As Homewood, Ill.-based Carl Buddig and Company celebrated its 75th anniversary in 2018, there was much abuzz about the company, both internally and around the meat and poultry industry. Known more typically as a quiet, hardworking, headline-avoiding company, Buddig made several splashes in the span of 18-24 months, setting the seeds for success through significant acquisitions and expansions.
First, Buddig addressed capacity constraints at its legacy Old Wisconsin facility in Sheboygan, Wis., with the construction and opening in 2016 of a brand new plant off Interstate 43 on the outskirts of town. Next, in June 2017, Buddig acquired a South Holland, Ill., neighbor, Rupari Food Services, and made it the backbone of the CBQ LLC division of the company, focused on barbecued meats, ribs and heat-and-serve entrees. Shortly afterward, CBQ secured a multi-year licensing deal with the Kingsford brand to produce barbecue meats for the retail marketplace. Then, in January 2018, Buddig closed a deal to acquire Butterball’s shuttered processing plant in Montgomery, Ill., adding approximately 280,000 square feet of much-needed processing capacity.
Admittedly, The National Provisioner had eyed Buddig for its 2018 Processor of the Year award based on this barrage of moves, but decided it best to give the company a “prove it” period — a chance to demonstrate all this big news would pan out successfully.
Suffice to say, those seeds have begun to bloom and even bear fruit in some instances — and as such, the staff of The National Provisioner is pleased to name Carl Buddig and Company its 2019 Processor of the Year.
Processor of the Year
2019: Carl Buddig and Company
2006: Smithfield Foods
2005: Smithfield Foods
2004: Hormel Foods
2003: Cargill Meat Solutions
2002: Tyson Foods
2001: (Unknown; archives missing)
2000: Colorado Boxed Beef
1999: Farmland Industries Meat Group
1998: Smithfield Foods
1997: Sara Lee Meats
1996: IBP Inc.
1995: Oscar Mayer Corp.
1994: Hormel Foods
Buddig has watched its Old Wisconsin business grow since purchasing it in 1981, but in recent years, consumer demand for protein snacks has made Old Wisconsin products that much more popular.
“Growth of Old Wisconsin products has spiked because snacking is the hot trend today, and protein snacking is even more of a hot trend,” says Bob Buddig, CEO. Although Old Wisconsin produces a wide variety of sausage products, it has been able to capitalize on the excitement around protein snacks in recent years. Yet, three years ago, the division was still operating out of its legacy plant in town and needed to make a major move to reap the rewards of this demand.
“We’ve asked an awful lot of our plants,” explains Steve Harrison, vice president and general manager, Old Wisconsin. “We would squeeze in as much [production] as we could, but then eventually you get to a point where you’ve got to take a bigger bite. To be perfectly honest, there were times we questioned whether we could take on additional business because we didn’t have the space or capabilities.”
The time was right for Buddig to take that bigger bite, and the company broke ground on the Weeden Creek Road facility in 2015.
“We were hopeful that if we built capacity, the retailers that we supply would reward us with new business to fill that capacity,” says Tom Buddig, executive vice president of marketing for Buddig. Harrison says the new plant has given the Old Wisconsin team the confidence, tools and space needed to follow through on those new opportunities.
Old Wisconsin moved 12 packaging lines to Weeden Creek, which opened up a significant amount of floorspace at the legacy plant on Union Avenue. Yet, moving just that one department — at the time, roughly 60 percent of the workforce there — to Weeden Creek was more than just a footprint play, says Steve Wakefield, senior production manager.
“It opened everything up and gave us opportunities to renovate different departments, but it [also] opened the door to automation,” Wakefield explains. “We had some automation at the old plant, but with the bigger space and higher ceilings, [Weeden Creek] allowed us to automate more.”
It didn’t take long for the domino effect to reach the Union Avenue plant either, says Chuck Pfrang, plant manager.
“[Weeden Creek] set the path for completely changing the flow of [Union Avenue]; we were able to open up one-third of that building and move departments around, add new floors and walls, move walls, add ovens,” Pfrang says. “Now, we just have great flow, and products are flowing at these facilities like they’ve never done before.”
Relocation of the summer sausage business to Buddig’s Montgomery plant upon that facility’s acquisition also has helped the Sheboygan operations achieve better flow. Pfrang says that move was the catalyst for innovation, because it made the Sheboygan operation a dedicated stick-production facility.
“The pinch point in our process is the ovens, and success for us is to get as much product in them, standardize the cycle time and make it somewhat predictable,” he says. With the team not needing to worry about handling different types of product on racks and in the ovens, it was able to realize a 17 percent increase in throughput on stick production — without adding any equipment.
Since the opening of Weeden Creek, Buddig has been able to grow along with its customers, keeping the Old Wisconsin brand on its fast-paced growth curve. When Buddig purchased the company in 1981, it had two packaging lines. Fast-forward to the opening of Weeden Creek, when Old Wisconsin, as mentioned above, had grown to 12 packaging lines. At presstime for this story, Weeden Creek was expected to have finished installation on its 17th packaging line.
Acquire, Part 1
Make no mistake, the Old Wisconsin business wasn’t the only portion of Buddig’s portfolio that had outgrown its space. Buddig’s legacy lunchmeat business has been booming over the years, particularly in comparison to the rest of the deli sliced meat segment.
“[Market data] tells us the lunchmeat category isn’t growing, it’s churning,” says Tom Buddig. “But there are growth opportunities for us to grow faster than this lunchmeat category.”
To that end, lunchmeat production at Buddig’s South Holland facility was bursting at the seams in late 2015, and the company began to entertain possible solutions to add more capacity. The eventual remedy for this issue would also add new processing capabilities.
Until the first half of 2016, Buddig was a family-owned processor of deli meat and sausage, but when June 2016 rolled around, change was in the air. Rupari Food Services, a virtual neighbor of Buddig’s South Holland plant, became available for purchase, and the Buddig family decided this was the opportunity to provide needed lunchmeat production capacity and also to expand into a new segment.
Rupari had been producing branded and private label, restaurant-quality barbecued meats, ribs and heat-and-serve offerings, and Buddig quickly stabilized the relationships with customers and employees, retaining the bulk of the Rupari employees through the transition, says Karen Noble, executive vice president of human resources.
“With regard to the production lines, we’re very fortunate that the bulk of the production workers and managers did stay, because they knew the smokehouses and how to make that product,” she says. “We did lose a few people in salaried and office positions, but it’s a union facility with the same union that we have here, so we were able to work out a contract and keep almost everybody in the plant.”
Additionally, Bob Buddig says, the change in ownership eventually was viewed as a positive development for many of the Rupari employees.
“The culture went from a private-equity culture to a family-owned culture,” he says. “It didn’t take long, however, for them to become a lot more comfortable with us, because they were used to the presence of ownership being very limited, but we showed them that we were here and we care.”
Tim Buddig, executive vice president, adds that Buddig proved it cared through immediate actions as well.
“When we bought it, we invested quite a bit in equipment and the welfare areas, so not only were we there, but we also were investing in getting the facility where they knew it needed to be,” he says. “We went ahead and made their lives easier and a better environment for them to work in.”
Buddig prides itself on being family-owned and operated, and for treating the employees like family — so making these moves were almost automatic to the company, says Kate Weicher, human resources.
“We’re bringing a product to the marketplace that people consume and rely on, but we also remember that we’re supporting 2,500 families that have lives and homes,” she says. “We know that’s part of the family atmosphere we try to foster, and it’s part of the Buddig family dynamic as well.”
Although the facility transition went smoothly, Rupari’s best-known business — a licensing agreement in the barbecued, heat-and-serve entrees segment — would not survive the acquisition. Tom Buddig recalls that as a crossroads for the acquisition.
“We had bought a facility that made a product, but we didn’t have a brand [any longer],” he says. “So, do we develop something under the Buddig brand, or do we develop a new brand from scratch, or is there an opportunity out there for licensing with a brand name that we could build on?”
Fortunately, a few months prior to the acquisition, representatives from The Clorox Co. had approached Buddig about producing Kingsford-branded sausage products in Sheboygan (prior to construction of the Weeden Creek facility), but Buddig had to put that concept on hold because of capacity issues.
“Because we hadn’t closed on the Rupari deal yet, I couldn’t talk about it, but when it closed, we weighed [the Kingsford agreement] against some other licensing opportunities,” Tom Buddig explains. “We went ahead and were able to secure the brand name for the entrees, and I believe they’re pleased with the effort we’ve put behind it. … While we don’t have quite the volume we’d like, it has certainly opened the door and in 2019, we have some additional distribution that I believe will bump us up closer to 60 percent ACV at the end of Year Two.”
Roger Buddig, executive vice president of operations, says the learning curve on the Buddig side has been challenging because of the differences in the company’s legacy product lines versus this new segment, but the family is confident that the team is moving forward at a quick enough pace.
“When we bought the company, we tasted the products, and they’re exceptional products,” he says. “We need to grow these products by getting them in front of people, and now, the second year into it, we feel like we have a better feel for the product line.”
Acquire, Part 2
Around the same time that Buddig acquired Rupari, Garner, N.C.-based turkey processor Butterball LLC had begun winding down production at its Montgomery processing plant, looking for a buyer for the 280,000-square-foot facility that had been producing turkey bacon.
The plant sat on the market for nearly six months before Buddig stepped in and purchased it — a fortuitous opportunity that instantly gave Buddig’s lunchmeat production footprint a huge boost. Tim Buddig explains that the plant made a lot of sense simply to take production pressure off all the other facilities.
“It had more than 20 smokehouses, blenders and other equipment that matches what we have in our other facilities,” he explains. “It was almost a dream come true that it was available, and it was a big investment including the money we put into it; but five years from now, I think we’re going to say that’s the best investment we’ve ever made.”
Buddig moved quickly to get the plant staffed up and production ramped up, says Roger Buddig.
“When we first started, we hired some of the managers who were previously at Montgomery, and they were able to bring at least 200-250 people in to us immediately,” he explains. “And when they came back, they couldn’t believe what they were walking into: an immaculate plant with the floors and lighting redone — they didn’t think it was the same facility.”
Production began officially in late spring of 2018, with the transfer of some lunchmeat production from South Holland and summer sausage production from Sheboygan. At the time of this story’s interviews, Buddig relayed that nearly two-thirds of the production space at Montgomery was being utilized, but it expected growth to continue to fill it out in the near future.
The biggest challenge for Montgomery, to this point, has been competing with other industry in the area for qualified workers, but Buddig believes it will be able to reach its employment goals and fill the plant with production as its customers bring business its way.
The future, as many say, is now — truthfully, that is the reality for Carl Buddig and Company. Bob Buddig explains that success for the company now is less splashy headline and more data-driven and operational efficiency.
“This particular year is what we’re calling ‘The Year of Execution,’” he says. “We’ve done purchases, we’ve done the process changes, and now we need to execute as efficiently as we know we can. We always will continue to build on execution and try to do things in a better way, but now that we’ve grabbed a lot of new things, we need to absorb them and execute.”
The strategic approach toward execution has created additional growth within the last year, and the team expects that to continue as Buddig employees become even more experienced. However, execution starts with making employees’ jobs and lives easier, says Noble.
“Our people worked way too much overtime in the last few years, and that’s why Montgomery is a blessing to the employees here,” she explains. “There will always be overtime, and that’s not a bad thing. But having the facility out there, it has just been a savings to everyone.”
Tim Buddig says the company will continue to invest in improving working conditions through capital expenditures where they make sense, but also in training employees.
“The next biggest hurdle is training people and getting them to operate [most efficiently],” he says. “That’s our key objective in the next six months. The equipment’s there, we’ve made that purchase, it’s investment in people.”
Having put the major acquisitions, expansions and renovations, and all the heavy lifting of those projects behind it, the third-generation executive team at Buddig believes the strong success can continue with minimal changes. Bob Buddig relays that “The Year of Execution” is summarized well by a conversation he had with a consultant who works with the company.
“[The consultant said] people would ask him what kind of work he’s doing at Buddig, and he’d say he was tuning up Corvettes,” Bob Buddig says. “In other words, he knows we can rock and roll, but there’s always a little tweak that can be made to make it better.” NP