Food startup Blue Nest offers beef from cattle that fix climate-change problems

Some consumers are trying to avoid eating red meat. Others want to eat grass-fed meat. And still others want to know the exact farm from which their meat came.

But for some, those attributes don't go far enough. A small-but-growing number of people now shop for grass-fed meat that is raised by ranchers whose farming practices actually make the land better than when they found it.

Blue Nest Beef, a direct-to-consumer meat-delivery startup, wants to be on the leading edge of providing products for these consumers who see cattle and bison as a solution to climate change, habitat loss and soil degradation rather than a cause of it.

All of this is happening at the same time plant-based meat alternatives are exploding among mainstream consumers, with well-known brands like Impossible Foods and Beyond Meat getting their products in fast-food retailers from Burger King to Dunkin'. While plant-based products are gaining popularity for perceived health and environmental benefits, Blue Nest's target audience sees things a bit differently.

The company launched earlier this month when it processed and shipped its first boxes from facilities in Minnesota. Still in its infancy, Blue Nest's executives are spread out across the United States. A well-known figure in the Minnesota food scene, Todd Churchill, is its chief financial officer and chief marketing officer.

Local restaurateurs and grocers know Churchill as the founder of Thousand Hills Cattle Co. He sold the company in 2015 to his longtime business partner when he realized he didn't like working through middlemen to get retail shelf space.

"When you get to a certain size, selling into gross retail space becomes a sharp elbows thing — like the classic Coke vs. Pepsi battle," Churchill said. "I was perpetually frustrated that I had these third-party intermediaries dictating how and when I could interact with the customers at a level I wanted."

He didn't act on that frustration for several years, until meeting Blue Nest founders Russ Conser, Bill Godfrey and Allen Williams. The four men share a passion for the regenerative-agriculture movement and wanted to start a company that gave its practitioners greater market access and incentive to continue that work.

"That's hard to do unless you connect with a partner that already has a large audience, and that's where the Audubon Society comes into it," said Churchill, who still ranches near Cannon Falls, Minn.

Audubon recently developed a certification program for ranchers who use bird-friendly practices and habitat on their grazing land.

"Native grasslands are among the most altered and imperiled ecosystems in the world," the Audubon Society wrote in its handbook for certification program. "Since the vast majority of remaining grasslands are privately owned, grassland bird conservation can only be achieved through cooperative approaches that work with the farmers and ranchers that live and work on these lands."

With Audubon's backing, Blue Nest hopes to immediately have a bigger audience to draw upon.

The primary goal is to create a grassland environment where birds can nest. That means there must be grasses tall enough to hide them from predators. Conventional ranching uses what is called set stock grazing, which gives cattle access to all of the acres at once. Audubon and Blue Nest growers put the animals on smaller portions of land and never let the cattle graze the pasture all the way to the ground. This gives the birds an undisturbed area to nest.

Audubon has already certified 1.8 million acres in the United States. On top of the organization's standards, Blue Nest imposes the 100% grass-fed standard, meaning the cattle are never given any grains, which can be harder on their digestion.

Blue Nest currently sources from ranchers with a total of 5,000 acres. "We don't think the supply side will be the problem," said Conser, Blue Nest's CEO. "The bigger question is: Are there enough consumers that care enough?"

There is no question that demand for grass-fed beef is growing, said Alice Mintz, senior manager of strategic partnerships with Spins, a market-research firm in Chicago that specializes in natural and organic foods. U.S. retail sales of grass-fed beef across mainstream and specialty stores has increased nearly 16% in the last two years and now represents 5% of the total U.S. beef market.

This data doesn't capture what is called "random weight" meat sold directly to consumers from butchers, Mintz said. "The direct-to-consumer model is becoming a bigger part of the meat market as we are seeing this reversion back to local butcheries with the emergence of high-end meat companies with close relationships with their growers and purveyors."

Consumer understanding of food products grown using regenerative agriculture — or its close cousin, "biodynamic" agriculture — is still low. But awareness is growing among natural-foods shoppers, Mintz said.

Blue Nest pays its ranchers a 50% premium over conventional cattle prices, outpacing premiums for hormone-free and antibiotic-free meat, as well as most grass-fed premiums. This is meant to create an incentive for ranchers to use their regenerative practices, Conser said. Customers can order a "flyway beef box" for $179 that includes 12-14 pounds of mixed cuts, from steaks to roasts to ground beef, or the "prairie ground box," which includes 10 pounds of ground beef and burger patties for $99. Subscriptions can be set for monthly, bimonthly or quarterly delivery.

The company currently contracts with Lorentz Meats in Cannon Falls to process its beef. It is then sent to a facility in Burnsville where it is aged, frozen, stored and shipped to customers.

Blue Nest's hardest job may be convincing people that their products are better than those of competitors already doing home-meat deliveries, like ButcherBox and longtime incumbent Omaha Steaks.

The buying behavior and sentiments of "progressive core consumers" — those who are the forerunners of trends that may become mainstream in the future — suggests there is a place for companies like Blue Nest, said Melissa Abbott, an executive with consumer research firm the Hartman Group.

"We are finding many of these consumers are able to be a bit more realistic and analytic. They are making a more informed, smart decision and they're questioning if plant-based is the way forward," Abbott said. "A lot of those plant-based meat alternatives have sugars, commoditized grains and oils from industrial sources that are not necessarily good for the planet or human health."

Instead, this small percentage of the population is reducing meat consumption, but buying it from high-quality (and often more expensive) sources. But the definition of "high quality" is shifting, Abbott said.

They want to eat beef that comes from cattle that were used to improve the land, she said, or other forms of animal protein that were a part of that system.

"The regenerative movement is all about the beef," Abbott said. "What these companies are saying is that you don't have to burn the rainforest to eat meat. You need the animals to participate to make the soil healthier because you need the manure."

E-commerce presents a greater opportunity for companies offering something that currently seems like a niche product.

"As a consumer who has been a vegan, vegetarian and an omnivore, I've seen how we fall into tribes so easily, particularly when it comes to meat eating, and particularly right now. Consumers are very tribal in how they get their information through things like podcasts where they know who their audience is," Abbott said. ButcherBox advertises on podcasts like Joe Rogan's, which has a focus on primal eating and the effect on human and planet health. But even that meat-delivery competitor isn't answering all of the questions these highly informed consumers are asking.

"What consumers are telling us is you can't just look at one metric like organic or grass-fed anymore," Abbott said. "Consumers are asking even deeper questions about how to make the soil and habitats better, and that's what these companies like Blue Nest are trying to answer."

Kristen Leigh Painter • 612-673-4767