Bulk Meat Startup Zaycon Delivers Lower Prices, Fresher Food And Faster Recalls
How fresh is the meat that consumers typically purchase from a local grocery store?
According to Mike Conrad, co-owner of Zaycon Foods, it will work its way through at least one distribution center before it arrives at the store. All told, it could be 15 days (between the time that it travels from the processing plant to the store) before consumers get it home.
"We got a lot of people saying, 'This is awesome chicken!'" Conrad told Benzinga. "And we're like, 'It's no different from what you get at the store.' But then we realized it's because we're getting it to 'em in three days or four days, rather than having it sit in a distribution center and another distribution center and then the store."
Zaycon sells meat in bulk at discounted prices. Chicken, for example, comes in a 40-pound box that typically retails for less than $2 per pound. Customers purchase the meat in advance by registering with Zaycon, which will bring it to a pre-scheduled location for customers to pick up.
There are dozens of pickup events planned for today and tomorrow (Thursday, October 31) all over the United States. Consumers who live in Alabama, California, Georgia, Idaho, Kansas, Michigan, Missouri, North Carolina, New Mexico, Ohio, Oregon, Pennsylvania, South Carolina or Washington will be able to order and pick up cases of bacon or sausage.
"We're delivering stuff out of the back of a truck," said Conrad. "That freaks out some people sometimes. But really, every chicken you've ever eaten has come out of the back of a truck."
When Company X issues a recall, the health department typically promotes the recall on the local news, in the paper, and in other forms of traditional media. If the recall is large enough, it might get a national promo.
"That's so old-school," said Conrad. "You know what I do? In three seconds I can e-mail, text and call every single customer that received my chicken. Every customer! And they respond back, and anybody that doesn't respond back, I will call them personally and make sure they don't eat that chicken."
Conrad said that most grocery stores are forced to throw away 20 to 30 percent of their meat because it expires before it is sold.
By taking orders in advance, Zaycon is able to avoid a similar level of waste. When the company goes to an event, it only brings meat that consumers have purchased in advance -- no more, no less.
This strategy caught the attention of The Post Harvest Project, a non-profit organization that focuses on reducing post harvest waste (among other things). The organization awarded Zaycon with the first Post Harvest Waste Innovation Award.
Zaycon may be a startup, but logistics keep it from working with smaller farms.
"We currently buy from larger farms," said Conrad. "When we have a million, two million, five million customers, we'll be able to go to a community and help all the local farmers. We'll be able to buy the corn, buy the bread, buy whatever and sell it within that community.
"That hasn't happened yet because we're not big enough. When we get to that point, we are going to do that. Because we want to help the community. We want to create jobs. We want to go into a community and build it, not destroy it."
Zaycon estimates that it will earn between $13 million and $16 million in revenue this year -- up from just $404,000 in 2010.
Now that the company is really starting to grow, Conrad has some advice for those who wish to launch a startup.
"The bottom line is, you just gotta take the risk," he said. "I've done a few other small companies -- some work, some didn't. Never give up. Just because you fail… There's a lot of benefit in failing. A ton. Because you learn all those things you ought to do the next time. As long as you get back up and keep moving, you'll succeed."
Conrad added that the day an entrepreneur decides to quit is the day that he or she actually fails.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.