August 21, 2019

By Lynda Kiernan

Dallas-based private equity firm CoveMark has announced its second investment in the agricultural space, partnering with Capra Foods, the U.S.’s top producer of premium Dorper lamb, a variety of lamb bred for meat, not wool. 

Located in Goldthwaite, Texas, Capra relies exclusively on a collective of more than 120 family ranchers across Central Texas. Its lamb supply is 100 percent pasture-raised, vegetarian grass-fed, without the use of antibiotics, added growth hormones, or animal byproducts. As the only certified lamb program in the U.S., Capra has gained the rank of the U.S.’s top producer of premium lamb.

“At Capra, we are committed to bringing grass-fed, premium dorper lamb to the market and to the dinner table,” said Craig Jones, CEO, Capra. “More importantly, we are focused on meeting and exceeding the highest standards and, along with our more than 120 ranchers, nurturing the animals as well the land.”

CoveMark

Founded in 2012 in Dallas, Texas, the bulk of CoveMark’s investments have been related to real estate and energy, however, driven by its commitment to build-out a diverse portfolio, CoveMark is decidedly industry agnostic, seeking out investment opportunities across various sectors, drilling down to those they believe to be the most profitable amidst the current macroeconomic landscape.

This partnership with Capra is the second agricultural investment for the firm, adding to its existing livestock holdings. Through this deal, CoveMark and Capra plan to expand operations to meet current demand and to capitalize upon the significant opportunities for growth in the market. 

“We are thrilled to partner with the Capra team and help scale their operations and meet existing customer demand,” said Aaron Cook, CEO, CoveMark. “The Capra team’s commitment to animal welfare and ethical protein production as well as the land along with their long standing relationships with key retailers such as Whole Foods are just a few reasons why we wanted to invest.”

A Casualty of WWII

A survey conducted by the American Lamb Board in 2011 found that many Americans are unfamiliar with lamb, and that nearly half of consumers have never eaten it. Lamb meat is from sheep that are between four and 12 months of age, while meat from older sheep, which is much tougher and gamier, is called mutton. During World War II in Europe, many U.S. service members were fed the tougher mutton, leading to a sharp decline in demand after the war, when service members returned home and refused to eat any version of lamb, according to Agweek.

In 1945 per capita consumption of lamb in the U.S. was 7.3 pounds. But by 2011 this consumption rate nearly disappeared, falling to 0.85 pounds per person by 2011 – virtually nothing compared to the 92 pounds of chicken per person, or the 57 pounds of beef per person per year, recorded in 2017. 

However, demand is climbing by dual factors – consumers are now buying more lamb, and at higher prices, according to a report issued by the American Lamb Board. In 2015 U.S. lamb demand saw a year-on-year increase of 7 percent, and the following year, saw another year-on-year increase of 2.5 percent. 

Now, looking toward the future, the American Lamb Board has plans to increase demand by 10 percent over the 2018-2022 period through the implementation of five strategies:

~ Grow awareness and usage among consumers and chefs

~ Promote and strengthen the industry’s value proposition

~ Improve quality and consistency

~ Increase domestic supply

~ Collaborate and communicate with industry partners and stakeholders

“The future holds tremendous promise for our industry which produces a unique, flavorful, tender and nutritious protein that meets the changing needs and preferences of consumers,” said Jim Percival, ALB chairman.