When a massive chain of fast food restaurants advertises ‘Top Grade Sirloin’ or ‘100 percent Angus Beef’ it is somewhat deceptive – and nowhere near the quality of beef provided by Premier Proteins. Premier Proteins is a supplier of ultra-high quality meat to the retail and food services sector. It specializes in Wagyu/Premier American Kobe Beef®, Japanese Kobe beef and Premier American Grass-Fed Beef® along with Berkshire pork. Business in Focus spoke with its, owner Timothy Haas, to learn more.
In Timothy Haas’ opinion, what separates Premier Proteins from its competitors is knowledge and quality. “It has to do with product knowledge and knowledge of marketing needs,” he shares. “There are a lot of ranchers or farmers that want to sell meat; everybody thinks they can sell meat, but that is not necessarily the case. The programs we have really are truly top of the line, so it’s about quality, service and integrity of the program.”
Within its Red Top Farms® line, Haas says that the Berkshire pork is one of the highest quality products out there, and the company will be creating more volume of that product.
Premier Proteins is now in its tenth year. It started with Wagyu beef as a main item, and later, in 2007, it incorporated Berkshire pork with a line that is from pure Berkshire hogs. In 2008, it added premier American grass-fed beef. In 2010, a cross-breed pork variety called Red Top Farms® Berkshire pork was included in an already impressive portfolio of products and a few new products are on the horizon.
Wagyu American style beef comes from one of several lines of Japanese breed of cattle. “There is a black line and a red line,” Haas explains. “The black generally does better than the red when it comes to difference in quality. Two of Premier’s lines are both USDA prime or higher. The fat content is physically different as it has higher amounts of unsaturated fats. Chemically it is more like chicken fat. That makes it a healthier meat.”
Wagyu meat, while renowned for its taste and tenderness, is the healthiest form of beef known. Large scale studies are being done in institutions such as Texas A&M, which are proving that Wagyu beef is the healthiest beef on the planet and even healthier than grass-fed beef.
An association has been found between lower rates of cardiovascular disease and consumption of higher levels of monounsaturated fatty acid in the diet. Studies at Washington State University have shown that Wagyu beef has about a 2:1 ratio of monounsaturated fatty acid to saturated fatty acid compared to British cattle with a 1:1 ratio.
This is a rare form of beef, and its small volumes are a tiny part of the industry. The whole year’s production for Premier Proteins could probably be processed in a major U.S. beef plant in one day. Not every city even has access to this kind of beef. Toronto is a city of over three million people, and it only has one butcher shop that distributes it.
The U.S. is the leading market for Premier Proteins, but it also exports to Canada, Mexico, the Caribbean, Central America, Japan, Hong Kong, Thailand, Taiwan, Indonesia, Malaysia and Korea. Europe will be the next phase of expansion, and it has also sold some product to the Middle East, but the logistics do not always work in its favour.
“There are a lot of restrictions, depending on where we sell, especially with beef,” says Haas. “For example, in China, you cannot send U.S. beef, and that has been the way of things for some time. China is very protectionist, and Russia is very political, and that’s why I stay out of both of those countries.”
Premier Proteins’ primary customers are U.S. retailers and distributors. It sells to restaurant groups and distributors. Haas, when asked about major fast food chains, responded that the lowest end user to which the company would cater is something akin to an Applebee’s. “Unless McDonald’s wanted to do something very short term as a special, it would not happen. Their volumes are way too large.”
The two plants that it contracts out to are SQF certified (Safe Quality Food) with systems in place to ensure and maintain quality meat processing. The sites are also subject to Hazard Analysis and Critical Control Points, a system that focuses on identifying and preventing hazards that could cause food borne illnesses.
With any business, there are issues with which to contend. “The problem with us is that we have hit a ceiling on our prices, but our costs keep going higher. The commodity market has not gone up high enough to push us through that ceiling. Costs go up, but prices do not and that has been our biggest challenge over the last two to three years. Our margins are as tight as they have ever been.”
PED, or Porcine Epidemic Diarrhoea, was another tough challenge to deal with in 2014. This virus hit the hog industry across the world and killed young piglets which, in turn, created a shortage of hogs. For Premier Proteins, it meant the loss in sales of several millions of dollars, and for the industry as a whole, it may have been in the billions.
“We are a small company, and we have a set overhead. When sales go down, that makes it tougher on us. In fact, this is the first year our sales went down just slightly less than 1 percent, but we would have been up about 20 percent if it wasn’t for PED. That’s pretty significant. But, by end of May that will all be behind us and it will be on to greener pastures.”
As for the future of the industry, patterns of the past are indicative of future trends. In the 1990s and 2000s, food became quite cheap and restaurants, instead of lowering prices, increased portions. Then, restaurants realized that by increasing portions, the prices could go up, and more money could be made. Now things are changing again, due to a number of variables.
“Food has become extremely expensive, which puts pressure on portion sizes,” explains Haas. “This helps us because they are not expecting to produce twenty ounce pork chops. Also, I think that people understand that you get what you pay for, and whereas before it was cheap, now quality is coming back. People are seeing value in our high-end pork.” Three to four years ago, people did not fully understand high-end pork, but now there is certainly a market for it.
In the end, as Haas says, it comes down to three things: quality, integrity and service. There are farmers and suppliers that just offer grass-fed beef or Berkshire pork, and others may offer Wagyu beef exclusively. Some are good at what they do, and some are not. “We are good at everything we do, and you can put it all on one pallet and save logistically. We create programs of high-quality meats.”
Not coming to a fast food restaurant near you!