This past month, C. Larry Pope was among the 250,000 spectators at the 58th Daytona 500. A longtime NASCAR enthusiast and an attendee of many races at the Daytona International Speedway, Pope will certainly remember this year’s race as the first he’s enjoyed as a retiree.
Having taken the checkered flag as president and CEO of Smithfield Foods at the end of 2015, Pope’s finish signaled the next era of leadership for the company. The 61-year-old didn’t start out in the driver’s seat of what is now a pork-producing juggernaut. He joined the company in the role of controller at the age of 26. During the ensuing three-and-a-half decades, Pope has worked his way to the front row at Smithfield, jockeying to put the company in the lead among a field of game competitors in conditions that were often less than ideal.
In early February, Pope took time to reflect on his upbringing, his entrepreneurial spirt, the academic journey and the serendipitous career path that led him to the front door of Smithfield Foods.
“I always thought I’d be a McDonald’s franchisee or own a car dealership,” Pope says, neither of which should come as a surprise, given that he worked at a McDonald’s restaurant as a young man, and his father owned a Ford dealership.
The oldest boy in his family, Pope has an older sister, a younger brother and a younger sister. “I’m the forgotten middle child,” he jokes. Pope’s father served in the US Air Force for four years and Pope was born at Langley Air Force Base in Hampton, Virginia. His father was a radar technician in the service and his training in what was then a new technology, propelled him into his first civilian job as a radio and TV appliance technician. Moving the family south, his father opened a TV-appliance business in Daytona Beach, Florida, “because Florida was exploding with population growth and television was just coming into vogue in a big way,” Pope says.
The family next moved to Franklin, Virginia, where the elder Pope purchased and successfully operated a Ford dealership. After selling that business the family moved to Newport News, Virginia, where the middle son finished high school at the age of 17. He recalls working as a bookkeeper during high school for the retail store his parents operated at the time. The young entrepreneur also earned money doing yard work for neighbors and other odd jobs.
“My father said, ‘you are an early achiever,’” Pope says, admitting the motivation for his industriousness was simple. “I always liked to have a little money in my pocket,” he says. His first official job was with a company that would later be an important customer of Smithfield’s.
“I got my first real paycheck from McDonald’s,” he says, where he adopted a lifelong work ethic of working at least 40 hours per week starting at the age of 16.
Pope says by the eleventh grade he had already decided on a career path. “I went to college and was absolutely sure what I was going to do.” Starting college early, Pope attended the College of William & Mary, where he earned his undergraduate degree in accounting at the age of 21, in 1975. During college he was also working full time, taking on various jobs.
During the school’s athletic events, Pope was tasked with the unenviable job of making sense of ticket sales and took on whatever other jobs were available.
“I’m the fool who balanced the sales of football tickets and basketball tickets,” he jokes. “I drove the school bus; I was a bellman at a Ramada Inn,” he says, and like his father, he also was a TV repairman. One summer, Pope worked on a construction crew that was responsible for installing ceiling tiles at what was then the new Smithfield Packing plant in Smithfield, Virginia.
“I’m one of those guys who gets up early in the morning and goes to work until late in the day – that’s just what I’ve done for 40 years,” he says.
After graduating from college, Pope didn’t stray far from home and went on to become a certified public accountant (CPA) and got a job at the accounting firm that is today known as Pricewaterhouse Coopers. He later would join a private practice for several years.
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Opportunity knocked
After a busy tax season about 35 years ago, a group of accountants and tax preparers in the community – including Pope – were at an annual golfing event when one of his colleagues mentioned to him that he had recently heard Smithfield was hiring a controller and he had recommended Pope for the job. At that time he knew very little about the pork company but he figured if opportunity knocked, he’d at least listen. His friend said he might expect to be contacted by the company and Pope remembers thinking, “I’m not really interested in going into the meatpacking business, but I guess I’ll take the phone call if they ever call.” And they did.
When he went to visit the company, mostly out of curiosity, the interviewer said, “I’d like you to meet Joe Luter,” better known as Joseph W. Luter III, who served as president of Smithfield from 1966 to 1969 and served as CEO from 1975 to 2006. Pope, who was then just 26 years old, remembers that first meeting with the man whose father and grandfather had founded Smithfield in 1936.
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| C. Larry Pope, former president and CEO of Smithfield Foods |
“We sat down and had a nice conversation,” Pope recalls. “He never mentioned anything about accounting at all.”
Instead the discussion focused on Pope’s family life. Luter wanted to learn more about him as a person, not his financial background or educational prowess.
“I was really intrigued by the mere fact that he was interested in my personal life and didn’t really ask any professional questions at all.”
The day after that meeting, Smithfield’s CFO at the time, Aaron Trube, called back and told Pope they were interested in hiring him. Still on the fence about a career in the meat business, Pope aimed high during the negotiations and somewhat whimsically, asked for double the salary he was making at the time – proposing about $35,000 per year – “which seemed like a fortune to me,” Pope says. “About two days later they called back and said, ‘We’ll pay it.’”
After discussing the opportunity more with his wife, Mary, he accepted the position, knowing that if nothing else, the experience and job title would look good on his resume. He admits now that he never planned to stay at Smithfield for more than one year.
Day One
During his first day on the job at Smithfield, in September of 1980, Pope wrote down 10 accomplishments he set as career goals. No. 10 on that list was to be president of the company; something he never fathomed would ever come to fruition.
Thirty-five years later, he says, “I accomplished all of the things on that list.”
Along the way, Pope would work alongside people who would be lifelong friends while working his way up the corporate ladder and learning more about the meat processing business and the mettle required to lead 50,000 people and grow one of the largest pork-producing companies in the world during good times and bad.
Along the way, Pope recalls many names who were there through some or all of his journey, including Joe Luter, Aaron Trube, Henry Morris, George Richter, Dennis Treacy and Bo Manly, just to name a few.
At about the same time Pope began his career at Smithfield, Henry Morris also started working at the company, ultimately assuming the role of senior corporate vice president of operations and engineering. Morris left Smithfield and went to work with ConAgra and then as a consultant. After about nine years, Pope recruited him to rejoin the company. “I thought Henry was so talented and I wanted to build this new ham plant in (Kinston) North Carolina.”
Pope also worked alongside Bo Manly for many years, from 1986 to 1996, before he left the company to lead Premium Standard Farms. Ten years later, Manly was recruited back to Smithfield by Pope to serve as executive vice president and then CFO before his role was expanded to executive vice president and chief synergy officer. Manly would spend the rest of his career with Smithfield, retiring in early 2015.
Manly and Morris were not only coworkers, but also friends and confidants of Pope and he counts the rehiring of them among his proudest and most important accomplishments of his career.
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Pope was at the helm during Smithfield’s acquisition binge, which began with a flicker, when the company purchased Gwaltney Packing in 1981.
Prior to that, Luter spent nearly five years cleaning up Smithfield’s balance sheet after it nearly went belly up under the ownership of the private equity group, Liberty Equities, which the Luters sold to in the early 1970s and later bought back.
Pope worked alongside Luter for many years, and considers him a huge influence in his success.
“Joe was there during the consolidation of the industry,” Pope says, adding: “Joe was largely the consolidator.
“He was really the entrepreneur behind many of the acquisitions,” Pope says.
One of the often-quoted Luter-isms during that era was “Capital seeks opportunity,” a strategy that was effective during Luter’s tenure, but one that created challenges later, with many of the companies competing with each other.
“Joe was very good at bringing those in under the Smithfield umbrella and essentially leaving them alone,” says Pope, who was named president and CEO in 2006. During that time, there was an inordinate amount of financially struggling companies in the industry that were ideal acquisition targets. The resulting independent operating companies, were the byproducts of Smithfield’s appetite for acquisitions, spanning from about 1984 through 2007 and including companies such as Patrick Cudahy, Esskay, Hamilton’s, Hancock Country Hams, Lykes Meat Group, Valleydale, John Morrell, North Side Foods, Mash’s, Farmland Foods, Cook’s and Premium Standard Farms.
Pope spent a majority of his time during this period assimilating the flurry of limping companies that were acquired as part of Joseph W. Luter III’s strategy. The strategy at the time was increasing the profitability of each company by just a percent or two. Making these small improvements went on for nearly 15 years, says Pope, who then realized at one point, “We’ve just got too much overhead, too much overlap in operations; companies competing too strongly with one another and we need to go in a different direction.”
After taking over as CEO, Pope was forced to evolve, restructure and reinvent Smithfield. “The world has changed,” he realized and began a campaign to eliminate the independent operating companies, first down to 12; then to seven; then three; and ultimately to what is now known as “One Smithfield,” which is still a work in progress
But with marketing horsepower behind the effort and a solid manufacturing platform, Pope says, “I think it’s Smithfield’s time.”
This, he believes, is his legacy: to have begun the transition of Smithfield from a commodity-based company toward a consumer packaged goods company. “I think I did a good job of that. I’m very proud of that,” he says.
Furthermore, Pope says, Smithfield’s fresh pork business is going to be the first to create branded fresh pork in the US. “They will succeed in doing that; that will happen.”
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The worst of times
2008 began what Pope admits was easily the worst time of his career, professionally and personally. When the perfect storm of animal disease, record-high input costs, ethanol production mandates challenging feed supplies and low hog prices converged, Smithfield and most companies in the industry, suffered and were forced to make drastic changes.
What turned out to be a 2 ½ year confluence of bad luck and bad timing, caused Pope to lose sleep, but not hope.
“It was a dark period,” Pope says with all seriousness. “The dynamics in our business were just catastrophically bad.”
He marvels that while he was at the helm during that time, despite Smithfield’s stock price going from $35 to $5 per share, he still was able to hold onto his job and have a corporate airplane.
“Can you believe they kept me on board?” he jokes. In the midst of the trouble, Pope recalls being interviewed about the H1N1 virus affecting the pork industry, possibly infecting people and specifically, if Smithfield was responsible for the outbreak. During a CNBC interview he was quoted saying “I’m chasing a ghost, it has nothing to do with pigs at all yet everybody’s blaming us.”
Call it a gut feeling, but Pope sensed trouble in early 2008, after the company had enjoyed a prolonged, successful run. During the first quarter, “I said ‘man, something doesn’t feel right,’” and he knew it was important to insulate the company with extra capital, something the company couldn’t access from the market at that time. It was, however, able to secure a high-yield bond deal in early July 2008, one of the last to be approved before the recession settled in.
“I think that’s what saved this company,” he says.
It was also in early 2008 when the Smithfield Beef Group was sold to JBS SA for $565 million. Two years later, it also sold its 49 percent interest in Butterball LLC to its joint venture partner, Maxwell Farms, for $175 million.
Meanwhile, at home during the downturn, Pope was in the middle of a huge renovation project at a recently built home for he and his wife as well as remodeling the home next door he had recently purchased for his daughter.
“Then the world went into a complete crash,” he says, and in the middle of both projects, he called the contractor saying, “Stop everything, I don’t have any more money.”
Back at Smithfield, Pope issued an internal memo, initiating a system-wide cost-saving campaign. For example, the company’s two corporate jets were grounded, travel budgets were slashed, sales calls, including Pope’s, were to be made by cars. The results were almost immediate. Within the first month, travel costs dropped by 80 percent. Additionally, prior to the year ending, Pope made it clear that there would not be bonuses awarded to executives and salaried employees due to the crippling market conditions. The effort was a part of a campaign to cut costs and save $125 million by 2011, which was achieved. However, the hard times also forced the decision to close six plants in 2009, eliminating about 1,800 jobs at those facilities.
Also during that era of challenge, Pope made it a point, starting in 2010, to spend time in the field, dividing time twice per week to visit customers and visit employees in the plants.
“People want to see the boss, so I made it a priority,” he said. “It helped me know the business better. It helped me relate to our sales organization better.”
This routine has been adopted by Pope’s replacement, Ken Sullivan, and is still another part of Pope’s legacy he proudly leaves behind.
Succeeding in any business requires adapting and changing approaches to customers and consumers and this has definitely been the case with Smithfield. “In the last 15 years, the world has simply changed.”
And he agrees that the challenges Joe Luter faced were very different than those he faced as the company’s leader, which in turn, will be different from those awaiting Ken Sullivan. Something they’ve all faced to a degree is the growing influence consumer activist groups have on consumers. Add in the role social media plays in consumer perception and the challenge looks to only get larger. “Joe would have had a hard time with it; I have a hard time with some of it; we all do but we also know it’s the reality of the business.”
When it comes to food safety and the improvements and emphasis that have occurred within Smithfield’s culture, Pope quotes a slogan made famous by the Ford Motor Company: “That’s job one.”
Smithfield’s commitment to never compromising on food safety is unequivocally the top priority. He points out that nowhere is this more evident than on the floor of the plants where any employee is empowered to stop the production line if they see anything occurring that would cause them to not feed a product to their family.
The blockbuster
Recounting the events that led to the sale of the company in 2013 to China’s WH Group for $4.7 billion, Pope points out that the process was preceded by an activist shareholder who pushed for change within the company. This pressure ultimately led to Smithfield being courted by three suitors. The company’s board of directors, Joe Luter and Pope agreed that a deal with a China-based company made the most sense, due in large part because the country accounts for nearly half of the world’s pork consumption.
Additionally, “The US didn’t have strong access into the Chinese market; the US market is very mature; virtually 100 percent of the growth in the industry has been in export product – there’s no new consumption in the United States,” he says, which has meant that for the past 20 years, any additional hogs or pork produced in the US had to be exported. So it made sense to go with the bid from the WH Group, he says.
“We could have picked any of the three suitors,” Pope says, “but the Chinese option was the best for the shareholders and the best for all the constituents of Smithfield.”
The deal raised the ire of many skeptics worried about the acquisition costing jobs and jeopardizing food safety in the US. Through it all, Pope maintained that the company’s operations in the US would maintain and that the transaction was “all about exports.”
Before the ink was dry on the deal Pope says he was preaching the result for US consumers and workers would be ‘the same old Smithfield.’ “I said that, and the Chinese added the phrase, ‘only better,’ because they were going to provide the opportunity for exports.”
Since the deal has been done, Pope said he still made 99.9 percent of all the decisions through his last day at the company and the WH Group officials never got involved with the day-to-day business in the US.
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Future facing
Since Ken Sullivan officially took the torch on Jan. 1, Pope sees his successor facing very different challenges than he did when he took over as CEO in 2006. One of those is polishing and promoting the One Smithfield concept, which was officially rolled out less than one year ago.
“It has a lot of momentum but it’s not done,” Pope says, and it will be up to Sullivan to see it through. Pope also points out that Sullivan will be point man as the WH Group will inevitably assume a bigger and growing role in the future.
“They have much more interest in…tighter financial control and the budget process,” Pope says. This process is somewhat of a tide shift, he says, as Smithfield historically managed to the previous year’s results and outside forces.
“Ken’s got a much more disciplined financial structure that I was not really accustomed to,” he says.
Externally, Sullivan is poised for success, according to his predecessor. “I think he’s in there at the right time.”
He adds however, that the focus on animal production and specifically the use of antibiotics in livestock will continue to demand attention and education among customers and consumers. Antibiotics, Pope says, “is a monster – it’s a big monster. The judicious and substantive use of antibiotics on farms will continue to serve as a challenge for our industry, including Sullivan,” Pope says.
Into the sunset
Dec. 21 was officially the last day Pope spent in the Smithfield office. He looks forward to spending more time with his wife of 40 years, his son as well as his daughter and three grandchildren. The couple recently returned from a trip to visit several friends along the East Coast, including his old buddy, Bo Manly. Returning home for a couple of weeks, his next planned trip was to Daytona, Florida, for the NASCAR event. His last day at work was highlighted by a holiday luncheon where he had an opportunity to thank his coworkers. It was emotional, but Pope says he isn’t the type to openly shed tears.
He admits, “It was a little odd to walk out and say, ‘goodbye guys, it’s been fun. It’s been a wonderful 35 years for me-more than I ever dreamed and I wish you all the very best.’”
