New player eyeing to break in the U.S broiler duopoly with improved breed
When it comes to the poultry meat industry, no bigger names than Cobb and Aviagen come to mind. They are […]
When it comes to the poultry meat industry, no bigger names than Cobb and Aviagen come to mind. They are both multibillion dollar genetics companies that have utterly dominated the chicken meat market in the the U.S for many decades, with no stopping in sight. In fact, the two of them together comprise a whopping 99% of all poultry products consumed in America.
However, according to Matt Wadiak, former cofounder and COO of Blue Apron, it was high time a third player got in on the competition.
In fact, he raised $10 million as a Series A investment of his new company, Cooks Venture (2018), in order to further develop a new breed of chicken, which he believes will be better for the birds and tastier than whatever’s available on the market right now.
Wadiak’s Cooks Venture farm is quite extensive, covering 800 acres of land in the Ozark foothills of Northwest Arkansas. It is the only vertically integrated chicken producer in the country that has an independent genetics operation—meaning it breeds through selection, not genetic engineering—and has no links to Cobb or Aviagen.
“We have over 100,000 animals that we’re feeding just to produce genetics. I don’t monetize any of that,” Wadiak says.
Looking at the Wadiak’s competition, saying it is a tall mountain to climb would be understating things. Tyson-owned Cobb and privately held Aviagen have cornered the $28 billion market since the 1980’s through their top two best selling broiler breeds—the Cobb 500 and the Ross 308 respectively. According to Cooks Venture, these chickens were not only easy to grow but cheap as well as they sacrificed quality aspects for better pricing. The meats were known for not having as many omega-3s as they should and the breast meats were prone to a woody texture.
In 2017, when Blue Apron’s highly anticipated IPO failed to garner appeal, Wadiak stepped down as COO and decided to re-envision poultry; America’s most consumed meat, through his new company Cooks Venture, that he bought for an undisclosed amount.
“I thought I’d put my money where my mouth was. I’d been preaching for a decade about changing agriculture,” said the 42-year-old.
However, this came with heavy financial challenges, as not only was a team of scientists hired, the operation itself came with its own plant and facilities such as hatcheries, research labs and the poultry houses. Additionally, Cooks Venture sells its non-GMO certified, pasture-raised chicken online and through e-commerce retailers, meaning that Wadiak needed a CFO, a sales team, human resources and support staff, staggering the company costs further.
“I was getting hundreds of thousands of bills every single week out of pocket,” he says. “It only works if there’s so many birds per week that are going out the door. And it’s a high number to get to that.”
After cashing out of his shares at Blue Apron, Wadiak was convinced that his new venture can only be made possible with the help of investors. For some entities like SJF Ventures and impact investor Larry Schwartz, it was easy to get on board, as they facilitated the Series A 1o million $ investment mentioned earlier. For others however, more convincing was needed.
“I’ve met with dozens and dozens of agtech investors who just don’t get it. Starting a Blue Apron kind of company doesn’t require any real cash. We started that business with less than a million bucks and never really burned cash for many, many, many, many cycles,” Wadiak says. “You don’t have a business that has negative working capital. Customers pay. You pay your vendor 60 days later.”
Unlike his time at Blue Apron, Wadiak wishes to play a more focal role in directing the company, as he remains adamant on staying the largest shareholder. He believes that success lies in allowing the scientists and experts to shine. In fact, the company employs Richard Udale, a global authority on slow growing breeds used in the modern chicken industry.
In collaboration with current Cooks Venture executive VP Blake Evans; grandson of poultry breeding enthusiast Lloyd Peterson, they created the new breed, labelled “Pioneer”. Improved leg health, bone density and immune systems are one of the hallmarks that differentiates this breed to the aforementioned commercial powerhouses.
Another ace up their sleeves is Cooks Venture’s partnership with FoodID, cofounded by Bill Niman. The company’s objective is to provide the meat industry’s first platform to comprehensively test the presence of antibiotics and other food adulterants. This use of antibiotics in animal agriculture has always been a volatile topic, considering 70% of operations still use them and are directly responsible for leading to resistance in humans.
The supply chain of the poultry industry remains ambiguous to the use of marketing terms such as “organic” or “antibiotic-free”, and even Niman has stated that “deceit and deception tactics” are prominent in the sector, “regardless if 5% antibiotics were involved, or 55%”.
With the collaboration agree with FoodID, Cooks Venture is now the only company that can independently validate that it never uses antibiotics and that it provides verified non-GMO feed to its birds.
“After Blue Apron, Matt saw an opportunity to step in and become a farmer,” says Niman. “But he doesn’t do anything small.”
Source: https://www.forbes.com/sites/chloesorvino/2020/07/22/blue-apron-cofounder-raises-10-million-in-funding-to-breed-a-better-chicken/#5c53bb701f0d
