By Frank Morris
Walmart plans to build an Olathe meatpacking plant that will take big cuts of beef from a slaughterhouse in North Platte, Nebraska, and turn them into single serving pieces, packaged and priced for Walmart stores across the Midwest.
The facility will handle the kind of work that grocery store butchers do — at factory scale.
The Arkansas-based mega-retailer said it plans to hire more than 650 people to staff the $257 million plant it’s building on the southern edge of Olathe near U.S. 169 and 167th Street.
David Anderson, who specializes in Livestock and food product marketing at Texas A&M, said this kind of plant reflects a growing beef industry trend.
“This is the next step in that evolution of our beef and meat supply chain. We used to have terminal markets. Kansas City was a great one,” Anderson said. “The stockyards, the meat packers were there.”
For over a century starting in the late 1800s, cattle ambled off trains in Kansas City’s West Bottoms area where workers waited to kill them, cut them up and ship them out as shipping sides of beef to the rest of the country.
But the facility Walmart is building in Olathe will take in large boxes of meat, not live cattle. The product coming out will be packages all ready for customers to take home from Walmart coolers.
“It fits a bunch of trends in the industry, and one is case-ready product,” Anderson said.
It also fits in with vertical integration. Walmart owns a majority share of the slaughterhouse in Nebraska, so it’s doing everything but raising the cattle.
“It's a continuation of Walmart's strategy as they highlight to be end-to-end business operations in the beef supply chain,” said Lee Schulz, an agricultural economist at Iowa State University.
By controlling more of the supply chain, retailers can be more responsive to consumer demand. For instance, consumers have been buying more high-quality beef lately. They’re more interested in how sustainably and humanely it’s produced.
While the centralized Walmart approach takes work away from local butchers and other food processors, the greater Kansas City region could benefit.
The area’s central location and robust logistical network make it a compelling place for processing and distribution centers and recent investment rings the metropolitan area, according to Chris Gutierrez, president of Kansas City SmartPort.
Cost is another driver. A central packaging plant like the one Walmart is building in Olathe could replace hundreds of grocery store butchers working in the back of stores. It can be more efficient and more automated.
Click here to see more...