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Our globalized economy has created a food system that is controlled by a few large players. Combine this with publically traded companies that require higher and higher returns for their shareholders, and you have the perfect recipe for misaligned incentives. This never ends well for the consumer.
Chloe Sorvino knows this world well. She leads coverage of food, drink, and agriculture at Forbes. From her time at reporting for Forbes, Chloe has unique insight into the financial side of the food world that most of us don’t get to see.
Chloe’s debut book is a compilation of everything she’s learned from talking to some of the wealthiest meat barons in the world. Her book Raw Deal: Hidden Corporate Greed and the Fight for the Future of Meat is out now.
My co-host, James Connolly, chats with Chloe about some of the stories in her book, and they cover:
How the meat industry has been underwritten by financial institutions and controlled by four primary companies
- The concept of monopsony
- Collusion in the meat industry and Agri Stats
- The rise of JBS, one of the world’s largest food companies
- The financialization of the plant-based meat industry
Resources:
Raw Deal: Hidden Corporate Greed and the Fight for the Future of Meat
Fields of Gold: Financing the Global Land Rush by Madeleine Fairbairn
The Dorito Effect by Mark Schatzker
The Wizard and the Prophet by Charles Mann
Connect with Chloe:
Website: Chloe Sorvino
Twitter: @chloesorvino
Instagram: @csorvino
Episode Credits:
Thank you to all who’ve made this show possible. Our hosts are Diana Rodgers and James Connelly. Our producer is Emily Soape. And, of course, we are grateful for our sponsors, Patreon supporters, and listeners.
If you’re ready to take your support for a nutritious, sustainable, and equitable food system to the next level, join my Global Food Justice Alliance community on Patreon. You will have access to ad-free podcasts, exclusive videos, a discussion community, and much more. Go to sustainabledish.com/join to support my work.
Thanks to our episode sponsor, Annmarie Skin Care, a company committed to creating the best natural skin care possible and doing it sustainably. While I’ve always been picky about what goes on my skin, this product goes beyond that, feeding the skin with high-performance seed oils, antioxidant-rich botanicals, and synergistic plant stem cells that deliver skin-supporting nutrients. My skin feels fantastic, and these products smell so good.
For a limited time, you can receive 30% off your order at sustainabledish.com/skin with code DIANA30.
Quotes:
“The alternative proteins that are trying to take a bite out of “big meat” and doing a horrible job at doing so, by the way, are underwritten by the same financial institutions.” – Chloe Sorvino
“Food maybe shouldn’t have the same amounts of returns or profits that other companies like a tech, cloud, SAAS startup would have.” = Chloe Sorvino
Transcript:
Diana Rodgers, RD
Welcome to the Sustainable Dish Podcast. I’m Diana Rodgers, a real food registered dietitian, author, and sustainability advocate. I co-host this podcast with James Connelly, who was a producer on my film Sacred Cow. I also founded the Global Food Justice Alliance, an initiative advocating for the inclusion of animal-source foods like meat, dairy, and eggs for a more nutritious, sustainable, and equitable worldwide food system. You can check it out and join me at global food justice.org. Thanks again for listening. And now, on to our show.
(Patreon Ad) Diana Rodgers, RD
Ready to take your support for a nutritious, sustainable, and equitable food system to the next level? Join my Global Food Justice Alliance community on Patreon and have access to ad-free podcasts, exclusive videos, and a discussion community, plus so much more. Go to sustainable dish.com/join to support my work, and thank you.
James Connolly
Hi, this is James Connolly with Sustainable Dish. So let me do an intro for Chloe. Chloe Sorvino leads coverage of food, drink, and agriculture at Forbes. The title of the book is called Raw Deal: Hidden Corporate Greed and the Fight for the Future of Meat, Simon and Schuster’s Altria books is coming out soon. She works at 30 under 30, food and drink and Forbe’s ag tech summits with signature events in Salinas and Indianapolis. She serves as a steward of the Forbes Union. Her work has been featured in NPR, Women’s Wear Daily, and the Financial Times. She lives in lower Manhattan and so do I. So thank you so much for coming on.
Chloe Sorvino
Thank you so much for having me. And you did not mention that I live with my composting worms on my terrace in lower Manhattan. That’s a crucial part of my bio. But no, I so appreciate it. And yeah, you know, the past near decade of reporting at Forbes has really just blown my mind in so many ways. But this book is really a compilation of everything I’ve learned from talking to some of the wealthiest meat barons in the world. And, you know, hearing from them during the darkest days of the pandemic, talking about lining their pockets with profits, and just being shocked by that. And then you know, at the same time reading the IPCC reports and all these horrible climate studies, and just seeing complete disconnect.
James Connolly
I think when you’re focusing on food, some of the aspects of it, we’ll go into, you know, one of the things that, I guess you call it a bugbear, if I was like born in the 1930s. One of the problems that I have is this sort of false divide between plant-based and meat-based. And I think people were advocating for a better food system, want to at least have a deeper dive into some of the components of that. The meat industry itself is, you know, to many of the people who are advocating for a different system is really problematic. I mean, it’s just so much worse than you could possibly imagine. We had John Ikerd in our film, and you kind of profiled him, one of the sweetest people I’ve ever met in the world. One of the things that he kind of said in the documentary was that the push during the 70s and 80s, when he was really fighting for sort of building a better farming system was about feeding the world. And so this idea of efficiency and profits, and all of that stuff, were really meant to deal with a lot of the crises that kind of came out of World War Two. And you profile a lot of the stuff that kind of happened is in the 80s, into the 90s. And then into the 2000s. I kind of want to focus on some of the aspects of JBS, Cargill, and you have some very, what should have been a long time ago, very alarming statistics on the consolidation in the meat industry. So I wonder if you can kind of go a little bit into that.
Chloe Sorvino
Absolutely. And so you know, you have this corporatization that’s happened in the meat industry that’s been completely underwritten by financial institutions, loans, debt, you know, institutional investors on the stock market. And what has resulted is massive amounts of power and actual corporate profits being controlled by the very small, few individuals – mostly meat billionaires. And that’s really from this mass consolidation that’s happened over time. Because, you know, as the plants got bigger and bigger, and they started, you know, exerting more control on their growers and producers and having these contracts, that loans again, were forcing the growers to be, you know, to have in order to, you know, get these deals. You have, you know, the ability that these corporations to withstand drought, withstand a lot of market fluctuations, and other issues that others haven’t. So you had mass bankruptcies, you had a lot of swallowing up of the smaller players by these larger companies. And it’s resulted in, you know, more than 80% of the beef industry is controlled by the top four. More than 70% of the pork industry, and more than 60% of chicken. That’s wild, especially when you consider that, you know, the antitrust regulators consider, you know, 20, to 25% to be massive amounts – controlled by the top four. So, you know, these are really some of the most consolidated industries in the country. And that’s negatively impacted workers. That’s negatively impacted consumers who are paying more in grocery stores for products that are less nutritious and have a lot of environmental degradation that comes along with them. And, you know, it just really can’t be understated that it all comes back to the financial institutions that are underpinning, this stripping away of profits from producers, to these corporate powers, that are, again, are backed mostly by billionaires. You know, there’s many of these companies are publicly traded, which means that they have the kind of fiduciary duty, legally speaking, to return more and more profits and returns to their shareholders. And that’s kind of one of the underlying financial arguments that I questioned in this book and want to really bring about because, to your point about the alternative proteins that are trying to take a bite out of big meat and doing a horrible job at doing so, by the way, you know, they are underwritten by the same financial institutions. They have not made any meaningful changes to corporate governance or structure that would indicate to me that they actually really want to go beyond the same, you know, downward pressures and race to the bottom that the meat industry has proven, is, you know, the incentive for decades and decades. And so, you know, you still have systems that are underwriting monoculture and biodiversity degradation, soil erosion, water pollution, and, you know, still being backed by institutional investors still having to deal with short sellers. So having loan officers and major debt being dictated and like having those financial institutions dictating, you know, how their farmers must farm down to the chemicals used. That also happens with the meat producers. I mean, these are just unfortunately, you know, patterns that seem to be repeating themselves. And that’s one of the main areas I want to explore with this book. And that’s why we set it up talking about the power that’s already so dominant in the meat industry, and then talking about the disappointment with some of these alternative challengers, who are just having to work within the same structures.
James Connolly
Yeah, I think one of the interesting points in something I hadn’t ever heard before was the kind of the overall sort of first third of the book really goes into this sort of concept of how the consumer is sort of bounced back and forth between… you use a term called monopsony is that what… am I saying that correctly? A guy who spends more time reading than talking, but I want to kind of go into that, because I think it’s actually a really interesting concept. And you know, we’re the end result of these conflicts that are kind of happening. Can we talk a little bit about the overview of that, and then we’ll talk about Agra stats. We all sort of heard it. I think it got lost within the signal, kind of get lost within the noise. So I just wonder if you can go into some of the aspects of those two stories.
Chloe Sorvino
Yeah, absolutely. Thank you. And I think one of my, one of the weirdest parts of what I learned through researching this book is monopsony, and I’m now trying to make monopsony happen. And I’m not sure if we’re ever really going to get there. But it’s in short, it really is the kind of other side of the coin to monopoly. And everyone, you know, grows up playing the game Monopoly. So that’s a very kind of clear idea. We have a very understood understanding of what that is societally, but no one really can wrap their head around monopsony, which is just one or you know, an oligopoly would be a few buyers. And so then, you know, the market is so much more small, because there are so few buyers. And so, you know, the big point here, the big takeaway is that, you know, everyone talks about how there is this major issue how much control, corporate control in the meat industry, and how can we unwind that. How can unscramble the eggs, but you really can’t fix a monopoly problem without also fixing the monopsony problem. And meat packers really, you know, say that at the end of the day, they pass it off and say it’s the retailer’s problem. They’re squeezing us. We can’t raise our prices any higher. We can’t give more to our producers because we’re being squeezed by Walmart, or Amazon. Those giant behemoths of the retail industry that have also been driving a race to the bottom in retail. I mean, you’ve seen massive consolidation, bankruptcies, lots of m&a happening and just in the past decade in the grocery industry. Now Kroger/Albertsons was just announced. And now there’s antitrust scrutiny on that because, you know, the top two grocer essentially trying to combine forces to be able to get to the point where they can compete with a Walmart. But I mean, it seems like almost it’s an infinitesimal scale because there’s should be no real system where there are that big of mergers happening, that when there’s still so many other issues involved. And so, you know, the food system has gotten so consolidated and the globalization has made it so many different pieces into working together that it’s going to be really hard to unscramble the eggs. But it’s really not going to change unless there also is a diversification of retail and ways that consumers can access food and shop. But then it all kind of stems back to where some of the consolidation has had problems over the years. And, you know, the original Packers and Stockyards Act was set up in some ways to prevent illegal collusion and manipulation of meat markets, because there already were so few back then. And right now we have this system where there are some markets in across the nation, different regions where there’s one or two buyers, very few, and it’s become extremely uncompetitive. And so then we’ve gotten different allegations, different stories of manipulation of markets or collusion over the years, but the past decade has had this insane scheme of price fixing unraveled, mostly in relation to this one data provider, Agri Stats. And the allegations are still out there. There’ll be hundreds of these lawsuits playing out in the courts for years. There’ve already been a lot of settlements. And, you know, some of them are denying wrongdoing, some not. But it really shows how, when there are so few players, and they’re able to pay to have better data and better access to information, thanks to technology, that, you know, there are systems where collusion can be completely facilitated. And Agri Stats is like this tiny, tiny company in the south, and it has really driven this wild scheme in the meat industry for the past decade.
James Connolly
Yeah, and, you know, some of the aspects of it are, they tried to give the illusion that this, a lot of the data can be anonymized or not compiled in a way so that other meat producers could look at it. And sort of, I had some difficulty trying to find out or understand whether the data was very sort of, like played out in terms of just numbers, or if there were actual collusion back and forth between these companies. Once the data was kind of out there to, you know, in same way that LIBOR was, you remember, this LIBOR scandal? You know, you’d have these guys emailing each other and be like, Listen, I need, I need the price for feed to go down a little bit, because I’ve got quarterly reports coming up, or anything like that I need to make my numbers look good or anything like that.
Chloe Sorvino
So yeah, Agri Stats allegations almost kind of are around like facilitation of collusion. But there are so many different, you know, different cases that have stemmed from some of the data and some of the other types of data providers that have modeled themselves off of Agri Stats and the wage manipulation case I also feature in that book is a prime example of that. There was even a consent decree just this past summer, in regard to that case, because data was being used to subjugate workers and keep their pay as low and their benefits as low as possible. And, you know, there obviously, were several other criminal cases at the Department of Justice went after those cases, we’ve been playing on the courts for several months now. And after lots of different mistrials, mostly, every one of the most everyone’s been acquitted. But there’s still several of these private civil suits and lots of different class actions around, you know, pay for meat being too high because of collusion that will continue to play out.
James Connolly
Yeah and I think you you go into a lot of detail in terms of the degree to which there was retaliation against anybody who spoke up is workers within these meatpacking plants. A number of people who felt like they were… OSHA safeguards were practically non existent. People were getting hurt on the job, being transferred to departments for complaining about anything, there’s just doesn’t seem to be any real sort of oversight of this and we saw this during the pandemic, right? We saw the level to which I would say it was in… there was government collusion with to kind of keep a lot of the plants open, and safeguards that were nominally just you know, passed but never followed.
Chloe Sorvino
Absolutely, you know, I think there’s been so many folks who’ve been really disappointed by slaps on the wrist from OSHA or other regulators and a lot of workers who feel like they’ve been in the most vulnerable positions possible and that they’ve been let down. They’ve been put in harm’s way, specifically to have these corporations continue to make profits. So it’s been brutal for them. And that’s why I wanted to show a pattern.
James Connolly
Yeah, there’s a story in there that I don’t know, for whatever reason just made me so angry, but just talking about plant workers working at chicken plants for, you know, 18 years, but still not being able to afford the meat that they’re cutting up and producing. I want to kind of jump a little bit back and forth on this, JBS, just for whatever reason and I kind of want to focus on them, because I think it’s maybe they’re just really like, because of the way certain level of collusion, bribery and everything that happened in Brazil, the degree to which they were able to amass enormous amounts of wealth, but also kind of came into the US industry, playing a lot of the same games that they had played in Brazil. Maybe they’re just, like, get caught, like a lot more. But just like you’re just reading about these two brothers and their family, and you’re just like, How is this even possible that we haven’t kicked them out of the country? We had the meatpacking problem that was that was happening with imports from Brazil that had any number of different problems with it from
Chloe Sorvino
Gross lymph nodes, blood clots…
James Connolly
Yes. Oh, all of that. Right. So we put a moratorium on imports. And that lasted for, I don’t know, maybe five or six years. But then JBS comes to the states and enacts these practices. Can we like try to do like a 10 minutes bio on these two brothers?
Chloe Sorvino
Absolutely. You know, the JBS story, that’s the only company that gets two full chapters in this book. And that’s I wanted to make sure people came away with the understanding of what this company really is and how they took over the American Meat Market. Because it was shocking to me that so few folks really, truly understand how, you know, because of so much consolidation already in the meat industry, the meat market was extremely vulnerable. And when some of these assets were distressed, or going bankrupt, it only took a foreign company, like JBS to you know, get access to some really favorable loans, thanks to you know, prejudicial access. And they were able to buy up American companies on the cheap, really cheap. And now they are this major part of the US meat industry, that’s been exerting downward pressure on their producers, and also creating environmental issues and increasing methane production, for example. And so I spent months spending, you know, hours and hours, days and days 1000s and 1000s, of legal documents, testimony, different videos from police from this investigation, because there’s a Brazilian side of this, but to your point, there’s also the side of this that happens in the US. But I’ll take a step back to explain it all. Because the wild saga that would be similar to like a Netflix drug running documentary, in some ways, like that’s kind of how it plays out. So, JBS was this small family run company started in a countryside area, in Brazil, and under the third generation owners, the Batista brothers, Joesley and Wesley, who had taken over for from their father. They had international ambitions like no one had ever seen. And they made a point to use bribes to get preferential access to loan officers so that they were, you know, able to make deals in the US and outside of Brazil happen. And so, you know, there’s different parts of this bribery scheme. There’s a kind of the headline grabbing part of the bribery scheme, but then there’s also the aspect of this that they were paying different politicians for kickbacks for their businesses well, before even you know, Joesley was passing bags of coins to different Brazilian presidents. So there’s that aspect. And then, you know, essentially what happened was there was one major finance minister, who they started doing a lot of deals with and he would get a constant kickback. And these kickbacks in the way these transactions happened over the years differed in different ways. Sometimes they were through, you know, cattle purchases, even invoices. There was a transfer of a helicopter. There was you know, the transfer of a 3% of the profits of a concession stand were one of the football soccer stadiums where the World Cup was hosted. And so these bribes are happening in cash deals and coins, but also in these kind of, you know, hidden transactions. There was even a $1.5 million apartment in Manhattan that was transferred. And so, you know, this one finance minister had was on the payroll, and they kept on wanting to try to get more financing for more US deals as this US shopping spree was really happening. And the Batista brothers claimed that they never really knew where this money was going. Just they were they’re holding in these accounts for this finance minister. They didn’t really know who exactly was on the full extent of the other end of it. But what happened was, you know, by 2014, the finance minister came knocking and said, Okay, you got all this money stored away for me. It’s really for President Dilma and former President Lula, and we now have to use this money to get the Workers Party still in the office, because this election is brutal. And so he pretty much had Joesley dictating and figuring out where all these different bribes to different a thousand plus politicians were going in Brazil on an effort to try to get Dilma reelected. And you know, there was millions of dollars spent on these bribes. Joesley himself, I’ve alluded to it, but Joesley himself personally handed money to Lula, personally dealt with Dilma for another bribe, she needed him to pay off, and even ended up passing cash multiple times to President Temer, who was Dilma’s was eventual replacement. And so that’s like, the highest level of bribery and corruption that actually could happen. And, you know, Brazil, the book goes into all the different ways that Brazilian politics, you know, kind of went over the Batista brothers actually, you know, end up going to jail. But lots of different kinds of crazy political saga that happens around this major, major scandal. And the Batista brothers are only really able to save their skin at a certain point, before they went to jail, because they were, you know, wearing a wire to tape the President Temer and implicate him, eventually still did a bunch of other bad things and continue to make bribes that the investigators found out about. So they did end up going to jail for six months. But the the thing that’s really important about this is that all of this was happening as they were charting insane growth and starting to exert serious control on the US meat industry. And especially again, they were able to do this because they had access to money, capital that, again, was from, you know, aided by bribery, but there was so much consolidation that competitors weren’t able really to bid against them. I mean, there weren’t enough others willing to bid. And so this massive vulnerability was exploited. And what you have now is, you know, they control with more than 20% in beef, chicken and pork, and they’re the company that has pled guilty to you know… They’re the major backer of Pilgrims Pride, which Pride, which has pled guilty, so to some of the price fixing allegations, the Batista brothers themselves in the US have agreed to violations of the Securities Exchange Commission for foreign corruption act practices. And, you know, there’s been lots of different fines for, you know, JNF, their parent company as well. So, unfortunately, currently unscramble the eggs. And now this company is still in the US and still kept getting, you know, funding for public school lunches, benefiting from subsidies, getting different tax breaks, getting, you know, different trade aid. And there are some lawmakers who have been quite upset or have been trying to see if there’s an inbuilt way to you know, have JBS leave the country but what you have is not enough action and a lot of power and a lot of control.
James Connolly
Yeah, and I think one of the things that you’ve outlined really well is the way the structure of these sort of big box stores, Walmart and everything like that have put all of this pressure on farmers and meat producers. And, you know, and in many ways sort of marketed it as trying to save money for the American consumer. But that war that’s sort of happening in between, in essence kind of creates a market by which these companies can be taken over because the margins are so small, right for profits. And so it’s really, you know, the extraction of a lot of that, and I don’t necessarily want to say, you know, I think one of these… some of the some of the times when you kind of talk about this stuff, you talk about Smithfield or anything like that you kind of get a xenophobic response, but the US does this in Brazil as well. I mean, Cargill has been down there for years. They’re one of the primary sort of foreign agents over there to the conversion of soy, in the Serato and in rainforests. Harvard has been down there for a long time. Their endowment is associated with that. Really what it comes down to is sort of very small, very nimble players who are financial advising a market that is, you know, in – some people would call a sort of Wild West, right? Regardless, where you are going, say, if you went to a place in Sub Saharan Africa, the risk is higher, but the reward is also greater. And so you see the commodification of coffee or any number of different products. You know, I mean, we have the history of Dole in Central America, banana republics, any number of different things, the outrage that the US is feeling is now I think, in some ways, wow, this is also happening. You know,
Chloe Sorvino
I call it a national security risk in the book and I want to be clear about what I do. I don’t say that from a xenophobic perspective at all, you know. I think I just see it as a national security risk. I think other students, well, when there’s just such a misalignment of incentives. I mean, you know, you saw it in the pandemic. These are corporations that are incentivized and have been choosing historically, to prioritize profits over people and prioritizing exports over keeping workers out of plants, or prioritizing experts and continuing to make more meat at the detriment of the environment or pollution surrounding, you know, their systems of production. And, you know, I think it’s the same type of misalignment of incentives that you see with, you know, to your point from earlier to Bill Gates, very only recently becoming the largest farm landowner owner in the country. And just the ramifications that you get with that. And so I think there’s just always gonna be national security risk when there’s not an incentive to support the resilience of the regional community.
James Connolly
Yeah, and one of the things I think that happens when you have these landowners who are so far away from the ramifications of, you know, misaligned incentives, so you are willing to pollute the land, pollute the water, any number of different environmental effects because you would never have to see it from from your vantage point, maybe it’s 3000 miles away, maybe it’s even 200. There’s just no incentive to look at the level of the degradation. And this is what I think a lot of farmers have been talking about for years. This is in Madeline Fairbairn’s book that even in 1978, with the level of pressure that was being put on farmers that then moved into the farming crisis in the 80s, the main pushback on that was once you had the financial might of a lot of the banking industry, leveraging their wealth in order to raise the prices of farmland, because it’s now become a market, what happens to the farmer can no longer afford the rent on that land? And so, you know, I think we’ve seen this across the board in many different ways. And I think it’s one of the things about the meat industry is that I don’t think the level… the level of scrutiny that kind of happens is not on the level that your book kind of goes into. And I really appreciate that. Because I think that, like you’re always looking for that book that will be like, Here, take this book, right, read this and then we can talk, you know. The pressure that’s being put on farmers, especially ones who are meat producers, you talk in there in the book about just the genetic breeding of chickens, the level of consolidation that happens. Can we talk a little bit about that? Because that was like… I’m always, like, so surprised usually, like feed, antibiotics, like, whatever it is, I’m like, Oh, yeah genetics too.
Chloe Sorvino
Genetics is always forgotten about and it shouldn’t be. And I’ll answer that question too, just to say the, you know, I’ve been at Forbes for nine years, and I started out on the billionaire beat. So my training was in doing the valuations you see on the list, like the Forbes 400 and the World Billionaires list that are really our signature. And so I did hedge funds, real estate financiers from across the board, and then also did a lot of agriculture. And so I had this knack for finding these hidden billionaires and kind of secret monopolist hiding in our food industry and genetics world blew my mind because 99% of all chicken in the US comes from one major genetics line, which is at two companies. You have the Ross and the Cobb, and Cobb is owned by Tyson. It’s been losing a lot of share, but continues to be one of the only players in the US market. And then you have this massive German conglomerate, which I found out about through my work at Forbes and ended up figuring out that there was a billionaire, Erich Wesjohann who, of course, controls it because with all of these massive conglomerates that have eked out profits and exerted control and efficiency in our food system, there tends to be a billionaire behind them. And so Erich Wesjohann has been acquiring up pretty much every genetics company that he and his EW Group can get their hands on. And in the US, it is now one of the major, pretty much the major dominant player. EW and Tyson still have around 50/50. But there’s a lot of different, you know, figures to go around. And I got my hands actually on some Agri Stats data, which speaks to, you know, the ever evolving share and EW group continuing… to continue to grow in a way that’s been startling. But, you know, I think it’s important to talk about this, because, you know, I’m sure your viewers and your audience understands that, you know, the chicken you get in a grocery store can be… it’s very sickly, when it grows up. It doesn’t really grow up with its full organs. There’s immunity issues, there’s gut issues. And it’s pretty much bred to have large breasts, and not to have much taste and just to grow as quickly as possible. And that’s created this really flavorless bland and less nutritional chicken that’s been fed to almost everyone in America. I mean, pretty much everyone can say that they’ve had a piece of chicken like that, at one point in their lives, probably. And it doesn’t have to be that way. But it’s happened because there’s just this massive consolidation on the actual eggs and the genetics behind that all the chicken we eat.
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James Connolly
Yeah, I remember going to France for the first time and they have a sort of a national bird there. I don’t remember the name of it. So there’s a pool, a ruse, rouge, Puli Roush, and then there’s one that’s their national bird. The breast is tiny. I mean, the legs actually looks like a dinosaur. The talons are huge, almost the size of the breast, and the level of fat that drips off of it. Yellow fat is…
Chloe Sorvino
Yes. Yellow fat.
James Connolly
You go to these places that rouge is, it’s absolutely delicious. And you’re satisfied with only a few bites. It’s not one of those things where you’re constantly eating, looking for nutrients, or are trying to sort of fulfill a need. I don’t know how much Americans understand how much was lost. I was sending out an emoji for Happy Thanksgiving. And it was Julia Child’s, like an old photo of Julia Child, and it was a turkey and she pulls out the wings. And the wings were absolutely huge. You know, we see that on turkeys as well, we’ve sort of built this food system for the most blandish ubiquitous, tasteless type of breeds, you know, and it’s so hard to kind of watch.
Chloe Sorvino
Yeah, it’s really what’s lost.
James Connolly
You know, because you have to drown it right? You have to drown it in butter and, you know, compound butter
Chloe Sorvino
That’s different. I mean, the white striping that happens on a chicken breasts, like the white fat, it just it tastes completely different. And there’s less omega threes. There’s less actual phytonutrients that are so important for us to actually consume. I mean, the actual nutritional aspect of it, too. It’s not just flavor, you know, flavor often correlates to more nutritional efficiency.
James Connolly
Yeah. Mark Schatzker, his book, The Dorito Effect kind of goes very deeply into this. And, uh, you know, I just find it’s kind of one of those things, we’re using flavor as a secondary sort of filler source for what our bodies are actually needing. And I think that’s problematic. I think it’s one of those things where you actually go and you go to Italy, and you taste a real tomato, and you’re like, oh, that’s what it’s supposed to taste like.
Chloe Sorvino
Yes. Lots of flavor, and no slave labor, no slave labor-like conditions anyway, I’ll say. But tomatoes are brutal.
James Connolly
Yeah, well, the mafia is very involved in the citrus industry over there. I don’t know if you read anything about that. It’s pretty brutal. So I want to get involved in some of the aspects of you did a podcast it was a clubhouse. So that goes a lot into the sort of plant-based meat alternatives. And it’s ranging. It was actually really wonderful. I’m going to try to put it into the shownotes. You were involved in it. But it was a number of journalists who were actually involved in the agriculture industry reporting on, there are certain aspects of the financialization of the plant-based meat industry. We can actually take out the the animal rights component of it, which was sort of heavily funded in the beginning with Good Food Institute and a number of different things kind of associated with it. But the venture capitalist aspect of it that kind of goes into it. I wonder if you can tell us a little bit more about the Josh Tetrick kind of story. And then we can kind of move into the Beyond Meat and Impossible Burger aspect of it.
Chloe Sorvino
Yeah, for sure. And so this is another one of those parts where I felt like so few of the same people were talking to each other. And I was like one of the only kind of nexus points for all this, which is why I really wanted to put this in the book. So she because it also exists, you know, the under 30 work I do, and just seeing how many different investors were taking up huge percentage of the companies that I was betting and, you know, essentially what happened overall in the food investing space, just in the past decade is, you know, there’s been this massive frenzy to profit off of it. You know, I can’t tell you how many investors have talked to me about, you know, kind of chomping at the bit saying, this is feels like the early days of the internet. And it’s just, you know, it’s often met with an eyeroll because, you know, food maybe shouldn’t have the same amounts of returns or profits that other companies like a tech, cloud, SAAS startup would have. And I think there was this period where there were tech investors who, you know, had invested a lot of money in really big cloud companies, and really, really just big tech, software hardware types of valuations. And then those funds rolled over and three to five years, they had a lot of profits to do stuff with, and they started looking at the food and farming world, as this last frontier and started pumping money in, you know, the book often calls it dumb money because they were blowing up markets, creating crazy valuations, creating a lot of hype, driving, a lot of, you know, back and forth bids. But all at the end of the day in less than, you know, two years to have a lot of these startups blow up, you know, a lot of them have gone bankrupt, a lot of them have gotten rolling up by, you know, their investors with other startups they’ve been invested in because their sales adoption hasn’t really gotten there. And, you know, I’ll take a step back to bring some numbers in here. You know, 20 years ago, there were some investors and food, but it was very few, you know. They would expect maybe one to five times return on their investments, you know, in three to five years with that, you know, but with these new investors, the industry started seeing some pretty big exits, but also started seeing a lot of big busts. And so the investors started expecting more risk taking on more risk and expecting higher returns for it and they would get, you know, 10 times returns, but also get just as many, you know, zero times returns or even write offs. And that kind of drove this continued frenzy and a lot of copycats, especially in the alternative protein part of the food world because it got the most funding. There are billions of dollars flowing in like there’s never been, and a lot of founders didn’t know what to do with it. The pressures for investors were extremely high. And the grocery launch, the fast food launch, they’ve all kind of fumbled. The adoption’s really low. It’s not hitting expectations at all. And you know, even in June, I wrote a story, a feature for Forbes called the Lifeless Market for Meatless Meat. And I think that kind of just says it all. But you know, it’s interesting because there are these kind of kind of key founder stories that I think people still look to and, you know, you mentioned, Josh Tetrick. Josh is one of the founders that in some ways is still doing way better, you know, than like the Beyond Meat, the Impossibles of the world which have gone through big layoffs this year, big markdowns, kind of crashing stock prices. I mean, Josh Tetrick’s Eat Just and his, you know, lab grown meat startup – Good Meat, you know, they’re still unprofitable. I think there’s still just a lot of money backing it. Both Josh Tetrick in particular, you know, my book goes into it a bit because I think he’s kind of the poster boy in a lot of ways for money getting to him, you know, at the right time. He was sleeping on a couch in San Francisco, got a chance meeting with a billionaire backed VC, got a lot of money right on the spot. He’s a really good talker. He’s like, he’s a smooth talker. I don’t know if anyone here has talked to him before. But let me tell you, Josh Tetrick could talk himself out of a paper bag. Right clearly. And, you know, he’s gone through this very public testing of his startup. It’s gone through several different iterations. My book goes into, you know, the stories of this major board fight coup that he ended up nullifying because of the wild saga, and how he is able to kind of maintain control of his startup through that in a very rare and impressive way I’ll say because he was really able to foresee the challenges and pick off his opponents one by one you know. I don’t know. I mean, I think for him, it’s actually proven out more than for some of the others because his products are still actually doing well. They’ve gotten a lot of distribution they actually do sell and on top of that, you know the board members that tried the coup years ago, were kind of sniffing at him for thinking that he would do you know, cultivated meat. But now, you know, kind of joke’s on them. Because a few years later, he’s the first one to launch into Singapore, when Singapore opens up for, you know, having the first cultivated meat to sell in the world. And he’s actually been charting the path quicker than some of the other US startups have been. So, you know, we can talk about lab grown meat and all its actual products separately, but I think from like an entrepreneurial perspective and navigating this crazy financial investor system, I mean, he’s been able to do it far better than the rest.
James Connolly
You know, the thing about Josh was and maybe he is a little bit bulletproof. But I distinctly remember him, you know, getting in trouble for buying his own product off of Whole Foods shelves to create this idea that there was a run on his product. And then you kind of outlined something I hadn’t heard before, which was he cribbed off of Coca-Cola, you know, to kind of create a product that could then fit into a number of different other products. So Coca-Cola had decided they were just going to sell their patented syrup, and you add your own carbonation to it as it moves down the product line. And so like I understand that, but like really is a Coca-Cola in some varied form, like a mung bean paste that we now add into these things to kind of make them look like they’re virtuous. I just find it to be really problematic. And maybe it’s a… maybe it was overhyped, the degree to which he was buying his own product. You said it was about 1% of sales maybe? Or something?
Chloe Sorvino
Yes, that’s what they say. That’s what they say, though, I will say to one of the other fascinating stories about him, you know, having Teflon on him, the American Egg Board once joked about putting a hit on him. So you know, one of my personal favorite moments. But no, I think he has maneuvered. And he’s figured out a way to constantly be a chameleon and morph himself into whatever his investors need from him. But he also has used that to maintain a certain control. I do think you’re seeing him do these things. And like that Coca-Cola model, I do think is one of the aspects of really what saved the startup from going totally bankrupt at a certain point. But you know, he’s been able to solidify his own control on the company, which I think has been everything for him.
James Connolly
Yeah, he does seem to be more of a believer than a lot of the original board, which actually wanted to do what the original talk tech companies wanted to do was build a product that that gave the illusion that it was an industry disrupter, only to be able to sell it to a competing product to just make a lot of money. Yeah, I do believe it.
Chloe Sorvino
Do we have the time and resources to waste on something that just gonna get sold and and maybe won’t even actually really exist in five years. You know, just so much capital going away is.
James Connolly
The degree to which a lot of these companies have bought into that you had… let’s see if we can go down the list. I actually wanted to go through some of the the iterations of plant based. So there was corn milk, corn milk that came out. It was potato milk, cockroach milk. There was one that came out for a while.
Chloe Sorvino
Wait! Can I just say about cockroaches for a quick sec? Something I think your your audience will actually particularly enjoy something I learned recently, not in the book, but it’s something I learned through doing all this work. And so not cockroaches, but crickets. Okay, crickets, bear with me.
James Connolly
Cricket protein?
Chloe Sorvino
Everyone’s, like crickets are one of the proteins of the future. And, you know, first of all, it’s not vegan. I don’t want anyone to think it’s vegan. But I do think it’s interesting because there’s companies now that are trying to sell cricket farming as like an add on to an industrial pork system. And that is particularly because crickets are super picky eaters, and they actually prefer to eat pork and almost all the crickets in industrial farming settings are actually eating industrialized pork or like wastes are byproducts from that.
James Connolly
No way.
Chloe Sorvino
And so like it just another one of these raw deal systems issues honestly were like this alternative protein is being completely you know, grown and erected within this already problematic system. Wasn’t there.
James Connolly
Wasn’t there just a undercover camera release? It was talking about how a lot of byproducts like plastic byproducts are being fed to pigs. Did you see this?
Chloe Sorvino
The byproducts are I mean, unless your label really says 100% vegetarian, that meat especially for pigs because they’ll eat a lot of things. You’re getting crazy things in that feed.
James Connolly
I just don’t understand what the hell we’re doing. Okay, so you have companies like Kellogg’s, DuPont got heavily involved in plant-based meats, large multinationals, Nestle, any… I think any Cargill got really involved in it, any company that, in essence, I think wanted to kind of take out the middleman. Middleman in meat being livestock, and already had the abilities and facilities to like upscale their production capacity to build all of that stuff started to feed livestock feed to humans. I think that’s a lot of this stuff that kind of happened. But you had this sort of dual growth within systems that were like Beyond Meat and Impossible that I do actually believe had an ethical component that was driving a lot of their business and then other companies were pretty much a for profit motive. Did you find that in your research? Or did you find there was just too much blending of a lot of different concepts of intellectual property rights, profits and, you know, allusions to sustainability?
Chloe Sorvino
Yeah, you know, I really worry when the underlying equity and governance systems haven’t changed on top of that, like the sourcing, often hasn’t changed. It hasn’t made meaningful change, right, like, talk about the environmental impact of Beyond Meat or Impossible, they’re still sourcing from monoculture. They’re still sourcing from lands that have often had been sprayed with harsh chemicals. No one’s sourcing organic. No one’s saying they’ll put people over profits by becoming a B Corp or a benefit corporation tax wise. There are ways that they could actually put their money where their mouths or give themselves some teeth to fight back against the constant pressure for shareholder returns. And they really just haven’t.
James Connolly
Yeah, I’ve seen that with one of the worrying aspects of it for me with Impossible is when they push really heavily for GRAS status. For the listener, some of the international people might not know what GRAS status is – generally regarded as safe. God, what do we have right now? 9000 different ingredients that are allowable in the US food system that are…
Chloe Sorvino
Nearly 2000 that aren’t allowed in Europe or other countries.
James Connolly
And so they were able to kind of push through GRAS status and push the I would say, my opinion, bully the FDA into approving their GMO soy leghemoglobin. But the aspect of to me that that worried me most was when they started to push for the ability to to purvey a lot of that stuff to the Department of Education and two systems that are governmental systems that don’t allow for people to have much choice, whether it’s the prison system, the military, or our educational system. I wonder if you have an opinion on that?
Chloe Sorvino
Absolutely. One of the few interviews I’ve agreed to do with Impossible was after that launch for starting to market to public schools because of the same reason I had been doing a deep dive into heme. And the trial with the FDA around the questions of why they hadn’t done certain, you know, tests for cancer and other big scope issues when they say they want this to be fed to the entire world. And it was only a few weeks later after that, you know, decision was handed down that they were like, okay, great launch into public schools, full court press. And I agree, it’s problematic when there’s no choice. And when no, this could be displacing, you know, more whole food type of products, like lentils, or bean burgers, because again, that heme, you know, wasn’t as tested to the full extent of trials that, you know, a product that’s being fed to everyone in the world, probably should have been tested for. And I’ll give you a little scoop, which actually is not in the book. But I’ve been hearing that there’s been so much controversy around heme and how it’s made it so impossible, no pun intended for Impossible to launch into Asian countries and European countries in certain places where they’ve needed for expansion that there have been a lot of internal struggles around the future of heme and its products. And there’s been a lot of leadership changes recently that I think also speak to that.
James Connolly
Yeah, one of the things I want to get into, sorry, I’m gonna jump. But you had a really interesting point about Beyond Meat and the degree, how it was playing out in the stock market. Can you kind of go into that? Because I think that there’s a, you know, is as much as you might be, not you, but the consumer may be somebody who is afraid of novel products or anything like that. The degree of scrutiny and celebration of what happened to Beyond Meat, as its stock price went down and all that stuff. But the interesting part about it, to me was the level to which people were shorting the stock or sort of playing around and manipulating it. You had sort of an interesting sort of wisdom on that.
Chloe Sorvino
I appreciate that. Yeah, I think short sellers are one of the negatives that you can encounter when you go public, just like, you know, that pressure to constantly have shareholder returns and Beyond Meat hit a point. And I was one of the few people writing about how crazy the amounts of the stock were being shorted. I mean, this has hit levels, you know, a Tyson, for example, is around 1% shorted. And there actually are, you know, as we’ve been discussing fundamental questions with the long term of its business, right, just from a climate perspective. But short sellers don’t see it that way. Yet, for Beyond Meat, more than a third plus, over the past several years have been shorted, which is an astronomical amount, which means that you know, short sellers are really dictating the stock price, the amount of capital, then you’re able to leverage for that the amount of debt, what you’re really able to do with your expansion. They’ve been cratering, this stock, as the pylon has, you know, gotten worse and worse for Beyond. And like the fall from grace for Beyond Meat really can’t be overstated. Because when it went public, it was one of the first food companies to go public in the past in the decade, the whole decade prior, only five food companies had gone public and the entire decade prior to Beyond Meat going public and startup so quickly. You know, at its peak, it hit $9 billion in market cap, which is an insane amount for a company that was unprofitable and barely selling in nationwide grocery stores or fast food chains.
James Connolly
Wasn’t that similar to the evaluation Elizabeth Holmes company?
Chloe Sorvino
Very similar, very similar. No, I mean, it was completely inflated by investors who saw this as needing to do well for the future of ESG and alternative protein on the whole. But obviously, that stock has now been, you know, symbolically used as kind of like the benchmark for the alternative protein space on the public markets entirely. And short sellers have just been such a big resource drain on Beyond Meat. And that’s why I wanted to focus on that story. Because resource drain is the issue I see with alternative proteins in general, just the amount of resources and capital that they are consuming. And then often wasting or seeing go poof in the financial markets. When there’s just so little time left to waste. And we really need to be spending all the capital positive possible on actually, you know, securing the future of the food system.
James Connolly
Yeah, I do… we’re about an hour in and I do feel like I can talk to you for days about this stuff. But I kind of want to go into some of the positive aspects that you talk about, towards the end of the book. But one of the interesting quotes, and I’m going to try to paraphrase, because I’m a skeptical believer in regenerative ag, let’s call it that. I’m a skeptical believer in its promise. And I do feel like there are a number of people who genuinely care about biodiversity, our water systems and rebuilding topsoil. And you talk a lot about that and have talked to, I think, a lot of the people in the industry who are doing incredibly good work on that. Paige Stanley is one of my favorites, my absolute favorites. And you know, one of the things that I always say as a mantra is one of the things that she kind of taught me, which is how hard it is to quantify, you know, on a local level, the degree to which regenerative ag can have measures that would be extrapolated out. And so as we move towards sustainability and efficiency, and you know, in more surveillance and sort of, you know, in a way, the way I worry about it, I think what ends up getting lost in a lot of regenerative ag is the degree to which the southwest and the northeast and have different measures and metrics for what they would consider to be regenerative, which makes it hard to define. And I think you go into that really well. I wonder if you can talk it a little bit, some positivity.
Chloe Sorvino
Yeah, absolutely. I will say, you know, I don’t even think I use the word regenerative in the books. I was really trying to get to your point, this Paige’s point, you know, I’m really trying to make sure I’m talking about the actual science based systems and also the markers we have like in the market, so I was using grass-fed or pasture-raised, often interchangeably, or you know, talking about this actual systems like Paige Stanley, you know, multi, you know, adaptive multi-paddock grazing. And what Paige taught me is that there will always be a place for grazing and livestock that can heal soil with manure and hooves, especially because there are some cropland, some lands that are completely degraded either from you know, generations of industrial chemical harm from farming, and monoculture or you know, other areas around the world that just, you can’t do anything else with the land because it’s so rocky or what have you. And so there always will be a place for livestock systems in the future there. There has to be. There are some lands that truly will need it. That said, obviously, you know, meat consumption on the whole needs to go down and meat demand on the whole needs to go down as industrial systems that pollute, and have confinement need to come to an end. But, you know, there’s been so much debate and, you know, this regenerative agriculture world, about science and data and what quantification you can get. And while you know, I am, unfortunately skeptical, around, you know, if you can, you know, be like a one for one carbon offset, I think that would be problematic, and probably impossible to actually figure it out on a mass level, you know, that aside, you can’t take away the gains, and the total rehabilitation that’s happened on some of these farms, particularly like, you know, for example, White Oak Pastures, which is in the book, you can’t take away. Just that total microbe content in those soils, and how those soils have become so productive and so successful after, you know, generations of being really harmed from industrial peanut production. And you know, what looks a great example of, you know, taking continuing to expand and taking over different parts of other degraded lands, and really creating community and lasting community impacts around this farming operation. You know, the rural urban divide is talked about a lot, but what needs to be talked about more is really just the shipping of community away from rural areas, especially due to the industrialization and the corporatization of agriculture. We need to see these communities thriving again. And that’s what’s going to help communities withstand crisis from the climate, and otherwise indignity.
James Connolly
Yeah. I mean, I think it’s unfortunate that we always end up going back to, you know, say somebody like White Oak Pastures, I wish there was a lot more that we can, you know, kind of the world and say, look, it’s working in multiple different regions. But I really enjoy what he, what Will has been able to do, in order to sort of bring the level of byproducts that happened with livestock and actually utilize that to create wealth within the community. I do like, there is Charles Mann’s book, The Wizard and the Prophet actually goes into, he said, if we weren’t dealing with climate change, particularly carbon in our atmosphere, the number one thing that he thinks would be nitrogen pollution. And so I think a lot of the stuff that’s associated with that, you talk about cover crops being able to pull in a lot of that nitrogen, you know, pulling it out of our waterways and into these dead zones. There were a lot of techniques that were kind of part of our system now that I think are you utilizable, you talk about what’s the chicken, the chicken farmer who’s using sort of cover crops, cover crop wheat, and doing double harvests on them, so you can actually have that the plants on the land and still actually harvest part of it for it to grow back as well. Can we talk about… do you have to have to go? No, okay.
Chloe Sorvino
No, I’m good. I’m here for you all day, baby. I think I agree. I think nitrogen pollution is one of the most pressing issues that’s not talked about. Waterways are so polluted right now. I mean, the Clean Air Act and the Clean Water Act have been eating away at over time, in part because of how much industrial meatpacking has been lobbying for, you know, easy regulations and how states and local bodies have just not adopted some of the same federal principles. And so, you know, we have this system where the monocrop corn, soy system has been creating devastation across waterways, at the same time, as water access has already kind of become a fundamental issue. I mean, the Mississippi River, which has already so much pollution is responsible for that major dead zone in the Gulf. I mean, it’s been receding drought has been seeing there be parts of the Mississippi River drying up. I mean, there’s been crazy drought on top of pollution, which is seriously concerning. And it’s only going to really get worse, according to a lot of scientists. And taking nitrogen out through cover crops is pretty much one of the clearest, easiest and strongest ways for there to be nitrogen fixing, you know, for some of these soils to for not to end up in water. And I cited a few studies that show that there could be significant reduction and quite easily if proper crops were actually adopted widely, you know, I think there needs to be, unfortunately, mass reshaping of incentives based on subsidies and the Farm Bill, really for that to happen. But it should, I don’t know why subsidies and there are so many incentives from crop insurance and other systems for, you know, to keep incentivizing pollution. You know, you mentioned the conglomerates earlier. So ADM is a prime example of that in the book. I was blown away when I was talking to the ADM executive who is now in charge of their, you know, sustainability, alternative protein division, essentially talking about how they are the company to chart this path for the future because they have all the ethanol. And because they have all the ethanol manufacturing and plants and assets around the world, they are going to be able to use those sugars from you know, by the way, again, industrial monoculture and pollution, to then fuel the fermentation that so many of the alternative protein startups require for their production. And so the reason I want to write this book is because I’ve also been seeing this slow whittling in of corporations into the future of food and, you know, greenwashing and erecting this future around their existing problematic systems.
James Connolly
Yeah. Do you feel like there’s any pushback?
Chloe Sorvino
Unfortunately, this is also obscured from the consumer that I feel like there’s even if there is, you know, general greenwashing pushback of general corporate consumer activism, and it doesn’t have the same effect as saying ADM, why are we supporting more ethanol production for the alternative protein industry? You know, I think it’s also obscured and hidden because these systems are so intertwined, that it’s become very hard to actually create accountability, and then get that message across.
James Connolly
Yeah. So I do often want to leave on a positive note but I’d like… there is a lot of promise, I think in the end chapters of your book. I think that there are people who are fundamentally, shaming the system that we’ve sort of been brought up and not taking it for granted is the only way to feed the world. And I think that this book is so important to the argument of what’s actually happening. Thank you so much for spending the time in writing it. I do think if you want to understand Chloe’s work, go through all of her writing. There’s so much on some monoculture, the droughts in California, understand our agriculture system better. She’s viewing it from a macro lens, and then going to places and really talking with people that I really appreciate their opinion on. I didn’t think that there would be anybody who would write this book. And then lo and behold, thank you so much for doing it.
Chloe Sorvino
Thank you so much, I so appreciate it. And, you know, I think the takeaway for me really is that, unfortunately, as much as I want to burn it all down and start from scratch, we don’t have the time to and it’s just going to take every single person on every level of this to demand change and demand reform and to make real substantial changes, and also reactivate and re-regionalize the food system. And that’s the only way we’re going to be able to get through the crises to come. So thank you so much. I really appreciate it. And I’ve loved talking about it today.
James Connolly
So how do they find you? And tell me when the book comes out? And I’ll repeat the name of the book as well.
Chloe Sorvino
Thanks. So yeah, Raw Deal: Hidden Corruption, Corporate Greed and the Fight for the Future of Meat publishes on December sixth. It’ll be every where books are sold. And you can find me on Twitter at Chloe Sorvino on Instagram at C Sorvino. My email is very accessible. I’ve got newsletters, please, excited to share this with the world.
James Connolly
Cool. Great. Thank you very much.
Diana Rodgers, RD
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