Joel's 2019 Spring Epistle

March 2019

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Big changes coming this year!

What got you here won't get you there

Hear ye, hear ye, Polyface patron saints–

These spring epistles, as they are affectionately called around here, have always been a way to communicate our innermost hopes, struggles, and thoughts. These are as transparent as we know how to be. In that light, the question of business evolution dominates our planning discussions, our family conversations, and our innermost meditations. Let’s examine how we got where we are.

Polyface is too big for diapers and too small for big boy pants. This is a horribly uncomfortable situation and we need some relief. Do we downsize, reduce services, eliminate personnel and cloister ourselves? Or do we stretch, abandon our militant local-only position, and let folks from greater distances enjoy our healing food?

We’ve never had a sales target, purchased much advertising, or even had a business plan. But we’ve always attempted to navigate new waters, in essence pioneering new are as to lead others and better caress the land. We developed new markets and encouraged other farmers to jump into this expanding pool loosely called integrity food.

To access some larger institutional markets like a Veterans Administration hospital near Richmond, we were forced reluctantly to leave our all-local insurance providers and go with a big national firm to get enough liability coverage to satisfy their underwriters. To access Wegman’s in Charlottesville we needed bar codes, even though a decade ago we proudly called ourselves the “non-bar code people.”

Meanwhile, land owners in the area, both new and old, started noticing the beauty of pastoral landscapes faithfully managed by a Polyface embrace. “Would you come and manage my land?” became a driving force in our business even though early on it had never entered our imagination. Few things excite us as much as healing land, watching it transform into more soil, abundance, biomass, pollinators, wildlife, and water.

The additional land created a new imperative to grow the market to sell what we could produce. If we don’t sell what we grow, we don’t survive. Furthermore, we try to accommodate young people who apply for the Polyface internship. A handpicked few stay on our team to manage these other properties, building one of the most vibrant food cluster collaborative entrepreneurial agrarian communities in the world.

During the half century of the farm’s existence, a changing context requires that we rethink some old dogmas–not all of them, but some of them. For illustration, when Joel and Teresa built the Polyface brand on a little farm inherited from Joel’s parents but never profitably operated, the hub of social friendships and conversations revolved around churches and civic clubs: Kiwanis, Rotary, Ruritan, Civitan, Jaycees and others.

Toting his Kodak carousel slide projector to these groups as they invited him for their entertainment, Joel told his story and slowly found customers. This local one-on-one marketing strategy worked well in the 1970s and 1980s. But things started changing. Today, these groups scarcely exist, and where they do, they’re a shell of the past. Millennials are creating and occupying a different social and marketing space. In 2019, Millennial buying power will pass Baby Boomer buying power for the first time. That means that in order to sustain a thriving business, we must embrace these changes.

Joel has often said that nostalgia is okay, as long as you abandon it the day before it becomes obsolete. In the wider culture, things changed that made remaining a viable business with a self-imposed militant local customer boundary more difficult.

Here are a few examples of things that have changed our context over the last 40 years.

Confiscatory federal taxes increased 30 percent. In order to keep our net level, we need a lot more gross. That is a federal government overlay on our local context that we did not imagine nor endorse, but it fundamentally changed economic realities.

Escalating costs of insurance, of all types. Liability, including product liability, comes in big chunks. If you’re going to sell to a big boy, you need big boy coverage or they won’t look at you. The Affordable Care Act priced our whole business and family completely out of the health insurance market, escalating our premiums 50 percent overnight on Dec. 31, 2015. Love it or hate it, insurance and the threat of litigation drive decisions now. Neither came from local changes; they were foisted upon us by distant national events. Because animals are hazardous and risk actuaries are based on deathtrap Concentrated Animal Feeding Operations (CAFOs) our workmen’s compensation payments are extremely high. Even though we’re on grass and not in fecal particulate buildings.

Tightening regulations. Zoning laws prohibit value added food processing on our farm. Historically normal activities like curing bacon or making meat pies to sell to neighbors now requires expensive and onerous zoning variations. Food safety requirements regarding private water (we have a good well, but it’s not public water) sources, inane and arduous food handling paperwork, tracking, coding, and licensing make embryonic enterprises nearly impossible (hence food trucks instead of small brick-and-mortar eateries). The full impact of Obama’s Food Safety Modernization Act are just now beginning to be felt on smaller enterprises; compliance could be crippling. We’re still digesting its implications for us and reading about new ramifications almost daily.

Cheapening and expanding distribution. Amazon, Fed Ex, UPS and others fundamentally alter shopping patterns and expectations. At the turn of the millennium when we launched our metropolitan buying clubs, new family member Sheri (when she married Daniel) catapulted that model into several thousand families, 30 drop points, and 40 percent of all Polyface sales. But the model may no longer be cutting edge. The changing face of door- step delivery in retail jeopardizes the viability of our innovative and initial convenient drop points. The times they are a-changin’.

Growing consumer demands. Finally, our do-it-yourself, rugged food rebel of the past is being replaced by whole-meal impatient convenience-oriented buyers who even refuse to drive on a dirt road. From our perspective as a relationship marketing local-themed direct-to-consumer farm business, we’re struggling to be relevant. We feel like the world is pulling away from us and that our historically successful messaging to connect, empower, and minister is fast becoming archaic.

Seeing all of this, Polyface launched two tests in 2017 we thought would be cutting edge. The first was a delivery service to Staunton (20,000 people 10 minutes away) and Stuarts Draft (5,000 people 20 minutes away). With increasing frequency, these local folks told us the farm was too far away and they would buy if we would do a routine delivery. We did. They didn’t. Coming to a pick-up point was too inconvenient. They wanted it on their doorstep along with diapers, bananas and dishwashing soap. Like, doing business with like, another vendor, like one that doesn’t have everything you want, like, on one shopping cart? Like, really? You’ve gotta, like, be kidding!

We thought when we acquiesced to a new generation of customers 20 years ago who demanded cut-up chickens instead of whole birds we had compromised our principles. We actually thought that if we taught people, for free, how to cut up a chicken, they’d start doing it. We came to that additional luxury service kicking and screaming, but it kept us relevant. Around our house, we joke that today what everyone really wants is Polyface Hot Pockets. You can see the disconnection progression in this integrity food space: pastured chicken (“I’m not getting that junk factory chicken any more.”); cut-up chicken (“What do you do with a whole chicken?”); boneless skinless breast (“How do you eat bones?”); breast with a whole meal (“I don’t know what to cook with it.”); pre-cooked ordered in (“I don’t have time to cook.”). That’s evolution.

The second test was hiring two sharp millennials, one to market product and one to develop customers through social media. We especially had pork in mind. For a decade, local patrons could purchase Polyface ready-to-eat pork at the Harrisonburg and Charlottesville Chipotles. Their numerous food scares changed their protocols, prohibiting in-store cooking and resulted in us losing those accounts. In an attempt to continue offering a cooked pork option for local patrons and to salvage a sudden inventory surplus, we went to every pork barbecue outfit along the I-81 corridor from roughly New Market to Fincastle (50 miles from the farm, both north and south).

We offered each barbecue outfit GMO-free (Genetically Modified Organism-free) pastured pork at the same price they were paying, regardless of source, and could not get ONE bite. It reminded us of 20 years ago when we had an overage of eggs one spring. We went to five brisk breakfast trade restaurants in Staunton with a match-price offer and only landed one. The excuses were hilarious. “We will never have a brown egg in this establishment.” “They’re too big.” “I’ll never buy from you; you’re too big.” “Our customers don’t care about quality.” It’s like a grade schooler making excuses for not doing homework.

Bear in mind, none of Chipotle’s problems involved Polyface or even meat, but outside influences pushed them to quit cooking in-house, which knocked local providers like us out of their supply chain. All of this was completely outside the control of these two savvy and eager millenial marketers. We invested and pushed as hard as we knew how on the local market, and it did not respond.

Over the years, Polyface has turned down sales in Baltimore, New York, Chicago and Charlotte in order to follow a mystique about local. We are still completely committed to local, but exterior forces–many of them federal government regulations–consistently erode the viability of a local context. Perhaps nothing recently illustrated this like one of the poignant and profound data points voiced in the excellent new documentary Farmers for America produced and directed by Graham Meriwether: in 1970, 11 percent of America’s food was imported; today, it’s 22 percent. That means one out of every five bites taken by Americans comes from another country.

Perhaps things have shifted so dramatically that local is now the U.S. If we could just tie a knot in the end of that rope, maybe that’s good enough. Or maybe that’s where the new frontier lies. Can’t we as a nation feed ourselves?

Certainly some Polyface fans will be shocked, angry, or feel betrayed by this explanation. But perhaps we’re staring down today’s hottest business axiom: “What got you here won’t get you there.” It doesn’t mean you change everything. It doesn’t mean you abandon everything. It does mean that if you don’t change enough to keep from being obsolete, you’ll eventually be out of relevance, and then you’ll be out of business. We live in interesting times, disturbing times. As Darren Doherty of Regrarians says: “The hardest climate to change is the climate of the mind.” Here at Polyface, we’re doing some serious climate change rethinking.

Why should we turn down easy and significant sales from Baltimore while we beat our heads against the wall with nearby folks? People located 10 minutes away from us are purchasing Australian-sourced dinner-in-a-box with doorstep delivery rather than patronizing us. At some point, even for our sanity, we must realize the world has changed. Another business axiom: outfits need to re-invent themselves about every 10 years in order to stay relevant. Maybe we’re 10 years behind and have to catch up. Changes you see in the next year will simply reflect catching up with relevance.

Polyface is a for profit business with no guarantee of success. But just like we’ve done in the past, we expect to adapt and win in this next cyclical context. We plan to provide healing food and caress the land for a long time to come. That requires unshackling ourselves from a cultish adherence to mileage boundaries. Please walk with us as we stay one step ahead of obsolete. Deeply appreciating and holding onto the best of heritage can only be viable if we embrace enough of today to be credible. This is the path to survival. Thank you for listening, for caring, for telling your friends about us, and for eating the best food on earth.

Thank you for caring,

Joel Salatin

for the Polyface Team