Superior Farms unveils new lamb plant

by Kimberlie Clyma
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 Superior Farms
Shane MacKenzie (left), vice president of operations, and President and CEO Rick Stott were part of the management team that helped build Superior Farms' new sustainable lamb plant in Dixon, California. 
 

When the leadership at Superior Farms decided to invest $17 million in a new lamb plant adjacent to their existing Dixon, California, lamb facility, many people thought they were crazy. After all, the US lamb industry is small. Only 2 million lambs are processed in the US each year, compared to the New Zealand lamb market that processes 30 million per year and the Australian lamb market that processes 70 million per year. And compared to other proteins processed annually in the US – 120 million hogs and 30.3 million beef cows – lamb represents a small percentage of the US meat industry.

But Superior Farms executives, led by Rick Stott, president and CEO, saw something the skeptics didn’t see – an exceptional growth opportunity for an up-and-coming industry, and the chance to produce a truly sustainable protein at a time when the meat industry is constantly facing environmental scrutiny.

Changing direction

Stott is relatively new to the lamb industry, his tenure at Superior Farms started just a few years ago. Prior to assuming the top spot at Superior Farms in early 2013, Stott spent 20 years in the beef industry, with Agri Beef Co., based in Boise, Idaho. When he left Agri Beef he was serving as executive vice president. He was an integral member of the management team that helped grow the integrated beef company from a $125 million firm when he first started, to a company with revenues of close to $1 billion at the time he left.

“I got a lot of grief when I decided to go from the cattle business to the sheep business. Being one of the key executives at Agri Beef, it came as a big shock to people that I would leave the company and the beef industry,” Stott explains. “But it gave me the opportunity to do something in my career that I had always wanted to do – lead a company.

“I also saw a great opportunity to take the skills I had learned at Agri Beef – the skills about developing brands, market segmentation and product differentiation – and apply them to the lamb industry, and specifically to Superior Farms.”

Stott sees a huge opportunity for growth in the US lamb market. There was a 14 percent increase in demand for lamb in foodservice and 9 percent increase in retail over the past two years, he says. And 40 percent of US consumers say they have never tried lamb. “It’s fun to watch that demand starting to grow and to see lamb being discovered,” he says.

“We believe the opportunity for the future of this industry has never been better. That’s why we built this plant,” Stott says. “We’re so optimistic about what we have right in front of us that we’re willing to invest our own money as employee owners. We see something in this industry that’s pretty exciting.”

Superior Farms, with annual revenues of around $250 million,has been an Employee Stock Ownership Program (ESOP) company since 1981. Many of the plant’s 146 employees have been with the company for more than 15 years (the longest serving employee has been there since Superior Farms purchased the plant in 1981). The company has paid out over $20 million to retired employee owners since the inception of the ESOP.

Superior Farms was founded in 1964 in Ellensburg, Washington, and in 1981, purchased the Dixon facility (which was originally built in 1923). The company has an additional plant in Denver, which it took ownership of in the late 1990s, as well as a plant in Hawarden, Iowa, formerly Iowa Lamb, which now produces pet treats for the company. Superior also has a sales and fabrication facility based in Chicago, and sales facilities in both Los Angeles and Boston.

The decision to build a new plant in Dixon was a relatively simple one once the choices were considered, Stott says. “Our old plant was a 1920s vintage plant, so we were going to have to make some changes in the next five years or so. Our options were to try to redesign it bit by bit, not knowing what we might find when we peeled back the layers. Or just leave California altogether and work out of our Colorado plant. The third option was to build a completely new facility,” he explains. “We had to ask ourselves if we were committed to the American, and specifically the West Coast, lamb industry, and if we were committed to expanding the American lamb industry. If so, building a new plant in California was a must from a big picture standpoint.”

California is the second-largest lamb producing state in the US, says Shane MacKenzie, vice president of operations. “We want to support the industry both in California and in the US. We have growers and producers that have made investments in this infrastructure and we want to be here long term for them.”

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