#54 - Cody Hopkins @ Grass Roots Farmers’ Cooperative

Episode Recap:

ReGen Brands Recap #54 - The Regenerative Co-Op Selling Seven Species Of Livestock  - (RECAP LINK)

Episode Transcript:

Disclaimer: This transcript was generated with AI and is not 100% accurate.

Kyle Krull - 00:00:15
Welcome to the ReGen Brands Podcast. This is a place for consumers, operators and investors to learn about the consumer brands, supporting regenerative agriculture and how they're changing the world. This is your host, Kyle, joined by my co-host, AC, who is going to take us into the episode.

Anthony Corsaro - 00:00:33
On this episode, we have Cody Hopkins who is the CEO and Founding Farmer at Grass Roots Farmers’ Cooperative. Grass Roots is supporting regenerative agriculture with its seven-species lineup of regenerative raised meat products. In this episode, we learn why Cody was inspired to start the co-op after being a small scale poultry farmer, what makes their business model and corporate structure unique and how Heifer International and Heifer USA have been an important partner along their journey. Cody is simply the best, just an amazing guy who oozes transparency and integrity, Grass Roots has one of the most interesting models and stories in our space and it was super fun to dive into all of it with Cody. Let's go. What's up everybody? Welcome back to another episode of the ReGen Brands Podcast. Very fired up today to have our friend Cody from Grass Roots Farmers’ Cooperative joining us.

Anthony Corsaro - 00:01:20
So welcome

Cody Hopkins - 00:01:28
Cody. Thanks a lot. Glad to be here,

Kyle Krull - 00:01:32
Cody. We're super pumped as we talked about in a lot of episodes. We uh a ac and I both have a personal passion of wanting to de vilify the meat industry and talk about how uh ruminants and even mono GST risks can really be beneficial for the, for the environment and for human health. So we're super pumped to have you here um For those who are unfamiliar with Grass Roots farmers co-op give us a quick lay of the land. Like, what sort of, you know, meats do you do you play in? What sort of categories? What sort of products do you produce? Where can people find your products today?

Cody Hopkins - 00:01:59
Sure. Yeah. Um So uh Grass Roots Farmers co-op is a uh it focuses on raising pasture raised grass fed meat. So we sell uh grass fed beef and grass fed, uh lamb and grass fed bison. Uh And we also sell pasture raised chickens, uh and pasture raised turkey. And uh we do and we have done a little duck too. So it's all meat focused. And these, we work with smaller scale farmers. Typically we don't have any huge, huge farmers. Uh We're um and we, we mostly go direct to consumer, but we also have some wholesale business on the side that goes uh into, you know, with like white label programs, whether it's other ecommerce companies, uh or um other, uh you know, we do a, like a little bit of food service here and there. We don't have a big, any presence really in the retail side of things, you know, out on store shelves and grocery stores. We've dabbled a little bit in that, but never, never really.

Cody Hopkins - 00:02:48
Um, we don't have, we're not really on the, on the shelves of many stores at this stage.

Kyle Krull - 00:03:02
Got you. Not yet.

Cody Hopkins - 00:03:04
Not yet. I think I, I counted with the show and it scares me off from doing that actually. So.

Kyle Krull - 00:03:13
Well. Well, hey, you know, we, we want you to walk into that, that, uh, situation with both eyes open. So if that, if that points for you a little bit and get you to focus somewhere else, like that's ok because it's a scary place. Um, but I think I counted six different animals, I guess, you know, maybe 5.5. You said little duck, I'm not sure. You know, it's like we don't have to make a joke about little ducks. That's a lot. That's, it's got to be complicated. Um, I, I can't even imagine like the regulatory, the sourcing it, it's a lot. So, um, we're excited to learn more. It's gonna be interesting.

Cody Hopkins - 00:03:45
Yeah. Yeah. And we're definitely like, we're, it is like we take on hard problems. That's something that I have a passion for clear. And, uh, you know, we've definitely along the way, learned everything. Uh, it seems like the hard way. Probably twice. Uh And uh you know, it's uh and we are vertically integrated. We're not like going out and just buying, you know, packaged or cases of chicken breast and then reselling those. We actually are vertically integrated. We're, we're coordinating all the way through from the production side up through the uh processing, actually own part of our processing company. So it's uh it is a pretty complicated operation.

Kyle Krull - 00:04:21
Yeah,

Anthony Corsaro - 00:04:21
there's, there's so many pieces, I'm so excited to unpack. Um And just, yeah, pumped to have you with us Cody. Uh This all started with, with your farm, with your family farm. And I think we were talking about, I think this is our first co-op. Um So just take us back man. Where did this all start? And kind of give us the origin story.

Cody Hopkins - 00:04:41
Yeah. So um my wife Andrea, who actually she is really the farmer on our farm now. She runs the farm. She's amazing. Um And I get to like see her drive by out the window and stuff and then help out on the weekend. But um so um the uh we're both first generation farmers. We didn't come into this with like a plot of land or anything. So this was back in 2006 7 range. Uh got inspired by Joel Salatin omnivores dilemma. You know, like so many farmers in this space that, that period, there's a lot of folks who got inspired by, by pollen's, you know, Domino for dilemma. Um And, uh, and that definitely was our case.

Cody Hopkins - 00:05:09
And so we, um, we were both kind of freshly out of college had just kind of met and we were like, well, we'd love to stay in rural Arkansas, find a way to make a living. Um, and we both were into food in different for different reasons, whether it be health or environment is all, I mean, food just touches everything as you know, I mean, whether it's health environment, um, you know, economic development, all those kinds of things. So, uh we sort of latched on to farming and launching a farm, a direct to consumer farm business. And well, I mean, direct marketing, farm business, uh where we were going, we set it up, leased 40 acres from a neighbor, start doing some pasture, raised chickens really following the, the salton, you know, book of, you know, the you can farm book, uh and jumped into it and started going to restaurants and selling to in local restaurants in Arkansas and um going to farmers markets really beating the pavement. Uh It wasn't too long into that journey where we started to realize that we'd add some more species and we were starting to see, oh my gosh. There are all these hurdles to being able to get product from farm to market.

Cody Hopkins - 00:06:15
Um And you know, whether it's processing real quick,

Kyle Krull - 00:06:30
real quick. I um sorry to interrupt, but, you know, you mentioned the pasture raised chickens. And I think this is a good consumer question. Um There's free range chicken, there's pasture raised chicken, there's regular chicken with no claims. Give us a quick understanding like, you know, how, what do you have to do to qualify for pasture raised? And is that exactly what your farm is doing or like how does, how does raising chickens on your farm look like or what?

Cody Hopkins - 00:06:53
So on our farm and all the farms are part of Grass Roots because we all have the same common standards and production practices. Um It's a uh so they are in uh mobile pins and they're, they spend, they spend the first couple of weeks in a brooder where they're, until they get a few feathers on them, we put them out on pasture, uh and they're moved every single day to fresh pasture. And so, um you know, and they never go back over an area more than once a year. Uh And so you get this great fertilization, the animals are moving and getting fresh grass to eat. It's cleaner. Um You know, they get, it's sunshine, all those kinds of things. It's not like a stationary house with them, sort of popping out if they, if they are, if the weather is good enough or whatever, they're out every single day on that fresh pasture.

Cody Hopkins - 00:07:31
And it's seasonal too, which is, you know, create some hurdles on the production and economic side of it. Uh it is nice for to have a little bit of time off because it's a pretty intensive season for us when we're doing our chickens. But um yeah, that's, that's kind of the model and um that daily move is really important to us. We think that's very important to be able to really create, uh give us the best chance to regenerate the land. And um and so, uh you know, and that's, you know, it's really um one of the reasons we've gone direct to consumers because this landscape is so dang, you know, understanding the labels and uh you know, what free range versus cage free versus whatever means is just almost impossible for a consumer, I would say. And so we've gone that route of that direct relationship to the point of being able to have that trust and really explain here's how we do things.

Cody Hopkins - 00:08:24
Um And so, um

Kyle Krull - 00:08:34
totally makes sense. I mean, it took, you know, maybe, maybe 90 seconds to get that answer really hard to synthesize that into a claim on a package, right? Where somebody is walking on a retail shelf and they can see that and, and understand and just to clarify, I think you mentioned pasture raise. But you're also doing the rotational piece which the term pasture raise doesn't really give you credit for. So you sort of like pasture raise plus, right? That's right. We can get into more, more of that agronomy piece later. I just wanted to, I know we're gonna, we're gonna talk about at least five different animals here.

Kyle Krull - 00:08:52
I want to call out how and what Grass Roots is doing different and better than most other farmers to make sure you get credit for that. And our consumers understand.

Cody Hopkins - 00:09:11
Yeah. No, I appreciate that. It's a great clarification point. Kyle. Um, and, uh, so, yeah, going back to the origin story, um, you know, we started to see these hurdles on processing. We were processing our poultry on farm under uh the, the uh USDA exemption. Um And, you know, we were basically this little like mini vertically integrated operation. Uh And that just wasn't working for us economically. It wasn't penciling out. It was, you couldn't figure out where one enterprise started and the other one began. Um And we were hauling animals to from the large animal side, the beef and pork side, we do pork too if I didn't say that earlier. But we um so to add that to your list, Kyle, sorry, it goes to six now.

Cody Hopkins - 00:09:37
Uh But um we uh we were, you know, hauling animals to the processor and, you know, Andrew and I would kind of see each other on the roads maybe driving by you that it wasn't really the lifestyle that we were, we envisioned. Um And uh and so, uh at the same time, we had developed a really great community of other farmers that we were uh you know, we'd work with at the farmers market or we would maybe share a load of feed. Uh like they would get half the load of feed and we get the other half to help sort of balance out cash flow and those sort of things. Uh And that's what and we may even like share a market opportunity or uh a load of animals going into the processor. And so we started to see like, like I have a natural, I'm bent towards like collaboration in general, but that um seeing that in practice really started uh pushing us to think about, is there a co-operative model that would allow us to um you know, have a more sustainable model for our farm and our community here and address some of these issues where the farmers could really focus on being great farmers and then there being, you know, over time, what it's kind of developed into is hiring professional people to run marketing, sales, distribution, customer service. Uh but not like not have the farmers lose ownership of that. And so not require the farmers to run and understand the, you know, have the expertise to do all those things, but to um have a stake and, you know, basically to still have ownership of that entity.

Cody Hopkins - 00:11:00
Uh So, um you know, that's what led to eventually our co-op getting founded in 2014. So we've been around for just under uh I guess it's what? Oh just under 10 years now. And um it's been yeah, a real learning journey for us along the way. So

Anthony Corsaro - 00:11:35
what Cody, what I'm trying to think of, I'm trying to put myself in your shoes and get to that inflection point, right? And the background makes complete sense. But how do you do the initial? And this is like a super nerdy business question? Like how are you thinking about type of entity? How are you thinking about critical mass of supply to like, really pull the trigger? Like, did you have a certain number of animals? Like, did you know it was gonna be a co-op early on? Like, how are you thinking about it organizationally even in those early stages before you pull the trigger?

Cody Hopkins - 00:12:04
Well, so um I would say that it, you know, definitely, you know, there wasn't enough whatever I was thinking back then was wrong, I guess the first thing I just, yeah, I mean, so it sort of like, you know, so I have a degree in physics. I'm a math person by nature. Um I'm oriented that way, which is great. It helps me out. Um I did not come into this with an MB A. Uh So I'd say I've learned it, you know, through the school of hard knocks, right? So um so came into this, like, look, I mean, definitely um you know, was I was inspired by a couple of different group, one company, actually a company called Zingerman's, it's kind of a weird connection, but they're a, they're an amazing company, uh be a great company to have on here, actually. Um, out of Ann Arbor Michigan, really interesting business model where it's a community of businesses that are all sort of had these shared ownership structures.

Cody Hopkins - 00:12:53
And so I came across them, read a couple of books that one of the founders had written that really got me thinking about like different business models and, and ways of structuring that could help uh be uh you know, help solve some of these challenges that we were facing. Um We also did a um we ended up getting a VA PG grant from the USDA to do a feasibility study on this and that was helpful and kind of putting together some financial models. Um But, you know, so there was just kind of like a general like desire to want to collaborate plus like a, you know, a few like inspirational models that I had come across. Um another book I read called Small Giants that, that was really interesting. Uh and certainly was familiar with Organic Valley. And um and, but there aren't like, there are very few young co ops like you don't find, like you don't find producer co ops um especially in the AG space.

Cody Hopkins - 00:13:41
I mean, Organic Valley seems like a new one and they didn't, they started in the eighties, right? So, um so, you know, we, so those things were going on. Plus, you know, there was a, we saw as we were having these conversations, um we had a conversation with Hefer International which I'm sure we'll talk about through this, through this uh interview. Um And they came to us looking to uh they have a domestic program under Hefer USA. Uh and they were looking to make some investments in the regenerative ag space to help small farmers. And they are also very and they, they're known mainly for the international work, but they do um internationally, they do a lot of work with co-op. So that's a model they're pretty comfortable with.

Cody Hopkins - 00:14:30
And it's a way for them to make an investment into an entity that has the ability to make that sort of, you know, uh lift all boats, right? And so, you know, that that kind of was another sort of thing that was like, huh? Well, that's, that fits too. And then we had a um a customer come to us, come to one of our like one of the farmers that was part of the conversation and want to place an order for. Uh I can't remember how much chicken it was, how much pasture chicken it was at the time, but it was a sizable amount that none of us could produce on our own. Um at that time, like probably the biggest volume.

Cody Hopkins - 00:15:09
So it was really a customer like that demand piece was also a big galvanizing factor in that moment. And so it was several things that came together that sort of gave us the confidence to like make the jump uh into doing this

Anthony Corsaro - 00:15:35
just to contextualize it for the audience to I think frame the whole conversation is when you started how many farmers ish, like how many species and like now how, how many farmers are you sourcing from how many state radius like just give us some numbers back and forth to, to frame that transition up.

Cody Hopkins - 00:15:51
So it was honestly probably four or 56 farmers in the beginning. Um Some of those are still with us. Some aren't, it just didn't work out for some and some it did. Um And you know, we were, we started out with chicken. That was our, the first year. It was just chicken. I think we may have sold maybe, uh you know, a little over $100,000 in chicken. But at the time, like the biggest farm was a producing 10,000, 15,000 chickens, which is probably our farm at the time. Now, it's more like 45,000 or 50,000 chickens, right? Um So, um so that was then, and then now we're working with about, you know, it's roughly about 50 farms we buy from um geographically. So in the beginning, it was all Arkansas farmers.

Cody Hopkins - 00:16:17
Uh at this stage, we do, we have Arkansas farmers, we have Missouri farmers, some in Mississippi, some in Oklahoma. And then we have some relationships with folks like, um, like Corey Carman at Carmen Ranch that we work with to source some product from. And then, um, you know, Jamie Hickory Nut Gap, um, a little bit with white oak. So we have some like these partner farm groups that we work with too. Um, so it's definitely, um, you know, the geographic footprint has expanded at the time, we were just selling uh this that wholesale customers in Missouri. Uh But outside of that, it was just Arkansas sales in the beginning. Um And that one wholesale customer in Missouri.

Cody Hopkins - 00:16:55
Now we ship to the lower 48 and uh actually California is our biggest market. So, yeah. Awesome. Yeah. Yeah,

Kyle Krull - 00:17:19
I've got, I've got a three part question. I want to tee up. Number one, you mentioned you, I'll remind you or maybe I'll forget, I don't know. By the time I'm done talking, I might not even know all I am too. Um You mentioned you guys got started in like 2007 and I'm curious, you know, number one, like why did you choose to start with animal based agriculture? Um Just number one as, as people who had not had no, no farming experience. Why was that the decision you made? Part two? When did regenerative become a term and or movement that you realize you really wanted to become a part of? Um and then part three and you sort of touched on this a little bit with the last conversation piece is like, what is the standardization process between all the different farmers and all these different, you know, meat types? What did that look like? Especially without a certifying body?

Kyle Krull - 00:17:58
Because I'm assuming that must have been somewhat complicated. And how do you convince the others? Like, hey, you want to be raising animals this way?

Cody Hopkins - 00:18:21
Yeah. Yeah. Wow, those are all, those are three good questions. Um OK, so the first one is, why don't we start with livestock? Um One was because of uh you know, we just, we read the omnivores dilemma. That was, you know, clearly that was a lot about livestock and like the challenges and the problems with the, the the livestock industry. Another big part is we live in the Ozarks. It's not like super fertile soil. Uh So livestock production is really kind of, I mean, from a contextual standpoint, like it just, this is a place where, you know, there aren't row crops around here. Um It's, it's more pasture land and small like rocky, you know, uh soil, small pastures, rocky soils, those kind of things. So uh so like it made sense from a um like take those, take those chickens, that's why we started with chicken because we need fertilization.

Cody Hopkins - 00:18:56
Uh And you know, that was a great way to sort of kick off the, the the farm and while also being able to fertilize right um, and so those were kind of the main reasons we, you know, my wife is also, she grew up, uh, trained horses. She was just naturally an animal person. Uh, so that was all part of it too. Yeah. Yeah. Um, and then, uh, what was the second question?

Cody Hopkins - 00:19:27
The

Kyle Krull - 00:19:37
second question? When did we become a thing?

Cody Hopkins - 00:19:41
Yeah. Gosh, that's a, I, I was trying maybe 2018, 2019. Like the, like when they, I mean, like I always struggled with that idea of like sustainable. It just seems so limiting to me. Uh It's like, well, we don't want to just sustain, we want to do better than that, right? And so I can't remember when I first heard the regenerative uh you know, that word being used to describe agriculture but um you know, it didn't take much at all for me to latch, latch on to that because that's always been the goal is to like, not see status quo, but to actually make the soils better, see our organic matter go up, you know, see the, the the mineral levels in the soil go up, uh see the quality of the animals, the carrying capacity, all those things go up and improve over time. So it was not a, I don't know when it happened, but it was certainly a very easy jump for me to get to that to be on board with that. So, um and then the last question which is prob so this like standardization question. All right. Um So, you know, this, that's a big, that's a can of worms, I would say because it was, it's been uh we're in a good place now. I mean, but it was really tough as you like the farmers that are in this space.

Cody Hopkins - 00:20:41
I mean, just think about like, just for a second, amazing folks like, you know, uh Joel Salton or Will Harris, like, you've got some big personalities in this space. I mean, they're amazing, amazing, but they're definitely big personalities that want to do things a certain way, right? And standardization is not something that is, you know, it's almost like a curse word in the Virginia ag space, right in some way or it can be depends on what, you know, um But like a business model standpoint, you do have to reckon with that because there's efficiencies and standardization. There's also like, uh you know, if you're going, you know, depending on what your path to market is, that's also can be pretty damn important to have a common standard, right? Uh And so, um we sort of over time just drew more and more like, like created more and more bumpers, right? Uh So we started out very early on uh with um uh I had a friend actually who doesn't work for us anymore, but at the time he worked for us and he um you know, helped sort of just pull from several different resources.

Cody Hopkins - 00:21:39
We put together our own set of standards that we have modified over the years. But they're publicly, they're on our website. You know, it's, uh, it's so we sort of developed those. Um, and, um, you know, we have like one thing that's unique about us. Again, we are, we're not just a sales business. I'm not like some guy that wanted to sell a product and thought, well, I can make some money on meat. And so I'll go do that and then, oh, e commerce is the hot thing.

Cody Hopkins - 00:22:07
I should do it that way. Right. That was not how we started. We started with like, huh, I wanna raise some chickens in the middle of Arkansas. Right? And so, uh, yeah.

Cody Hopkins - 00:22:17
Um, and, uh, I'm not saying that my idea was that my approach is the better one by any stretch. But the, uh, um, so, um, you know, we, so we, we knew we had to have standards and we came at it from a standpoint of like, let's get some things, you know, down, make it public and then we'll adjust over time. All right. And we, uh, um, you know, whether it be so the standard part hasn't been super hard. There have been times in the early days where like, hey, this farmer was not willing to move his chickens every day. And so sorry, we can't buy those.

Cody Hopkins - 00:22:49
And, you know, at that point, you know, as we were figuring it out. There were a couple of times that, like, I mean, we, we would buy the chickens, but we would like, donate them somewhere. All right. And those were really tough times, uh, really tough times and same thing on the processing side, it was very difficult. Like I remember a period where we couldn't get our chickens plucked properly. And, and so, you know, I was jumping in trying to get the processor, trying to help them get equipment and all those kinds of things and, and again, like we would take product and, you know, it wasn't meeting our standards.

Cody Hopkins - 00:23:21
So we would, um you know, we would donate that, right. Um And, but, you know, so over time though, we've been able to get more and more specific on those things have, you know, head off those conversations on the front end and then back to what I was saying a second ago, we're different from other companies because we do, we have a couple of, we have a, a department that is on the live animal side that works with the farmers to ensure that they are meeting the standard, they have the resources they need, they really understand what is expected and they're out visiting those farms a couple of times, you know, once twice a month, sometimes more than that, depending on what stage they're at. Uh But then we also like have to get standardized on like what's a what's a volume that we are willing to because we don't have, like, we don't, especially on the chicken side, there's not like a pool of farmer, a pool of production. And certainly back at that time, there wasn't a pasture bird either to go, like, pull some product from every farm was a start up and scale up for us on that front. And that's kind of been the way it's operated. And so, um early on, we would work with a farm that raised 1000 chickens a year.

Cody Hopkins - 00:24:37
Now, if you're going to be part of our core program where we commit to buy what you produce, uh we, you know, it's more like uh you probably need to be in the 20,000 bird range to be able to make it, make sense because we have a common pay rate that we pay to all of our farmers. We don't pay different, different based on scale and those kind of things. It's a, it's a cost of production model. Our payment like structure is, is, is based off of cost of production with those farms. So we're working with them to understand their financial situation, taking pictures from various farms and then putting building a pay, you know, farmer pay strategy that's based off of that.

Anthony Corsaro - 00:25:22
That, that is super interesting. And I want you to, to talk about that more. I want to interject with one question because what Kyle's gonna want you to do is pull up every single species PDF and walk through the ergonomics line by line. So before we, before we do that, before we do that, I'm gonna ask the Anthony investor question and just say Cody in a simple fashion, maybe with not all the detail, describe the corporate structure for, for everyone listening, right? So we have the co-op which is really sales and marketing, focus some technical assistance, maybe some other things you haven't listed. There's a processing company that is partially shared ownership, but not the same entity. You have Pepper's involvement, just, just so people understand like, what are the entities? How do they play together? What are they responsible for?

Anthony Corsaro - 00:25:57
Just so we can frame the

Cody Hopkins - 00:26:04
conversation that. Yeah, yeah, that's great. And so we sort of refer to that internally as like our ecosystem. Uh And so we have uh you Grass Roots the farmer co-op that's owned by the farmers, right? And governed by the farmers. And that's the um you know, that that entity, then it's a for profit entity that also has a um uh ownership in our processing company. So we own um you know, it's, it's a minority ownership but we own like 49% roughly of our processing uh partner. Um And that entity has, it's called Cypress Valley Meat Company. All right. And that company has, uh they're amazing, you need to have them on here at some point. Uh But they are um so they operate, um, one poultry facility, inspect, federally inspected, uh, two red meat facilities.

Cody Hopkins - 00:26:37
Uh, and then they have, uh, two custom facilities. Uh, they operate. And so, um, you know, and, and that poultry facility was actually, oh, the custom,

Anthony Corsaro - 00:27:10
what is custom? Yeah. What does custom mean for the

Cody Hopkins - 00:27:12
layperson? So, custom exempt is not, it's not inspected by the USDA. And so it's, um, it's really for, like, if someone wants to harvest their own animal, they can take it there. You know, if they can take a cow there or if they want to sell someone, like uh you want to sell your neighbor a whole animal and they want to have it processed or you can get down as, as you can break it down to a quarter, it's like quarters, halves and holes, that's what you can sell. Uh But basically the idea is that you're not actually selling the meat to that customer or that neighbor, you're selling the live animal to those, say four neighbors and then they have to call the, the processor and, and give the cut instructions. And so, um it's a, it's a, you know, they're smaller plants, uh really small, you know, but they're, they provide a really important service to, to especially local rural communities that, to give some processing without all the, the additional cost and overhead associated with being federally inspected.

Anthony Corsaro - 00:28:13
And is, is everything that co-op purchases like a lot like a live animal uh purchase that's going through Cypress Valley or is it that plus it, it goes through maybe some other processors as well, just like articulate that?

Cody Hopkins - 00:28:28
Yeah. So the vast majority again, 90 I don't know, 95 98% goes through uh Cypress Valley. Uh those, those, those three federally inspected facilities we do in the case of some of our partnerships like with, you know, Corey Carmen for, you know, they'll process, have them processed out, harvested there and then we bring the primal back to get those cut, cut up and then packaged and, um, and then, uh, you know, we might do a little bit of value added stuff. Um uh Mark work with Mark Keller Keller Meats, uh previously Keller Meats, I guess, uh to do some like corned beef for us and those kinds of things. So, if you like value added products we've done outside the uh that aren't in Cypress Valleys Lane. Uh We've done with other cooks but by and large it's all done there.

Kyle Krull - 00:29:14
Cool. Uh First I want to give Cody credit for answering all three of my, my question down a notepad and very, very well. Um So great, great

Cody Hopkins - 00:29:25
work either. I couldn't like I was trying to figure out the food line, but uh

Kyle Krull - 00:29:31
well, it might be kind of her but, you know, I guess it didn't come off the right way and that's fine. That's totally fine. Um, ac is normally. Right. I would want to get into the Agronomy on every single different animal, but that's gonna take way too much time. Instead, what I'd really like to understand better is, you know, the standardization process to me feels really difficult and we have these certifications today. So, Cody, I'd like to get a better understanding of what your relationship with certification is today. How you feel about the space. Um, why to the best of my knowledge, there is no certification yet or verification um for Grass Roots Farmers co-op, which is totally ok. Uh But I'm wondering why that decision has been made, if there's something in the future and if not, why is it, is it capital, is it, you don't believe in some of the, the requirements, you know, walk us through your relationships with the certifications?

Cody Hopkins - 00:30:18
Yeah. Yeah. So, um we are actually in the pro we are going through the land market verification process. So we are part of the EOV program. That is, and that's the first one we've ever done. I mean, we've looked into all of them, but this is the first one that we felt good enough about making the jump on. Um And, um, and so going back like we've, over the years, we've had this conversation a lot of times. Uh and on the cusp, you know, we were back before Amazon bought Whole Foods. We were in conversations about a regional pork, like whole whole animal program, I never panned out. But in that moment, we would have definitely gone gap. We would have had to have gone g, um, and, and, but that didn't pan out. So it was always, our approach has always been, what does our, is there a customer need for it? And, um, that's been the driver.

Cody Hopkins - 00:30:57
And so if we, certainly, if we're in, we're focused more on retail, we would have had to figure out something there. Um, but given our direct to consumer approach, um, it's been a, um, I mean, it's definitely been limited at times. We've missed some deals because we haven't, you know, on the wholesale side because we weren't, you know, this or that. But, um, as we looked at it, it was just never like, I certainly have, um, uh, you know, there's a lot, I definitely have concerns about different certifications, different certifications because they, they, you know, I mean, it's, uh, it's just, uh like it be organic, everybody knows this. It can, there's a lot of things you can do in organic that are, you know, not that great and are not what I would consider regenerative. Um And uh but there are good things about organic too. So we're not like anti organic.

Cody Hopkins - 00:31:45
We just never saw it as being our, our thing, you know, we do source GMO free grain. Uh It's been good enough for us to be able to say, hey, we do that. Here's where we source it from our approach has always been about transparency given our direct to consumer approach. And so it's like, well, let's find ways to be as transparent as we possibly can. Uh let's publish our feed invoices if we need to or whatever it is, you know. Um and uh versus like trying to have some stamp that probably muddies the water, but we are excited.

Cody Hopkins - 00:32:15
Yeah, I definitely think that uh I, you know, I know that the regenerative uh certification verification space is messy right now and there's not a clear, you know, winner, maybe there never will be on that front. Uh But I really um even if the land and market verification didn't exist, the EOV monitoring process is awesome and I love doing that on our farms monitoring over time. The impact that these um you know, our production practices are having on their farms uh is something that's really important to us. And so uh that really scratched an itch um regardless of the um the verification in the stamp

Anthony Corsaro - 00:33:07
that, that seems like such a cool part of their program is that it's not only the label, but it's also this really robust data back, almost procurement strategy or, or so solution or call um Cody, I'm curious, you know, we've had other people on that have basically said regenerative as a claim still doesn't move the needle with our customers, right? So especially in that direct to consumer environment, I'm sure you all have played around with titles and tags and all kinds of fun stuff. Like, is it grass fed? Is it pasture raised? Is it, you know, have you done surveys? Like, what do you know about what the customers actually care about in terms of claims hierarchy right now?

Cody Hopkins - 00:33:44
Yeah, that's a great question. Um So I think that definitely pasture raised is still like, uh that's one that I would say is probably, you know, from like a, you know, a paid search bidding standpoint, you know, keyword standpoint, that's like a, that's a, and the chicken side is really, you know, like, that's actually about 40 or 50% of our sales are chicken. So that's, you know, it's um that's a big part of our program still where it's funny, I, I talked to a lot of folks in the space who have very different, you know, profile. So we have a different customer profile than other folks. Some are more, much more beef oriented. Um So, um yeah, but I, I definitely like the regenerative piece of it is absolutely like it's growing, I don't know, like where it fits in the hierarchy of like the, you know, things that customers care about the most. Uh I mean, definitely the number one thing I think I've heard you say this before, it's all about like health and flavor. Those are the top two things. Everything else is just like a cool thing to have.

Cody Hopkins - 00:34:33
Now, there are those people who are like, I don't care what it tastes like. I'm gonna buy it because, you know, it's good for the earth. But though there are a lot of those books, most people are focused on health first, vir uh, flavor second. And so those were, that's where you really got to start. And then, uh, from there it's like, you know, because we always wanted, we would love for it to be, uh, oh, the number one thing is about, you know, supporting small farmers. That's, I care a lot about that. Uh, but I'm also, you know, a, uh, you know, a farmer in rural America, you know, there's people that are out buying this stuff, they care about farmers, but it's not the driver.

Kyle Krull - 00:35:20
Mhm. Right. That the purchase decision.

Cody Hopkins - 00:35:23
Yeah. Yeah. I mean, and we've done surveys, you know, from 2017, 2016. Which, so that's when we sort of launch some kind of direct to consumer program through this year. And it's still the same, you know, it's, there's, there's things people care about beyond health and flavor. Uh, and they probably use those as like, uh, certainly the health part as an approximate to some of those other things. Right. Um, but, uh, but definitely over and over again, you know, it's like we've never gonna start, like, oh, yeah, number one thing is the environment or number one thing is, uh, is, uh, you know, that the farmers' bottom line. So

Kyle Krull - 00:36:02
on the health front, you know, how are you communicating that attribute or that proposition to consumers? Has Grass Roots farmers coop participated in any of the, the super cool data that's coming out now with like the differences between pasture raised and conventionally raised meats. Um Are you, are you kind of using some of the other correlated data? Um How are you explaining the health benefit of your products versus rest of industry?

Cody Hopkins - 00:36:24
Yeah, great question. So we've done um a little bit of both. So we're definitely using some of the information as it comes out uh to help sort of back up, you know what we believe and, and see, and we've also done actually our own testing, like sending off um samples of our meat to lipid labs to have them tested and see, you know what the difference is, then we take those, those tests and like, you know, hey, here's what we're seeing, show that to customers, right? And so uh now uh I definitely like we could definitely get better on that front. I love, you know, the stuff that as what Dan Kittridge is that his name is doing like some of the some of the Bio nutrient Institute maybe or whatever it was called. Like that stuff is super. I think that could be a real game changer for this industry. I mean, because consumers really, really care about that health is so as you both know, it's, it's a huge, huge driver of purchase behavior.

Cody Hopkins - 00:37:02
And, uh and so if there were a way for folks to really see and it'd be just really black and white and easy to digest, I think that could be probably one of the, probably the biggest, you know, in my opinion, needle mover for this, this stuff. So

Kyle Krull - 00:37:29
totally. And it's just so annoying and frustrating that the way our food system works in the United States is that it takes small brands um and small companies to do this research to tell consumers. It's like, could you imagine if our, our regulatory bodies did this for us so that consumers could make that decision? Because that's like it's the right thing to do and the government cares about health, you know, it's, it's just, it's really sad. Um That, that's not the case. So to you and the team for, for leading

Cody Hopkins - 00:38:00
the charge. Well, that's what happens when you have so much money in politics. I mean, really, I mean, that's what, you know, I'm not gonna get on my FCC for

Kyle Krull - 00:38:07
citizens United Man. Totally agree that everything changes.

Cody Hopkins - 00:38:14
Yes. Yeah, that's right. And so that's the, I mean, at the end of the day, it's uh the good thing is we still have a society where people can choose what they want to buy. Right. So that's awesome. And that's what we got to focus on.

Anthony Corsaro - 00:38:25
Yeah. Agreed. 11 comment and then one question the comment on the nutrient density pieces. Um You know, I'm always beating the dead horse of we need more capital allocation downstream into brands that isn't just pure investment. That could be one of these foundations that really cares about region ag investing in nutrient density testing for this cohort of amazing regenerative brands. So it's not Grass Roots paying $50,000 100,000 dollars, whatever it is, right? And it's a pool of a million $5 million that gets divvied up to do this research. And I still think those, those names get thrown out there all the time. Like Dan, like like nutrient, like what Eric's doing at Ada, like what Tina nutrient density alliance, we still need millions of dollars put into those people's hands and other scientific bodies hands to actually create this robust data set that can back up claims from a regulatory perspective. So that's my, that's my soapbox on, on philanthropic capital funding

Kyle Krull - 00:39:18
nutrient ac I just want to spin off on that real quick also just don't mean to interrupt if we could utilize the philanthropic dollars to go to disease prevention and funnel it towards what AC is talking about. Like the amount of potential good is extraordinary. So I just want to call that out. I think about the tons of millions of dollars going to all this disease prevention to, to, to find the cure when really is preventative. And if we get e more nutrient dense food like that solves the problem.

Cody Hopkins - 00:39:44
So that reminds me a lot of the, I mean, there was a quote in, I think it was maybe the island of words of Lima, one of Michael Pollen's books about it. Uh, where he talked about in the fifties, we spent about 20% of our income on food or 18% and about seven or 8% on health care. And today that's totally flipped and, you know, we're spending close to 20% on health care and less than 10% like 7 8% on, on our food. And I mean, you know, it's just crazy to me. It's crazy.

Anthony Corsaro - 00:40:14
The, the question you, you brought up the farmers a couple of times recently here in the conversation, Cody and something that's kind of tied to the agronomic I think would be cool. That's a business question is really articulate for us. What's the average farmer profile that y'all work with? And let's just do chicken because for simplicity's sake, that's a good way to go. But you mean 20,000 birds? Like how much acres does that person need to have to do 20,000 birds? What other, what other things like fit their profile? So I just think it's always cool to understand kind of you're working with all these small farmers but what do they actually look like? What are they really doing?

Cody Hopkins - 00:40:47
Yeah. Yeah. So if they're just doing, checking on and doing say 20,000. I mean, a good rule of thumb is around 700 to 1000 chickens per acre. So I'd say 30 acres to 20,000 birds, you know, and, and it might be good to have a little bit more 40 just to have a little bit of, you know, depends on how flat and even it is and whatnot. Um, and, um, so, but if they're doing like beef, obviously it's a lot more land. Um, and probably closer to, you know, a couple 100 acres in our neck of the woods here. Um, and so, uh, but we do have a lot of farms who are, uh, or our chicken farms are, I think we have maybe 12 to 14 of them. And, um, they are those smaller footprints except for, say our farm. We also have a ranch, uh, which is a, you know, a savory hub that's part of heper usa produces some chickens for Grass Roots. Um, and there's probably one more farm that, yeah, it's like diversified that has multi species like that sell to Grass Roots.

Cody Hopkins - 00:41:26
Um, those are gonna be your, you know, bigger operations. But, um, yeah, we do have, uh, we work with some, uh, farmers in Missouri that a lot of them have may, you know, maybe 4550 acres. Um, and that can work for poultry and in those scenarios, we do have, um, you know, with those farmers, uh, they're, most of them are getting into the chicken, the chicken business because they want to, you know, uh, well, the reason they're doing it because they, they feel comfortable with Grass Roots buying their product. Right. They want, they have an outlet for their product. They're not, most of them are not folks who are also wanting to go sell those chickens someplace else.

Cody Hopkins - 00:42:15
Now, we do have producer, we do have some farmers that, um, that like on the beef side that might sell us, you know, 10% of what they produce in a year. And that's great. That works out, you know, we, we like being a piece of the cha of their sales channel and not 100%. But in some cases, we, you know, for a species anyway, we're 100% of what they and, but we guarantee contracts, you know, we give them every year, they know what they're gonna sell to Grass Roots um at the start across all

Anthony Corsaro - 00:42:49
species Cody or just chicken for the guaranteed

Cody Hopkins - 00:42:53
we are most. So I would say 80 to 90% across all species. And then there's some like some flex, right? Yeah.

Anthony Corsaro - 00:43:01
And that cost based product, you, you have a better term for it. The cost based production price or model. Does that apply to all species as well or?

Cody Hopkins - 00:43:10
Yes. Yes. That cost of production model is, I mean, in the beef side, there is a little bit more of like a uh informal like index that kind of gets established across the grass fed beef industry. Uh But definitely on the pork and, and uh chicken side, um we're in Turkey side. Uh we're definitely doing, it's very like it all cost of production focused. So, and that's why, you know, so one reason why we have that live animal side is to help, uh you know, push for efficiencies, like how do we get more efficient. Um And so, uh whether it be, you know, better feed rations or some adjustments to the um infrastructure, like the, the kind of infrastructure we're using or um you know, some changes in just how the farmer is breeding the chickens, all those kinds of things. Uh We really get into the weeds with them on that to try to help figure out what's um you know, how can we help reduce that cost of production? Because we know that, you know, we can only sell it for so much out there and the lower we can bring more affordable, we can make it for folks, the more volume we can move for farmers.

Cody Hopkins - 00:44:06
So

Kyle Krull - 00:44:15
makes sense. Uh I want to take it. Uh This is like role reversals for me. So it feels weird. I want to take it to more of the brand side. Um Usually ac drives us to the brand but uh you know, from a retail perspective, like it's really simple to talk about differentiation. And you'd mentioned that Grass Roots is now shipping to all 48 there are a number of other DTC meat companies out there. How are you differentiating yourself? Um, you know, in that ecosystem? And why would somebody want to choose Grass Roots over some of the other competitors out there?

Cody Hopkins - 00:44:48
Yeah. Yeah. So, um, you know, when I think about the folks who are really competing on a national level, all right, most of those competitors that we see are, in some cases they'll buy from us, right? And so, like, we position ourselves like we are the farmers, like we supply a lot of those folks with the product they sell. And so, um it's, uh you know, that's, that's, and again, like, you know, how well that works, you know, I mean, we're not the best marketers in the world for sure. We didn't come into this as marketers, right? Um And then, but it's certainly gotten more challenging to differentiate over time, right? Um And um you know, there are a lot of um sort of regional smaller, um which more like um farmer driven uh D to c companies sprouting up or folks just going d to c right on that front. We're supportive of that.

Cody Hopkins - 00:45:25
Like honestly, like let buy from them. If you're, they're in your region, like buy from them, you know, we want to support those folks, we want to see those folks thrive. I don't see that they're peers. Uh you know, they're partners for us in so many different ways and same thing with like, you know, if a customer can buy. So we're just like, we're, we're really like, we over index on profarmer, like, buy from your farmer, know your farmer get as close to your farmer as you can. And that's really sort of our positioning.

Cody Hopkins - 00:46:01
And, um, you know, that's, we also do things like, you know, we've, we committed to doing go, you know, we're in a small market here in Arkansas. Um And really, if we wanted to like, do a regional play for ourselves, we didn't want to go direct to consumer. We didn't come into this wanting to be ad to c company. We were hoping we could do it all wholesale, but we're in such a small market. Um and working with farmers that aren't super scaled. So we didn't have like a cost, we didn't have like a cost advantage.

Cody Hopkins - 00:46:36
Um And, and so, yeah, and we're like in the Texas market and Kyle as you know, I mean, like we, we're not too far away from Texas, but if you're not in Texas, you're not local Texas, right? And so, um so that's, you know, we ended up making the decision at some like 2017, 2018 range. All right, we're gonna have to go national and be a national brand of some kind. And so, um that was a moment where, you know, we, uh it was a big decision and it was, you know, I didn't really understand all the implications at the time, but it was certainly a big change. And, um, and I think we, we do have a story that resonates with folks. Um And, you know, especially from that sort of like, you know, we're trying to rebuild the food system in a way.

Cody Hopkins - 00:47:09
And we're actually like, but we, I mean, the hardest thing for the thing that frustrated me over the years is just like, like we're doing the really hard work, like we're actually investing in processing, we're investing in farmers, we're helping farmers get access to capital, we're helping them improve their uh their production models. We're helping them source chickens or, you know, we're doing all kinds of things to help build the food supply chain that um other companies and competitors in our space just they don't do that, but they piggyback off and use that same kind of messaging and it's awesome for them if they buy from a good sourcing standpoint, you know, if they buy, they source from like the right kinds of farmers. And uh but um that's, that's, we've tried our best to communicate that message and, and it's, you know, it's resonated. We're Yeah. Anyway.

Anthony Corsaro - 00:48:07
Yeah. Yeah, we could, we could name some names there. I won't. Um And you know, it's, it's different, it's different context. It's like the Agro, right?

Cody Hopkins - 00:48:17
Um And what, sorry to interrupt you. One thing I will say is that, you know, we've as I mentioned earlier on the call, we've had an amazing relationship with Heifer USA. You

Anthony Corsaro - 00:48:30
read my mind, man, that's what I was gonna,

Cody Hopkins - 00:48:32
they, they funded us. Uh, they've been like our major funder from a, you know, and it's all, you know, it's not all been philanthropic. We've taken on some debt too along the way and it's not been without its hurdles, but it has allowed us to like we've never taken VC capital. So if you take VC capital, I mean, that does tend to change. I mean, like it doesn't, it's all fun and games until, you know, you're not hitting whatever the benchmarks are, you need to be hitting and then um you know, the, it's very easy from what I've seen um for the standards to go out the window and the the values to go out the window in pursuit of the D CS return. So

Anthony Corsaro - 00:49:12
yeah, it's, it's much harder. Your capital is limited in what it can do in terms of the injecting into the uh outside of the most critically, commercially viable pieces of the business. So the technical assistance piece, the standardization piece, probably some of the cool marketing to like like show the farmers off like that either is going to be a tier two thing or you're not going to be able to do it if depending on the financial situation. So we need all the models and we need to do more of that work clearly. Um, you're, you're kind of shifting from that, that venture, uh, venture philanthropy is almost what we'd call it Cody into. You've been around now and it's like, hey, how do we build the profitability for, for more stable future growth? How has that been? And like, what have you learned and just what other lessons I want to harvest for the other founders listening and other people in the ecosystem of like, what has worked, what hasn't worked? What do you think about for the future? Just from that capitalization perspective?

Cody Hopkins - 00:50:08
Yeah. Yeah. Um Gosh, I know it is a big question. Um So the first thing I would say is sort of a lesson learned, which is not, I mean, this is typical and I, yeah, I'm, this is probably not super uncommon, but like, we just weren't clear enough with Heifer on both sides. Like, what does success look like? Like what, what's the outcome here? Right? Um Like we like, you know, it was very clear that they did not, they weren't looking to get like some capital return. Um And that wasn't what they were focused on now.

Cody Hopkins - 00:50:29
They have spun up a um social impact investing division uh which is, you know, uh you know, very friendly uh funds, you know, funding uh that has a different approach and they do want to get that back. Um But at the time we started working with that, that was not in place yet. And so it was all about like generating farmer impact more farmers, right? And that, that uh not getting clear enough on like what is that, what is success really look like here on that front? Because you know, it wasn't a 10 X return on capital, it was a 10 X return on farmers, right? Which is awesome. Like that's amazing.

Cody Hopkins - 00:51:04
Yes, it is. Yes, yes. Yeah. Um But that also put us in a mindset of like we got to grow, grow, grow, grow, grow, grow, right? And that's the number one thing versus profitability, right? And so, um so, you know, I will say, um and I mean, I get another interesting thing to have, you know, group to have on here at some point, some folks from heffer USA or heer impact capital because they, you know, we're in the process right now where we're transitioning our relationship with heer USA. Um and still an amazing partnership, but we're moving out of that, like sort of moving off there like that sort of grow farmer impact train with them uh to focus on profitability.

Cody Hopkins - 00:51:48
And, you know, the great thing about heifer is they've been uh come to the table and said, all right, uh let's make this pivot, but let's do it in a way that's not going to cause the wheels to come off the bus here. And so, you know, we've been working over the past nine months to sort of do some right, sizing, um, you know, change some of our marketing approaches and really re center with a focus on profitability, uh, you know, no profit, no mission is kind of our mantra at the moment internally. And, um, and it feels great and it's, it's, you know, it's, it's been tough at times for sure, but I do have to give a lot of credit to Heffer as they, the way they've sort of come to the table and helped us sort of navigate this and this and there was no playbook we had for this. So, you know, we've been sort of figuring things out along the way with Hefer. Um And uh you know, as a sort of a sidebar here when you were talking about structurally, we talked about that processing business. So Heifer has also invested in that processing business.

Cody Hopkins - 00:52:41
So they do have, you know, they do have a uh equity investment in that processing business. They do not have an equity investment in Grass Roots. Um And uh but so they, they are invested across our entire supply chain in a uh really uh interesting and, uh you know, uh most of the time helpful way and um have brought a lot of resources to the table for us and uh this, you know, and in this moment of transition for us, um they've, um you know, been very, you know, it's not the kind of thing that you just like, uh you know, you can't just pull out the rug here. So there's like a sort of period of adjustment that we're going through with them and, uh with a goal on the other side to continue to, um have, you know, a really strong partnership but to be, uh for Grass Roots to be very, very pro, you know, like, less focused. Yeah, exactly. Yes. To control our own destiny, basically. Yeah.

Kyle Krull - 00:53:55
Yeah. Yeah. You know, one of the underlying themes that I think this whole podcast is like the importance of partnerships, you know, starting with just your neighbors when you're getting, going and splitting some of like the, the cost of grain and like that. And I think for, for young start up companies who are trying to do things the right way and bucking the system, those partnerships are so crucial. Um And we all know that, you know, that the capital intensive processing facilities, I mean, it's, it's impossible to do that on your own. So awesome that you had the partnership experience you've had from both like a neighbor, other farm perspective and from a financial partner like that. That, that's really, really cool. Um ac you sort of talked about the financial future. I want to take it to kind of the future for Grass Roots, you know, we've talked about and he grew up to seven animals now. Um Maybe, maybe there's some other hidden animals in there.

Kyle Krull - 00:54:28
I don't know. Uh we talked about savory and the not, not yet. Uh We talked about the market. Um And we talked about how this podcast has scared you off from retail. So I'm curious from like a, a future perspective, what are, what are some of the goals for Grass Roots? Is it trying to get into additional animals? Is it looking to expand that DTC, you know, footprint that you already have?

Kyle Krull - 00:54:55
Is it, you know, do you eventually want to get into wholesale or sorry, retail or is it more wholesale accounts? Like, what do you, what are you hoping to achieve in the next one? 35 years?

Cody Hopkins - 00:55:16
Yeah. Yeah, good question. Um Before I answer that, I do want to comment on that relationship, comment. Uh And I think that's um uh that relationships in this regenerative space to me uh is like, that's actually like a really important thing to hold on to and like I hold on to and see is like a core value when it comes to like being able to help the regenerative movement get, you know, make progress here and because it's just, there's so many important relation, you know, the nature of relationships between like buyers and sellers and, you know, uh owners and, and workers and, you know, all those kinds of things. Like, I just think that's something that's really important to um being able to make uh you know, help, make this movement successful and looking for ways for, you know, symbio, looking for opportunities for symbiosis and, and those kind of things. So just wanted to like, take you back on that for a second. Um So, you know, as far as the future goes, so, you know, we definitely see opportunities to grow our white label program and like our, our wholesale uh and we have really close relationships with our wholesale partners. It's, you know, they're not transit, we have a couple maybe that are kind of transactional. But one of our core values is relationships, not transactions.

Cody Hopkins - 00:56:25
And so, you know, we really like we need that like, um we have close relationships with our um with our wholesale partners and so we have, we see growth on that side. Um The DC side, we expect to continue to sort of grow slowly. We're not like banking on some like major, it's kind of a tough environment on that front right now. Uh coming out of, you know, all the COVID and everything else. It just, we had this crazy bump and then some attrition and then it's kind of leveled out and now we start to grow a bit again, which is great, but we're not gonna go crazy trying to um you know, dump much money and money into Facebook or something like that to do that. Um We also, um you know, one of the things that I would like to see us doing is we've always had this dream of having like more regional clusters of farmers where, you know, we've got customers all over the, the lower 48.

Cody Hopkins - 00:57:10
Uh, we constantly get interest from farmers around the country. Um, we already do have some really important relationships with some farmers in different parts of the country. But we, I'd love to see us stand up some, um, some regional, uh, uh, like co-op clusters that would then be able to, like, feed that product into, uh, into that local, that regional market. So for me, I feel like regional, I mean, all those certifications and stuff, like it's trumped by a local, you know, product, a regional product, you know, I think really helps. So I, I would love to see us be able to offer more of a regional experience for our customers over time. Uh And, you know, do even like regional marketing, you know, uh strategies and those kinds of things. So that's definitely something that's on our radar.

Cody Hopkins - 00:58:01
Uh We're not pulling the trigger on anything big right now, but it is something that, um you know, we've, uh you know, we've definitely got an eye eye towards and want to move into over time. So

Kyle Krull - 00:58:27
I, I so love to hear you say that and I think we've discussed it on a couple of other podcasts. But to me, like, one of the biggest problems with our food system is the centralization. So to your point, if we can decentralize and feed those regional hubs and keep product that is raised in the Pacific Northwest process in the Pacific Northwest, feeding the Pacific Northwest, just as an example like that. That is a win on so many different levels. You know, there's less transportation of live animals, less transportation of finished products. We keep more circular economy, money within a specific region. Um So I I think it's really cool and if, if we could pull that off under a single brand, like a national brand with decentralized regional hubs, I think that bottle is going to be what the future needs. And I think that you're not the only individual talking about it. I think that that and that can be replicated over a variety of industries. So just super pumped to hear you talking about that and would love to see it in the future.

Cody Hopkins - 00:59:20
Yeah. Yeah, the branding side of that, like one thing we do already is every package that we ship out has a form of origin stamp on it. Um So figuring out like the branding, you know, way to brand that the right way so that customers really understand that um and communicate that story. But II I share that sort of enthusiasm and passion you have for because there's also there's a real benefit cus customers would love the source regionally. I know that I think we all know that uh the closer the better and uh but there's also a benefit of having like a like a integrate like a supply chain that can coordinate at a national level but say the beef trim, right? You take that you move that into a certain market. I mean, if anybody's ever had a beef trim problem, probably not. But uh you know, so uh you can take that and move that into a, a different type of market.

Cody Hopkins - 00:59:56
So there's sort of like there's just like that to me is there's a little bit of that going on now. But gosh, I mean that to me is like the, the holy grail for uh for, for what I want to do in life. So yeah.

Anthony Corsaro - 01:00:20
Uh I don't know how many more region beef people, I got to tell why does someone not call the Whole Foods buyer and say we will do a national program that's regionally sourced through these processors and these like aggregated brands, you can slap the farm of Origin or the region of origin story because like you said, local slash regional still resonates with the consumer more than regenerative whole foods wants the regenerative piece for their internal sustainability goals and because they support it, um it, it seems like such a layup and low hanging fruit to me. I, I know there's a mass amount of complexity there. So I, I don't wanna, I don't wanna over, over um you know, dramatize that or minimize that. Um But the thing that's coming to mind in my head through all that conversation is we have to do all that regional work in the constraints of the economic and the retail system that we have to live with, which is, it's still got to be a Whole Foods National program and you got to do the sausage making for them because they're not gonna do it. You can source it regionally. Right. So it's supposed to show up because you're not going to get the retail and the consumer to change that much. But we can. So I think there's, there's like more work to do on the supply side uh from a workload perspective.

Anthony Corsaro - 01:01:14
And I also just want to call out, I, I think Grass Roots and other aggregator, livestock type brands we've had on the podcast are really good examples of not all efficiency is bad, not all scale is bad. Like what you talked about, the original problem set as to why you, you know, created this co-op is the answer to all those things. It's about doing that equitably. It's, it's about doing that in an environmental friendly way. But those things from a business imperative and just the raw capitalism competition we have in this country, we will have to do those things. And so I get a little weird of some of what I call the the region purist conversations where it has to be small scale.

Anthony Corsaro - 01:01:51
I really push back on that pretty heavily because to compete and to try and eventually. So for accessibility, which we're still really far away from, we are gonna have to harness some of those vertical integration scale efficiency things that are not always bad. It's really about, it's just like the cow. It's, it's not the cow, it's the, how, you know, it's not that it's the, how it's

Cody Hopkins - 01:02:23
done. Yeah. That's right. Yeah. And I think that's where I totally agree with that. And I think, uh, you know what, like, as you've heard from the start of the podcast, like we started, you know, from zero and, you know, pumping it going to farmers markets and all those kinds of things that's still like, probably a decent way to get going if you're starting from scratch, something like that. Um What I see Grass Roots as now is a place where farmers could graduate to, right? You graduate to where it, we have a direct to consumer model with which allows us to, uh pay more than if we were just 100% wholesale. Um So we're able to bring in farmers that are not, you know, that are still like, not super scale but, you know, and kind of work them up. Uh And then you add on the wholesale side that allows for like a different level of scale than what. Um, and so that's kind of, you know, that's definitely how we can see Grass Roots at this stage and, and, um, you know, certainly far from perfect but kind of the, the way we've been thinking about it is that

Anthony Corsaro - 01:03:21
n no explicit plans for branded retail product. It's really just D to C and wholesale Tech white label still is

Cody Hopkins - 01:03:28
not, not at this time. Yeah, maybe, you know, I we do not have uh it may be something we try to take on sometime in the next 18 months or something but it's not, it's not um is definitely not sitting up on our, on our plan for next year. It's not in the, in the, in the budget or plan at this stage. So the

Anthony Corsaro - 01:03:48
I think the challenge there is what you've mentioned a couple of times and you and I have had a couple of conversations about it. Cody is the consumer demand and the retailer density isn't there in those markets where your regional local claims would really, so it's really hard to get something like that off the ground from a

Cody Hopkins - 01:04:05
retail perspective. It's funny you mentioned the Pacific Northwest. Really? We do have a, you know, have some a developing partnership with a group out there that, you know, may be a place where we test this the first time, some sort of like, you know, a regional model that yeah, so it's um that is, it's not like the best place. It's not the most like cost, most efficient cost of production uh area. But you know, there's a, an opportunity there, I think. And so we're definitely exploring that as maybe our pilot project to expand into a more of that regional marketing approach that then I think I agree could dovetail in the, into some retail opportunities too that we don't quite see right now. So,

Kyle Krull - 01:04:44
totally. Well, you've got one consumer ready to go in the Pacific Northwest. Uh, me to

Cody Hopkins - 01:04:49
buy in Texas, I guess fire

Kyle Krull - 01:04:54
is based in Texas. Um, but I'm up in Bend Oregon but, uh I think, yeah, love everything we're talking about here team. Um And I just want to call ac you talked about, you know, why it's challenging to do that decentralized model. And to me, the biggest barrier really is that processing piece, you know, it's so difficult to find those processors in all those different regions because there's been so much aggregate there. And I think we all learned when COVID hit when J BS had a COVID outbreak and they kind of hamstrung meat processing for a significant period of time, like how vulnerable that system is. So it's not just a matter of like we should do this for a region, we should really like decentralize our supply chain just for food safety and food security for our country. So it's um it should be a higher priority and I'm just again happy to be having that conversation here.

Cody Hopkins - 01:05:45
Yeah. Yeah, I agree. And, you know, the economics and the processing side are just as tough or harder honestly than the farming side. Um You know, we uh it's not an easy business to, to make pens. And it's also like labor and developing a work culture that's gonna be really healthy and, and good for folks and stuff. So we do, our processor does have employee ownership as a part. Like they're, they're in the process of adding that. Um which isn't, you know, it's like just trying to find ways to treat the employees with respect and, and give them, you know, create a job that they feel like they feel hurt. And I mean, but it's tough in the processing side, especially no one wakes up, you know, or graduates college or high school and says I want to go like butcher, you know, beef or kill beef or something, you know. So it's, uh it's definitely a tough, a tough business model. Uh One of the things that we found is successful, like we launched our uh with our poultry processing business that was a joint venture that was launched from scratch.

Cody Hopkins - 01:06:29
Um And so it was zero to, yeah, and, and it took us a while to get to profitability, you know, we're, it's there now. It's, you know, it's not wildly profitable but it's, you know, it's, it's, and they have an amazing management team on that front. Um but having an anchor customer to start out with and then being able to lay on other farmers, uh that's been really helpful and, and giving sort of the, the company a really stable base of revenue even if it is a little bit lower margin and then bring on these other, um these other local farmers. And so I think, you know, it's, uh um and at this stage, that facility is just about maxed out and, and so we're talking about an expansion there. So, yeah, yeah,

Kyle Krull - 01:07:22
super cool. I mean, I, I want to touch on something that we, we rarely have the opportunity to talk to talk about like these different high level challenges within not just the regenerative industry, but, you know, working within the confines of the United States. Um So I'm gonna try to weave this narrative real quick here just to synthesize some of the challenges we're facing. And you know, as you talk about like building processing facilities that treat their employees equitably, you know, that's going to cost more money. So people are going to have to pay a premium for their food or what they deem to be a quote premium. But that kind of alludes back to the conversation we had about like people should be paying more money for their food. And when you think about where you're spending your money, would you rather like buy the bottom of the barrel chicken or spend a little bit more, maybe spend a little bit less money on your medicine cabinet or doctor visits, you know, and these are the sorts of like cultural mind shifts that we the regenerative movement like really needs to try to figure out how we can communicate this effectively at every different level from, you know, legislation to industry to consumer. Um, so it's just a really complicated problem. Um, and I appreciate the conversation we had today, kind of like spotlighting those things individually.

Cody Hopkins - 01:08:25
Yeah. Yeah. No, that definitely resonates to me. It's hard to, it's hard to even communicate that story to anybody. I mean, to, you know, you've taken us a whole hour over an hour to do that here. And so, um, you know, certainly you can't do it in an email to a customer or something, right? And so, um it's, it's, uh but I completely agree with you. It's um it's, uh it's super important. Yeah,

Anthony Corsaro - 01:08:48
it, to me, the way to try and sum it up concisely is the, the regenerative brands and the regenerative ecosystems being built are really having to hold the line of tension between idealism and realism, right? Really, really? Well, and that line between progress and perfection really, really well, like the fact that the processing company didn't try to do an employee ownership deal out of the gate shows the, the perfect example of that, which is, it maybe wasn't attainable then or wasn't economical then. And um you know, the fact of the matter is we have to make some of those societal changes that comment and the fact of the matter also is that they're not going to happen quickly probably. Um So how do you balance, you know, how do you balance that Macro and micro? Um So we, we might have already answered this question in the last seven minutes, but I'll take us home with the, with the final question that we asked everybody for you, Cody is, how do we get regenerative brands to have 50% market share by 2050? I know it's an easy one. So, you know,

Cody Hopkins - 01:09:52
I mean, it's all consumer to me, it's all market driven, like what it's, we need to figure out some way to convince, you know, consumers to vote with their fork. You know, and I think it's gonna be about, I think what we touched on earlier in the conversation around um a nutrient density. I think that has a huge potential to really uh increase the, the, uh you know, consumer demand for these regenerative products. Um because I think that to me is gonna be probably the, if I had to just pick on the spot here, one of the biggest movers, I would say that honestly is where I would focus. Um I think that they're figuring out like ways to piece together uh creative capital stacks, both philanthropic uh because I was just, you know, the previous thing you were talking about around like this, like idealism versus like the reality of running a business, right? Um You know, Heifer's philanthropic funds allowed us to get to a certain scale where we can do, you know, we could like, hold some certain values that we probably wouldn't have been able to hold as tightly, uh, if we were bootstrapping from day one. And so I think, figuring out creative ways to use philanthropic funds to jumpstart or get to a certain place, um And, but that transition is not easy from like philanthropic to, you know, more traditional sources.

Cody Hopkins - 01:10:59
Um And, uh, and so, you know, those are the two things that come to mind that sort of a creative capital structures and, and, you know, philanthropic investment on, uh and then, you know, really figuring out ways to really scratch the edge. What do customers really need to know about these products to uh increase demand here? And um and so, yeah,

Kyle Krull - 01:11:35
I really like the, the market answer. And I, I was actually at a meeting in Austin with Whole Foods earlier this week and before we even started the presentation, they sat down and said, hey, we're really focusing on these three pillars and the first thing they said was nutrient density and that's the first time they've ever said anything like that to me. And I'm aware of that being like a big problem. Yeah. So that's super interesting that, you know, the, the natural channel leader in the United States, which I, I don't wanna, I don't have a ton of experience worldwide in the natural food industry, but a little bit and um you know, potentially you could call them the the natural leader in the world, if nutrient density is really big on their radar right now, like that's a really good sign. Um And again, all of the, the individuals brands farmers, whoever are focusing on region right now, if we can figure out how to pair region with nutrient density, that could be the big unlock. So I'm totally aligned with you.

Cody Hopkins - 01:12:31
Yeah. Yeah. And I guess I'd add one more thing if I've got time here. It's, I do think collaboration, like finding ways to like, collaborate to have a bigger voice. Like that's, you know, one thing our co-op does, like if my farm were totally solo, not part of Grass Roots. Uh you know, I wouldn't be here. I wouldn't be doing, we wouldn't have access to processing. Uh We wouldn't, you know, it's just, there's a um this idea of, you know, having, um uh you know, strength in numbers I think is, is important to keep in mind. And so finding ways, you know, we don't overlap, you know, all the farmers and Grass Roots don't have, don't see everything the same way, but we find enough common ground to work together and have a, a way to um uh you know, punch above our weight because of that. So

Anthony Corsaro - 01:13:13
I, I hate to make that comment as self serving. But the last many episodes, uh each guest has cut a promo for the region coalition unprompted, which is exactly what we're trying to do on that front, Cody. So

Cody Hopkins - 01:13:30
you pay me to say that just by the way. Yeah. Yeah, we are a co-op. So it's uh yeah, we come by it honestly.

Anthony Corsaro - 01:13:37
Yeah. Yeah. Well, man, you're living it and the, the intention and just the action around all of it is, is so clear and appreciated brother. So just thank you for everything that you're doing seriously.

Cody Hopkins - 01:13:47
Yeah, thanks for having me. It was great to, to chat. It was a lot of fun.

Kyle Krull - 01:13:51
Super appreciate it. I want to make sure that uh consumers or anybody who's listening who wants to learn more can go to its Grass Roots co-op dot com. Um I already was on the website this morning. They're, they're currently sold out of extra large turkeys for Thanksgiving. Um Small, medium large is still available. So if by the time this airs somebody's looking for a Thanksgiving turkey, you know where to find it

Anthony Corsaro - 01:14:13
and hurry up everybody because Kyle's gonna clear out the rest of the duck

Cody Hopkins - 01:14:16
that's available. Yeah. Yeah. Yeah, 100%. I am if you don't find it or a big chicken. So.

Anthony Corsaro - 01:14:23
All right. Thank you, Cody. I appreciate you, man. Yeah.

Cody Hopkins - 01:14:25
Thanks a lot guys

Anthony Corsaro - 01:14:30
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