Going Mainstream: Meat and Poultry Raised Without Antibiotics (PDF)

NRDC: Going Mainstream: Meat and Poultry Raised Without Antibiotics (PDF) May 2015 CS:13-03-C CASE STUDY Going Mainstream: Meat and Poultry Raised Without Antibiotics Sales of chicken, turkey, pork, and beef raised without antibiotics remain a small segment of the market, but demand is growing fast.1 For reasons that include personal health, environmental concerns, animal welfare, taste, and quality, many consumers are seeking alternatives to conventional meat products, which are typically produced with routine use of antibiotics. NRDC has identified companies that are leading the way to make antibiotic-free meat more readily available to American consumers. These consumer brands, restaurants, and grocery retailers have responded to growing consumer demand and now report sourcing meat from farmers raising meat and poultry without reliance on antibiotics. These companies are successfully marketing their antibiotic-free offerings to customers across the country, selling hundreds of millions of pounds of meat and poultry each year. PAGE 1 | Going Mainstream: Meat and Poultry Raised Without Antibiotics THE MARKET FOR meat AND POULTRY RAISED Superbugs can spread from farms through air, soil, water, WITHOUT ANTIBIOTICS IS BOOMING and people in contact with the animals. They also end up in meat at the grocery store, putting millions at risk of infections Consider the following: that are harder to treat or completely untreatable. At the n Antibiotic-free meat still likely accounts for less than same time, few new antibiotics are being developed. Leading 5 percent of total meat sales. However, according to health experts agree that the intensive use of antibiotics in reporting published in 2012, by some estimates sales were animal agriculture is a key culprit in the rise of antibiotic- up 25 percent over the three prior years.2 This increase resistant infections in humans, posing a serious threat to is despite the fact that U.S. per capita consumption of human health.11 all four major meat categories (beef, pork, chicken and turkey) was in decline during those years and continues to decline today. CONSUMERS CARE—AND ARE WILLING TO paY MORE n In 2011, United States Department of Agriculture (USDA) Certified Organic meats3—just one segment of the American consumers are awakening to this issue and antibiotic-free meat and poultry market—were the fastest pointing to the misuse of antibiotics in livestock production growing segment of the $31 billion organic foods industry.4 as a top sustainability concern. Consumers continue to In 2013, sales of organic meat, poultry, and fish increased demand more meat and poultry raised without antibiotics by 11 percent year-over-year to $675 million.5 and are willing to pay a premium for it. According to a Consumer Reports survey, 86 percent of consumers polled n A small but growing share of broiler chicken production is organic or antibiotic-free, and chicken raised without said that antibiotic-free meat should be available in their antibiotics is sometimes sold at a competitive price with local supermarket and more than 60 percent said they would conventional poultry.6 Brands marketing these products in be willing to pay at least $0.05 cents per pound more for supermarkets include Fieldale Farms, Springer Mountain it. Nearly 40 percent said they would pay $1 or more per 12 Farms, Mary’s Chicken, Murray’s, Bell and Evans, Miller pound. Amish, and Perdue’s Coleman Natural, and Harvestland.7 n Even the largest chicken companies are reducing their EXpertS PREDICT LOW TRANSITION COSTS reliance on antibiotics. Perdue Farms—the third largest Though meat and poultry raised without antibiotics can cost chicken producer in the United States—announced that more than conventional meat products, this premium is not it is now raising 95 percent of its birds without antibiotics just for eliminating the use of antibiotics. Evidence suggests that are important to human medicine, with the remaining that transitioning away from a reliance on antibiotics in meat use limited to treating sick chickens.8 These changes are production does not have to substantially increase costs. largely due to increasing consumer demand for either antibiotic-free or organic poultry products.9 NRDC has not independently verified the practices of profiled companies USING ANTIBIOTICS ON LIVESTOCK THat don’T and case studies are not meant to be an endorsement of any company. NEED THEM THreateNS THE HEALTH OF PEOPLE Our goal is to document that large, mainstream companies have reduced WHO DO reliance on antibiotics in their operations and supply chains and report that Today, according to the Food and Drug Administration they are doing so. The companies profiled here are just some of the brands, (FDA), a stunning 80 percent of all antibiotics sold in the restaurants, and food retailers that have demonstrated leadership in the United States are given to farm animals—not humans.10 Most market for antibiotic-free meat products. A large and growing number of food of these antibiotics are not used to cure sick animals, but to companies across the country are joining their ranks and offering meat and accelerate their growth and compensate for dirty, crowded poultry products raised without antibiotics. conditions common in factory farms. Fed to animals at low levels day after day, they kill the weak germs and leave behind those that are hardest to destroy. Over time, these drug-resistant bacteria, or “superbugs,” multiply and spread. “ANTIBIOTIC-FREE MEAT IS STILL LIKELY LESS THAN 5% OF THE MARKET, BUT 86% OF CONSUMERS ESTIMATES ARE THAT 2012 SALES POLLED SAID THAT MEAT AND POULTRY RAISED WITHOUT ANTIBIOTICS SHOULD BE AVAILABLE IN THEIR LOCAL SUPERMARKET WERE UP 25% OVER THREE YEARS. PAGE 2 | Going Mainstream: Meat and Poultry Raised Without Antibiotics Several studies indicate that getting rid of antibiotics in In 1999 the National Research Council estimated that if U.S. chicken feed and water would cost mere pennies per pound.13 producers eliminated all non-therapeutic use of antibiotics in Current retail prices for antibiotic-free chicken are higher meat production, it would cost the average grocery shopper than this estimated cost, but some of this difference may less than $10 annually.16 In today’s dollars, that would be have to do with other attributes of antibiotic-free chicken $13.50 per year—a mere dollar per month per person. While brands (e.g. “free range,” “vegetarian-fed,” and others), as USDA economists continue to find that non-therapeutic well as other factors affecting poultry markets and consumer antibiotics have a small, positive effect on productivity in demand.14 A World Health Organization analysis of poultry the pork industry, they note that wholesale price increases prices in Denmark following their ban on antibiotics found are likely to be small if these uses were eliminated, and no net cost changes because the savings associated with not consumers will likely see even smaller price increases.17 New purchasing these drugs offset the cost associated with the research from the Economic Research Service of the USDA reduction in feed efficiency.15 suggests that if producers eliminated all non-therapeutic antibiotic uses, wholesale prices of pork and poultry would increase by less than 5 percent, and retail prices would increase by even less.18 PAGE 3 | Going Mainstream: Meat and Poultry Raised Without Antibiotics CHIPOTLE: TAKING Meat APPLegate: CreatING A MULTI-MILLION RAISED WITHOUT ANTIBIOTICS DOLLAR MARKET FOR Meat RAISED MAINSTREAM WITHOUT ANTIBIOTICS Chipotle is one of the fastest growing fast-casual restaurant Applegate is an organic and natural meats company whose chains in the United States, operating approximately 1,700 products are sold in nearly 25,000 stores across the United restaurants and opening about three new locations each States. The company entered the specialty meat business in week. The company’s annual revenues top $3 billion. 1987 with nitrate-free bacon, seeking to differentiate itself Chipotle restaurants began serving antibiotic-free pork in from the conventional market at a time when the market for 2000, antibiotic-free chicken in 2002, and antibiotic-free antibiotic-free meat did not exist. Applegate began offering beef in 2003.1 Today, Chipotle’s goal is to serve such meats antibiotic-free meat and poultry in the 1990s and soon added exclusively in their offerings of burritos, burrito bowls, tacos, organic meat products. Today, Applegate reports that it works quesadillas, and salads. In 2013, the company reported with roughly 1,500 farms in 8 states and 4 countries and sees purchasing 140 million pounds of antibiotic-free pork, nearly $300 million in annual sales from its multi-species chicken, and beef, making it one of the largest buyers of line of branded antibiotic-free and organic beef, pork, and antibiotic-free meat products in the country.2 poultry products.1 BUILDING CUSTOMER LOYALTY WITH BUILDING AN ANTIBIOTIC-FREE SUPPLY CHAIN A BETTER PRODUCT AND BRAND According to Chipotle, the company first considered pork According to Applegate CEO Stephen McDonnell, it is the raised without antibiotics because its pork carnitas were Applegate brand that links the company with its customer selling poorly. Seeking improved sales, Chipotle launched and the customer with the farmer. Unlike the conventional a process to create a better tasting recipe. After cooking meat industry, which remains largely a commodity market, with Niman Ranch’s pork, Chipotle CEO Steve Ells reported McDonnell suggests that it is through cooked and branded finding that pigs raised outdoors and without reliance on products that Applegate is able to create a retail market for its antibiotics developed more back fat, leading to more moist antibiotic-free meats, adding sufficient value for consumers and flavorful pork. The company began sourcing Niman to justify higher prices.2 Ranch pork for its updated carnitas and saw sales double, Applegate says it ensures a stable supply of antibiotic-free despite raising the menu price by $1.00.

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