In December 2016, Andy Hanacek sat down with Ken Sullivan, president and CEO of Smithfield Foods, to discuss his company's most recent acquisition on the West Coast, shortly after it was announced.

Andy Hanacek: Talk to me a little bit about why Farmer John was attractive to Smithfield. What led to the acquisition?

Ken Sullivan: First and foremost, it starts with the brand. Farmer John is a very strong brand in the West. In particular in California, it’s got that local flavor. It’s locally grown. So it starts with the brand, but the reality is, we own the supply chain there. If you didn’t know it, we’ve been growing hogs for that business for the last 25 years. Ultimately, we have a pig operation in Utah, which is the raw materials supply for that plant in Vernon, California. It’s about us bringing together those components of the business. We’ve got the supply chain. Ultimately now, we’d like to move up the value chain. It’s a fresh meat operation, but it’s a branded operation, which is the end of the business in which we want to live in. The second thing is that we’ve been migrating West, and this gives us another foothold in the West. It gives us an opportunity to leverage the Farmer John brand with our other brand portfolios. We’ve got a portfolio that includes about 12 to 14 major brands. We obviously have dozens of other brands. These are the brands that we put marketing dollars behind, and part of our strategy is to try to capture the United States or saturate further West. Smithfield historically had been an East coast type of operation. We’ve made tremendous strides nationally with the Smithfield brand, in particular with Smithfield Bacon. The points of distribution that we’ve seen and the migration westward are nothing short of astonishing. This gives another foothold West.

Hanacek: Do you see a lot of brand overlap out there or is this truly fitting kind of a puzzle piece perfectly in terms of your overall brand distribution?

Sullivan: I think it is complementary to our current brand portfolio. We have what I call the whole range of the brand spectrum, all the way from the premium brands to the more value brands, and I think the Farmer John brand fits nicely into our existing portfolio.

Hanacek: What did you tell the employees or what are you telling the business world out there about the fit moving forward? You kind of hinted at that a little bit. You want to grow it. You aren’t looking to downsize it. How does it fit into the overall One Smithfield part of the equation?

Sullivan: One of the things we don’t want to do is ruin the culture of Farmer John, because the fact is they’ve got a great culture out there. Fundamentally that brand is about a local flavor. We don’t want to do anything to impair the brand. So first and foremost, we are going to tread lightly. We are going to figure it out. The message to the employees is sincere. We want to grow that business. Obviously, no one buys a business to try to shrink it. Our intention is to grow. We think it is good news for the employees at Farmer John. Ultimately, they become part of Smithfield, a bigger company with a whole portfolio of brands, and at some point they become fully integrated into the One Smithfield family, but that doesn’t mean anything negative for the employees there. In fact, I think it means more opportunity for the employees there. [It’s] a proverbial win-win situation in that we take this raw materials supply that we have out of Utah and we marry it up now with further capabilities and we continue our march westward.