When one Sustaining Customer = staying alive
Prime Future 251: the newsletter for innovators in livestock, meat, and dairy
Who are the most intriguing & compelling companies to watch in meat, poultry, or dairy? It could be production, processing, or further processing — any interesting company in the physical value chain of meat and dairy.
Do me a huge favor – hit reply to this email with the company(s) that come to mind. Bonus points if you include your rationale 😉
“There was a defining pattern in all of the rocketship-to-success examples: find a fast-growing category, secure the fastest-growing player within it, and don't let go.
Having one dominant, dynamic, rapidly scaling customer can be the difference between staying a small business and becoming a relevant player…if they’re a great customer.”
That was last week. This week, my intent was to take the counterpoint and highlight all the reasons that in every other situation – outside of a customer of Walmart or McDonald’s caliber – having only one mega customer is a terrible, no good, very bad idea.
That intent was derailed entirely when I remembered that having one mega customer is actually the general rule for the vast majority of livestock production companies.
It's true for commercial cattle feeders, dairies, and independent hog producers. By definition, it’s true for contract poultry growers or corporate-owned hog production.
So yeah, that whole one customer phenomenon isn’t much of a phenomenon in livestock — it’s the default scenario at the handoff transaction from production to processing.
I started asking around about the reasons most production companies have one large customer, and if there are any reasons to think that model might be changing, or if this is a core, fundamental feature that’s unlikely to change until the very nature of commodity production changes. (aka it ain’t happening, sis)
The responses I received back reminded me of an SNL monologue by my favorite comedian on the planet, Nate Bargatze: