Americans have never had this many options in the beef aisle. That's certainly what the growing number of offerings lining supermarket shelves would seem to suggest. And yet, behind the carefully branded facade of new packaged meats is a rather different and troubling reality: the mere illusion of choice.
Americans, as it turns out, have actually never had so few options in deciding what company makes their meat. "The US meat industry is more consolidated today than it's ever been before," Christopher Leonard, author of The Meat Racket: The Secret Takeover of America's Food Business, said in an interview.
Indeed, the top four US beef packers—Tyson Foods, JBS USA, Cargill, and National Beef—control some 75% of the US beef market, according to Tyson (pdf p. 11), the nation's largest packager. Leonard, for his part, puts the number closer to 80%. 50 years ago, that number, formally referred to as the four-firm concentration, was nearer to 25%, per estimates by the Census Bureau (pdf p. 8).
Copying Big Soda
A similar shift has played out in other US industries. The soda industry, despite its many branded offerings, is heavily controlled by two companies—Pepsi and Coca Cola. A soda buyer might feel as though she's choosing between a healthy selection of diverse carbonated offerings, but in reality she's picking one of the many carefully targeted drinks developed by one of the two giants. Pepsi and Coca Cola, after all, control some 72% of the overall soda market.
But meat is a different, and more dangerous game. Consumers are becoming increasingly more concerned with how their meat is produced. Part of that is born from a demand for more humane practices—the meat industry's malpractices are well documented—and part of that stems from a heightened awareness about what people are putting into their bodies—the meat industry has come under fire for both its questionable practices and potential for large-scale contamination. An ever-shrinking pool of options will only make it more difficult for consumers the fair opportunity to appropriately decide whom they do business with.
The great American beef consolidation
So why has the beef industry tended toward near monopolies? A healthy appetite for the kind of acquisition that Tyson is about to make by purchasing Hillshire, which makes Jimmy Dean sausages, ball park hot dogs, packaged deli meats, and a horde of other popular, branded meat products. Tyson is reportedly offering to buy Hillshire for $7.7 billion. “We want to buy this business for what it can become, not just for what it is now," Tyson chief executive Donnie Smith told investors in a conference call. What Hillshire can become is the latest vertical integration by the nation's largest meat company.
Unlike Tyson, which primarily packages the sort of unbranded meats lapped up by restaurants, cafeterias, and supermarkets around the US, Hillshire instead focuses on the end product—branded, value-added, packaged meats. Think pepperoni, sausage, and hot dogs—most of which just so happens to be made with Tyson's, or one of its competitors', unbranded offerings.
The move is merely par for course, since Tyson has been gobbling up its meat suppliers, buyers, and competitors for decades, and, in doing so, forcing other beef behemoths to do the same. Brazil-based meat packer JBS, the second largest beef provider in the US, now churns out 3.3 million pounds of supermarket-ready meat each day. "Companies like Tyson are swallowing up all the independent brands," Leonard said. "It's not only true of beef, but poultry, too." Tyson, mind you, was the king of chicken before it usurped the American beef throne as well.
Tyson is basically forcing its competitors to mimic it or get out of business." That appetite began in earnest in the late 1970s (which is reflected in the USDA data charted above), and has largely shaped the American meat landscape. It's why today, more than ever before, the modern meat consumer enjoys the mere illusion of choice.