No beef with NZ farmers

Long-established family business Marx Foods is the key distributor in the United States for Silver Fern Farms' red meat. Frank and Justin Marx, who are respectively the fourth and fifth generation to be involved in the business, have been in Otago this week and caught up with agribusiness reporter Sally Rae.

Justin and Frank Marx enjoy lunch during a beef producer day at Silver Fern Farms' Finegand plant in South Otago.
Justin and Frank Marx enjoy lunch during a beef producer day at Silver Fern Farms' Finegand plant in South Otago.
When it comes to describing New Zealand's agricultural sector, Marx Foods chief executive Justin Marx is effusive in his praise.

It had the whole package, from beautiful landscapes to sheep and beef farmers who were ''the class of the world'', he said.

''I think a lot of Kiwis take for granted you ... have absolutely gorgeous farms, and farmers that really care about the environment, care about their animals. That's just your way of life.''

He was impressed with how farmers were thinking about the next generation, saying not only were they stewards of the land, but also stewards for subsequent generations.

''One of the reasons I love coming here ... I get to go out to your farms and see what [farmers] do. I'm always struck by how complex and hard it is and I always walk away with real admiration for everything that goes into it, Mr Marx said.

''Gorgeous animals on gorgeous pasture - [it's] not so in the States,'' he said.

When it comes to the food industry - and meat, in particular - the Marx family know their stuff.

''It's our life,'' Justin's father, Frank, said.

Justin and his two brothers, Keith and Garrett, are the fifth generation of the family to be involved in the business.

The Marx family migrated from Germany to the United States in 1895, opening a butcher shop in Brooklyn, New York.

They then moved to New Jersey in the early 1900s and opened a slaughterhouse and cattle-dealing business.

By the 1940s, the business had expanded into a retail butcher shop and wholesale meat distribution.

Frank Marx - described by Justin as ''ahead of his time'' in the meat industry - developed the company into a large meat processor and distributor by the 1970s. Since then, he and his sons have evolved the business to include food importing, restaurant distribution and food marketing.

They were involved at every level of the distribution chain, from hotels and restaurants through to food services, supermarkets, distributors and even consumers through their consumer-direct business.

The Marx companies were now run from offices in Atlantic Highlands, New Jersey, where Frank Marx is based, and in Seattle, where Justin Marx is.

All the Marx men were exposed to the livestock industry at a young age. Justin Marx was accompanying his father to livestock auctions when he was 3 and, by the time he was 11, held a position in the family packing plant.

He later graduated with a law degree but decided a career as a lawyer was not to his liking and instead joined the family business.

Frank Marx said he was proud his children were involved. Heritage was important to them and they took pride in being ''number five'', which was unusual in business these days, he said.

Justin Marx said what was ''really cool'' about the family was how he and his brothers had been able to contribute significantly and each take over a part of the business that suited them.

Justin, who is in charge of marketing and the consumer-direct business, has been coming to New Zealand annually for the past three years, while his father has been coming for nine, meeting Silver Fern Farms staff and also catching up with farmers. American consumers wanted grass-fed meat and the grass-fed market in the US was growing about 20% a year.

As most of the domestic supply of grass-fed beef in the US came from small, regionalised production, where farmers did not invest very heavily in genetics, many consumers expected grass-fed beef to be ''pretty poor'', Justin Marx said.

People expected it to be tough and not taste good and there was a surprising - and positive - response when they tasted Silver Fern Farms' beef.

They also did not want artificial hormones, and the antibiotic issue was getting ''bigger and bigger'', Frank Marx said.

The public wanted healthy food, they wanted their children to be healthy, and they were increasingly concerned about where their food came from, he said.

It was refreshing to come to New Zealand because, while he was raised around farmers, that was ''all gone in Jersey. [New] Jersey has basically become factory farming'', he said.

Justin Marx said consumers also wanted consistency and that covered everything from quality to pricing and availability. They were looking increasingly to get more connected to their food.

The Marx family has been involved with Silver Fern Farms since its days as PPCS and before it moved into branded programmes.

Silver Fern Farms had put much hard work into brand development and creating value programmes, Justin Marx said.

It took much time and much cost was involved but it was laying the foundation for a really strong future - and the Marx business was oriented in an identical fashion.

Developing such a foundation should not be thought of as an expense but as an investment, he said.

Frank Marx, who had seen the branding programmes from their inception, said the vision of the company was becoming apparent.

Marx Foods was putting the Silver Fern Farms brand ''out there'' in the US extensively, and it was seeing ''great success''.

''We're growing the market significantly, but still things take time. It's easy to gain sales if you drop your price 25% below market. A way to get premium prices out of the market is to develop long-term value,'' Justin Marx said.

Most people tended to think in terms of ''instant gratification'', rather than looking at the long term, Frank Marx said.

The Marxs attended trade shows throughout the US, most recently visiting the Fancy Food Show in San Francisco, where Silver Fern Farms' Angus beef and Silere Alpine Origin Merino - its joint venture with the New Zealand Merino Company - were both exhibited.

The Fancy Food Show, also held in June in New York and where Marx Foods would again be exhibiting, was the premier trade show for specialty foods in the US, Justin Marx said.

Last month's show went extremely well.

''Buyers love the taste, they love the story and they love the comprehensive marketing support and branding programme that we offer,'' he said. Many Americans did not have a taste for lamb but with the Silere Alpine Origin Merino, which had a much milder flavour, he believed a larger market for lamb could be unlocked, he said.

Both Frank and Justin Marx were excited about Silver Fern Farms' ''eating quality'' system. Customers were intrigued by the sophistication of the grading and it was also creating a ''massive'' feedback loop, Justin said.

He also believed the company's marketing programme was one of the most sophisticated to come out of a meat-processing company ''anywhere in the world''.

He was ''extremely optimistic'' about the future, especially as the eating quality programme began to kick in, and he believed Silver Fern Farms' enormous investment in marketing and the eating quality programme were key to expanding the market.

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