Excelling in today's volatile business climate is an accomplishment shared by only a select group of packers and processors. Weathering financial and market ups and downs during the past year, these industry leaders are charting courses they hope will set themselves further apart from the rest of the pack.

Every year, The NATIONAL PROVISIONER polls the nation’s leading meat and poultry companies to get a snapshot of the industry in terms of overall growth and individual company success. Each time, the information we gather yields clues about the general economic climate, customer product demand, and each companies’ capability to invest in new products and processes.

It’s like a high school or college yearbook, in a sense. The annual Top 125 report is a freeze-frame look at the industry’s class of meatpackers, with an elite group of leaders, a notable category of up-and-comers, a segment of creative risk-takers, and those who are above all performance minded. All of these groups comprise a body of work, with varying degrees of achievement and effort.

As with a yearbook, the Top 125 report is a reflection of trends at the time. As readers will learn by scrolling through this year’s rankings and profiles of the industry’s top processors, there are several trends at work in the meat and poultry sector. Some are a continuation of ongoing shifts, while others represent a move in a new direction.

The processors at the top of the class — those with sales figures that earn them a berth in the Top 10 — continue their domination.

On a sheer sales level, the big keep getting bigger. Tyson Foods, Springdale, AR, is the behemoth of the industry at the top of the rankings, and it grew its business from $24.5 billion to more than $26.4 billion in the past year. Likewise, Wichita, KS-based Cargill Meat Solutions (formerly ranked as Excel Corp.) notched large sales gains, from $12.5 billion to $15 billion. Elsewhere in the top 10, Greeley, CO-based Swift & Co., Smithfield, VA-based Smithfield Foods Inc., Pittsburg, TX-based Pilgrim’s Pride Corp., and Austin, MN-based Hormel Foods Corp. posted increases. Meanwhile, successful corporate subsidiaries, including the Madison, WI-based Oscar Mayer division of Kraft Foods Inc., the Sara Lee Foods arm of Chicago-based Sara Lee Corp., and the meat and poultry business of Omaha, NE-based ConAgra Foods, boosted their respective sales performances.

Those at the fore of the industry also had their share of makeovers since The NATIONAL PROVISIONER last profiled them in the Top 125 report. At Cargill, the Excel Corp. division is now considered part of the umbrella Cargill Meat Solutions group. Earlier in 2005, Sara Lee Foods, formerly run out of the Cincinnati office, returned to the fold of the Sara Lee Corp. and it is now based in the company’s main office in Chicago.

The trend of leading processors acquiring and consolidating with other operations continues as well. Cargill, for its part, recently created a sector called Cargill Value Added Meats, comprised of the former Emmpak Foods and Cargill Turkey Products, and acquired half of the shares of Finexcor, a leading Argentine beef processor and exporter. Since last year, Smithfield Foods has boosted its capacity, acquiring Campofrio Alimentacion SA, Norwich Food Co. Ltd., Ridpath Pek, Jean Caby, MF Cattle Feeding Inc., Morliny SA, and Comtim Group SRL.

The industry’s poultry leaders also experienced noteworthy shakeups and changes this year. ConAgra and Pilgrim’s Pride crossed paths, with the purchase and integration of the ConAgra chicken division into Pilgrim’s Pride during the fiscal year of 2004. As it lost its founder Jim Perdue, Perdue Farms looked to the future with the company’s new Innovation Center for Research and Development in Salisbury, MD.

Meanwhile, just as the Top 10 companies continued to expand their businesses, there are changes across the Top 125. Some companies have changed their names, such as Minneapolis-based GFI America, now under the Kings Deluxe Foods name, and Seymour, WI-based Provimi Veal is now known as Provimi Foods.

In addition to structural changes, many frontrunners have also reported changes in infrastructure. Although new plant construction, additions, and renovations are not at the level where they were a decade or so ago in the boom of the mid-1990s, there has been work done in plants across the board to improve efficiencies — as well as to enhance food-safety efforts. Cargill Meat Solutions, for example, recently began installing a hide-on carcass wash in all fed beef plants, and it also added tools to help detect contaminants including harmful microorganisms. Seaboard Farms Inc., Shawnee Mission, KS, announced last year a marketing agreement to market its pork products from a new state-of-the-art pork processing plant in St. Joseph, MO. Chicago Meat Authority expanded its facilities, as well, with new office space, kitchen space, and even an exercise and lounge area for employees.

In efforts to boost sales, many of this year’s leading processors have diversified their product lines. United Food Group, Vernon, CA, recently added cooked beef and pork lines, requiring expansions in equipment and employees. Harris Ranch Beef Co., Selma, CA, is offering three new fresh seasoned products, a precooked ham product, retail frozen ground beef patties, and a line of case-ready ground beef. Bob Evans Farms, Columbus, OH, has been prolific, too, developing a cooked sliced brisket, a line of slow-roasted dinners, and new breakfast entrées. Another example is Stampede Meat Inc., Bridgeview, IL, which recently added production lines to accommodate demand for new cooked items and value-added products.

Developing products, especially fully cooked and prepared meal offerings, has proven to be an important priority to many processors seeking to stay competitive. Catelli Brothers Veal & Lamb, Collingswood, NJ, sought to compensate for comparatively lower demand for fresh veal with a slew of new value-added items, including new Italian Bistro dishes like veal cutlets with piccata, marsala, and provencale sauces. Provimi Foods also has pursued a broader array of products, adding new prepared foods to its veal operations, such as cooked roasts, pasta dishes, and sauces.

Beyond going after the burgeoning value-added and prepared-meal segment of the market, some companies have diversified in different ways. Boston-based Cambridge Packing Co., for instance, added a new, branded, natural-beef program.

Finally, just as every yearbook chronicles the comings and goings of an institution’s members, this year’s Top 125 report features a few new faces and some spots filled by others due to business closings or acquisitions. One can expect more of that in the year to come, as meat, poultry, seafood, and prepared-foods manufacturers grapple with supply and demand fluctuations, price issues, and general economic uncertainty.

Indeed, as any one of these 125 business leaders knows, ups and downs are a hallmark of the business. Tyson CEO John Tyson recently shared his outlook for the company, in the midst of various volatile market factors: “The first quarter of fiscal 2005 was extremely difficult for our company, and we expect the second quarter to be equally as challenging as we deal with more of the same market problems in our red meat business. However, we continue to expect significant improvements in the second half of this year.”

View Top 125 (pdf format, 300K)