Was a Food InnovatorUnfairly Targeted?

? Web reaction to the harvesting of meat scraps results in customers leaving and plants closing

? "Eldon Roth basically is a genius. BPI has been in the forefront of food safety"

Thirty-one years ago, a young man withno college degree and the restless mindof a tinkerer started an unusual meat-

processing company. Eldon Roth's BeefProducts Inc. (BPI) bought tons of fattyscraps left over after cattle were carved

into steaks and roasts. Roth concocted

a way to use centrifuges to spin the fat

away and quick-freeze the remainingmeat into a pink pulp that made groundbeef leaner when it was mixed in. He

called it "lean finely textured beef."

McDonald's, Wal-Mart Stores, BurgerKing, Kroger, and Taco Bell used it.

Roth opened plants in Texas, Kansas,

lowa, and Nebraska, employing about

1,500 workers. He was inducted into the

Meat Industry Hall of Fame last fall in a

ceremony that brought him to tears.Then last month a news article refer-

ring to Roth's product as "pink slime"

caught the attention of food bloggerBettina Elias Siegel. She launched an

online petition to have it banned fromthe federal school lunch program. AsABC News and other media jumped onthe story, portrayals of BPl's product as

gross and unsafe rippled through the

blogosphere. With his customers aban-

doning him, Roth on March 26 suspend-ed production at three plants, laid off

almost half his workers, and now faces

a struggle to keep BPI alive."It's gotten to the point of absurdity,"

says Craig Letch, 39, Roth's son-in-lawand BPl's chief of safety and quality, as

he wends Ms way through a warren ofstainless-steel pipes and whirring grind-ers at the company's plant in South Sioux

City, Neb. "Have you had a hamburgerin die last 20 years? Odds are lean finelytextured beef was a part of that."

BPl's predicament is unusual because

it wasn't precipitated by an outbreak offood-borne illness, and its product has

never been directly linked to one. Plain-

tiffs attorney Bill Marler, noted for suingJack in the Box and other companiesover unsafe meat, says the rap againstReef Products is overblown. "BPl's

product is no more or less safe thanother parts of hamburger," he says."There's a lot of scraps that get putinto hamburger because that's whatthe hell hamburger is."

Why the outrage aroundBPI? The Web petition? The

TV coverage? "That's the

wrong way to think about

this," says Matthew Salganik, an assis-

tant professor of sociology at Prince-ton University. "Imagine a forest fire.No one thinks, 'Which lightning strikedid it?'" More telling are the scant rain-fall and hot weather that set the stagefor a blaze. The meat industry has been

taking heat in books, films, and newsstories for years. Add a catchy phrase,schoolchildren, and the prospect thatsome icky-sounding stuff is in Junior'sWhopper, and you have a PR disaster."Social media is something that adds

oxygen to the environment," explainsSalganik. "It increases the chance thata small spark will turn into a big fire."

Associates describe Roth, 69, as

heartbroken. He declined to be inter-viewed. He's paving sidelined employeesthrough May, but is facing the real pos-sibility that he may be forced to perma-nently ditch them. Blogger Siegel says thejob losses are "tragic." But she notes thatBPI "should have had no hesitation toinform consumers that [its product] wasin the ground beef from the beginning,"perhaps through labeling. "I have never

expressed anywhere a desire to drive this

company out of business," she says.Roth grew up poor in South Dakota,

where his company is now headquar-tered in Dakota Dunes. He became fasci-nated with refrigeration while workingat an ice cream plant, and in 1971 starteda refrigeration company that worked

with meat processors. Seeing beef trim-

mings going to waste, he experimentedwith ways to harvest the bits encased infat. Slicing it out by hand was costly. So

Roth figured out how to cull the meat

by warming ground-up scraps to aboutIOOF-the approximate body tempera-ture of a steer-and spinning them in in-dustrial centrifuges at thousands of revo-lutions per minute. The meat was frozenon a 14-foot drum Roth developed, then

chopped into chips or compressed into

60-pound blocks that look like Spam.He started BPI in 1981 with a plant

in Amarillo, Tex., selling to processorsthat blended the product with otherbeef. At more than 90 percent lean,BPl's product is usually added to makefattier grinds leaner, mostly in pack-aged ground beef and hamburger pat-ties but also taco meat and low-fat hot

dogs. At peak production in the last

decade, BPI churned out 500 millionpounds a year.

After four children died of £. coli

poisoning from Jack in the Box burg-ers in 1992 and 1993, Roth began look-

ing for ways to avoid similar tragedies.

As media scrutinyincreased,f astfood andsupermarket chainsabandoned the product

In 2001, he received U.S. Departmentof Agriculture approval to treat his prod-uct with a puff of ammonium hydrox-ide after the fat was spun out. Ammoniaoccurs naturally in beef and other foodsand has long been approved as an addi-tive in many products, from cheese to

pudding. BPl's puff treatment raises themeat's pH to a level that can kill bacteria.

Every carton of BPl's beef is tested forE. coli and other pathogens before goingto customers. "Eldon Roth basically is a

genius," says Steve Kay, editor of news-letter Cattle Buyers Weekly. "BPI has beenin the forefront of food safety in the beefindustry for a decade or more." j

BPI has had detractors, however.About a decade ago, a USDA microbi-ologist coined "pink slime" in an e-mailabout BPl's product. The term surfaced

publicly in a prize-winning New YorkTimes story about BPI in late 2009, quot-ing the e-mail as saying the microbiolo-

gist didn't consider treated trimmingsto be actual ground beef. The storysaid that E. coli and salmonella hadshown up in beef trimmings destinedfor school lunches, but never reachedkids' meals. A year ago, celebrity chefJamie Oliver mocked BPl's product onhis Food Revolution TV show, slosh-

ing household ammonia over a moundof beef. Also in 2011, McDonald's,Burger King, and Taco Bell qui-etly stopped using textured beef in

their meat. McDonald's says it wantedto standardize its global beef supply.Burger King says its move "wasn't relat-ed to safety concerns." Taco Bell didn'treturn calls. Letch says no customershave expressed safety concerns.

Cattle Buyers Weekly reported thedefections on Jan. 2, saying they hadcost BPI about 25 percent of its busi-

ness and forced the company to reduce

production to four days a week fromfive. A few short stories about McDon-ald's shift ran in mainstream medialater that month.

Then blogger Siegel, who monitorsfood coverage from her Houston home,

got involved. The 46-year-old Harvardlaw graduate started her blog, The Lunch

Tray, in 2010 after working on the Hous-

ton school district's parent advisorycommittee on food. That July, her blog

reported that the Departmentof Agriculture had announced

tougher testing standards forschool lunch beef. Siegel saysshe thought it meant leanfinely textured beef wouldno longer be used

So she was surprised to read onMarch 5 of this year a story about BPl's

product on the website The Daily.com,owned by News Corp. Headlined "Part-ners in 'Slime,' " it was accompanied bya photo of chef Oliver wielding a bottleof ammonia. The story said the USDA

planned to use 7 million pounds of BPl'streated meat in school lunches. Thenext morning, Siegel started a petition at

Change.org, asking Agriculture SecretaryTom Vilsack to "put an immediate end tothe use of 'pink slime' in our children'sschool food." Explains Siegel: "The con-

trast was stark to me, that McDonald's

was responding to consumer concern,I believe in part. And yet schoolchildrenhave no say." The next evening, ABCNews aired its first of at least six reportsincluding material previously reportedby The Daily.com and the Times. The-

Daily.com wrote several follow-up sto-

ries, and Siegel blogged, tweeted, and

Facebook-posted about her petition to

great effect: On one weekend, more than

137,000 signed it, Change.org says.On March 15, the USDA, while insist-

ing BPl's product was safe, said it wouldlet schools choose whether to buy meatwith or without textured beef. BPI start-ed a website, pinksUmeisamyth.com,and ran full-page newspaper ads inwhich Roth bemoaned a "campaign oflies and deceit." But one by one, Krogerand other customers said they'd stopusing the product, while Wal-Mart andothers said they'd offer a choice of beefwith and without it. Three weeks after

TheDaily.com's first story, Roth closedall but one of his plants.

Other companies have been affectedas well. Cargill, which makes a similarproduct using citric acid instead of am-monia, has cut production. Meat proces-sor AFA Foods cited "ongoing media at-tention" that hurt beef demand when itfiled for Chapter 11 bankruptcy on April2. Tyson Foods and others are seekingUSDA permission to list beef trimmingson package labels in the hope of calmingconsumers.

lowa Governor Terry Branstad,whose state hosts a BPI plant, is seekinga congressional investigation of whathe calls a "smear campaign" againstBPI. Letch and other meat industry ex-ecutives still profess bafflement at whythis story went viral. "It's emotional,it's concrete, it's easy to tell someoneabout," says Salganik, the sociologist.

I

"The most painful part," Letch says,I "was looking 700 [employees] in the eye,and them asking why and not having a

good answer." —Bryan Gruley andElizabeth Campbell

ThebottomlineßPlranintcaWebpetition buzz sawthat's helped lead to the closure of three of Its plantsand the idling of almost 700 workers.

4 Sheets of "leanfinely textured beef"

on the factory's14-foot drums

A Texas GovernorRick Perry on a tourof the South SiouxCity, Neb., plant In

March

? lowa Governor TerryBranstad, foreground,

wants Congress toinvestigate the anti-

BPI "smear campaign"

Lobbying

A Startup Learns HowSausage Gets Made

? Web video company Boxee findsit can't ignore Washington

? "We're not speaking D.C.-speak orFCC-speak, for good or for worse"

Avner Ronen, an Israeli entrepreneurwho lives in New York City, doesn't nor-

mally pay much attention to Americanpolitics. Then in January he realizedhis company, the Internet video pro-vider Boxee, had a lot to lose by ignor-ing Washington. He set up a meetingwith Federal Communications Com-mission Chairman Julius Genachowskiand booked three train tickets to Wash-

ington. Two were for Ronen and thestartup's sole lawyer. The third was foran intern who, for the purposes of theGenachowski meeting, got the title Headof Government Relations.

Wearing a hoodie to maintain his

startup vibe, Ronen showed how ownersof the Boxee Box, a $180 device made byD-Link that aggregates videos from allover the Web and displays them on a TVset, can seamlessly flip between MajorLeague Baseball games, Netflix, and a re-

ality show. He pleaded for FCC officials to

reject proposed rules that put Boxee at a

disadvantage to big cable-TV providers."Definitely startups, but tech in gener-al, don't focus on D.C. as much," Ronen

says. "We're not speaking D.C.-speak orFCC-speak, for good or for worse."

Boxee is embroiled in a spat withComcast, News Corp., and WaltDisney, companies that own cable chan-nels and are much more fluent in the lan-

guage of Washington. The entertainmentheavyweights are among those backinga rule the FCC proposed in October thatwould allow cable operators to encryptall their TV transmissions. That would be

a blow to Boxee, which allows cable sub-scribers to plug their cords directly intoBoxee Boxes-bypassing the cable com-

panies' own set-top boxes, and givingexpensive dramas like Mad Men equalbilling with You Tube's dog-on-skate-board videos. If the rule goes into effect,

people using Boxee to watch cable willonly see static. Other set-top boxes JM|such as Apple TV, Roku, and Google

TV could be

affected in thefuture, though

they don't current

ly allow for cable-TV

input.In public filings with

the FCC, the cable companies

say encryption would allow them to shut

off service remotely when a customer

moves instead of making them wait for

a technician, and would minimize cable

theft. Third parties like Boxee would be

able to decrypt and display cable-vid-

eo feeds if they include a special chipin their devices, though the ConsumerElectronics Association argues that such

a step is too costly and cumbersome forhardware manufacturers. Comcast and

News Corp. declined to comment, and

Disney didn't respond to multiple re-

quests for comment.

Christopher King, an analyst for

Stifel Nicolaus, says the cable companies

probably won't fret over Boxee's trou-

bles. The startup has actively pushedthe idea that homeowners should give

up their costly cable plans and rely in-

stead on free, over-the-air networkbroadcasts and Internet video-all ag-

gregated by a Boxee Box, of course. The

more TV watchers rely on such devices,

"the less power that cable companiesand the content providers have in the

long run," says King.Ronen first learned about the ob-

scure encryption rule two months

after the FCC proposed it, when internNick Miller received a Facebook mes-

sage about it from a concerned user.

"There's no attempt by the regulato-

ry groups to actually talk to us," says

Miller. "None of us had ever dealt withthe FCC. So it took us a while to figure

out, OK, how are we going to approachthis problem? What are the optionsthat are open to us?"

Taking a page from the Internet in-

dustry's recent defeat of the media

industry-backed Stop Online Piracy Act,Boxee has rallied some of its 2 million

users through blogs and social networks,

asking them to voice their opposition to

the FCC rule. About 2,000 people have

written detailed, personal messages,

Ronen says. He hopes such grass-rootsefforts can help narrow the spending

gap: While Comcast, News Corp., and

Disney dedicated a combined $30.6 mil-

lion to lobbying last year, according to

OpenSecrets.org, Boxee can't afford

to spend more than $50,000. "I don't

believe it is realistic to expect startupsto pay too much attention to regulato-

ry and legislative proceedings," Ronen

says. "I guess one lesson to other start-

ups is that if there is an issue that con-

cerns you, it may be worth a trip to D.C."

—MarkMilian

The bottom line The startup Boxee has only

$50,000 to fight a cable company-backed FCC rule

that would limit the usefulness of its set-top box.