Walmart invests in ranchers’ company as shoppers favor premium beef

As more grocery shoppers opt for higher quality meats, Walmart said Wednesday that it is investing in a company led by ranchers and beef producers to bulk up its supply.

The retailer is taking a minority stake in Sustainable Beef, which plans to open a processing facility in North Platte, a small town in west-central Nebraska that is home to the former ranch of storied Western showman Buffalo Bill Cody. It expects to break ground next month and create 800 jobs.

Walmart declined to disclose the specific amount of its investment. As part of the deal, however, the retailer will get the majority of beef produced at the facility, which is expected to open by late 2024, said Tyler Lehr, senior vice president of merchandising for deli services, meat and seafood for Walmart U.S. It will also get representation on the company’s board.

For the retailer, the deal means a larger, more consistent supply of beef, including better cuts. For shoppers, it will show up in the form of ground beef and steaks — including ribeye, sirloin and New York strip — in its meat department. Walmart will source Angus from the company, a type of beef that comes from a cattle breed often associated with more flavor because of its marbling.

The beef will hit store shelves in the central part of the country starting in late 2024, Lehr said.

Walmart, the country’s largest grocer by revenue, is making investments in agriculture and food production as consumers eat differently and crave more information about the items they toss in their shopping carts. The company invested earlier this year in Plenty, a California-based startup that grows leafy greens indoors and closer to urban centers. The agriculture method of vertical farming uses less water, eliminates the need for pesticides and requires less transportation to get to the store shelf.

Two years ago, Walmart opened a beef-processing facility for Angus beef in Thomasville, Ga., and in 2018, it opened a high-tech dairy plant in Fort Wayne, Ind.

The Sustainable Beef investment also feeds Walmart’s environmental and social commitments. By 2030, the retailer, along with the company’s foundation, has pledged to protect, restore or more sustainably manage at least 50 million acres of land and 1 million square miles of ocean by 2030. And two years ago, it said it would work toward sourcing more sustainable fresh beef by working with ranchers on grazing management, grain sourcing and more.

Groceries drive almost 60% of Walmart’s U.S. sales, according to its most recent annual report. Fresh groceries like fruits, vegetables and meats are especially a growth driver and influence where people choose to shop, Lehr said.

“Customers continue to tell us one of the biggest points of differentiation is they want to know where it comes from,” Lehr said. “They like…