June 1, 2007
By Sam Gazdziak, Senior Editor
A group of turkey growers joined forces to form a new company with a cutting-edge facility.
Faced with rising costs, falling profits and the concern that they might not be able to remain in business, a group of 44 turkey growers in the Dakotas and Minnesota decided to take matters into their own hands. In 2002, they launched a study to see if they should do something else. That “something else” ended up being the construction of the first turkey-processing plant in the country in 20 years and the creation of Dakota Provisions.
“They started out thinking, ‘Should we build a plant?’” explains Kenneth Rutledge, president and CEO of the company. “The growers went out and actively took a look at other facilities and what other people had done as a part of their study.”
The turkey growers are mostly composed of Hutterite colonies, each of which is an independent business unit. They eventually formed Dakota Turkey Growers LLC, and decided to invest in a state-of-the-art processing facility in South Dakota, where the majority of the growers were located. With that goal in mind, they brought Rutledge into the company to help guide it forward. Rutledge, who has 34 years of experience in the meat-processing industry, was formerly CEO of a plant in West Liberty, Iowa, that was sold by Oscar Mayer to a group of independent turkey growers. “What had happened in Iowa was essentially what was going to happen here if they decided to build a plant,” he says. “The differences being that they had a plant and an existing workforce [in Iowa].”
Rutledge says that there has been a change in consumer consumption of turkey in the last decade or so. Where price was once the principal motivator for purchase, health and food-safety issues are now becoming paramount in what people buy. He adds that there had not been a new turkey facility constructed in the United States in almost 20 years, so he saw how Dakota Provisions could capitalize on that.
“It seemed to be that 20 years of food-safety innovation, being available to build into a plant from day one, would put this plant in a different position than a lot of the competition,” he explains. “I frankly felt that it would mean something, not only to consumers but to other food production companies that were interested in having products co-manufactured for them.”
State of the art
Dakota Provisions’ plant, which began construction in July of 2004 and started operations last January, is located in Huron, S.D. It has the capacity to produce any needed foodservice product and almost any retail product, from ground turkey to 7- to 9-pound turkey breasts. It can produce fully cooked or raw product, marinated or non-marinated. It can package the products with modified-atmosphere packaging, vacuum packaging or tray pack.
The specialty of the company lies in its slicing abilities. It has five slicing rooms, each individually environmentally controlled and each capable of working with any protein or even cheese. The reason that Dakota Provisions is a DBA (doing business as) name for Dakota Turkey Growers is that the company doesn’t want to be associated as producing just turkey. The company produces sliced beef and pork and is working on introducing a chicken line as well.
The 150,000-square-foot facility is actually two plants side-by-side, with the raw side being completely segregated from the further-processing side. It currently employs about 400 people. Food safety has been factored into every imaginable facet of the building. Turkeys are cleaned using a three-stage process, with the final stage using fresh water. A complete rapid bacterial detection lab is located on-site, so all tests can be done in-house. Even the landscaping was designed to prevent pests from infesting the facility.
One of the noteworthy features of the plant is a 50-camera video system that is installed throughout the plant. Everything that takes place in the plant throughout the day is independently audited by a third party, which then sends a report to Dakota Provisions the next day.
As an example, Rutledge says that a quality assurance manager may be assigned to test the metal detector at a certain time of day. “[The third-party auditor] will tell us what time the QA person arrived in the room, and if they actually ran the number of tests we told them should be conducted on the metal detector,” he says. “That’s true of hundreds of different functions that occur inside the plant.”
The live dock of the plant is also monitored at all times, so if there is any mistreatment of the animals at any times, it will get recorded. “If it’s something that has not been identified as acceptable behavior, it gets reported to us the following morning,” Rutledge says.
While the camera system helps make sure that the birds are treated properly, it also helps make certain that the company’s raw and ready-to-eat products are all being produced, packaged and handled in the right way. It’s one more safeguard for product quality, and that point has not gone unnoticed by customers who have toured the plant. “This facility, and our video system we use, gives the customer added assurance that the products we produce for them are going to meet their expectations,” he says.
The humane treatment of the birds also extends to the stunning method used. Dakota Provisions invented, patented and built its own carbon dioxide stunning system to put the birds to sleep before being dispatched. Rutledge notes that the company is one of the first in the country to have installed a CO2 system.
Having been in operation for about a year and a half, Dakota Provisions distributes product from coast-to-coast, as well as a strong export program to Mexico. Some of its turkeys are raised antibiotic-free and vegetable-fed, and those products are distributed to natural food markets. Other customers distribute to supermarket chains in California and several thousand stores throughout the Midwest.
“Right now there’s no question that our biggest opportunities lie in co-manufacturing products for specific customers,” Rutledge notes. “You can name any of the major customers who are out buying products and having products co-manufactured. They’re always looking at new opportunities, and we’re a new opportunity for folks.”
He also notes that private labeling is a strong opportunity, as is the growing quick-serve sandwich market. “We have the ability to slice product to specification and package to specification for those accounts,” he says.
Along with Rutledge, Dakota Provisions has a veteran management team with contacts all over the meat-processing industry. That industry knowledge has helped open many doors, but what has helped seal the deal in most cases is the plant itself. Rutledge says that before any deals are made, customers will come up to Huron to tour and audit the facility to ensure that it produces high-quality products. “We’re having no problems passing muster, because we have had some of the highest audit scores recorded by our customers. We have a great facility to impress customers with,” he proudly states.
Starting from scratch
The scenario that Rutledge envisioned for the company, one where it would be a co-manufacturer and private labeler for retail and foodservice customers instead of focusing on brand-name products, was one that was successful with his previous company in Iowa. This time around, however, the plant had to first be built from the ground up, and the workforce had to be completely assembled from scratch.
The first six months of operation, he says, was largely dedicated to getting the slaughter and deboning side of the process fully functional and efficient. While Huron has a past history in the meat-processing industry, he says that there was no turkey-processing experience there. He attributes the management team for the success in getting the employees properly trained.
“I think our first day of operation, we had 390 turkeys scheduled, and it took us all day to get those through the plant,” he recalls. “Today, we’re running upwards of 16,000 or 17,000 birds per day.” All of the birds it processes are toms, with a target live weight of 40 pounds.
If it should come to the point that the further-processing side nears capacity, then the company has the ability to expand. The facility was designed with expansion in mind, with walls that can be moved and a cooler that can have its current capacity of about four million pounds doubled. “We can make the further-process side as large as we want to make it,” says Rutledge.
Since its start, work has been continually coming Dakota Provisions’ way, and the company continues to solicit customers. “We think we offer something to the customers that perhaps others cannot offer, in terms of food safety. We’re very interested in talking to customers who are interested in a facility that can meet their absolute expectations and possibly exceed their expectations in terms of food safety.”
(Corporate Name: Dakota Turkey Growers LLC)
Founded in 2004
(Began production in 2006)
Headquarters: Huron, S.D.
2005 sales: $505 million
Founded in 2004
(Began production in 2006)
Headquarters: Huron, S.D.
2005 sales: $505 million