Sadler's Smokehouse goes national

by Bryan Salvage
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FRISCO, TEXAS — Sadler's Smokehouse Ltd., a processor of premium, smoked meats, dinners and other products, doubled its distribution in 2009 and expanded into a national company since its 2007 acquisition by Wholesome Holdings Group LLC and Brazos Private Equity Partners LLC.

Despite the recession that recently has driven the fully cooked category down 8%, a combination of new leadership, marketing strategy and packaging innovations is being credited for enabling the once regional company to bring its products to more than 7,200 retail stores, foodservice distributors, national chain restaurants and other branded food processors nationwide.

Added marketing focus, teamwork with legacy management, key operational investments and a resistance to product development shortcuts and other cost-cutting methods more common with private equity acquisitions are being credited by company leaders for this growth.

"When we joined forces with Harold Sadler and the Sadler family in 2007, we were attracted to the family's top-quality product and the widening consumer appeal of premium pit-smoked meats and barbecue," said Terry O'Brien, Wholesome Holdings chairman and chief executive officer. "In the last two years, we've worked together to build an industry-leading team devoted to building the brand through innovation, national expansion and continual improvement."

Three key moves were behind unlocking Sadler’s rapid distribution expansion, said Mr. O'Brien, who agreed to step in as Sadler's chief executive. First, he and founder Harold Sadler invested many hours before the acquisition discussing their views on how to run a company that consistently met extremely high standards for quality, customer service, food safety and value for today's consumer. "Terry cuts no corners on the important things like quality," said Harold Sadler.

Both men also committed to a $2.5 million packaging investment to increase shelf life and provide an added layer of food safety most fully-cooked food suppliers cannot offer. "I credit Brazos and our Board of Directors for supporting this investment immediately after our deal closed," Mr. O'Brien said. "Most private-equity partners would not be so supportive so early on."

When asked to expand on the company’s shelf life and food-safety claim, Mr. O’Brien told MEATPOULTRY.com Sadler’s has incorporated high-pressure pasteurization. "We procured a single line, as well as kind of the upstream and downstream capabilities that you have to have," he added. "It’s a very efficient, in-line process for us. We’re probably a little more advanced than the average high-pressure pasteurization process. We’ve installed a state-of-the-art version."

This process extends Sadler’s product shelf life from 35 to 60 days or longer, he added. "For food safety, your H.A.C.C.P. plan becomes that much stronger (in using the H.P.P. process)" he continues. "You’re subjecting each package to a final kill step when the product is in the package. Traditional H.A.C.C.P. plans rely on a so-called micro-kill step to be prior to the packaging phase and the product is still hot, and then it’s packaged. With high-pressure pasteurization, you’re not only going through your normal cooking techniques and temperature/time protocols, but you’re adding a final pressurized step that becomes that added food-safety layer. We think this technology is going to continue to grow in awareness and popularity. This has been an effort we have been focused on for two years. It’s really bearing fruit for us."

Mr. O'Brien also hired managers who previously worked at companies like Smithfield, ConAgra and Schwan's, who were handpicked to fit in with the existing team and family culture. New products were carefully researched and honed to meet Sadler's high standards. Sadler's broker network coverage was expanded from four states to 48 states and fully integrated with Sadler's marketing team.

"Our success has allowed us to turn our attention to making Sadler's Smokehouse a much larger platform company and to continue pursuing new acquisitions," said Mr. O'Brien, who is recruiting a new c.e.o. to allow him to move to chairman of Sadler's' operating company. "As the credit markets ease and our brand expands, we see numerous acquisition opportunities. The key components will remain our people, our quality and our innovative approach. We believe we will be a winner in this marketplace."

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