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by Bryan Gruley and Elizabeth Campbell, Bloomberg Businessweek
Thirty-one years ago, a young man with no college degree and the restless mind of a tinkerer started an unusual meat-processing company. Eldon Roth’s Beef Products Inc. (BPI) bought tons of fatty scraps left over after cattle were carved into steaks and roasts. Roth concocted a way to use centrifuges to spin the fat away and quick-freeze the remaining meat into a pink pulp that made ground beef leaner when it was mixed in. He called it “lean finely textured beef.” McDonald’s (MCD), Wal-Mart Stores (WMT), Burger King, Kroger (KR), and Taco Bell (YUM) used it. Roth opened plants in Texas, Kansas, Iowa, and Nebraska, employing about 1,500 workers. He was inducted into the Meat Industry Hall of Fame last fall in a ceremony that brought him to tears.
Then last month a news article referring to Roth’s product as “pink slime” caught the attention of food blogger Bettina Elias Siegel. She launched an online petition to have it banned from the federal school lunch program. As ABC News and other media jumped on the story, portrayals of BPI’s product as gross and unsafe rippled through the blogosphere. With his customers abandoning him, Roth on March 26 suspended production at three plants, laid off almost half his workers, and now faces a struggle to keep BPI alive.
“It’s gotten to the point of absurdity,” says Craig Letch, 39, Roth’s son-in-law and BPI’s chief of safety and quality, as he wends his way through a warren of stainless-steel pipes and whirring grinders at the company’s plant in South Sioux City, Neb. “Have you had a hamburger in the last 20 years? Odds are lean finely textured beef was a part of that.”
BPI’s predicament is unusual because it wasn’t precipitated by an outbreak of food-borne illness, and its product has never been directly linked to one. Plaintiffs attorney Bill Marler, noted for suing Jack in the Box (JACK) and other companies over unsafe meat, says the rap against Beef Products is overblown. “BPI’s product is no more or less safe than other parts of hamburger,” he says. “There’s a lot of scraps that get put into hamburger because that’s what the hell hamburger is.”
Why the outrage around BPI? The Web petition? The TV coverage? “That’s the wrong way to think about this,” says Matthew Salganik, an assistant professor of sociology at Princeton University. “Imagine a forest fire. No one thinks, ‘Which lightning strike did it?’” More telling are the scant rainfall and hot weather that set the stage for a blaze. The meat industry has been taking heat in books, films, and news stories for years. Add a catchy phrase, schoolchildren, and the prospect that some icky-sounding stuff is in Junior’s Whopper, and you have a PR disaster. “Social media is something that adds oxygen to the environment,” explains Salganik. “It increases the chance that a small spark will turn into a big fire.”
Associates describe Roth, 69, as heartbroken. He declined to be interviewed. He’s paying sidelined employees through May, but is facing the real possibility that he may be forced to permanently ditch them. Blogger Siegel says the job losses are “tragic.” But she notes that BPI “should have had no hesitation to inform consumers that [its product] was in the ground beef from the beginning,” perhaps through labeling. “I have never expressed anywhere a desire to drive this company out of business,” she says.
Roth grew up poor in South Dakota, where his company is now headquartered in Dakota Dunes. He became fascinated with refrigeration while working at an ice cream plant, and in 1971 started a refrigeration company that worked with meat processors. Seeing beef trimmings going to waste, he experimented with ways to harvest the bits encased in fat. Slicing it out by hand was costly. So Roth figured out how to cull the meat by warming ground-up scraps to about 100F—the approximate body temperature of a steer—and spinning them in industrial centrifuges at thousands of revolutions per minute. The meat was frozen on a 14-foot drum Roth developed, then chopped into chips or compressed into 60-pound blocks that look like Spam.
He started BPI in 1981 with a plant in Amarillo, Tex., selling to processors that blended the product with other beef. At more than 90 percent lean, BPI’s product is usually added to make fattier grinds leaner, mostly in packaged ground beef and hamburger patties but also taco meat and low-fat hot dogs. At peak production in the last decade, BPI churned out 500 million pounds a year.
After four children died of E. coli poisoning from Jack in the Box burgers in 1992 and 1993, Roth began looking for ways to avoid similar tragedies. In 2001, he received U.S. Department of Agriculture approval to treat his product with a puff of ammonium hydroxide after the fat was spun out. Ammonia occurs naturally in beef and other foods and has long been approved as an additive in many products, from cheese to pudding. BPI’s puff treatment raises the meat’s pH to a level that can kill bacteria. Every carton of BPI’s beef is tested for E. coli and other pathogens before going to customers. “Eldon Roth basically is a genius,” says Steve Kay, editor of newsletter Cattle Buyers Weekly. “BPI has been in the forefront of food safety in the beef industry for a decade or more.”
BPI has had detractors, however. About a decade ago, a USDA microbiologist coined “pink slime” in an e-mail about BPI’s product. The term surfaced publicly in a prize-winning New York Times story about BPI in late 2009, quoting the e-mail as saying the microbiologist didn’t consider treated trimmings to be actual ground beef. The story said that E. coli and salmonella had shown up in beef trimmings destined for school lunches, but never reached kids’ meals. A year ago, celebrity chef Jamie Oliver mocked BPI’s product on his Food Revolution TV show, sloshing household ammonia over a mound of beef. Also in 2011, McDonald’s, Burger King, and Taco Bell quietly stopped using textured beef in their meat. McDonald’s says it wanted to standardize its global beef supply. Burger King says its move “wasn’t related to safety concerns.” Taco Bell didn’t return calls. Letch says no customers have expressed safety concerns.
Cattle Buyers Weekly reported the defections on Jan. 2, saying they had cost BPI about 25 percent of its business and forced the company to reduce production to four days a week from five. A few short stories about McDonald’s shift ran in mainstream media later that month.
Then blogger Siegel, who monitors food coverage from her Houston home, got involved. The 46-year-old Harvard law graduate started her blog, The Lunch Tray, in 2010 after working on the Houston school district’s parent advisory committee on food. That July, her blog reported that the Department of Agriculture had announced tougher testing standards for school lunch beef. Siegel says she thought it meant lean finely textured beef would no longer be used.
So she was surprised to read on March 5 of this year a story about BPI’s product on the website TheDaily.com, owned by News Corp. Headlined “Partners in ‘Slime,’” it was accompanied by a photo of chef Oliver wielding a bottle of ammonia. The story said the USDA planned to use 7 million pounds of BPI’s treated meat in school lunches. The next morning, Siegel started a petition at Change.org, asking Agriculture Secretary Tom Vilsack to “put an immediate end to the use of ‘pink slime’ in our children’s school food.” Explains Siegel: “The contrast was stark to me, that McDonald’s was responding to consumer concern, I believe in part. And yet schoolchildren have no say.” The next evening, ABC News aired its first of at least six reports including material previously reported by TheDaily.com and the Times. TheDaily.com wrote several follow-up stories, and Siegel blogged, tweeted, and Facebook-posted about her petition to great effect: On one weekend, more than 137,000 signed it, Change.org says.
On March 15, the USDA, while insisting BPI’s product was safe, said it would let schools choose whether to buy meat with or without textured beef. BPI started a website, pinkslimeisamyth.com, and ran full-page newspaper ads in which Roth bemoaned a “campaign of lies and deceit.” But one by one, Kroger and other customers said they’d stop using the product, while Wal-Mart and others said they’d offer a choice of beef with and without it. Three weeks after TheDaily.com’s first story, Roth closed all but one of his plants.
Other companies have been affected as well. Cargill, which makes a similar product using citric acid instead of ammonia, has cut production. Meat processor AFA Foods cited “ongoing media attention” that hurt beef demand when it filed for Chapter 11 bankruptcy on April 2. Tyson Foods (TSN) and others are seeking USDA permission to list beef trimmings on package labels in the hope of calming consumers.
Iowa Governor Terry Branstad, whose state hosts a BPI plant, is seeking a congressional investigation of what he calls a “smear campaign” against BPI. Letch and other meat industry executives still profess bafflement at why this story went viral. “It’s emotional, it’s concrete, it’s easy to tell someone about,” says Salganik, the sociologist.
“The most painful part,” Letch says, “was looking 700 [employees] in the eye, and them asking why and not having a good answer.”
The bottom line: BPI ran into a Web petition buzz saw that’s helped lead to the closure of three of its plants and the idling of almost 700 workers.
Source: Bloomberg Businessweek
Posted by Haylie Shipp