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Exclusive interview: Butterball’s Brenneman outlines plans for Gusto plant
Story Date: 1/4/2013
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Source: Rita Jane Gabbett, MEATINGPLACE, 1/4/13
On the first working day of the new year, Garner, N.C.-based Butterball, LLC announced that it has acquired pork processor Gusto Packing Co., located in Montgomery, Ill.
Gusto Packing Co. is a family-owned and -operated business that offers six basic product lines from a single plant that employs 500 workers: Hickory & Apple Wood Smoked Bacon, Bone-In Smoked Pork & Turkey Products, Smoked Boneless Hams, Cooked Hams, Pork & Turkey Deli Meats and Spiral Sliced Hams.
As the move is a departure from Butterball’s exclusive focus on turkey, Meatingplace asked CEO Rod Brenneman to explain the purchase and illuminate his plans for integrating the pork processor into Butterball’s core business.
Meatingplace: I understand Gusto has an impressive plant. What attracted you to this merger?
BRENNEMAN: The main attraction for us was the available capacity it has on the value-added side of the business, which is one of our growth strategies. This plant has a capacity of about 325 million pounds and is only doing about 185 million to 190 million pounds worth of business. The plant is about 260,000 square feet, which is huge.
We can bring turkey products into and process in that facility. The other nice thing is the location is about 45 miles from one of our major distribution centers. So, on both the strategic and operational sides of this, there were a lot of things attractive to us.
Meatingplace: This is also a diversification into pork.
BRENNEMAN: Having another protein, while that may not be a major focus of Butterball — because we like to hold ourselves out as being the turkey experts — certainly it is not a negative. As we continue to grow our business to have the ability to look beyond turkey and maybe even do some other things with the Butterball brand down the road.
This puts us in a position to do that if we so choose. If not, it will be business as usual for both Butterball and Gusto. Butterball will focus on turkey; Gusto will focus on the pork products. Hopefully, we leverage synergies between the two companies. Butterball is strong in research and development and we have national distribution and sales network that we can leverage as well.
Meatingplace: What is the main advantage of making turkey products at the Gusto plant?
BRENNEMAN: We are at capacity in our further processing operations. We are also co-packing a lot of our products today, so hopefully this puts us in a position to not only continue to grow internally, but also evaluate what we want to process outside versus inside.
Meatingplace: What types of turkey products will you be looking to process at the Gusto plant?
BRENNEMAN: Obviously any of the deli-type products can easily be brought in there. Also, all of the cooked products we produce today we would have the ability to produce at that facility. The vast majority of our further processed products are cooked products. A lot of the equipment is very similar or the same. We might have to add some additional equipment here and there to do the type of packaging we want for a specific kind of product, but they do sliced products, they do whole-muscle products, they do all kinds of cooked products today. And they have a lot of space.
Meatingplace: Do you see keeping Gusto products as a distinct brand or do you see this as a way to extend the Butterball brand?
BRENNEMAN: It is really both. It is business as usual for both companies. They do a lot of private label business today, but they also have the Gusto brand, they have a Heartland brand. They are a regional pork company. We can bring in our Butterball products under the Butterball brand. They will continue to do their Gusto brand or whatever private label business they are doing.
Over time, we will evaluate if there are things that might make sense from a branding standpoint, either in pork under the Butterball brand or other options. There is a lot that goes into leveraging a brand over multiple proteins. Sometimes it makes sense and sometimes it doesn’t. We have not made those decisions today. It is business as usual for now. We are going to continue to leverage those things that have worked well at Butterball, whether that is R&D or food safety, or whatever we can do to continue to grow.
Meatingplace: Are you looking to expand the Gusto brand and take it nationally?
BRENNEMAN: We are going to use our national distribution and logistics network to expand their business, but I would not say we are going to throw our focus on building the Gusto brand. It is more about putting Butterball in a great position to grow.
Meatingplace: In the first two days of the new year, we have Butterball diversifying into pork and Hormel diversifying into peanut butter. How important to do you see protein diversification as a strategy?
BRENNEMAN: As all companies grow, we have to look at not only what we can do with our own product lines, but what we might be able to leverage them to do. Everybody is looking at how they can grow their business. Butterball is a growing company. We are excited about that growth. Make no mistake: we are a turkey expert company and we will stay focused on that. But at the same time, we want to broaden our horizons and make sure we are creating growth opportunities for our associates.
Meatingplace: A number of consulting firms are projecting more consumer interest in non-meat proteins and here is Hormel going into peanut butter. As the head of a turkey company, do you see that as something on your radar?
BRENNEMAN: I guess you never want to close the door on anything, but that would not be our immediate focus at all. We have so many opportunities in front of us in traditional meat protein and specifically turkey; that is clearly where our focus is for the foreseeable future.
For more stories, go to http://www.meatingplace.com/.
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