Walmart takes an equity stake in a premium beef producer

Walmart is acquiring a minority stake in a rancher-owned, premium beef company to expand its sourcing of sustainable meat, the retail giant announced Wednesday.

Terms of Walmart’s deal with North Platte, Nebraska-based Sustainable Beef LLC were not disclosed. But Walmart said the transaction would give the retailer representation on the beef company’s board.

Walmart’s investment will help Sustainable Beef open a beef processing facility at its Nebraska headquarters. The facility is expected to break ground next month and open by late 2024 and will hire more than 800 workers, the company said in a statement.

“At Walmart, we are dedicated to providing high-quality, affordable beef to our customers, and an investment in Sustainable Beef LLC will give us even more access to these products,” Tyler Lehr, Walmart’s SVP of merchandising for deli services, meat and seafood, said in a statement. “We know Sustainable Beef LLC has a responsible approach to beef processing, one that includes creating long-term growth for cattle ranchers and family farmers. This investment provides greater visibility into the beef supply chain and complements Walmart’s regeneration commitment to improve grazing management.”

Sustainable Beef LLC began early in 2021 to focus on vertical integration of beef production, according to an agricultural industry report. The company grew out of supply chain disruptions caused by the pandemic. The new processing plant has a goal of processing 1,500 head of beef per shift, per day, the report said.

The processing facility, located atop a city wastewater lagoon, will cost at least $325 million, the report noted.

“We set out on a journey two years ago to create a new beef processing plant to add some capacity to the industry and provide an opportunity for producers to integrate their business of raising quality cattle with the beef processing portion of the industry and do it in a sustainable manner,” David Briggs, CEO of Sustainable Beef, said in a statement. “During this journey we found that Sustainable Beef and Walmart aligned on continuing to improve how we care for our animals and crops and provide consumers the positive experience of enjoying quality beef.”

Sustainable Beef will work with producers on sustainability action items such as grain sourcing and grazing management, Bentonville, Ark.-based Walmart said.

In April, Walmart published an animal welfare roadmap, stating that the retailer aspires to “meet increasing demand for affordable protein while improving animal welfare … .”

Among the action items, Walmart said it would seek suppliers who responsibly use antibiotics on their livestock.

Under the new relationship with Sustainable Beef, Walmart said there will be “a consistent approach to antibiotic use and reporting across herds” in line with those previously stated animal welfare goals.

In June 2020, Walmart opened a case-ready facility in Thomasville, Ga., part of the retailer’s then-new efforts to create an Angus beef supply chain.

Construction on the 201,000-square-foot facility began in August 2018. It distributes Angus steaks and roasts to 500 Walmart stores in the southeast, the company said at the time. The facility offers customers “unprecedented transparency” on the supply chain, Walmart said.

“Our new Angus beef supply chain is a perfect example of Walmart’s dedication to bringing customers high-quality food at a great price,” Scott Neal, Walmart’s SVP of meat, said in a statement at the time.