A Company With Few Peers
January 1, 2005
A Company With Few Peers
By Sam Gazdziak, Senior Editor
With a history that dates to the 1860s, Peer Foods has retooled to be on the cutting edge of mass customization.
Peer Foods’ history is evident by the pictures on the walls of its office. Giant photos of the Chicago Stockyards, taken in the 1930s, line the walls, showing the cattle pens as well as many of the premier meat packers of the time. The stockyards of the 1930s are gone, most of the buildings are gone, and many of the meat companies have long since disappeared or moved away. One thing that still remains is the manufacturing plant for the company now known as Peer Foods Group Inc.
Having been in continuous operation since 1922, the company’s four-story building is steeped in history. But inside the walls is a very modern operation designed with an eye toward the future.
The early days
Peer Foods was started by the Buehler family in 1867, and it remained family-owned until 2002, when then-president Robert Buehler decided to retire at the age of 99. Now 101 years old, he allowed the company’s management team to lead an employee buyout.
The Chicago-based management team includes Larry O’Connell, president; Gary Radville, chief operating officer; Harold Dangler, director of marketing; Paul Forde, director of sales; and Tim Murray, director of research & development.
The management team has continued a retooling that has been taking place for about the last 12 years. Peer Foods, formerly known as a regional supplier of vat-cured bacon, hams, and other smoked meats, is now growing its reputation as a supplier of custom meat products and solutions for national foodservice operations. Along with its 95,000 square-foot plant in Chicago, Peer also has a plant in Columbus, IN, boasting 130,000 square feet of operating space.
Radville says that the change from a regional to national distributor was a necessary one. “The independent restaurants were slowly going away, and there was more and more chain business,” he explains. “We saw growth opportunities. The skills that we had were not being fully used, and we felt we could take the skills we had in smoking products and curing products into a broader marketplace.”
While making the transition, the company benefited from its long-tenured employees. Forde says that, for example, the last employee hired on its hotel bacon-slicing line was more than 12 years ago. “You can imagine for a chain that’s worried about product consistency, knowing that we’re not turning over employees is a pretty valuable quality,” he says.
Forde describes Peer as a “big enough, small enough” company. With about $100 million in annual sales, the company is able to invest heavily in food-safety precautions, research and development, procurement, and more. “We’re big enough that we can facilitate custom manufacturing for chains,” he adds. “But we’re small enough that the people on the line actually know the names of all our customers. When they’re manufacturing a product, our line people know who they’re making it for.”
Evolving from a regional to national supplier has involved several changes. Peer continues to spend millions of dollars re-fabricating its two plants, to the point that the two locations are nearly interchangeable, in terms of capabilities. Food safety was another priority, with meat scientists being hired at both plants.
“We’re constantly monitoring and are very dedicated to meeting the needs of food safety,” Dangler says. “We have never to this day had a recall, and we want to maintain that history.”
Peer Foods also expanded its capabilities beyond bacon and hams into beef, chicken, turkey, and more. “When customers are looking for a place to go to fulfill a broader line of their needs, with our ability to do all the proteins, we can fulfill those needs,” Dangler says.
Peer also renovated the top floor of its Chicago plant and built a culinary center, containing all the equipment typically found in a restaurant’s kitchen.
“Every one of the chain restaurants is trying to be different,” O’Connell says. “They have a certain theme to whatever their chain is, and we will customize their products to fit that. We will work with them to figure out what their theme is and what they want.”
“To that end,” Forde adds, “we have invested in Chef Tim Murray, who heads up our R&D effort. Chef Tim has a lot of experience in developing a product from a customer’s culinary gold standard through to full-scale commercialization.”
Murray, who has been with Peer Foods for about four years, says that the culinary center acts as an extension of the client’s R&D center. A restaurant chain can come to Peer with a general idea for a new menu item, and Murray will create a product that incorporates that idea. Or, a chain’s corporate chef may develop a new product in a test kitchen, but the company may not be able to accurately reproduce it in a mass production environment. Murray takes over from there.
“I know it will be run in a plant, it needs to have the tasting profile and the visual characteristics they’re looking for, and we go on from there,” he says.
In creating a recipe that can be mass-produced, Murray takes full advantage of Peer’s experienced employees. “I get on the floor when I’m developing a product,” he says. “I’ll ask the smoker or an individual on the line, ‘This is what I need to do. How do you think we should do it?’ Sometimes I have it pretty much, and sometimes it’s totally opposite.”
Peer’s combined knowledge helped one client add a brand new item to its menu. The client, a sandwich company, wanted to include a high-end beef product on the menu, and its R&D department came up with the idea of tenderloin. With that information, Murray had not only a flavor characteristic to work with but also a price point. “They’re a sandwich company, so they can’t afford a fifteen dollar per-pound item or even a seven dollar per-pound item,” he says.
Murray developed several prototypes, starting with choice tenderloin and working his way down to cutter/canner grade. Each option provided its own problems. At the same time, the National Cattlemen’s Beef Association started promoting its value cuts program, and Peer Foods discovered the teres major muscle.
“The teres major has tremendous eating characteristics,” says Forde. “It eats like filet. They had this need for an upscale meat, so Chef Tim married the two. We brought it to our production team, and they figured out a way to keep it at the same rate of done-ness in our ovens.”
Examples like this are why one customer called Peer Foods a “microbrewery for meats,” acknowledging the company’s ability to produce extremely customized orders. That does not mean, though, that Peer is limited to producing just small batches, Forde explains. The company contracts with and produces for many of the largest packers and marketers in the country.
A willingness…and a want
Peer’s vat-cured bacon still makes up a significant portion of the company’s annual sales. Vat curing is a long, slow process that takes up to 14 days, and it requires a large amount of space in the plant. But the taste and performance of that bacon causes chefs from across the country to order it, which was one of the main drivers for becoming a national distributor.
Peer also became the exclusive processor for a nationally known ham company, which raised the company’s profile considerably. “It’s a great calling card,” Dangler says. “[Other companies] know how seriously we take our customers, because it’s a heck of a responsibility to be an exclusive supplier to anybody. We take it very seriously.”
O’Connell adds that producing customized meats in a production environment is a difficult task for the employees. “If they’re making a rib and putting a mesquite rub on the rib, they’re cooking it with a specific smoke cycle with a specific natural wood chip,” he explains. “The next cycle, they’re changing it, and they’ve got to remember all of that. They have to know this is different from all the other products that they’re making.”
For every new product, a manufacturing specification is created. Chef Tim is an important part of the process, as he takes the meat from the culinary center to the production floor. Peer’s management team and plant management also get involved, as well as the customer. The important lead people on the floor, such as the smoker or the marinade mixer, are also involved with quality control. Once production begins to ramp up, regular testings are performed to ensure the meat consistently meets the chain’s standards.
Though the process is difficult, Peer is so certain of its employees’ abilities that the company became a gourmet sausage supplier without actually having any natural casing sausage equipment in either of its plants. A gourmet sausage company was looking for a Midwest supplier, and Forde toured the company’s management through the Columbus plant. “They walked through the plant, and at the time we didn’t make a single stick of natural-casing sausage,” he says. “But the most important thing we had there was the skill set of our managers and operations people. We were able to convince them that we had the right people to get them what they wanted.” Peer Foods is now one of the sausage company’s top suppliers.
Forde says that Peer’s employees are accustomed to doing things that would not get done at a larger processor. “We have a willingness and a want to do difficult, complex projects.”
That kind of service helps Peer stand out from its competitors, Radville adds. “We are extremely flexible and extremely hands-on in our relationships,” he says. “It’s not just customizing the product, which is important, but it’s customizing the relationship and the service we’ve got with these customers. That’s the big point of differentiation for us, and we find tremendous reception from national chains because of it.
“Our mindset is that we have to and want to tackle the difficult things because anybody can do the easy things,” he adds. NP