What if 3 million vegans bought grass-fed beef? How to build an alternative to factory farming

That's the question I asked myself today while having a drink with a former vegan girl (who now eats paleo).  She loves visiting New York City because she can buy natural fats, like leaf lard, which are unavailable in Connecticut.  Unavailable because there aren't enough people who want to buy it.  Translation: there isn't enough market demand.  Which begs the question -- what if vegetarians stopped drinking self-righteous tea, rolled up their yoga mats, and started to help build an alternative to the factory farm system?  Not by lobbying.  Not by working on farms.  But by buying and eating animal products from farms that feed and raise their animals right.

Let's do the math.

• Assume the total US population is 300 million

• Conservatively, let's say 1% of the population is vegan/vegetarian

• Assume 8 ounces of meat per day. (This is average for the US, but double the rest of the world. But that's because the rest of the world is poor, and as they get richer, they're eating more meat.)

• Call it $7 per pound

That nets out to $3.8 billion per year.  The revenue for all of Whole Foods in 2009 was $8 billion, so it's half of the turnover at Whole Foods.  I'd like to see a list of the organic farms and food companies that have gotten off the ground because Whole Foods started to stock their product.

Now some of you might say, eh, $3.8 billion isn't actually that much when you look at all the food profits out there.  Cargill 2009 revenue = $116 billion.  Archer Daniels Midland 2009 revenue = $69 billion.  Yes, but when you're getting a new market off the ground, every dollar of demand punches above its weight.  Ask any entrepreneur or small business owner.  Getting that first dollar of revenue is hard.  Finding a product that people will actually buy is hard.  Once you have some consumers, booked a little revenue, and you're not burning through cash, you suddenly have a growth platform.

Consider the shoe market.  Demand for Vibram FiveFingers has exploded.  They've been selling millions of pairs.  But compared to the overall shoe market, VFFs are still a tiny, tiny drop in the bucket.  But it's caused the big guys to all respond -- and they've started R&D into minimalist footwear themselves.  And now we have Merrill, Nike, New Balance, Saucony, and more all angling to get in on the party.  There is more positive innovation happening in the shoe industry right now than in the past few decades combined.  Because a relatively small group of passionate advocates of barefoot and minimalist walking and running LOVED the product.  And started telling their friends.

It's not all that different with meat.  If more meat providers started delivering a higher quality product at an acceptable price, you can sure as hell bet that the big guys will take notice.  And they will start coming up with ways to get in on the action.  Hmm...I can charge more for these chickens if I treat them a little better?  And then you've got the R&D budgets of the big guys working on your problem.  That's the beauty of free enterprise.

But instead, vegetarians withdraw into Vegetarian Land.  Where the optimal health recommendations conveniently match your political beliefs.  And they sit on the sidelines, eating their gourmet vegan cupcakes and spelt crackers, and feeling morally superior.

Well, not all of them.