Sustaining growth

by Alicia Karapetian
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Though the economy’s trajectory remains uncertain, and processors are grappling with the potential of new governmental regulations, things are looking up in the turkey industry. U.S. Dept. of Agriculture data indicated that cold-storage stocks were down by about 15 percent at the end of June when compared with the same period the previous year. Operating profit at Hormel Foods’ Jennie-O Turkey Store nearly doubled in its third fiscal quarter, ended July 25, thanks mostly to operational efficiencies. Process improvements and balancing production levels with weaker demand have been a top priority for turkey processors, including Garner, N.C.-based Butterball LLC.

“At Butterball, we have made adjustments to our basic business model through more efficient practices and forecasting,” says CEO Keith Shoemaker. “I believe that our decisions to reduce volumes and alter production have made Butterball a stronger company with a very bright future.”

Dan Waters, general counsel for West Liberty, Iowa-based West Liberty Foods, is optimistic. “Things are going well for us right now,” he says. “When the economy first started to skid, there was a decrease in demand, and we cut back on production. But now, we’ve started ramping back up, and soon we’ll be back to full production. We’ve been using up our inventory, and they are declining.”

Navigating new regulations
Though the outlook is upbeat, challenges remain. Shoemaker points to a resolution introduced in Congress that would phase out the use of antibiotics for non-therapeutic purposes in food animals. “During a Congressional hearing in July, expert testimony was given stating there is no scientific consensus regarding the impact of antibiotic use in animal agriculture, yet [Congress continues] to write legislation,” he says.

The bill, entitled “Preservation of Antibiotics for Medical Treatment Act,” is currently in committee in the House, and as of early August had 119 co-sponsors in the House and 17 in the Senate. Some groups, such as the American Veterinary Medical Association, are actively pursuing the bill’s defeat. The Food and Drug Administration (FDA) also is studying the issue, and at the end of June issued draft guidance that recommended reducing the amount of antibiotics used in animal agriculture.

When the guidance was issued, Joshua Sharfstein, FDA’s principal deputy commissioner, said during a conference call with reporters, “This is an urgent public-health issue. To preserve the effectiveness, we simply must use them as judiciously as possible.” A comment period was opened for 60 days following the guidance’s issuance.

When discussing the resolution, Shoemaker doesn’t hold back. “Often, actions taken to institute new legislation, regulations and consumer preferences do not reflect science but are just reactions to misplaced perception,” he says. “I don’t like using clichés , but in this case, it is true. People do not understand where their food comes from or how it is produced.”

He advocates the turkey industry presenting a united front on this issue and being vocal to educate consumers as to how turkey is raised and processed. Butterball recently struck up a partnership with Weekly Reader magazine to get out its message. In addition, the Butterball Web site will include a new, educational “Celebrate Agriculture” feature that will be used in third- and sixth-grade classrooms in various parts of the country. “I’m excited about this program,” Shoemaker says, “because I feel that educating our youth as to where their food comes from is an important step in assuring the facts, and not myths, are believed.”

Eat more turkey
Promoting turkey consumption remains a priority for the industry, as well. Though Sherrie Rosenblatt, vice president of marketing and communications at the National Turkey Federation (NTF), acknowledges the recession “has been tough,” she, too, remains confident. “We hope more consumers will realize that turkey is not only a good-for-you product, but also a good economical choice.”

To that end, NTF has launched the “Upgrade It!” marketing campaign, which encourages moms to “upgrade” their protein choice to turkey. A large component of the campaign is an upgrade calculator, featured on eatturkey.com. For xample, consumers can click on a dish they might normally associate with another protein, such as ground beef in shepherd’s pie. Users who click on the menu item are shown how they can use lean ground turkey to enhance the nutritional profile of their meal. “It’s a way for busy moms to take things they would normally feed their families and change that protein to turkey,” Rosenblatt adds. She says NTF hopes to expand the campaign to include a wide swath of items for the breakfast, lunch and dinner dayparts.

New recipe ideas are a key component of Butterball’s push to increase consumer demand as is its long-standing direct-to-consumer phone line. The company has seen the popularity of its Turkey Talk-Line grow exponentially thanks to social media tools.

“We are now using Facebook, Twitter and bloggers to interact with our consumer and bring them…[information] to help them prepare delicious and nutritious meals,” Shoemaker says. Though the Talk-Line is most famous for its Thanksgiving turkey assistance, technological advancements have allowed it to encourage turkey consumption and inform consumers more than ever before.

After all, getting consumers to talk turkey is what everybody wants.

An appetite for deli meats
Turkey deli meat distribution grew 6 percent in 2009 to total more than 467 million lbs., according to a new survey from the National Turkey Federation. Some 43 percent of that product went to foodservice operations the 2009 Marketplace Survey noted.

This year, processors have introduced several new turkey deli-meat offerings, and foodservice operators are talking turkey with many new products, too. Garner, N.C.-based Butterball LLC introduced deepfried-flavored deli meats, including Thanksgiving Style Turkey and Honey Turkey. Those items, along with many others, such as the company’s Cajun Style Turkey Breast and Honey Roasted Turkey Breast, are certified by the American Heart Association as heart-healthy.

Tyson Food Service launched Tyson Deli Slices in May, and the line includes three varieties of Oven-Roasted Turkey Breast at varying quality levels, named Premium, Favorites and Basics.

Panini-style sandwiches are appearing on more restaurant menus, and the options often include turkey. In July, Cinnabon, which has 570 locations throughout the U.S., announced it would begin testing serving breakfast and lunch, including a smoked turkey panini. Carino’s Italian, a 70-plus-unit operation, introduced a new kid’s menu that features a turkey and mozzarella grilled panini.

According to NTF’s survey, foodservice sales account for 18 percent of turkey volume.

Alicia Karapetian is a free-lance writer based in the Chicago area.
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