In 2015, Mike Salguero founded ButcherBox using money raised through a crowdfunding campaign. The membership-based business sells and delivers sustainably sourced and humanely raised meat and poultry from family farms. In 2016, Michael Billings became employee No. 5 when he joined as head of procurement for the startup.
Billings joined ButcherBox out of retirement from BJ's Wholesale, where he spent 25 years as the head of meat and seafood. Since then, he has worked to scale the company for growth by enlarging its supply chain and streamlining processes.
NRF spoke with Billings about his experience at the two retailers, how ButcherBox commits to quality and the way it keeps tabs on the supply chain.
How does your current position compare with BJ’s?
The meat business is fast, regardless of where you work. At BJ’s I was the third employee brought on to build the meat department. We launched meat in 16 stores in three months while figuring out product selection, meat-cutting specifications, case design and store layout. That was all done from scratch, similar to the startup environment at ButcherBox.
Decisions get made differently when it’s maintenance versus growth. ButcherBox is still very entrepreneurial and the team here is very collaborative.
Early on at ButcherBox, we were buying domestic meat and shipping it to be processed in the Midwest and buying Uruguayan meat and shipping it to Vermont for processing. From there, everything went to our Wisconsin distribution center for shipment to members. Today we have four fulfillment centers strategically placed throughout the country and two steak cutters, which helps streamline the process.
But where the two experiences are totally different is how we thought about product and sales at BJ’s versus how we think about it at ButcherBox.
I think first and foremost about product, quality, the member experience and then price.
Can you elaborate?
At BJ’s, buying only USDA Choice meat and price were neck and neck in my thinking order, followed by customer service. At ButcherBox, price is nowhere near the top of the list. While it certainly has to fit into the model, I think first and foremost about product, quality, the member experience and then price.
What is ButcherBox’s commitment to product quality?
Our original mission was to be able to offer a product that created a higher nutritional value, took animal welfare into consideration, was farmer-focused and had a positive impact on the environment. We’ve followed that mission to this day.
We’re focused on claims-based, high-quality meat. What that means is 100-percent grass-fed, grass-finished beef, free-range organic chicken, heritage breed pork, wild-caught Alaskan sockeye salmon and wild-caught sea scallops. Our products are never given any antibiotics or added hormones, ever. Our chicken is USDA certified organic and GAP-3 certified. Our pork is Certified Humane or American Humane Certified.
And there’s a commitment to product traceability, right?
With what we’re facing with COVID-19, it has made more consumers even more ambitious in terms of knowing everything they can about their products. We want a product that has as much traceability we can find so we can offer that insight to our members.
We source a majority of our beef from Australia because the country has a fully traceable grass-fed system as well as higher and stricter standards on what grass-fed actually is. Cattle in Australia can be traced back to the farm they were raised on. That just doesn’t exist in the United States because animals change hands so many times in their lives, making it very difficult to have traceability.
We are aggressively working on a domestic program that will start with partial traceability and grow to a fully traceable program by 2021. Last summer when we launched our scallops, we were able to add a QR code on packaging which gives our members full transparency into where and when the product was caught as well as the vessel name. There is so much fraud in seafood that this type of traceability is a game changer for the industry and our members.
Urban members tend to rely on us for convenience whereas suburban members may have trouble sourcing the quality of meat they want in their local grocery stores.
What can you tell us about your members?
First and foremost, our members care about claims-based meat. They want to know where their meat comes from, they want to know it was humanely raised, that the farmer raising it was treated and compensated well, that the animal had an impact on the regenerative process of the land it was raised on.
Our members are a healthy mix of urban and suburban dwellers and household income ranges quite a bit. Based on member interviews we’ve done, we know urban members tend to rely on us for convenience whereas suburban members may have trouble sourcing the quality of meat they want in their local grocery stores. We have members across the entire U.S., except for Alaska and Hawaii where we do not currently ship.
There’s currently a waitlist for ButcherBox subscriptions. How will ButcherBox meet demand?
We actually decided to pause advertising at the start of the pandemic so that we could serve our existing members. As a company, we’re very heavily data-focused. The idea that we’re able to use technology all the way through our supply chain is incredible — from our suppliers, to our cutters, to our distribution centers and back to us. We use Microsoft’s Power BI to talk to all of the different parts of our supply chain.
As we’ve grown over the last three years, we’ve built a more complex inventory control dashboard and have better forecasting against demand to help us make better decisions. Relentless improvement is one of our core values as a company and we’re continuously improving in this area as well as many others.
Recently we hired a person whose prime focus is to build our domestic program. With his help, we have identified the top things we think are most important to build a domestic supply chain for 100-percent grass-fed beef. The goal is to work with partners who can scale with us. A lot of the farmers and ranchers are third- and fourth-generation and they’ve done things the same way their entire lives. So, when you are asking them to completely change the way they’ve done things, it takes time and trust to implement those changes.
Again, this isn't something that’s going to happen overnight, but our hope is we can help ranchers grow the type of product we need in the U.S., remove market volatility and provide consistent orders to them. Accountability is one of our core values, and it's important as a business when we commit to buying a product that we follow through on that commitment.