by consumers has dramatically increased between 2011 and 2014, according to at least one survey. About 23 percent of U.S. consumers said they had eaten 2 pounds of bacon in the past 30 days as of March 2014, compared to 21 percent for the same time period in 2013, and 20 percent in 2012. (Consumption of smaller amounts grew more modestly over the same time period.)
Nevertheless, there’s good news, too, for PRE Brands, an 8-person grass-fed beef company in Chicago, launched in February 2015. The company’s owner and founder, Lenny Lebovitch, says the WHO report will also be good for it, as consumers seek potentially healthier meat options. PRE Brands, which forecasts $4 million in sales for 2015, supplies non-organic beef to supermarkets including Giant Eagle and Walmart, in 9states. Generally speaking, grass-fed beef is considered healthier than grain-fed beef, produced by most conventional farms.
“The [WHO] information is good for us, and the emerging grass-fed option,” Lebovich says.