Farming in Flux
In the last five years, food-sourcing issues like traceability, sustainability, and quality have moved from the periphery of foodservice operations to the white-hot center. Fast-food titans like McDonald’s have pledged to source better ingredients, while emerging fast casuals have grown around the mission to serve fresh, and often local, fare.
Consumers are more educated about what they eat, and their involvement is apparent in how restaurants build their menus and market their concepts. Less visible to the average consumer, however, is the agriculture side of the relationship between foodservice and food producers.
For better or worse, their fates are intertwined: Both are faced with mounting costs, food safety concerns, and higher demands on the quality of their food. But while young entrepreneurs and venture capitalists are flocking to restaurants, other Millennials are leaving their multi-generational farms in favor of greener pastures with more economic certainty.
Building stronger relationships and working through these problems together, foodservice and agriculture stand to emerge even stronger.
The first thing one needs to know about the state of agriculture today and its importance to the restaurant industry is that the two are no longer begrudging partners. These days, they play for the same team.
“I don’t call them a customer, and they don’t call me a vendor. We’re partners,” says Jeff Tripician, general manager of Niman Ranch, in discussing the company’s foodservice clients. A natural meat processor comprised of small, family-owned livestock producers, Niman Ranch counts the likes of Shake Shack, Panera Bread, Au Bon Pain, and Burgerville as partners, as well as Chipotle, which has sourced pork from it since 2001.
Rancher Bill Niman founded Niman Ranch, a network of more than 725 farms, in Oakland, California, in 1969 (he left in 2007, a year after Chicago-based Natural Food Holdings bought a majority stake). Niman’s protocols for all farms within the system pull from traditional husbandry practices (animal feed is vegetarian, no antibiotics are used, pens must be a certain size, etc.), but when he founded Niman Ranch, he was decades ahead of the curve.
“In the past, there were a few very progressive partners—Chipotle, people like that. They were way out there in their thinking, and now other people are paying attention to that and saying we want that, too,” Tripician says. “We’re seeing this interest at a level that is unprecedented.”
Indeed, while Chipotle has been under intense scrutiny after a spate of food-borne illnesses, farmers and restaurants alike praise the brand for its trailblazing approach to sourcing higher-quality, fresh foods.
Bob Benenson manages communications for FamilyFarmed, a nonprofit that started as an environmental advocacy group but soon adjusted its mission to promote local, organic foods and provide support and training to farmers. He says that although some critics might blame the “fresh” food for Chipotle’s woes, the brand and other fast casuals shouldn’t try to put the genie back in the bottle.
“[Chipotle] set a pattern. They also put a big target on their back by confronting conventional agriculture and saying local and small is better,” Benenson says. He adds that the tide is changing when it comes to sourcing local, high-quality ingredients—although not as rapidly as he and others at FamilyFarmed would prefer—and restaurants are helping move the needle.
In 1987, when Rick Bayless opened his first restaurant, Frontera Grill, in Chicago, he wanted to replicate the system he had studied in Mexico, in which restaurants went to the local market for fresh ingredients. Back then, Bayless could find nothing—at least not in the quantities he needed—within the state of Illinois. As Benenson tells it, this led Bayless to do outreach within the agriculture community and find pioneering farmers who were producing superior products. Other Chicago chefs also carried the mantle, including Paul Kahan, Sarah Stegner, Carrie Nahabedian, and the late Charlie Trotter.
“In the Chicago area, it was actually restaurants and chefs who played a huge role,” Benenson says. “Farm to table went from a little niche … to a trend to a way of cooking, a way of doing business that has become so common that if you talk to some of the original farm-to-table chefs … they’ll say they don’t even use [the term] anymore because it would be cliché. It’s just the way we do our business.”
In those early days, Bayless would lend local farmers money to help make ends meet, and eventually this practice evolved into the Frontera Farmer Foundation. Since 2003, this nonprofit has raised money and awarded development grants of about $10,000–$12,000 to small, sustainable farms in the Midwest.
Casey Cora, media director for Bayless’ Frontera Grill, XOCO, and Topolobampo, says that after this summer’s round, the Frontera Farmer Foundation will have raised about $2 million in its 13 years of operation. The five-person board that reviews the grant applications is diverse—composed of a chef, a farmer, a social entrepreneur, a former grant winner, and a nonprofit expert—to ensure the farmers’ proposed projects actually become a reality.
“People say it’s been life-changing for their business. Just by virtue of what they do, it’s hard to sock away money, and so if you get a $10,000–$12,000 shot in the arm for this project, that sets them ahead a couple of years in doing what they want to do,” Cora says. “There have been a number of farms—I guess you could call ‘success stories’—that have been put in touch with new opportunities and restaurants.”
The new face of farming
Whether in the form of grants or business partnerships, restaurant support is vital to the future of agriculture. Not only have changing weather patterns wreaked havoc on crop and livestock yields, but farmers must also contend with diseases like last year’s avian flu. Combine these challenges with the unpredictable nature of agriculture and the hard manual labor required, and it’s no wonder the average age of farmers in the U.S. is 57.
According to the U.S. Department of Agriculture, that figure is up from 55 five years ago. In that same five-year period, the number of farmers under age 25 has decreased by 20 percent while farmers 75 or older have increased 30 percent in their ranks.
“If you’re a 20-something-year-old and you just got your ag degree from Iowa State, … would you like to take loans from the bank, work really hard, and then bring your livestock to market, and maybe lose a lot of money? Maybe make a little?” Tripician says. “You don’t really know because that’s determined on the day you come to market. Or you could go to the city and get a job doing something else. Most people were saying they’d go to the city, unfortunately.”
Niman Ranch is working to reinvigorate its farming base so that prospective farmers can earn good livelihoods. Whether through a contract or a handshake, farmers who follow Niman Ranch’s guidelines are guaranteed they will fetch the premium price for their animals. If feed or field prices skyrocket, Niman Ranch has the funds to make up the price difference so the farmers don’t take a hit.
“We want those farmers to do it the right way—to not cut any corners or break any rules. We don’t want them to worry about being paid,” Tripician says. “We want them to worry about quality.” A decade ago, the average age of a Niman rancher was 67; now, Tripician says, it’s down to 47.
As counterintuitive as it may sound, the last recession might have helped infuse agriculture with some much-needed young blood. Although much of the economy has improved, the altered landscape has led the Millennial generation (ages 20–36) to rethink their future plans.
“I really think the Great Recession reordered a lot of things in our society,” FamilyFarmed’s Benenson says. “Bad times create a lot of innovative and entrepreneurial energy; people have to fend for themselves. … What you see is a lot of young people going into food entrepreneurship.”
Benenson says Jim Slama, FamilyFarmed’s founder and president, had an epiphany years ago when he was driving through Illinois and saw all the “gorgeous black soil” being used for corn. Most of it was going into either cars or cows, with only 5 percent reserved for actual human consumption in Illinois. The new generation of farmers, Benenson says, don’t want to grow corn and soy; they’re interested in growing food.
Entrepreneurial, socially minded Millennials may be attracted to farming, but many lack the capital to buy land and equipment. At the same time, young people from farming families who understand the full commitment of such an endeavor are choosing not to continue the family business, even though they have the means and materials.
Labor—both in terms of cost and the physicality of farming—is another major concern. “There are few ways to automate farming until you get to the very large scale, and even there, it’s still very labor intensive. I think that’s the biggest challenge for most farmers,” says Dan Long, cofounder and chief culinary innovator of Mad Greens, as well as board member with the Colorado Fruit and Vegetable Growers Association. “A lot of people get into it without really thinking about how hard the work actually is. And then, obviously, the pay is another big issue.”
Despite these difficulties, emerging fast-casual and Fast Casual 2.0 brands, as well as established quick-service mainstays, are doing more to reach across the supply chain to farms and ranches than in decades past. Across the board, foodservice is interested in boosting the quality of its offerings, a shift that has been largely driven by more educated consumers.
“You can’t take the guest out of the equation. At the end of the day, the guest is the one that actually supports the local farm, not the restaurant,” says Mario Del Pero, cofounder and CEO of Fast Casual 2.0 Mendocino Farms. “We want people to understand that better ingredients do cost a little bit more, but actually taste better and, for that matter, are far better for you. But that education is secondary to taste.”
Since Del Pero and his wife, Ellen Chen, opened the first location, Mendocino Farms has worked with small and medium-size purveyors like Scarborough Farms, which supplies produce, and Drake Family Farms, which supplies goat cheese. Compared with 2003, when the concept opened its first location, more small fine-dining establishments and fast casuals are committing to buying local, sustainable ingredients. Del Pero says the taste discrepancy has been a giant leap forward for the movement; customers are starting to notice the difference in the quality of the food they can get at limited-service restaurants. At the same time, guests are also more interested in transparency and curious about the origins of their food.
“We continue to see nationally that people are caring for the provenance of where their food comes from,” Del Pero says. “We all talk about, ‘Well, it’s just the foodies,’ [but] I believe that everyone has a little bit of foodie in them—it’s just at different levels.”
Nowadays, it’s not uncommon to see the names of small, family-owned farms and ranches included on menus. But Frontera’s Cora says he can remember a time not so long ago when customers would scratch their heads at such mentions.
Such shoutouts to farming partners not only attract customers, but also can promote the farms themselves and the exceptional quality of the restaurant’s offerings. “We’re on well over 5,000 menus across the country, and we’ve never paid one penny,” says Niman Ranch’s Tripician. “It makes sense. If you’re going to spend the premium on our product, you’d be kind of nuts to do that and not tell them it’s ours.”
At the request of its partners, Niman also provides restaurant staff with handouts and training so that they can better answer questions guests may have about the ingredients.
Boston-based Au Bon Pain, which serves soups, salads, sandwiches, and wholesome snacks, uses Niman Ranch to source its beef and pork products, and works with other farmers to produce its antibiotic-free chicken and turkey. Katherine See, executive chef at Au Bon Pain, sets product standards with the purchasing department early on to help the brand establish long-term relationships with reliable suppliers.
While See comes from a restaurant background, she also has a master’s in nutrition, with a focus on agriculture. As a result, she has watched the system evolve with smaller operations and more community-sponsored agriculture (csa) outfits.
“Just in the last couple of weeks, I have been talking with some CSAs and smaller farmer suppliers who are young. It’s not your traditional one supplier, one farmer; it’s usually a consortium of five or six young people in their late 20s or 30s who all have a different background that helps with farming,” See says. She adds that their specialties range from agriculture to supply chain to marketing. “They’re not approaching it one-sided. They’re approaching it knowing all the other factors that need to work.”
Mad Greens’ Long has witnessed a similar grassroots movement with small, wholesale farmers’ markets seeking out foodservice partners. In the brand’s home state of Colorado, Long has seen a number of agricultural programs—almost like job fairs—where restaurants have an opportunity to visit local purveyors pedaling everything from granola and lettuce to buffalo meat and cheese. In these settings, businesses can find products they didn’t even know existed, and Long credits the farm-to-fork movement for building the infrastructure that allowed these agriculture grants and fairs to sprout up.
Restaurants with a limited number of stores in a concentrated geographic area might find viable partners in small operations. But as they grow, working with smaller producers becomes trickier.
When Mad Greens started, Long says, the brand was able to work with small purveyors and focus on applying fine-dining techniques to the fast-casual environment in an affordable, quick way. But once the brand expanded beyond Colorado and its number of stores grew, the system required some retooling.
“How do you bring these smaller purveyors forward into a more mainstream environment? When we only had one or two stores, it was relatively easy. As we grow and start having 15–16 stores in a given region, that becomes much more difficult to manage. It limits, to some extent, the size of the purveyors we can use,” Long says, adding that for some specialty products, volume isn’t as much of a barrier, but for main items like spring mix or spinach greens, it’s essential. “Our goal with using local products is local, not necessarily small. There are several benefits to local that have nothing to do with the size of the operation.”
Long’s viewpoint represents a small divide within the better-farming movement. Some companies, like Mad Greens, build new relationships in every market they enter to ensure the food is local, while others prioritize a more streamlined supply chain, regardless of location.
To that end, Au Bon Pain’s See points out that traceability becomes immensely simplified when a restaurant sources each product from a single producer.
At the same time, a consolidated supply chain presents risks for both restaurants and farmers. If a crop fails one season, and the restaurant only worked with one producer, it could face crippling losses. Similarly, a producer that grows crops for only one brand could risk losing business should the menu change or the restaurant lose business.
Cora says Frontera Grill never wants a single farm’s output to be monopolized by the restaurant. “We don’t want to be the main buyer from one farm,” he says. “In other words, we don’t want to have somebody growing 80–90 percent of their crops just for our business. I don’t think that’s sustainable.”
For example, Indiana-based Gunthorp Farms, which had provided pork and turkey to Frontera Grill, started raising chickens exclusively for the restaurant. The product was excellent, but Frontera did not want to be its only chicken customer. The partners came to an understanding that purchaser diversity would be mutually beneficial, and now Frontera Grill accounts for about 40 percent of Gunthorp’s poultry volumes.
From niche to mainstream
The new age of agriculture, much like the new fast-casual scene, offers no one-size-fits-all model. Instead, restaurants are encouraged to build their own system based on their core values, prices, size, and growth plans. Some choose vertical integration; New York City–based Dig Inn even plans to purchase its own farm to bolster its operation (read more on Page 62). Others work with a variety of farmers and ranchers depending on their specific needs and locations.
Regardless of the form it may take, the future of foodservice is inextricably tied to its relationships with agriculture.
Del Pero says that in the past, these two industries have fallen into adversarial roles. But he emphasizes that such conflict is completely unnecessary.
“The old mentality of Restaurant 101 is … I want the best price, the best quality, and I’m going to go to the broadliner and I’m going to have everyone bid for my business. Going directly to the source, it’s a completely different conversation,” he says.
He offers an example from a few years ago involving Scarborough Farms, a company that has supported other fast casuals, like Mendocino Farms’ Los Angeles neighbor Tender Greens. The cost of its premium field greens was above the market price, so Del Pero asked the farm if there were ways to shave off the cost. Scarborough followed up with its own solution: to package the greens in a bigger box and share in the price reduction. It was an ideal solution. Del Pero notes that this is a far cry from some farmer-restaurant relations that involve ultimatums and threats. In fact, Del Pero adds that he regularly grabs lunch with Scarborough Farms owner Jeff Stein to discuss things coming down the pipeline from both sides.
Whether informing farmer partners of new menu items or estimated volumes, regular communication makes the two parties a united team rather than opposing sides. In a way, fast casuals can be easier partners for farmers than a single fine-dining restaurant because their menus change less frequently and because they order in bulk.
“Specifically with Tender Greens and Mendocino Farms, we know the items and the volumes they will be ordering day in and day out. That cuts down on waste both in the field and the warehouse,” Stein writes in an email. He adds that these relationships benefit Scarborough Farms, as well. “It helps us evolve from a farm that is good at growing a few things to a partner that can be a part of future growth.”
And while small and medium-sized farms might best exemplify the ideal of this agriculture-restaurant dynamic, larger operations are taking note, too. Last year, Perdue Farms—one of the largest chicken, turkey, and pork processing companies in the country—bought Niman Ranch. The purchase could have worried foodservice partners and consumers alike that Perdue, a massive operation, was going to change Niman.
But it didn’t happen, Tripician says. He adds that Jim Perdue himself said that the company was hoping to learn from Niman Ranch’s operation and its culture.
“We’re a niche company; they’re a mainstream company,” Tripician says. “Is that a very visible sign that the middle of this industry is reading the tea leaves, listening to consumers, and saying we need to go in that direction? That is exactly what that is.”
A flexible future
Like any industry, agriculture faces challenges ahead—both known and unknown. Operators can help their farmer partners through uncertainty by committing to communicative relationships as Del Pero does, supporting grants given by nonprofits like FamilyFarmed and Frontera Farmers Foundation, and promoting the value of more premium ingredients to its customers.
Mad Greens’ Long says it also helps to be flexible.
“It’s trying to be flexible with your own needs and then also having that conversation, having that relationship with the farming community and understanding what their challenges are and what their needs are,” Long says. “You have to each trust each other and figure out how you make this work in an honest way so that everybody can win and everybody can be successful. It doesn’t help us if we drive such a hard bargain that it puts them out of business. That’s in nobody’s interest.”