Bobby Farias was desperate. The founder of Kunoa Cattle Company, a meat processing plant in Hawaii, couldn’t pay his employees, owed money to ranchers and had nearly a million dollars of cattle that had been slaughtered but not purchased.
That’s when Melaleuca CEO Frank VanderSloot stepped in. He not only bought the entire operation on the island of Oahu, but paid $1.5 million to the ranchers and several others who were owed money. The 50 or so employees of Kunoa, who were worried about their jobs, now have secure employment and every one of them received a pay raise.
“The path we were on wasn’t going to allow a future without Frank stepping in and helping us get back on track,” Farias tells EastIdahoNews.com. “The way it was set up, there was nowhere to go.”
Hawaii’s beef industry
Farias met VanderSloot years ago when the Idaho businessman needed to rent some corrals. VanderSloot’s Idaho Falls-based Riverbend Ranch has 500 cows in Kauai – cattle with some of the top genetics in the world.
The two men became friends and VanderSloot quickly learned how tough the cattle industry is on the islands.
“We can birth cows but getting them fed is the issue especially with what’s happened to the price of corn over the last 15-20 years,” says Scott Enright, the former chairman of Hawaii’s Department of Agriculture.
Ranchers typically send weaned calves to feedlots on the mainland, where they are slaughtered, processed and sold.
Less than eight percent of beef consumed in Hawaii is local, according to Farias, and 10 years ago he realized his business model was broken.
“Shipping calves to the mainland was getting increasingly harder to find sustainable margins,” he says. “Not only that, but we have around 100,000 mama cows in Hawaii and the facilities here couldn’t match the number of animals we had so overflow would go to the mainland.”
He launched Kunoa Cattle Company in 2016 in an effort to keep more cows local but ranchers needed sustainable prices and margins. Not only that, meat processing plants were closing across Hawaii.
“There used to be dozens of them spread around the state but with food safety regulations, we only have a few left,” Enright says.
Farias approached VanderSloot and explained his problem.
“I reached out to Frank and told him about where things were and where I thought they were headed,” Farias recalls. “We needed a lot of help cleaning up the financials and he was up to the challenge.”
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