July 12, 2011
by Bernard Shire
Creekstone Farms, a premium Black Angus beef processing company based in Arkansas City, Kan., was probably once best-known for its fight against the US Dept. of Agriculture to test each of its animals for bovine spongiform encephalopathy (BSE).
Back in 2004, about 35 percent of its sales were to export markets and its business suffered due to the BSE scare. So, at a cost of a half-million dollars, the company built a testing lab, reportedly the first one inside an American meat processing plant, and hired the necessary people to test every animal for BSE. But USDA, which controls the sale of kits to test beef animals for the disease, refused to sell Creekstone enough to conduct the tests.
As a result, the company fought a lengthy battle with the federal food inspection agency over the testing, but eventually lost.
Today, Creekstone Farms has evolved into a top steak seller. Its steak is sold in leading steakhouses throughout the US. Stories have been done about the company on the CNBC business channel, in the New York Times
and in other newspapers. And finance-wise, sales for the company have been growing as well, last year hitting $500 million, up from about $300 million three years earlier. When asked to describe Creekstone Farms’ position in the meat processing world, company CEO Dennis Buhlke describes his company as a smaller, high-quality “niche player” in a meat world dominated by huge meat packers whose costs aren’t all that high.
Creekstone Farms succeeds by offering high-quality meat products and prides itself on its customer service, the company says. The cost can take the products beyond the price grocery stores want to sell beef to their customers. But the world of restaurants is different, with customers willing to pay a higher price for steaks and other beef when they’re eating out at fine-dining, white-tablecloth restaurants.
The quality in beef is achieved by committing to the resources and relationships it has built through the years. The company has fostered relationships with producers who have quality Black Angus bulls. It coordinates the transfers of feeder cattle from the cattle producers to feedlots and then to Creekstone. The company hand-selects the cattle it wants. The cattle pens and the processing plant were designed by Temple Grandin, who is well-known for making cattle slaughter more humane. Future Beef Operations
The company began as Future Beef Operations in 2001, but it went out of business within six months. At the time, Creekstone Farms was a Black Angus beef producer based in Kentucky that acquired the plant from bankruptcy in 2003 to process its own beef products.
Then came the industry’s BSE scare of 2003. In 2005, the owners of Creekstone Farms sold it to Sun Capital Partners, a private-equity company that owns and operates Creekstone Farms today. Buhlke was hired to turn the company around, which he did.
Creekstone is working hard to get into the European market by sending meat from 2,000 head of cattle not treated with hormones there each month. But it is concentrating most of its efforts on the domestic market.
Creekstone Farms is committed to Black Angus beef as a product because it is USDA certified, one of the few branded programs certified by USDA. It uses verifiable Black Angus genetics, meaning the company seeks out the “cream of the crop” when it comes to Black Angus cattle. The animals are all born and bred in the US.