An assembly line of headless, featherless chickens whirs above me as two birds per second are eviscerated and their meat, livers, hearts, necks and gizzards are turned into money.
I am touring an expensive new processing line at the Farmer Focus certified-organic-chicken plant in Harrisonburg, Va., the flagship of Corwin Heatwole’s bid to grab a slice of the growing market for food that’s good for you.
Farmer-entrepreneur Heatwole is expanding his capacity at an inflection point in the food industry, the protein sphere in particular. The demand for organically raised meat and meat substitutes is fueling investor belief that a food wave is in full swing. Plant-based meat substitutes like Beyond Meat are capturing the imagination of consumers as they become more conscious of what they are eating.
Heatwole is positioning privately owned Farmer Focus to ride the wave. The new processing line, purchased from a Netherlands manufacturer, represents a $5 million investment by Heatwole and his financing team, which includes agriculture-technology investors such as S2G Ventures. But the boost in capacity will help Farmer Focus respond to the growing demand for organic food.
“This expansion will allow us to grow from our current production level of 175,000 birds per week to up to 650,000 birds per week,” said chief executive Heatwole, standing on a chilly, water-sloshed, factory floor in hairnet, safety glasses and white coat.
Heatwole was born and raised in Rockingham County, the heart of Virginia’s agriculture industry. He has been a farmer and a poultry man “from when I was walking around the farm with my father, barefoot. I grew up on farms, enjoyed farming and loved the farm.”
His $100 million company, Shenandoah Valley Organic (Farmer Focus is the brand name), is the result of a five-year-old idea: Take control over raising chickens away from giant poultry conglomerates and turn it over to the farmers.
The Farmer Focus plant in the Shenandoah Valley is tapping into a $2 billion-and-growing U.S. market for organically raised chickens. About 50 farms within an hour’s drive supply Heatwole with tens of thousands of birds that eventually end up in poultry coolers at 2,600 stores along the Northeast Corridor and as far west as California.
“Organic is a movement,” said Scott Nash, founder of MOM’s Organic stores, a Washington-area chain. Farmer Focus is one of the most popular items at MOM’s meat counter. “Consumers prefer . . . better health and nutrition, and want to help the environment.”
Farmer Focus products are carried by Giant, Hannaford, Winn-Dixie and SuperValu, to name a few grocery chains. Several big chains buy Farmer Focus chicken to sell under their own labels. Heatwole estimates Farmer Focus’s share of the U.S. organic-chicken market at about 5 percent.
Americans eat more than 90 pounds of chicken per person per year, according to the National Chicken Council. That’s substantially more chicken than either beef or pork. Capturing even a small portion of the chicken market could pay off.
What makes a certified-organic chicken? No antibiotics. Less-crowded living conditions. Access to pasture and sunlight. Organic feed and bugs and wild greens to munch on.
Heatwole’s idea was to tap into the growing demand for organic food encouraged by Whole Foods and other stores. “I have found a niche and am growing it,” Heatwole said.
Every Farmer Focus package has the name of the farmer who raised the bird and displays a code that allows the consumer to go online and see photos of the farmers, the farm and the chickens.
Farmer Focus isn’t cheap. Its chicken prices are half again or even double those of nonorganic chicken in the store, Heatwole said. But enough people pay.
“The organic consumer is an aware and more passionate consumer,” Heatwole said.
The 36-year-old entrepreneur is already thinking about his next big play. He has been shuttling between Virginia and the West Coast this year, scouting potential sites for another chicken plant.
“I am thinking of the next big step,” Heatwole said as we walked through the Harrisonburg plant. “This is part of a succession of steps I have taken to grow my businesses and act on my ideas. I don’t want to just manage a factory. I want to take this to the next level.”
Heatwole has been building businesses since he was 19, when he started a cow-hoof-care practice. He saved his money and bought a fire-damaged house that he fixed and flipped for a $60,000 profit. He also invested in apartments, but that didn’t work out.
By age 22, he had bought a poultry farm. He also built an energy and insulation company while continuing to farm.
Heatwole didn’t like being a contractor to the big chicken conglomerates. “You don’t own the birds, and you have to raise them according to the very specific directions” of the corporation, he said.
Essentially, the deal was that the farmer would supply the chicken coop and care for the chickens according to the dictates of the company. Then the company would take the flock when the birds matured, after seven weeks, and the cycle would start all over again.
“I didn’t like the economics, with the integrators owning the birds and telling us what we had to do,” Heatwole said. He wanted to raise chickens under better living conditions, with more sunlight, better food and less crowding.
He rented a farm and tried it the organic way. He ordered 300 chicks to raise organically. He learned by doing. He found mentors. He consulted the Virginia Department of Agriculture. That led him to Ayrshire Farm of Upperville, Va., his first customer, which sold and supplied organic meat and produce online and to restaurants. Ayrshire was started by Sandy Lerner, a co-founder of Cisco Systems and a proponent of organic food and the humane treatment of farmed animals.
Heatwole looked a few steps forward and figured that if he could scale up organic chicken farming enough to create a steady supply, there would be enough demand for a processing plant.
Heatwole began feeling out the farmers he knew in the area.
“The farmers asked for a model that allowed them to own their own birds and gave them the freedom and flexibility to make their own decisions,” he said. “They didn’t want to be told what to do.”
There would still be guidelines, standards for raising certified organic chickens, but the new system would make farmers feel in more control.
He found a former Swift plant that was empty. With $1.25 million from the sale of his insulation business and a loan from a bank, he bought the plant and filled it with equipment that he scrounged in Mississippi for 5 cents on the dollar.
On March 15, 2014, the plant received the first flocks of chickens for processing.
Shenandoah Valley Organic is on track to exceed $100 million in revenue this year. It should earn a profit in the single-digit millions, Heatwole said. The plant’s 438 blue-collar and white-collar jobs are a welcome addition to Harrisonburg, which is just five minutes from Interstate 81.
The new evisceration line “allows us to both better utilize the bird parts, greatly reducing the human contact and making it more sanitary,” Heatwole said. The employees will be redirected to other parts of the company.
I toured a chicken-processing plant about 25 years ago, and it wasn’t pleasant. So I drove to Harrisonburg with trepidation.
I was okay this time around. I warned Heatwole that I didn’t want to see a lot of blood or little white birds getting plucked and sliced.
I saw chicken carcasses, legs being deboned and lots and lots of washing. (The plant’s water bill is $45,000 a month.)
When I left, I stopped at a beef barbecue joint. I am going to give chicken wings a rest for a bit.