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Blue Apron Bought BN Ranch: Who are the Winners and Losers in this Deal?

April 5, 2017

Last week, meal-kit delivery company Blue Apron bought BN Ranch, a network of grass-fed cattle ranches and heritage turkey growers in California and New Zealand. Career rancher and sustainability entrepreneur Bill Niman launched BN Ranch in 2007, a “back to basics” move after he sold off his hyper-valuable Niman Ranch brand to Natural Food Holdings (who in turn sold it to Perdue…yes, that Perdue). 

There are some definite winners and losers in this deal, so let’s take a look. 

The Winners

Blue Apron

Reports widely described the move as a win for Blue Apron. But it’s also a risky move. By acquiring BN Ranch, Blue Apron vertically integrates meat production into its supply chain. That makes the raw cost of the meat go down, even though Blue Apron is actually increasing the average quality of their meat (grass-fed, grass-finished).

They’re betting that this will make them more efficient, give them an added edge over competitors, and bolster the value of their brand. The danger is that this makes Blue Apron more asset-heavy, which increases their risk if they do not realize their projected efficiency gains or if the market cools on meal-delivery services.

Bill Niman

That Niman has now developed and sold (for a pretty penny) two sustainable meat operations to larger corporations may be good or bad in your eyes. Either way, there’s no denying his business acumen. This basically makes Niman the Billy Beane of sustainable meat, grooming sustainable ranches until they’re ready for the big time, and then trading them off to true contenders for a premium price.

The Environment

Blue Apron’s acquisition of BN Ranch helps the environment in two key ways.

  1. More pastured animals on more people’s plates is great for the environment. It yields a healthier product, provides the animals with a better life, and engages farms in regenerative practices, which improve soil health and sequester carbon dioxide in the soil (great for mitigating the meat industry’s role in climate change).
  2. By making “grass-fed, grass-finished” and “pastured” central to the meats in all of their meals, Blue Apron is essentially forcing its customers to choose ethical, environmentally friendlier meat options. The consumer doesn’t even really get to choose. That means more people exposed to pastured meats and their benefits – I like that.

Consumers (short-term)

Speaking of Blue Apron customers, you’ve gotta love this move as a customer. At least in the short term, Blue Apron customers gain access to higher-quality food. And if Blue Apron is right, acquiring BN Ranch allows them to be more efficient. In theory, this means they can deliver that food to customers at the same or similar prices.  Because Blue Apron plans to practice whole animal butchery, in theory this also means we all become better practitioners of eating less commonplace cuts.

The Losers

Industrial Meat Producers

No matter how you cut it, this has to look bad if you’re an industrial meat producer. The gig is up and Americans want access to high-quality, sustainably raised meat. The old system is dying now that market disruptors like Blue Apron are proving that it can be done affordably and conveniently at scale.

Small-Scale Ranches

Bill Niman’s success has brought everyone along for the ride. But by vertically integrating with Blue Apron, BN Ranch puts small ranches in a tough spot. Join the BN Ranch Network, and you’re basically beholden to Blue Apron’s pay structure and supply chain demands. You may be independent in name, but in practice, another big corporation has you by the short hairs. Those relationships can be a stressful, “all your eggs in one basket” situation for small ranches.

Reporting to Blue Apron, instead of directly to the customer, also disassociates ranches from the retail market. In general, that means fewer profits and fewer customer relationships. Our definition of sustainability at A New Lens is inclusive of communities in which consumers and farmers are integrally connected. In this sense, I am nervous about Blue Apron’s move.

Consumers (long-term)

And that brings us back to consumers. Even though consumers win by accessing higher quality food, I can’t help but feel a certain sadness that this move consolidates power – the ranch and the distributor – and in doing so, muddies the waters. It allows Blue Apron to tell whatever food story it wants to tell. That concerns me. We remain disconnected from our food, only knowing as much or as little as Blue Apron tells us about its supply chain. It divorces us from the conversation.

Environment (long-term)

Like consumers, Blue Apron’s acquisition of BN Ranch is a double-edged sword for the environment. In the long-term, I’m ambivalent about the role of services like Blue Apron. I appreciate their convenience, that they connect people to cooking, and that they eliminate food waste via pre-portioning.

On the other hand, there’s no getting around the tremendous amount of packaging waste that goes into pre-portioning and delivering individual meal kits. Nor can one ignore the resource use necessary to deliver such small amounts of food. On a per-calorie basis, I would bet anyone that the meal delivery kit is the most fossil fuel-intensive way to move food around the country.

Don’t Knock It ‘Til You’ve Tried It

I’ve actually never used Blue Apron. My wife and I have tried other meal kit delivery services, mostly for kicks more than anything else. But we never loved them. The food was never as fresh as straight from the farm, the way we like it. And the pre-portioning meant we never had leftovers, an essential for keeping lunch affordable and healthy. That said, Blue Apron’s move to buy BN Ranch motivates me to try them first-hand and see how they do things.

Have you tried Blue Apron or other meal delivery services? What did you like about them? What do they get wrong? Leave a comment and let us know!

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