The defensive get disrupted.
Prime Future 53: the newsletter highlighting trends in livestock & meat
The big idea last week in Where's the Honeycrisp of the meat case? was:
Most genetic progress in livestock centers around live performance, not end product outcomes that the consumer can see, taste, and experience directly. We usually talk progress in terms of live performance metrics: Feed conversion. Growth rates. Calving ease. Hatchability. Outside of decreasing cost, none of these are attributes you can see at the meat case. So where’s the meat case equivalent of the Honeycrisp apple?
And there were some big opinions about that! Here are a few interesting responses:
"It will take some time and $$ and some smart Elon Musk thinkers and genetic engineers to move us in that direction. Wagyu and Akaushia are examples to me of 'Honey Crisp of beef'. While many of us have paid the big bucks for a ribeye from these, few have tried a hamburger. I have always thought of hamburger as being the product of cull beef and dairy cattle and very little difference in taste except the 90/10 being the least tasty; however, the first time i had hamburger from Wagyu and Akaushia i was amazed at the awesome taste experience!"
“I totally agree with the sentiment however on the protein side I think there is one honeycrisp...the rotisserie chicken.” This is an interesting point. I was thinking about product innovation from a genetics perspective specifically, but perhaps it's true that the primary innovation that the consumer experiences directly is in further processing. Increasingly meat, especially chicken, is more of a ‘blank canvas’ for further processing than anything else. But what about the 50% of chicken sold fresh, which is an even higher % in beef & pork?
"The beef industry has made great strides in presenting a more consistent product over the past 30 years. We may not yet have created the Honeycrisp, but at least the consumer no longer fears that 1 steak in 5 will turn out to be a Granny Smith inside." This point about increased consistency is not insignificant. But in a what-have-you-done-for-me-lately market, is 'you're way less likely to be disappointed' really the message you wanna double down on? As critical as it is, consistency is a table stakes value proposition...not a market opener or grower.
Before we move on, know that I love your feedback and comments, even pushback.
The pushback on this topic could be summarized as dismay with a heaping helping of industry self-righteousness from those compelled to verbally defend the status quo against the words of a heretic. Those defensive responses got me thinking about disruption….
What are characteristics of markets that are ripe for disruption?
high margin
mediocre product
no branding
poor customer experience
Let's add another characteristic to this list: defensiveness.
The defensive get disrupted.
It's true, isn't it? At an individual level, it’s true of the person that is more interested in defending past performance rather than continuously learning. It's true at a company level, when defending existing business happens at the expense of preparing for the future.
And it's true at an industry level. This week industry leaders shared articles on social media about the ‘big win against alternative meat’ as states pass bills to regulate the definition of meat. Seriously, do we really think the best defense in a dynamic market is to take the protectionist path and regulate our way to long term relevance?
There has to be a better way, a longer term path to be carved to sustained competitive advantage. Like, I dunno, just go make the product better, whatever better means for your specific market. Doesn’t increased value creation via innovation sound like a higher probability move in the long term game?
But 'disruption' is a word that makes me cringe. It's wildly overused and glamorized, and most 'disruptions' aren't actually disruptive. They are incremental. I haven't seen a good definition between the two types, but I kinda think of it as incremental innovation helps a customer do this thing in way that is better/faster/cheaper while disruptive innovation changes the thing to be done. That's not a perfect working definition tho. Maybe the distinction is more about magnitude of impact.
Regardless, when it comes to innovation I think curiosity is the real driver. The smartest people I know are the ones who ask questions they don't know the answer to, or ask new questions about what they do know….there’s an openness, a constant updating in their mental model as they take in new information or assimilate existing information in new ways.
They also play the long game. In “The Infinite Game”, author Simon Sinek draws the contrast between finite games which have clear rules and a defined start & end, like a football game, and infinite games with no clear end because the goal is to earn the right to continue playing the game, like business.
There are pockets of the meat industry playing an infinite game and leaning all the way into the hard work of innovating along every possible dimension - market, product, brand, supply chain, customer experience, and so on. Like Tyson's announcement this week around their Chairman Reserve premium pork brand now selling individually wrapped tomahawk chops in Target. Like OSI working with Impossible Foods as a manufacturing partner. Like the new McClaren Farms brand in Walmart.
And then, there are pockets of the industry that are busy metaphorically explaining how an apples-to-cattle comparison doesn’t even make sense. They are relying on short term advantages that could easily shift away, treating the game as a finite one with a foregone conclusion in their favor.
Let's see which of those groups ends up with better outcomes as the game plays on…
Prime Future is where I learn out loud about the big dynamics around livestock & meat. I'm on the Merck Animal Health Ventures team but this newsletter represents my personal views only.
Prime Future Summary
You can get the first 47 editions of Prime Future in 1 PDF here, check it out: