Bucking the economy
Dec. 5, 2011
by Larry Aylward
As the world spins toward the end of another year, longtime specialty sausage-maker Frank Stoysich and a few of his peers recently took the time to reflect on the challenges their businesses face in 2012.
There are plenty, for sure, the continued weak economy not withstanding. Sausage-makers will also continue to deal with the negative news and health claims associated with their products. Additionally, the pressure is always on to maintain business, including the development of new products, new twists on old products and creative marketing to sell all products.
The big, bad economy
Stoysich, owner of Frank Stoysich Meats in Omaha, Neb., says his business has endured the difficult economy well, but he has felt the pinch on occasion.
“I think everybody has felt the effects of these rough economic times to some degree,” Stoysich adds. “But I don’t think our particular business, in terms of a drop-off in sales, has seen it to the level that some other industries have.”
In October, Stoysich said sales for 2011 were similar to 2010.
“I’m satisfied with that,” he says. “Most people would agree that business can always be better. But in light of the economy, I can’t complain.”
Stoysich says people are still willing to pay a premium for quality, high-end products.
“That hasn’t ceased,” he adds. “But we have had some slower days.”
The biggest economic challenge for Stoysich is the increased cost of raw material, especially for pork and beef. But, Stoysich didn’t raise prices, thinking he might scare off customers.
“We have certainly incurred those costs up to this point,” Stoysich says. “How much longer can we continue to do that? I don’t know.”
Stoysich says protein prices are expected to remain high, at least through the middle of next year.
“You have [high corn prices] and transportation costs have gone up,” he says. “Meanwhile, our margins are getting tighter.”
Stoysich says he will have to look at his numbers and decide what to do.
“I don’t like raising prices, but at some point we have to be able to make a buck at the end of the day, too,” Stoysich says.
But he refuses to cut costs on raw materials, which he says would affect product quality.
“That’s just not an option for us,” Stoysich says. “If you want to put out a high-end product, you have to put in high-end raw materials. I’d rather have to raise the price and keep the quality. Because that’s what people expect when they come in here.”
Dan Glier, owner of Glier’s Meats in Covington, Ky., says his business has performed “reasonably well” the past few years. Glier’s Meats makes and sells smoked and fresh sausage, bratwurst, Italian sausage and goetta, a German breakfast sausage that blends the textures and flavors of pork, beef, whole grain steel-cut oats, fresh onions and spices. Goetta is Glier’s top product; the company produces more than 1 million lbs. of it a year.
“We’re not the white-tablecloth kind of item, which makes it better for us,” Glier says of the business climate.
Overall, Glier’s Meats’ sales have climbed the past several years, with goetta leading the way.
“We went through much of the early 2000s on a 6 percent to 7 percent growth increase per year,” Glier says. “That has tapered off a little because of the economy.”
The down economy didn’t stop Ben Fligner from opening Great Lakes Smoked Meats two years ago in Lorain, Ohio. Great Lakes offers a variety of smokies and sausages, the latter including a smoked andouille, smoked chorizo and smoked kielbasa. Fligner sells his products out of his retail shop and other area retail establishments.
“Our sales keep going up,” he says.
Fligner states he saw the need for an upscale sausage manufacturer in the community. It didn’t matter that he began the business in the midst of the Great Recession.
“Who says tomorrow is going to be any better?” Fligner asks. “If you feel good about something, there’s no time like the present.”
News of the day
Especially in the Information Age, there is no shortage of news stories warning of the ill effects of eating meat and poultry products, including sausage and hot dogs.
Stoysich believes the Internet has created a “heightened awareness” of news, in general.
Stoysich chuckles when asked if he heard about a billboard in Indianapolis last summer that compared eating hot dogs to smoking cigarettes. He laughs because he realizes the insanity of the billboard.
“Everything in moderation,” Stoysich says. “If you eat a dozen hot dogs a day every day, somewhere down the road you’re going to have health issues.”
Stoysich says it’s a rarity that consumers come in and question him about red meat and health issues.
“If anything, the people coming in here know the products we’re making are lower in salt than commercial products and have less preservatives,” Stoysich says. “Our products don’t have the shelf-life like some products, but people are coming here to get something that is less processed, if that makes sense. I think that’s a draw for us at times.”
Fligner agrees and says using high-quality ingredients makes a big difference in what kind of image your customers have of your business.
For instance, Fligner uses pork shoulder and top round in his hot dogs. He also uses lean meat and few preservatives in his smokies and sausages.
“One of the things we have going for us is a lot of people are more health-conscious and concerned about what they’re eating,” Fligner says. “We use the best ingredients possible.”
Glier’s Meats is also taking advantage of promoting the ingredients in its goetta. A few years ago, Glier’s expanded the marketing of its goetta, positioning it as equal or better than breakfast sausage.
“It’s lower in fat if people are concerned about fat,” Glier says, noting that some people view goetta as healthier because it contains whole grain oats.
Trends and tastes
Glier’s Meats has been in business for 51 years, and goetta has been the foundation of the company’s business.
“It’s the niche we’ve chosen to focus on,” Glier says.
Several years ago, Glier’s Meats aimed to increase consumers’ goetta consumption by suggesting new meal occasions to use it. Realizing that it’s a once-a-week-to-eat product, Glier’s sought to give the product’s loyal customer base another reason to eat the product during the week, with an aim to double the business.
“We wanted to get the concept in consumers’ minds that goetta isn’t just for breakfast anymore,” Glier says. “And it’s working.”
Now people eat pizza topped with goetta; goetta grilled cheese sandwiches, and goetta, lettuce and tomato (GLT) sandwiches.
Glier’s Meats also hosts the Goetta Fest in Cincinnati, an annual event that features about 30 vendors who prepare and present goetta in different recipes. This year, the event attracted about 150,000 people.
Glier’s also sells a hot-and-spicy version of goetta as well as an all-beef version. The company introduced turkey goetta a few years ago.
“We continue to experiment with different flavors, but nothing has really stuck,” Glier says.
Frank Stoysich Meats and Great Lakes Smoked Meats are also introducing more turkey-based products. Stoysich and Fligner say customers are asking for more turkey and chicken options.
“We’re expanding on them all the time,” Stoysich says. “We’re making a chicken chipotle sausage and a chicken brat with onion and lemon juice. We’re also making a turkey brat and a turkey Italian sausage. We’re addressing customers’ wants and needs by offering more of those types of products that are lower in calories and cholesterol and are more healthy.”
Because people are asking for it, Great Lakes will introduce a turkey smokie.
“A lot of people want turkey products,” Fligner says. “A good thing about being a small company is we listen to what the customer wants and we can go make it right away. And we have people that want turkey, so we’re experimenting with turkey.”
Despite a slight increase in chicken and turkey sausage sales, pork is still king when it comes to sausage processing at his business, Stoysich says, noting the top sellers are smoked sausage and fresh Polish sausage. While he uses a leaner cut of pork compared to most products, it’s not as lean as chicken breast.
“If you make a typical bratwurst or Italian sausage too lean, you’re taking away taste from it,” he says. “Nobody wants to say it but fat is flavor. We all know it. Without a given amount of fat, you’re sacrificing flavor.”
These days, more people want sausage with inclusions, Stoysich says, such as apples or even pineapple.
“We’re trying to find the right fit in the right products that people will buy,” Stoysich says. “The only limit is your imagination, but your imagination is dictated ultimately by what people will purchase.”