April 1, 2006
By Deborah Silver, Contributing Editor
With a new state-of-the-art plant in the works, Jemm – the small burger company with the can-do attitude – is ready to take center stage.
jemm Wholesale Meat Company Inc. has taken the do-one-thing-well philosophy to heart, staking its reputation on a single product type, the individually quick frozen (IQF) hamburger. Indeed, its fortunes were built on the burger, and it is that same product that is catapulting the Chicago-based company into the limelight. “We’re the small niche-market company with the big profile,” says Jemm president Dan Goldman.
Jemm, which processes some 40,000 pounds of ground-beef products daily, projects sales of $10 million this year, a 60 percent jump from the year 2000. And that’s based on burgers produced primarily in its current facility. In August, the company will move into its new Chicago plant, a completely overhauled manufacturing facility, with twice the machinery and at least four times the production capacity. Staff will nearly double to 80 employees, and when fully operational, the plant will allow Jemm to process from 160,000 pounds to 200,000 pounds of product daily. By the end of 2008, sales are expected to climb to $20 million.
“We have the management infrastructure securely in place,” says Goldman. “The new facility will be all about product and sales.”
Jemm is already a major player in the Chicago meat-industry market, boasting a presence in virtually every grocery outlet in the city and its environs, while maintaining a healthy foodservice business. Retail accounts for 60 percent of Jemm’s sales; foodservice, 40 percent. Although Jemm manufactures a few frozen sausage products, the majority of its 33 products represent a variation on the burger theme — different shapes and sizes, seasoned and unseasoned, soy-extended and not. They include private-label, Jemm and Glenmark brands (the company bought the rights to the Glenmark name in 1998). “Basically we make one product — frozen hamburger patties,” says Goldman. “And because our primary focus is burgers, they have to be the best burgers available. That’s how we became the premier retail manufacturer of IQF frozen patties in the Chicago metropolitan area. Our success depends on the quality of those products.”
It also depends on their safety, according to Goldman, an aspect of production that Jemm takes great pride in. The company does not accept any fresh meat through its doors that has not been tested and cleared for E.coli, and requires laboratory reports from each of its suppliers. In addition, the company takes samples from all of its finished products and sends them to a local independent laboratory for testing. Jemm also receives high marks from its customers. According to Goldman, the two most recent customer audits resulted in top grades.
“A decade ago, an operation could make hamburgers in the back room and sell them at the counter in front,” says Goldman. “Thankfully that’s no longer the case. There’s too much liability at risk. The nature of our product demands that sanitation and safety needs be met. I like to say that we’re guilty of over-managing — that’s what makes our controls so terrific.”
Jemm’s history extends back to the days when it was a different story for the meat industry. Founded in 1959 in the heart of Chicago’s Union Stockyards by a local meat processor (the company name represents the first letter of the names of the founder’s children), Jemm made only one product in those days: a seasoned 1/2-lb. hamburger patty called the Chicago chop steak. That product was sold exclusively by local peddlers, who vended it to restaurants and the occasional grocer door to door.
As the city grew, so did Jemm’s product roster. By mid-1960s, the company boasted four chop-steak products. During that period, the cultural landscape also changed. Fast food came into vogue, and consumers became accustomed to eating their food — particularly burgers — on the run. At the same time, women started to join the workforce in increasing numbers, spending less time in the kitchen cooking meals. As a result, grocery stores expanded their freezer sections to accommodate the growing number of frozen convenience foods. TV dinners were soon joined by other main-course options. A world of quick, easy and relatively inexpensive dining possibilities opened up to consumers.
Of course, the advent of advanced freezing technologies helped further the cause. “That changed the entire nature of the business,” says Tom Nacht, Jemm vice president of operations. “Freezing made everything easier to handle and allowed for faster production and higher volume. It was revolutionary.”
Jemm remodeled its plant in 1970, adding the IQF tunnel for production of frozen hamburgers and increasing its capacity to 1.5 million pounds of product per year. However, the operation continued per usual on other fronts, manufacturing the same number of products geared toward the foodservice industry. “Despite its advances, Jemm was still a sleepy little company,” says Goldman.
In 1989, Goldman and his partner purchased Jemm, and the new management realized it was time for a change. “At that time, Jemm’s three largest customers occupied 80 percent of its sales, and all of its sales were to restaurants,” says Goldman. “We felt that just wasn’t a good model to follow. We were proven right because, as luck would have it, all three of those top foodservice customers eventually went bankrupt.”
The company decided to shift its focus to retail sales. The plant’s manufacturing process was upgraded in 1989 with the addition of the latest state-of-the-art IQF technology, giving Jemm a production capacity of some 3.5 million pounds of product annually. And those products quickly caught on with grocers in the Chicago metropolitan area, including Albertson’s Jewel-Osco stores, Safeway’s Dominick’s, Supervalu’s Cub Foods and Certified Grocers.
In 1997, Jemm underwent another shift. On the business front, Goldman bought out his partner, who was retiring. On the manufacturing front, sausage-processing equipment was added, and once again the plant was overhauled and modernized. “That’s when our business really took off,” says Goldman.
Another dramatic change was in the works for the meat industry. In the late-1990s, the U.S. Department of Agriculture’s Food Safety and Inspection Service mandated that the meat and poultry industries in this country adopt the Hazard Analysis Critical Control Point (HACCP) program. “That put a lot of the old-time meat people out of business,” says Goldman. “The cost of doing business skyrocketed, and it was too much for them financially. Plus, it represented a radical shift in the way plants were run. They couldn’t cope with it.”
Jemm was the beneficiary. With $3 million in annual sales, the company took on the increased load of business. “Many retail and foodservice operations came to us, because we were willing to make small runs,” says Goldman. “We’d produce 5,000 pounds of IQF product, which larger companies wouldn’t accommodate. We doubled our business. By 2000, Jemm was a $6-million-a-year operation.”
The company also began co-packing for steak companies. “Historically, steak companies made the best hamburgers, taking scraps from filets, strips and porterhouses,” says Goldman. “The problem was, if someone got sick, they didn’t know where the meat came from. Jemm had a complete traceability program in place. We knew from our bar-coding system where everything came from, what was put in by whom and where it went. Steak companies decided to outsource that product rather than risk the exposure to E.coli.”
Its recent increases in production capacity enabled the company to sign more co-packing contracts with meat companies who wanted to retain the quality of their products but no longer were willing to risk manufacturing hamburger products themselves.
Into the future
Jemm is now ready for its next act. While hamburger will continue to represent the bulk of its business — 95 percent, to be exact — the new Chicago plant will allow the company to move into new arenas, including manufacturing precooked items, frozen chili and frozen sausage items, as well as repacking. The facility also will include cooking operations and a smokehouse, providing Jemm with the opportunity to move into hot dog manufacturing. The company already has a contract to product up to 2.5 million pounds of hot dogs a year under a private label.
Jemm’s ambitions extend beyond new product lines and increased capacity. Distribution expansion is in the works, as the company moves outside the Chicago area. It is already selling products in southern Illinois, Detroit, Indianapolis, Cleveland, and parts of Georgia and Wisconsin. “The Chicago area is seasonal as far as burgers are concerned,” says Nacht. “People grill in the summer. In this day of high gas prices, potential customers aren’t going to come into our market unless they have deep pockets. And we don’t do our own trucking, nor do we expect to. We’ll stay with what we know best — burgers — and go from there.” NP
Jemm Wholesale Meat Company Inc.
2005 sales: $9 million
Projected 2006 sales: $10 million
Employees: 45 (by yearend, 80)
Plant size: 10,000 sq. ft. (by yearend, 44,000 sq. ft.)
Production capacity: 40,000 lbs. (by yearend, approximately 160,000 lbs.)
Products: IQF hamburger patties under Jemm, Glenmark and private-label brands comprise 95 percent of the company’s products; frozen sausage products, 5 percent. By yearend, Jemm will add hot dogs and precooked items to its product roster.
Future plans: continued distribution expansion outside of the Chicago metropolitan area.