Sale of Butterball Not Expected to Change Icon of Thanksgiving
Posted November 22, 2006
This year isn't any different. At least, that's what Keith Shoemaker wants everyone to think.
"They better not notice anything different," said Shoemaker, president and chief executive officer of Butterball LLC. "I told the staff I want this to be absolutely, positively seamless for the customer for the holiday period. I don't want them to think that anything's happened."
But for Butterball, which sold its first turkey in 1954, a lot has happened since last Thanksgiving. ConAgra Foods Inc., the Omaha, Neb.-based leader in packaged foods, sold the iconic brand and its turkey business to privately held Carolina Turkey in October for $325 million. What was once the nation's fourth-largest turkey producer suddenly was No. 1, with 20 percent of the market.
And while customers might not notice a difference, having the Butterball name in hand has changed things at Mount Olive, N.C.-based Carolina Turkey. The company is now called Butterball LLC, and after selling only to restaurants and grocery stores for decades, it no longer has to worry about developing a brand name as it expands its consumer business.
"For this Christmas season, the product (consumers are) gonna buy _ Butterball _ will be the same as it was for the last 20 years," said Tom Vukina, a professor who specializes in poultry economics at North Carolina State University.
That's just the way Shoemaker wants it.
Shoemaker is a former executive at Virginia-based Smithfield Foods, the publicly traded firm that owns a large stake of the renamed company and is the world's largest pork producer. He has focused on ensuring a smooth transition _ one transparent to customers _ since the sale closed in October.
That includes keeping everything at Butterball's Turkey Talk-Line the same.
Callers will hear the same Midwestern voices that for years have answered the phones in Naperville, Ill., where a team of more than 50 Thanksgiving dinner experts educated at "Butterball University" are available every November and December at 1-800-BUTTERBALL to help kitchen klutzes.
"They're used to a Midwest accent," said Shoemaker of the tens of thousands expected to call this season. "I want everything to be so seamless I won't move the thing unless we move to another place in the Midwest.
"I must be anal about it."
Butterball's brand name commands a higher price in stores. At a Pathmark supermarket in Middletown, N.J. Butterball frozen whole turkeys were selling this week at $1.39 a pound, while the store brand frozen turkey was priced at 99 cents per pound and fresh Butterball turkeys sold for $1.49 a pound while fresh whole turkeys from Shady Brook Farms, a unit of Cargill Foods, sold for $1.29 a pound.
David Harvey, with the U.S. Department of Agriculture's Economic Research Service, said many grocery stores ordered their Thanksgiving turkeys before the sale was finalized, meaning there is little risk the sale could trip up the company this year. That will give Butterball LCC time to develop a new approach to managing the Butterball brand.
ConAgra tended to focus on the whole bird, which only accounts for about a fourth of turkey meat sales. The other Butterball products _ including turkey burgers, filets, tenderloins, turkey sausage, turkey bacon and turkey strips _ often got lost among ConAgra's massive product line, Shoemaker said.
Now, Butterball can build a sales and marketing staff that will only pitch turkey products, not hundreds of Conagra food products.
"We don't have a salesman who's going to talk to them about 1,400 (different food products)," he said. "We're going to talk to them about turkey."
With the sale, Carolina Turkey acquired ConAgra's processing plants in Arkansas, Missouri and Colorado, adding 3,200 employees to the 2,500 employee it already employed. The company's headquarters will for now remain in Mount Olive, where the company has a 1 million square foot facility it calls the world's largest turkey processing plant.
The sale comes in the midst of a boom for the industry. Americans ate 16.7 pounds of turkey per person last year, up from about 8 pounds in 1970, according to the National Turkey Federation. The Department of Agriculture expects the industry will continue to grow as health-conscious Americans look for low-cost and convenient sources of protein.
The U.S. is also the world's largest exporter of turkey products _ exports have grown nearly tenfold since 1990 _ and producers currently send nearly half a billion pounds of meat a year abroad, with more than half sent to Mexico.
And this year, an unusually hot summer resulted in smaller turkeys, tightening supply and boosting prices a bit higher _ but probably not enough for shoppers to notice, said turkey federation spokeswoman Sherrie Rosenblatt.
"This is a positive," Rosenblatt said. "The Butterball brand name continues and there's an investment in new products to make it easier to get turkey dinners on their table all year long."