Walmart’s New Beef Plant is More Sizzle than Steak, For Now

Key Points

• Through Walmart’s new case-ready beef plant and Angus supply chain, the largest food retailer in the U.S. is entering the beef industry in a new and innovative way.
• The goal is to provide customers “with unprecedented quality and transparency,” but the new plant and supply chain also enables Walmart to gain valuable insights into beef production.
• Creating an end-to-end beef supply chain is Walmart’s latest step in its vertical integration strategy in food and toward its stated goal to improve the quality of its food offering.
• Walmart will need to convince customers that the attributes of this beef – beef that is hormone-free, traceable, and potentially of higher grade – make it not only worth buying, but paying a premium price for.
• U.S. cattle producers, feeders, and packers will not likely suffer any significant near-term changes from Walmart’s entry, but its success could very well lead Walmart to make a bigger move in the future.

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