Feb. 11, 2016
Salm Partners LLC succeeds by sharing knowledge, experience, talents and gifts. (Photos: Andy Manis)
Green Bay Packers coaching legend, Vince Lombardi, once said: “Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.”
About 20 miles southeast of the hallowed ground that is Green Bay’s Lambeau Field, in Denmark, Wisc., four brothers with very different skill sets and unrelated career paths came together 12 years ago with a vision and commitment that would make Lombardi proud. Chris, Mark, Pete and Joe Salm, who grew up on their family’s farm with seven other siblings, likely never imagined those business paths would cross later in life. When the foursome took the calculated risk of founding Salm Partners LLC, few would have bet on the venture becoming one of the industry’s most prolific behind-the-scenes processors of premium, ready-to-eat sausage products and hot dogs.
With a Ph.D. in meat science and muscle biology, Chris is the only brother whose background was in the food industry, having worked at Oscar Mayer, Johnsonville Sausage and ConAgra. Chris started putting together first drafts of a business plan in the early 2000s, at a time when his brother Joe sold his dairy operation; Pete had recently retired from a 30-year career at Procter & Gamble; and Mark was thriving in a construction and engineering job that required him to be away from home more than he liked.
After leaving ConAgra in 2003, Chris says, “I put together a business plan that focused on helping suppliers who spend their lives, their passions and their energies developing technologies to get their technologies adopted in the marketplace.” The core technology for the strategy was Marel Townsend’s co-extrusion system for producing cooked-in package sausage products.
“So I put together the skeleton for the plan and I talked with my brothers Mark, Joe and Pete,” Chris says. “Fortunately, they were all at stages of their lives when they were interested in doing something.
“Each one of us brought a different set of knowledge and experience, gifts and talents,” he adds. Mark’s knowledge and connections in the construction industry were valuable because the business plan included building a processing plant. As a longtime dairy farmer in the Denmark area, Joe had an agricultural background and solid relationships built throughout the community. He would go on to handle the HR part of the business.
Pete was formerly a maintenance supervisor and line foreman at Proctor & Gamble. His background gave him insight into what it took to run a manufacturing line, so he handled the configuration of the post-process packaging part of the plant and spearheaded supplier logistics.
Building a business on co-extrusion technology wasn’t the only venture considered by the brothers. There was another technology and even a couple of other food-based businesses they contemplated buying and taking over.
“But this seemed to be the most impactful,” Chris says. Once the foursome understood the uniqueness and benefits the technology delivered versus other products on the market, the decision was made easier. Tasting the difference also helped convince them as part of their due diligence.
“We sat around tables in Joe’s garage with 125 different sausage items that we had bought in the market,” Chris says. After exhaustive sampling and comparing, “we felt like we could do something better.”
Mark recalls how the timing for each of the brothers was right, and they all believed the timing in the market was right. In a moment of realization he jokes, “I was the only one who had a job.” Mark says he still hears many people say the brothers should have launched their venture decades before they did, “but we couldn’t. We didn’t have our life experiences behind us to bring it all together.”
Construction is underway to add a fourth production line to the plant, pushing the facility's size to nearly 200,000 sq. ft.
Chris began his career working with Oscar Mayer in 1981 and the following year became the scientist leading the company’s research into co-extrusion technology. “So I started dabbling with co-extrusion early in my career and became familiar with what was being done in Europe in 1985 and 1986.” He later led ConAgra’s innovations in sausage link co-extrusion technology at its Junction City, Kan., plant in 2001.
Other companies did more than dabble. The Hillshire Brands Co. was an industry leader in co-extrusion in the early 1990s, which was used to make its cocktail links.
“They pioneered that technology into existence,” Chris says.
Next, Johnsonville and Hillshire implemented co-extrusion for sausage. Salm Partners then invested in a co-extrusion system that included cook-in packaging. The Salms committed to navigating the technology hurdles necessary to produce a high-quality product. Based on that commitment and the assumption that they could produce the products, “we said ‘alright, we’ll buy the system, and do it without commitments from customers,’” Chris says, with the intention of making a big enough splash that the No. 1 brand in the marketplace could not ignore it. It was truly a case of “build it and (hopefully) they’ll come.”
Salm Partners’ system started up in March of 2005. Previously, the conventional wisdom in the US marketplace was that there could never be a high-quality, cook-in package sausage. “A new technology that delivers a better quality product at a lower cost can change the world,” Chris says. Salm Partners’ strategy was to utilize the technology to produce high-quality product for brand marketers of sausage and hot dogs.
Chris and Mark agree a big hurdle in launching the company was financial. “We don’t come from old family money. We didn’t have a lot of money so we were going to need bank financing if we were going to do this,” Chris says. Fortunately, Joe’s longstanding business relationship with the local bank during his 30-plus years as a dairy farmer paid off as the lender saw the brothers’ venture as a good risk and granted them a loan.
“It’s not only relationships, it’s also family history,” Chris says.
Salm Partners produces more than 150 SKUs using 120 different product formulations.
While some might say the founding of Salm Partners was a leap of faith, Chris insists that confidence in the success of the company was and continues to be based on the brothers’ principles and fundamental planks. Two of these are “helping suppliers prove to the world that their new offerings are beneficial” and “all of the benefits go to the customer,” Chris says, adding that “we’re here to take inputs from suppliers and convert them into benefits for brand marketers. All the benefits go to them.”
The company is transparent about its costs and how it designs pricing to deliver a return on its investment. Paul Reich, Salm Partners’ executive vice president of business development, says customers know that and realize Salm Partners is there to serve them and not stockpile money.
“If we overcharge and hoard dollars, it would mean our customers are competing in the market at a disadvantage, and that isn’t good for anyone,” Reich adds.
Salm Partners is also adamant about being a silent, behind-the-scenes partner. “Our business is to not brand market,” Chris says. “We’re not here to compete with our brand marketing partners; we’re here to serve them.” He punctuates his point with what is perhaps his most common refrain. “We use our knowledge and experience, our gifts and talents to provide an avenue of growth for our brand marketers, not to compete with them,” he says.
Salm Partners’ other fundamental planks for doing business include clearly defining innovation as: the implementation of something new and beneficial into the marketplace. This is very different from discovery, invention, creation and new product development, Chris points out. The philosophy is that if Salm is inventing, creating and developing for its customers, it would be competing with other customers.
“We have to focus on being the best on the planet at implementing and operating,” Chris says, and leave the invention and creation of new products and ideas to the people behind the brands they work for. “They can’t rely on us to do that.”
Another “plank” Chris refers to when it comes to brand marketers is that his company is operating new technology systems that produce better quality products at a lower cost.
“Don’t ask us to duplicate your product that you’re manufacturing,” he says, which would mean a partnership based only on the lowest price. Instead, he says, “Let us make the best product the technology will deliver.”
Sharing the wealth
Using cook-in packaging, the shelf life of products made for Salm's brand marketers is up to 350 days.
A somewhat surprising premise for the Salm strategy is that if at any point, customers decide it is better for their business to duplicate what Salm does under its own roof, Salm provides them with the training and expertise to ensure those companies are implementing and operating the systems properly. Some of the industry’s best-known retail sausage brands started out with Salm before adopting the same technology in their own plants. Mark Salm, vice president, recalls one of the first major brand marketers to do this, a juggernaut brand in the sausage space.
“Their need was larger than two lines could handle,” Mark says, and the decision was made to take the process in-house, with the help of Salm Partners.
“We trained their operators here,” Mark says, and Salm opened its doors to have the company’s engineers come in and see the processing operations in Denmark. This serves to help Salm’s supplier partners demonstrate to the market that their technology is beneficial and viable.
“We’re here to provide all the benefits to the brand marketer and to do what is best for their business,” Mark says.
This sharing-the-knowledge approach serves to grow the market, which is good for everyone, says Keith Lindsey, president.
“The larger the universe gets for us, in some regards, the better the co-pack opportunities,” he says, so the trend of companies that adopt the Salm blueprint and invest in the technologies is not at all something Lindsey and the company’s other principals fear or see as a threat. The open-door policy is no secret, he adds.
“If you’re in a large meat company in the US, most likely somebody from your company has toured our plant,” Lindsey notes.
After packaging, products are immersed into hot water tanks to cooked an then into cool water to lower the temperature.
One partnership that evolved quickly into a business joint venture occurred soon after Chris Salm met Elton Maddox, chairman and CEO of Oakwood, Ga.-based Wayne Farms LLC, at a business dinner hosted by BMO Harris about three years ago. With belief systems and business approaches that were almost identical, the two were business partners in the matter of a few months. Focused on creating the best chicken sausage production system on the planet, a joint venture between Salm Partners and Wayne Farms, known as WFSP Foods LLC, was announced in late 2013. The venture included setting up a high-capacity, co-extrusion system that virtually mirrors Salm Partners’ operation to produce gourmet chicken-sausage products in Wayne Farms’ further-processing facility in Decatur, Ala. That system was in place and running by late 2014. WFSP produces sausage for Wayne Farms to market to restaurant operators under the Chef’s Craft Gourmet line, aligned with Wayne Farms’ long history as a co-packer and B2B supplier of chicken to foodservice customers. WFSP produces product for Salm Partners interchangeably with Salm’s Denmark facility to meet the demands of Salm’s customer base.
According to Jim Paskind, Salm Partners’ president of joint ventures, “The joint venture production system is succeeding because of the nature of our relationship with our Wayne Farms’ partners. Our respective teams’ talents, experiences and values mesh very well together.”
Lindsey adds, “The goal for the joint venture was to put in a high-capacity system that could be the best chicken-sausage production line in the country, and we think we have that.”
Lindsey was hired originally as CFO five years ago and was promoted to president last year. He stresses the importance of Salm Partners’ approach to partners throughout the company’s structure. Prefacing his comments by pointing out that “employee” is considered a four-letter word inside the walls of Salm Partners, he says the company’s success is dependent on all of its partners’ success.
“We define ‘partners’ as our co-worker partners, our supplier partners, our customer partners and our community partners, and strive to provide an ecosystem where all of them can grow and thrive,” Lindsey says.
The evolution of the types of sausage products produced by a growing number of brands includes more complex flavors and new specifications. These new products present some logistical challenges and complicate changeovers in the production line from one product to the next. But according to Lindsey, the demand for traditional style and formulas remains a big part of the production at the Denmark plant. “We still make a lot of those and they still have a very loyal following.” But, he adds, “We are definitely seeing growth in more adventurous flavors and better-for-you products, which is very exciting.”
Chris adds that the technology allows brand marketers to confidently roll out new products, in large part because of the shelf life the cook-in package process offers. “This technology allows for a stated shelf life that ranges from 150 to 350 days,” Chris says, which gives it enough time to occupy retail space and be noticed and picked up by shoppers rather than being removed because of its expiration date.
Salm also offers its customers the ability to get a new product to market faster, thanks to its in-house expertise in production, food safety, labeling requirements and US Dept. of Agriculture compliance. This is appealing for brands that need to get a new product to market quickly even though they are working with a co-packer.
“It’s not the big that eat the small, it’s the fast that eat the slow, and brand marketers want to be nimble,” Chris says.
“And we have the advantage of focusing on a core activity that we can be very efficient at,” Lindsey adds. “We focus on implementing and manufacturing.”
Suppliers to Salm Partners include Devro for its collagen; Marel Townsend is the supplier of the co-extrusion technology; Marlen International is Salm’s supplier for its vacuum and stuffing technology; RapidPak has been the longtime supplier of Salm’s packaging technology; Green Bay Packaging provides Salm with its corrugated packaging; Red Arrow is the supplier of hardwood smoke condensate; and Bemis-Curwood is its packaging film partner.
Chris says all the companies are continually investing in improving their technologies “and they know that when we utilize their components here, we’re a showcase for them.”
Lindsey adds that thanks to the selection of progressive technology partners that are on the cutting edge of their markets, “we haven’t had much turnover.”
“The vision is really ‘partners thriving together,’” Chris says.
Implementing and operating
Chris (left) and Mark Salm at the Salm Partners plant in Denmark, Wis.
Salm’s plant spans 168,000 sq. ft. Paul Hargarten, director of R&D, points out the plant was previously home to a printing company before Salm Partners transformed it. “We built a plant within a plant,” Hargarten says. Construction work is currently underway to add a fourth production line to the plant, pushing the square footage to nearly 200,000 sq. ft.
The plant employs 300-plus full-time “partners” and up to 100 part-time partners, depending on the production schedule. Hargarten points out the company started out with three main SKUs. Nowadays, Salm produces more than 150 SKUs using 120 different formulations, and the proteins include turkey, chicken, beef, and pork. Production is comprised of equal amounts of link and dinner rope sausage, all of which utilize the co-extrusion and cook-in package technology that has served as the foundation for the company’s strategy from Day 1.
With the US marketplace representing about 2 billion lbs. of hot dogs and approximately 900 million lbs. of ready-to-eat sausage each year, the company has plenty of room in the market to grow.
An area of growing importance at the plant is the work being done in sample preparation, which is led by Hargarten. Initially, Salm produces small-batch production runs for new and prospective customers and its speed to market is a point of pride.
“We don’t generate ideas per se, but we take requirements and work with the customers’ suppliers to develop products on a small scale, 5 lbs. at a time; the equivalent of what can be in production within two days,” he says. “The hardest part of product sample preparation is how to do it efficiently,” Hargarten says, and identifying those efficiencies is a specialty of his team.
The plant’s three production lines include two Marel Townsend QX systems (installed in 2005 and 2007) and a Marel Townsend QX CSL system implemented in 2010. An additional system is slated to come online this spring. To accommodate the growing number of customers asking for on-site production, Salm expanded its operations three years ago to include a designated blending operation with three blending machines and a room for inspection of meat materials.
“We can bring in the ingredients and do the blending here or customers can send us a pre-blend,” Hargarten says.
Blended product is formed by the co-extrusion equipment, which produces dinner rope sausages or links, while protein-based collagen casing is simultaneously spun around it followed immediately by a salt-water rinse that serves to “set” the casing. Dinner rope sausage products go through vertical and horizontal drying chambers while the linked hot dog products only go through vertical drying. The first drying chamber dries the casing and prepares it for smoking. After drying comes the smoke drench. Hargarten says the plant utilizes as many as 15 smoke profiles, which serve to not only flavor the product but also deliver a specific color and cross link the meat with the casing. Rope products then go through a bender to give it the familiar horseshoe shape and then on to the second drying step.
“From stuffing to casing takes about two-and-a-half hours,” Hargarten says. The next step, packaging using rollstock film and labeling, isn’t a one-size proposition, with as many as 10 packaging formats being used on any given day. After packaging, products are immersed into hot water tanks to cook and then into cool water to bring the temperature down to 40° F.
While the continuous production of the plant appears to be a turnkey proposition, Chris points out that there are numerous opportunities for processing failures, and it takes the attention of the entire Salm team to prevent that from occurring.
“There are so many different points along the way that if you mess up even one of them, it turns to slop,” says Chris. The precise operation and execution of each step is critical, which all of Salm’s partners realize. “It’s being integrated enough so that you know the consequences of what you do have on the eating experience,” he says.