After several recent years of suffering under a flagging economy, wide-ranging consolidations, safety-related product recalls, and turbulent supply-and-demand situations, leading meat and poultry processors weathered the storms to finally report robust growth and strong balance sheets. As this year’s ranking of the nation’s Top 125 performers demonstrate, cranked up bottom lines paved the way for more new employee hires, more new product rollouts, and more investments in operations and equipment.
Eking out incremental increases year after year changed the past year and, all things being equal, business is booming to the point of double-digit percentage growth in annual sales — not just for top-tier corporations, either.
Industry behemoth Tyson Foods Inc., Springdale, AR, boosted its sales by more than $1 billion dollars from $23.3 billion to $24.5 billion. Elsewhere in the Top 10 category, VA-based Smithfield Foods’ sales sheet grew by a similar margin, up to $9 billion from $8 billion, while the Oscar Mayer division of Kraft Foods North America, Madison, WI, reported sales this year totaling $1 million more than last year’s sales. Others in the elite frontrunners’ group also generated impressive returns including Mt. Olive, NC-based Carolina Turkey’s surge from $400 to $490 million to Batesburg, SC-based Amick Farm’s rise from $130 to $160 million to Baltimore, MD-based Deli Brands of America’s leap from $50 to $56 million. Small change it isn’t.
Such dynamic growth can be attributed to a number of factors, from the impact of mergers, acquisitions, and joint ventures to the development of new products to a more conducive sales and marketing climate. C. Dan Blackshear, president of Carolina Turkeys, cites two trends contributing to his company’s recent success. "One is product mix — a higher percentage of processed and value-added products. The second is the strength in commodity product year after year," he notes. Likewise, Jim Herlihy, senior vice president of communications for Greeley, CO-based Swift & Co., cites innovation and a receptive marketplace for meat and poultry as keys to processor profitability. "We haven’t really done any specific research on it, but certainly protein diets have to be a benefit for the industry. I also think consumer confidence in beef and pork have been very strong and the comeback of the economy as well," he says. The expansion into valueadded items will continue to have boon potential, he adds. "There is certainly a cost to the consumer for value-added items, but they are saying that the convenience for them is important," he continues. Elsewhere on the organizational front, the pace of consolidations has slowed somewhat but still has an effect on the industry’s players. Farmland Foods Inc., Kansas City MO, was acquired late last year by Smithfield Foods, while Washington Beef, Toppenish, WA, was acquired by Rembrandt Meats, and B.C. Natural Foods, Golden, CO, is a new company spawned by the consolidations of Coleman Natural Meats and other regional brands. One company on the frontrunners list for years, Simplot Food Products, closed its business for good last year. The NATIONAL PROVISIONER’s annual industry ranking may change in form from year to year, but one thing is certain: this year’s Top 125 are to be commended for their collective vision, hard work, and significant achievements.
Check out the February 2020 issue of The National Provisioner, featuring our cover story on Jack Daniel's Meats and Golden West Food Group's approach to building a successful licensed brand, the 2020 Seafood Report, and much more.