North Country Smokehouse

North Country Smokehouse’s local roots give duBreton new growth opportunities nationwide.

North Country Smokehouse needed to go big, and also stay home.

By the mid-2010s the company was bursting at the seams of its Claremont, N.H., smokehouse. Its owner, the esteemed Mike Satzow, was also looking to retire after spending a lifetime building a word-of-mouth mini empire of premium bacon and other smoked pork products that chefs across the country clamored for.

Satzow approached his longtime pork belly supplier, duBreton, about acquiring his business. He did have one condition, though. The smokehouse had to stay in Claremont, a hardscrabble former mill town bordering Vermont, which has been his family’s base in the meat industry for three generations.

“It was actually written into the acquisition agreement, and it was one of his conditions that if you’re going to buy the business, you have to maintain it in Claremont,” says Aaron Corbett, CEO of North Country and duBreton USA. “[Satzow] was born and raised here, and saw what happened when a bunch of businesses closed down.”

Quebec-based duBreton, itself a multi-generational family business of pork producers that has grown into the largest supplier of organic and certified humane pork in North America, smelled opportunity in North Country’s smoky pork products. It bought the company and began planning a new 62,000-square-foot smokehouse to replace the original. The Canadian company, which had strong fresh meat distribution in the retail space but less range on the deli side, bet that a new $35 million smokehouse would be able to take advantage of its vertical integration to push smoked organic and certified humane meats into new markets.

“We have relationships on the retail side with some flagship accounts,” says Vincent Breton, duBreton’s president. “[Satzow’s] business was mainly high-end foodservice and not natural and organic, so we knew we could grow the business.”

The new smokehouse, constructed over a period of 15 months in 2016-2017, sits a few miles down the road from the 15,000-square-foot ‘70s era original. The facility was designed with food safety, efficiency and worker satisfaction in mind, Corbett says. The raw and cooked sides are completely separated, with extensive work on condensation control. Employees are provided a large break room with floor-to-ceiling windows, and the hallway leading into the various sections of the plant also has windows that allow natural light inside. The hallway also serves a functional purpose by creating additional air space between the insulated walls, as does the mezzanine space above the refrigerated area, creating a “shell-inshell” design that improves efficiency.

Beyond those features, North Country knew the new space needed to meet two goals: give the company room to significantly grow its business with capacity to spare, as it grows its retail presence; and ensure that the flavor of its products would not change one iota with the transition.

According to Corbett, the company succeeded.

“Our trademark is our smoke,” he says. “It was critical for us not to change [the flavor], because that’s the signature, and you need to make sure it stays consistent from one plant to the next.” The company used the same recipes and German smokehouses that were used in the old plant, and according to Corbett, the transition to the new plant — at least on the smoking side — was seamless.

That Satzow stayed on with the company for a few years after the transition period helped both on the production and sales side. Corbett shared an office with him in the old smokehouse for two years, soaking up knowledge while the new plant was built out. “I learned a great deal from him,” Corbett says.

A STORIED PAST (AND FUTURE)
North Country made its name in the foodservice industry, building a customer base one chef at a time by delivering on its promise of no-compromise products and responsive service. At the time of its acquisition, North Country was selling 90-95% of its products in the foodservice channel. DuBreton lured Mike Kelly, a former Conagra executive with more than 23 years of retail experience, out of retirement to lead North Country’s retail efforts.

“Retail will become a larger portion of the overall sales, and one of the reasons for that is … in retail, you can easily tell your story on the package, so people can say, ‘I want organic,’ ‘I love the story about the farms,’” Kelly says. “In the foodservice arena, you don’t have that opportunity. . . . A lot of restaurants still haven’t moved to that level of certified humane or organic.”

North Country believes it has a compelling story to tell. It leans into Satzow’s family history in the meat industry, the company’s commitment to not taking shortcuts, and the pursuit of whole, local ingredients for its products. North Country’s maple syrup for curing its bacon and hams comes from a family- run New Hampshire sugar house 20 miles north of the smokehouse. It sources beer and cheese for its sausages from local companies across the border in Vermont, uses real wood chips for its smokers, and has employees peeling onions and measuring whole garlic cloves for flavoring its sausages.

DuBreton, Vincent Breton explains, sees North Country as a synergistic fit for its brand — it brings an animal welfare- focused pork operation to an established artisanal smoked meat producer. By combining North Country’s story and high-quality products with the promise of more humane animal husbandry, duBreton expects to find willing customers at the higher end of the retail segment.

“We’ve taken this really artisanal, high-end product and coupled it with this great organic, certified humane niche story, and that is what I feel differentiates us,” says Corbett. “A lot of people play in the niche space of organic or certified humane, and a lot of people play in this really small batch, low and slow highend product, but there’s not too many out there, I believe, that are doing both.”

North Country also makes sense to duBreton from a carcass balance perspective. “Organic production, GAP production, certified humane — it is a lot more expensive to produce,” Breton says. “It is important to get as much value as you can from the whole animal.” North Country’s value-added smoked sausage, deli meats, hams and other products allow duBreton to add value to trim and less expensive cuts, giving the company a more profitable outlet for all the parts of its animals.

ORGANIC GROWTH
With retail markets firmly in North Country’s sights, Kelly pounded away, moving the company’s bacon and other products into new groceries down the East Coast and into the South. As part of the transition, North Country began to downplay its products that used commodity pork and focus on duBreton’s certified humane and organic meat.

The company modernized its packaging design to put the organic and certified humane certifications front and center. By 2020, the company had grown the business overall while shifting retail sales to 25% (from less than 10%) of the total.

Then the pandemic hit. With a steady supply chain from the duBreton farms and a smokehouse located in a state not hit especially hard by the virus, though, North Country was primed to get meat onto barren grocery shelves. As its foodservice business cratered, the company hacked those lines to add additional retail capacity. It is now selling about 50-50 foodservice and retail, with the expectation that retail will continue to grow, Kelly says.

Earlier this year, the company announced a push into retail spaces in the Western U.S.

“One of the reasons we want to be in the West is that it has the highest development of organic consumers in the country, and there’s a demand out there,” Kelly says. “There are a lot of competitive products being sold that are certified humane or GAP or [antibiotic-free], but no one has as broad a line of organic pork products as we do, so we think there’s an opportunity for us in the organic space in the West.”

Corbett agrees. “The No. 1 organic market across all product lines in the country is California, so it’s a geography we need to play in if we want to continue to grow the organic business.” He notes, however, that the company is also making significant pushes into the South and Midwest.

Breton acknowledges the demand for organic originates from the coasts, but also sees a greater groundswell underway. “We are getting some requests and demand from customers that maybe were not considering organic as important five to 10 years ago, but now with the steady growth and the shift in the consumer mindset, the consumers are looking into what they eat and where it’s coming from,” he says. “It’s not just a geographic growth, it’s a consumer shift.”

Sales seem to bear that out. The company is producing four times the product it was pre-acquisition, and it also has almost four times the number of employees, going from 36 to around 120. “We’d like to have a few more,” Corbett says, noting the tight labor market.

Nonetheless, he is proud that the company is bringing more jobs to the town.

“It’s really cool that we can add another 90-plus people to our payroll and have good-paying jobs — we’re starting wages now at $15 an hour” with management positions a good bit higher, Corbett says. “Hopefully, we can keep it going and continue to grow. Five years from now we are talking about having 240 employees, all from the local area.”

A GROWING FAMILY BUSINESS
Despite the new ownership, North Country still sees itself as a family-run company that is responsive to customer needs and consumer demands. “It’s not a big corporation, it’s not a huge, big business — it’s a family,” Corbett says about duBreton. “It’s people that care about the legacy of their family and care about the animals.”

Kelly concurs: “We’ve still been able to move really fast,” he says. “We’ve had opportunities with customers who asked us to do something specific for them … and we’ve turned that around in two months and had the product produced and packaged and ready. The good news is there’s only a certain number of people who have to get on a call, and we can make decisions really fast.”

While the company plans to continue to offer smaller, one-off products to its customers, it is laser-focused on broadly expanding its organic and certified humane reach. North Country’s strategic plans call for it to introduce three new products a year, and the team is constantly reading the tea leaves of the marketplace to decide what to produce. This fall, the company will be releasing a six-ounce organic ham steak, for example.

“No one is producing an organic ham steak, so we differentiate ourselves right there, and we’ve already had significant interest in it,” Kelly says. “We look and say, ‘What’s doing well in the market, and is there an organic choice?’ If not, maybe that’s the right place for us.”

Read the full article here.

ORGANIC MEAT IS BOOMING. In the past year, organic meat sales have grown 37% versus two years ago, outpacing the meat department,
which grew 20%, according to Nielsen data. Although organic food is the largest growing sector of the food industry, it still only accounts for 5% of the total dollars spent on food
annually.

In NCS’s 2021 brand awareness survey, consumers report looking to retailers, second only to farmers, for trusted information. That means retailers have a responsibility to educate their shoppers about the values and benefits of eating organic, and to make these products available to consumers who value their health, animal welfare, and sustainability.
When it comes to organic meat, interest has been rising annually.

Jenny Burns, senior director of innovation and brand equity for Applegate, Bridgewater Township, N.J., noted that when it comes to the meat shelves at the supermarket, the industry has long seen brands and retailers developing organic versions of the top selling conventional items. “This is a popular strategy as it offers consumers more choice and retains the high-value shoppers looking for elevated standards,” she said. “More recently, however, we’ve seen a trend towards more unique or innovative items launched exclusively as organic. This is exciting because it signals that organic is a compelling and motivating selling point for them even if they are not familiar with the product or already purchasing it.”

“We’ve certainly seen this reflected back to us from our consumers shopping the meat aisles,” Burns said. “People tend to scrutinize the labels of their grocery items after major life events such as the birth of a child or a health setback. The organic label serves as their shorthand for the spectrum of benefits impacting them personally but also their community and the world around them.” Kay Cornelius, general manager of Panorama Organic Grass-Fed Meats, Westminster, Colo., noted organic and grass-fed meats remain very strong from the standpoint of consumer interest.

“Even now as the pandemic becomes ‘end-demic,’ consumers are still going to the grocery store at a higher click, and their meat purchases reflect that,” she said. “They’ve tried to cook different things during the pandemic and they want to stick with that. We’re seeing more organic cuts sticking at retailers because people are demanding it.”

Trending up
Aaron Corbett, CEO of North Country Smokehouse, Claremont, N.H., noted sugar-free proteins have been trending for the last few years and consumer demand continues to grow.

In addition, organic consumers are becoming increasingly more aware of the regenerative aspects of farming and are looking to buy from brands that don’t just check the non-GMO organic boxes, but who produce foods through sustainable practices that respect not only the livestock but also the land.

“Consumers understand the role they play in the food system, and how the choices they make impact the soil, air and water,” Corbett said. “This is a trend we’ll continue to see, and we’re well aligned because we’ve been doing it this way for years. In many cases, producers see an opportunity and pivot to meet the needs of the consumer. In our case, we’ve been operating in the best interest of a sustainable future for the last 16 years, and we’re happy to see the market begin to adopt a more sustainable food-philosophy.”

Anecdotally, Burns has noticed increased popularity of organic across meat categories within more conventional retailers—those not specialty or natural, over the last couple years.
“Many of our key accounts are working to expand their organic assortment to meet rising consumer demand, both in their brick and mortar stores and online,” she said.

Cornelius noted organic meat tends to be boosted by younger generations typically—millennials and Gen Z and checks a lot of the boxes for those consumers concerning health and ecological issues.

In an effort to offer more variety, Panorama is launching a new 80/20 organic ground beef product to appeal to cost-conscious shoppers, and also a restaurant-style brisket cut short-rib lamb for more adventurous diners.

Pandemic performance
The organic category performed well during the pandemic, as consumers were not only preparing more home meals, but looking for higher quality, unique products to liven up their meals.

“For North Country particularly, the supply chain issues many producers faced presented a real opportunity for us,” Corbettsaid. “Because we own our very organic family farms, as well as work with a network of farmer partners under our umbrella, we were able to step in and guarantee fulfillment at a time when many other suppliers were having immense challenges keeping the shelves stocked.”

Burns noted that COVID taught many that a strong defense against disease is one’s own immune system.

“People are interested in food that builds immunity or at least doesn’t compromise it. This equates to clean food raised without pesticides, antibiotics, and other additives and preservatives,” she said.

New and improved
North Country has a large offering of organic products ranging from bacon to sausage, deli meat and low and slow smoked ham.

“The pork is sourced from our very own vertically integrated, organic familyfarms,” Corbett said. “That means we have full control over the process and can offer our customers and consumers complete transparency.”

Over the last few years, the company has launched several new organic meat products that are the first-of-their-kind available in the marketplace, including Organic Canadian bacon, which can be found at upscale retailers across the country; and organic ham steak and organic petit ham.

“Not only are we offering new products with organic attributes, which until recently have been impossible to find on store shelves, we’re focused on modest and convenient pack sizes, so consumers can enjoy flavors they love without having to bite off more than they can chew,” Corbett said.

Burns noted that Applegate’s WELL CARVED line is the perfect example of taking popular items consumers crave and then not only elevating the quality of ingredients used to make them, but finding ways to make the product unique, such as pairing meat with plant blends.

For instance, WELL CARVED burgers and meatballs are made exclusively with organic meat and vegetables and offer consumers a way to enjoy real, clean meat in tandem with vegetables that promote health and a healthier planet.

“We are also about to launch a new organic snacking item called Applegate Organics Genoa Salami Bites,” Burns said. “Our traditional organic Genoa Salami is one of our more popular items and, with snacking continuing to be a huge food occasion, we hope making a version that is portable and bite-sized will satisfy the needs of consumers looking for organic snacking options that are also a good source of protein.”

Marketing matters
The more consumers demand organic food, the faster it will be produced to meet that demand.

Corbett feels stores can do their part in increasing organic meat knowledge by making information easily accessible with store signage and case display, plus utilizing its company website and digital assets to tell the story of where the meat is coming from.

“It’s also important to make sure the USDA Organic seal is evident and that shoppers understand the credibility of the claims labeled this way, to know that farms are third-party audited and have proven their programs and claims to be true,” Corbett said. “We’ve seen some retailers go as far as to hold webinars or instore cooking demonstrations so consumers can engage with brands first-hand and ask questions. That’s a wonderful approach.”

Panorama knows that organic meat is expensive for some consumers, so it makes sure that it’s in the right size package and work closely with retailers to promote it.

“If a retailer doesn’t know a consumer has it at the store, you’ve missed the boat,” Cornelius said. “We provide free magazines in a stand that have recipes and create a destination for shoppers who want to try the products.”

Applegate offers certified organic items in every product category that it offers and helps support retailers to both expand assortments and fill gaps in their existing sets with items that are highly differentiated and will increase total basket dollars.

“In order to better market organic meat, stores should group organic meats together at eye level and merchandise next to conventional meats, where there is high foot traffic,” Burns said.

“To help differentiate, signage and shelf tags should be used to call out which products are organic meats,” she added. “When it comes to e-commerce, organic meats should be featured prominently on retailers’ platforms, since the organic meat shopper has a much higher propensity to buy groceries online than the average shopper.”

Read the full article here.