HOUSTON (AP) — “We woke up one day, and all the restaurants were closed. All of them,” said Felix Florez, the owner of Black Hill Ranch, a hog farm in Cypress. Just like that, the coronavirus pandemic changed his business overnight.
Florez — who also has his own restaurant, Cherry Block at Bravery Chef Hall, and co-owns Ritual and Blood Bros. BBQ — sells his naturally raised pigs mostly to high-end restaurants in town, whose concepts don’t translate well to to-go service. He had a handful of more casual restaurant clients who were selling to-go, but because their profits were so low, they were looking for the cheapest product possible, and that’s not Black Hill. What’s more, the ranch’s biggest customer was Florez’s own restaurant, Cherry Block.
So Florez picked up the phone and called everyone he knew, friends, family, and asked if they would consider using Black Hill for their personal meat needs, to tide him over while the crisis played out.
The Black Hill operations have changed a little since then, the Houston Chronicle reported. Some of its restaurant clients turned their spaces into small markets, where Florez was able to sell some of his pork at retail. Then H-E-B asked Cherry Block to be part of its ready-to-eat meal program, which helped both the restaurant and the ranch. He’s also started selling direct-to-consumer.
These new revenue streams are not easy to navigate for a purveyor used to selling wholesale. A retail order of meat for the general public has to be cut very small, put in branded packages and completely ready to cook at home. For wholesale, it’s rough-cut items delivered in large containers, and no one cares what they look like. Companies that specialize in retail cuts have machinery to package the product in a cost-effective way, but Florez’s staff of 16 is vacuum-sealing and applying stickers by hand.
His employees are exhausted and working overtime, and though the new business is keeping Black Hill afloat, Florez says it’s still losing revenue.
Patrick Bierschwale, the owner of Katerra Exotics in Katy, didn’t have many restaurant customers, but his business is affected nonetheless. He specializes in bison and also raises sheep, goats and cows, which he sells mostly at farmers markets in the Houston area. When the restaurants closed, more people started cooking at home and seeking him out.
Bierschwale has received many calls from people looking to buy a whole or half animal, spurred by concerns about reports of the national meat shortage.
“It’s mostly new customers who are being turned onto the local meat scene,” Bierschwale said. “They just did a Google search for ‘grass-fed beef Houston’ or something like that, and I popped up.” It’s often their first time buying meat in bulk, he added, and explaining to them what they’re getting is an educational process. “It’s gonna be nothing like you go buy at H-E-B,” he said.
Though he’s willing to sell in bulk to individuals, if he sells a whole or half cow to one person one week, he won’t have any meat to sell to his regular customers at the farmers market on Saturday. This in itself creates a shortage.
“If everyone will stay calm and buy what they need, we’ll be fine,” said B.J. McElroy, chief financial officer of 44 Farms, a cattle ranch in Cameron. “But if everybody starts panicking, then yes, we’ll be in trouble.”
McElroy has been getting concerned calls about the meat shortage, too. Consumers stocking up on more meat than they can currently eat brings further uncertainty to purveyors’ forecasts. McElroy wonders, when restaurants open back up completely, will those people stay at home because their freezer is full of beef that needs eating?
44 Farms’ direct-to-consumer retail sales have gone up 680 percent over last year; it’s typically only 5 percent of the company’s total sales. The other 95 percent of its business comes from restaurants.
“When the stay-at-home orders went into effect, our production came to a screeching halt,” McElroy said.
The team didn’t slaughter a single animal for an entire month. It resumed harvesting on May 5, as it’s been getting creative in finding opportunities to sell the product, filling in here and there. For example, Chris Shepherd’s Korean braised beef dumplings available at H-E-B are made with 44 Farms shortribs. It’s a drastic business-model shift, McElroy said, as the company is not used to acting as a stopgap. It’s now back up at 85 percent of its usual production with deals lined up through May, but June is still a big question mark.
Despite being hectic and uncertain, for Bierschwale and Katerra Exotics, business has been good: He is doubling his usual output. He’s able to do this because he always has a little more stock than he needs to for risk management (animals can die, get stolen or get eaten by coyotes). But it’s not easy. He needs to source more females to breed. He’s also the only full-time worker at Katerra, helped by six part-time employees. They’re grateful to have jobs and be making good money while also helping people get food on the table, Bierschwale said.
Many produce farmers have also seen sales increases. Jason Angell, owner of Angell’s Farmstead & Apiary in Shiro, was lucky to have only two restaurant clients. He farms just 1 acre and focuses on the Community Supported Agriculture (CSA) farm-share model. Orders for his CSA boxes have almost doubled since the beginning of the pandemic. With the boost in demand, he was worried about having to turn people down at first, but he’s been able to handle it by planting more. Scaling up is not easy on such a small farm, but Angell is just happy to have a job at a time when so many people don’t.
Plant It Forward, a nonprofit that empowers refugees to start their own sustainable farms, has a network of 13 farmers who work at eight different farms, comprising a total of 6 acres. Their CSA subscriptions amount to 80 percent of their business, with the remaining 20 percent coming from restaurants. When the latter closed, Liz Vallette, Plant It Forward’s president, started panicking. But she needn’t have worried.
Just like Angell’s, the demand for its CSA boxes doubled. The dozen-plus farmers now feed 500 families every week through those sales. “The farmers are making more money than they ever have, it’s an incredible silver lining,” Vallette said.
Going to the grocery store is not an appealing prospect right now, especially for the immuno-compromised. Physical stores are breeding grounds for germs, and the stress from shortages, and waiting days and weeks on end for delivery or curbside orders, has led consumers to alternate sources of food.
“People appreciate that they have a guaranteed share of vegetables each week,” Vallette said.
Stacie Gundermann, owner of Gundermann Acres in Glen Flora, recognized people’s need for a more contactless experience. The farm mostly sells wholesale to grocery stores and retail at three farmers markets in the Houston area. The team had been trying to sell farm-share boxes for years, Gundermann says, but they never really took off. Then the pandemic came along, and all of a sudden, they were a hit.
Verdegreens, a hydroponic grower in northwest Houston, also launched farm boxes to make up for the loss in revenue from restaurants, which made up between half and two-thirds of its business. It grows mostly leafy greens in greenhouses, such as lettuce, herbs, kale, collards and bok choy. The farm boxes combine the outfit’s own produce with that of other farms, which it sells at cost.
“(Many) people call us with requests for more contactless pickup, often people who are compromised in some way, who are fearful of venturing out to grocery stores,” said Billy Trainor, one of Verdegreens’ owners. “It’s been great to be able to provide them with an alternative.”
The boxes have more than offset Verdegreens’ restaurant-revenue loss; it just recently sold its thousandth box. The farm has even hired two additional employees just to manage the extra load. Given the success, Trainor anticipates it’ll continue offering them in the future.
Gundermann also sees this as a possibility for her own farm-share boxes, if interest stays strong.
There’s no guarantee that consumers will keep these new habits once the pandemic is over. Vallette is working very hard on retention at Plant It Forward. She hopes people will continue to see the benefits of a shortened supply chain and being connected to their food and their farmers.
But for now, at least, the shift in the way we eat is helping some small farmers and ranchers, who too often struggle with razor-thin profit margins.
“I appreciate that everyone is looking for the local guy,” Bierschwale said.