Slideshow: California dreaming
April 14, 2014
by Bryan Salvage
|Jensen Meat Co.’s new plant manufactures 250 SKUs of retail and foodservice products such as individually quick-frozen and fresh patties. Click image to view slideshow.
More than 1,300 miles west of cattle-centric Midwest cities such as Dodge City, where the horizon is somewhat forgettable but the blustery winters and parched, dusty summers are anything but, Reggie Jensen founded a beef business seven miles inland from the Pacific Ocean in Vista, Calif. That was in 1958 and since then, the business that began by cutting premium steaks for high-end hotels and restaurants has evolved into a leading ground-beef processor for retail and foodservice customers – under new ownership and the guidance of a new executive management team.
Reggie couldn’t have known at the time that Jensen Meat Company would be thriving decades later, sales would top $130 million and that the growing business would move into a new corporate/production complex in San Diego – a city known for its pristine beaches, upscale real estate prices and mild climate.
Along the way, Reggie’s son, Bob, became CEO and the business grew and evolved into a leading processor of quality ground-beef products for US-based foodservice, distribution, restaurant, retail and school markets. In line with his secession plan, Bob sold his successful, growing business in September 2011 to a private-investor group headed by brothers Jeff and Gregg Hamann of El Cajon, Calif.-based Hamann Companies. In October 2013, Bob retired and sailed into the sunset.
Although the original Jensen Meat Co. may just be a memory, the new Jensen Meat Co. is intent on building on past successes under new ownership, new management, a new business philosophy and a new brand revitalization program – plus its portfolio of high-quality products are now being manufactured in a new processing plant in San Diego near Mexico’s border. (Read plant feature on page 44).
Thanks to this new management team and production policies currently in place, the company was prepared for the unexpected when it was recently impacted by an 8.7-million-lb. meat recall ignited by the slaughtering of alleged “diseased and unsound animals” from Rancho Feeding Corp., Petaluma, Calif. Jensen was a consignee in the Rancho Feeding Corp. recall as Rancho was a third-party vendor to Jensen. Since that time, Jensen has severed ties with the supplier, and that supplier has since sold its business.
“We have a zero-tolerance policy when it comes to food-safety issues, but if something happens – we are definitely prepared,” says Abel Olivera, Jensen’s COO, of the recall. “We have mock recall drills and go through the entire exercise to make sure we’re prepared. This was the first recall we were involved in over our 55-year history. Our team and ERP [Enterprise Resource Planning] computerized tracking systems were able to track all of the raw materials within hours of the first notification. We definitely have a robust system in place and a great team that was able to track all products down to the batch.”
“We’re able to track through our systems – what area in the plant a pallet is, we can tell if it’s in the trailer, sitting on the dock, at our refrigerated warehouse…we can track product any point in time,” adds Jeff Duran, vice president of logistics.
In 2008, Bob Jensen began secession planning while he was also looking to expand and grow the business. Around that time, he took Olivera under his wing and started training him to become the COO. Olivera was appointed COO in October 2011, just six years after Jensen hired him in 2005. “He served as an executive mentor for me and many others before his retirement,” Olivera says. “Sam Acuña has been here since 2010 and was named CFO in 2011 following Jensen’s acquisition. He was hired by Bob as director of finance.”
Although the last eight years have been turbulent for many businesses in this industry, Jensen Meat Co. was building its business. “We have seen steady growth during the last eight years,” Olivera says. Current annual sales are just over $130 million.
“Since 2008, we’ve seen significant growth – anywhere from 11 percent to 15 percent per year,” Acuña adds.
Key changes in managing the company are already in play thanks to Jensen’s new executive management team. For one, it is moving away from one person running the entire company. “We’re taking a different approach and giving our team more responsibility and freedom to make decisions to take the business to that next level,”Olivera says. “It’s impossible for one executive to know everything in order to make every decision. We are all more involved with our customers. Instead of going through one person, each customer gets involved with the Jensen team. Without this team, the company wouldn’t be the success it is today.”
Jensen Meat Co. also now uses a team approach when calling on customers and vendors. Instead of one person going out to make a presentation, three or four Jensenites go instead, Acuña explains.
“Customers ask us, ‘What is different about your products and how you do business?’ In a word, it’s transparency. After discussing the price factor, they want to know what our supply chain is like. ‘Will you be able to consistently supply me and become my partner?’ they ask. That’s where the transparency and food quality comes in. We have been doing this for a while now…this isn’t our first rodeo. They like that approach,” he adds.
Jensen’s entire executive management team is focused on transparency. Customers are given their costs up front and both parties come to a mutual agreement on a fair margin. It’s not a battle, it’s a partnership. Customers will oversee every aspect of the business so they can make intelligent, informed decisions rather than spending time trying to determine how Jensen operates. With this type of transparency, more time can be spent for both parties improving their businesses.
“We recently hired a new marketing company [NSTIG8 Inc. Carlsbad, Calif.] to help us with a lot of our brand marketing and public relations,” Olivera says.
But some things haven’t changed. “We started out as an organization known for its flexibility in operations and for being a leader in driving food safety,” Olivera says. “That hasn’t changed…they remain core values of our company…as well as being flexible and transparent. [Bob Jensen’s] business philosophy, food-safety philosophy and much more remain integral parts of the company strategy.”
Jensen Meat Co.’s new plant manufactures 250 SKUs of retail and foodservice products. It processes individually quick-frozen (IQF) and fresh patties in different shapes, lean/fat ratios and value-added products under both Jensen and private-label brands. Fifty percent of its retail products are under the Jensen label. The company plans to increase its Jensen branded business during the next year. The plant also processes a small percentage of turkey and pork sausage under the Jensen label. Currently, 80 percent of products produced are frozen, 20 percent are fresh/refrigerated. All products are distributed west of the Mississippi and consist of 65 percent retail products, 20 percent food distribution products and 15 percent restaurant products.
Newer Jensen-brand products include Bacon and Cheddar patties, Jalapeño patties, Swiss and mushroom patties, Chipotle and Monterey patties. “We manufacture a lot of different seasoned patties now that we didn’t make in the past,” says Anthony Crivello, vice president of production.
The key to developing a great business is specializing and Jensen’s focus is on grinding, Olivera says, but further diversifying into other species is being considered. “There’s a good possibility of expanding in pork and turkey. We don’t count anything out,” he says.
Although Jensen doesn’t currently export products, its management team is working on landing international accounts through the US military program.
Jensen Meat Co. is revitalized thanks to a full company corporate image change, which includes a new company logo, a redesigned website and a new company slogan: “Where Great Taste Meats Integrity.”
The company is also in the beginning stages of realigning its brands and core products, says Patricia Lavigne, executive accounts manager. “We’re looking at our CAB [Certified Angus Beef] products to all of our Jensen sacrosanct brands and all of our specialty items,” she adds. “We took a lot of history we had with our customers and what sells in retail and foodservice. We took that data and compiled it and were able to determine what are the best-sellers within each category. We were able to develop a better core assortment, a better lineup of products we will be able to launch and offer our customers.”
How does Jensen differ from the competition? Transparency, Acuña iterates. “We have an open book on where our raw materials come from, who we use, and more,” he says.
Jensen Meat Co. uses various sources for raw materials, Olivera says. “Sometimes the customer specifies which raw materials or suppliers to use,” he adds. “We’re flexible. We’re always looking to increase our supply chain. How we differ in how we do business now on the raw-materials side is before we would call a supplier and say, ‘We want X amount’. Now, we’re building relationships with those suppliers. We encourage and push our buyers and our QA staff to visit local and international slaughter facilities we use once or twice a year.”
Jensen’s major challenge for 2014 is securing its raw material supply. “We see that shrinking,” Olivera says. “We started having conversations on this topic five years ago and now it’s happening. We see a shrinking raw material supply, especially since we’re producing premium-quality products. This will require us to look more outside the US for raw materials. We don’t see relief on the cattle supply until 2016 or 2017 – and that is providing the conditions improve.
“We want to focus more on Jensen-branded products on the retail side this year,” he adds. “We want more consumers asking for Jensen-brand patties by name.”
Jensen’s biggest opportunities will also come from its flexibility. “We are always looking to be more flexible and efficient so we can best compete in the market,” Acuña says. “Having our new San Diego production facility gives us that ability.”