Vienna Beef Ltd.’s 140,000-sq.-ft. meat plant, which is connected to its corporate offices and Vienna’s Factory Store and Café on Chicago’s North Side, has the distinct designation of being "USDA Establishment No. 1." It is also the company’s only meat plant, which processes a wide range of the company’s flagship Vienna hot dogs and sausages, a line of premium deli meats and almost 70 upscale soups and chili products.
But meat isn’t the only food offered by the company, which reports annual sales of $110 million and is owned by Jim Eisenberg and Jim Bodman. Vienna also processes pickles and condiments under the Chipico brand, plus markets a range of Pie Piper desserts.
Vienna’s sales breakdown is approximately 80 percent foodservice and 20 percent retail. Online sales are starting to become an important factor, as well.
"We’ve always been more of a foodservice-focused company," says Howard Eirinberg, president and COO. "And we really don’t focus very much on international right now. There are plenty of business opportunities in the U.S."
Addressing the company’s expanding product portfolio, Eirinberg quickly iterates the iconic Vienna hot dog remains the "Golden Goose" of company products.
Manufacturing Vienna’s upscale hot dogs and other meat products is accomplished by combining sophisticated automation with Old-World meat-cutting and processing craftsmanship. Vienna employs about 400 people, says Jack Bodman, senior vice president, director of operations and son of co-owner Jim Bodman. "Our labor force fluctuates between 180 and 250 people," he adds. "We have some services we outsource; sanitation is one."
The plant operates five days a week, 24 hours a day, which includes sanitation. "We’ll occasionally add a sixth day for sausage processing," Bodman says.
Maintaining the quality of Vienna’s growing stable of meat products is key for continuing success, Eirinberg says. And ensuring quality products requires the craftsmanship of its production workers more than processing technology.
"We’re afraid to automate too many parts of our process," he adds. "We have an Old World sausage recipe. There are a million ways we can take costs out of [Vienna hot dogs] on the production floor, but we’re afraid automating too much may change the product taste, texture and other premium qualities that make Vienna hot dogs what they are today. This product is largely responsible for us being in business for 116 years."
Vienna’s meat plant processes approximately 20 million lbs. of sausage per year, while its deli meat and soup and chili business produce about 5 to 7 millions lbs. a year each, Bodman says.
The company also has several meat products co-packed, such as beef brisket jerky, hamburgers and turkey, as well as its No. 2 SKU – hot dog buns.
Vienna’s most popular products are Vienna hot dogs, Polish sausage, turkey breast pastrami, corned beef brisket, Chipico pickles and Vienna chili.
Bodman says the plant produces a large variety of specialty products for its vending customers.
"We cater to about 2,000 hot dog stands in the metropolitan Chicago area," he says, "and they all want different shapes and sizes of basically the same product."
The plant is set up for flexibility rather than volume, he adds. "We make some very ‘hand-made products’ like natural-casing sausages," Bodman says. "This used to be a totally hand-made operation, but now we use some machinery. There’s still labor, but we now get more out of the process and can make a more consistent length and weight product, which our customers demand."
Vienna has added automatic loading equipment to handle some of the higher-volume skinless products, Bodman continues. One technology supplier customized a loader that places five layers of 10 hot dogs into the case, oriented and automatically.
"We have a very fragmented approach in the meat area," Bodman says. "We have many machines, but we don’t use them all of the time. In sausage manufacturing, we use grinders, blenders and bowl choppers. We produce sausages using an array of different skinless equipment, natural casing equipment and handmade craftsmanship...we also use cellophane and natural casings."
Vienna’s deli-meat operation includes a butcher room where skilled cutters debone briskets and navels. "We process several different cuts of boneless beef – flats, top rounds and even some specialty products," Bodman says. "We still make an offal product – tongue. We do basic injection, tumbling and even vat curing on some cuts. We vacuum pack and water cook. We hang and smoke cooked deli meat.
"We also have various packaging machines and loaders, mostly horizontal vacuum packaging machines. Foodservice is the bulk of our business," he adds.
Vienna uses bull meat for its hot dogs and prefers more natural ingredients for all of its products. "Bull meat is not an easy protein to find, but we have several vendors who supply us regularly," Bodman says.
Vienna’s test kitchen was testing several different brisket products during the plant tour and company execs were also taking note of how the cure color held up on its natural sausages. "We get a good, steady source of high-quality briskets and we try to develop new products," explains Chef Scott Kerfman.
On most days, Vienna’s test kitchen hosts meetings consisting of six to eight company executives who view and taste products to ensure they comply with specifications, Bodman says.
Vienna uses fresh briskets, which are deboned on the butcher table, for some of its deli meats. "Here are the boneless navels for pastrami or corned beef," Bodman points out. "We have to have boneless round cuts like flats or top rounds."
Whole meat and fresh trimmings are ground and mixed for sausage and undergo fat analysis before final processing. This meat is emulsified using bowl choppers. "We get a better extraction and it makes a better product," Bodman says of the equipment.
Different linkers are required for natural and non-natural casing products. "This process still requires a lot of labor, but now they’re able to make a much more consistent product," Bodman says.
Eight smokehouses using hickory hardwood smoke separate the raw from the RTE side of the plant. The RTE side handles all sausage that is peeled and packaged and all deli meats, which are either trimmed, sliced or packaged whole. Most foodservice product packaging is gas flushed, while retail products are vacuum packaged.
Other than using more premium raw protein ingredients, deli meat manufacturing is pretty basic at Vienna, Bodman claims. "We want quality products made the same way they’ve been made traditionally. We try to avoid adding ingredients that only help yield."
Bodman pointed out a roast-beef product that was injected, tumbled, a rub placed on it, netted, hung and cooked in the smokehouse. "We do quite a bit of vat curing," he adds. "We’ll inject the product and then cover it with brine and let it sit three or four days depending on what you’re trying to do. Vat curing is better for pastrami and products we’re going to ship pickled."
Vienna’s soup processing room makes almost 70 different flavors of soup and chili. "We make foodservice soup almost exclusively, but we’re starting to get into some retail packaging – primarily 16 oz. cups," Bodman says. "Soup is made fresh and then it is frozen. The consumer or restaurant will heat [the full strength] soup and serve. We offer anything from chicken noodle to chili to split pea with ham or sausage. We also make custom flavors for restaurant chains."
By investing in new automated case printing technology recently, which streamlines the process, Vienna also reduced its case sizes – which trimmed its corrugated use by 15 percent.
Vienna has assembled a wellstaffed quality assurance department and a detailed HACCP plan. "We have two people on staff who monitor the performance of sanitation...this is basically where most of our time is spent from a food-safety standpoint," Bodman says.
"We have a Listeria program we follow for sliced products at retail," he adds. "We have some products we test and hold as a requirement of the vendors – and we’re getting more requests like this."
"Food safety is more top-of-mind in the industry today, and as a result, it is top of mind in everything we do here," Eirinberg says. Vienna dedicates considerable time ensuring it has a clean production facility. "We break down and clean our RTE area four times each day," Bodman says.
Introduced in 2008, Vienna Jalapeño Cheddar Franks are the company’s newest product. It was developed to address demand discovered from consumer research investigating what shoppers would like in a new sausage item, says Keith Smith, director of marketing. Smith is also responsible for promoting Vienna’s on-line store, Web site, sponsorships, the new Hot Dog University initiative and the promotions for Vienna’s national and local sales departments.
Consumers wanted more flavor and spice, Smith says. "Our New Products committee came up with the blend of jalapeño and cheddar," he adds. "We use real Wisconsin cheddar cheese and jalapeños."
"This is a super-premium Jalapeño Cheddar hot dog that has brought more excitement to the category," Eirinberg adds.
Vienna has also been able to bring more excitement to the hot dog category with its Vienna Mini Hot Dogs in Buns. "Not only do we offer the buns and the dogs separately, but we also do a pack where everything is a prepackaged unit – it’s really convenient," Eirinberg says. "Customers put these on kids’ menus, freeze this product and heat prior to use."
This product has won a lot of business in the bar-and-pub segment as an appetizer. "By making small changes to hot dogs and coming up with new products, we’ve been able to expand our reach and get some growth out if it," Eirinberg says.
"Vienna foodservice cases are usually 10 lb. boxes, each containing two, 5 lb. packages," Bodman says. "We evolved that package into a 5 lb. white box for retail and put a nice presentation label on it. We have about 15 products in this format – regular-sized hot dogs, jumbo dogs, Polish, mini-franks, hamburgers and corn dogs. They are all doing well."
Vienna has just finished working on enhancing the color of its new, all-natural hot dogs. "This product is better than most all-natural products, given that it delivers excellent taste, color and texture," Eirinberg says. "In order to grow, you have to find these niches and keep finding different areas for growth in a stagnant category."
Mini Bagel Dogs have also been highly successful for Vienna and have become a major product offering.
Vienna is also involved in some private-label. It makes foodservice products for a major department store chain and sausage products for large grocery chains.
"One of the major challenges we have as a business is to make sure we have a proper balance of products," Bodman says. "We have constant pressure to come out with new products."
But Vienna is not hesitant to apply a scalpel to its product portfolio when needed. "We went through a pretty significant SKU reduction about five years ago." Bodman says. "We became too item-heavy and it was affecting our capability of producing products at a proper cost structure to compete effectively. It’s a balance of ‘Do you need volume or variety’?
How do you grow? That’s the biggest struggle we face."
"One of our greatest challenges is with the size of our company and the commitment to quality that we have – it is sometimes hard to compete with larger meat companies as they costand quality-reduce products," Smith says. "We produce products with the highest quality and best taste on the market and we would not want that to ever change."
Smith believes Vienna’s greatest opportunity is going to be bringing hot dogs and sausages to the mainstream of dining.
"Who would have thought a hamburger could have brought in $10 to $15 on a menu?" he asks. "We believe hot dogs can be added to fast-casual dining menus with great success and made in various ways as you would a hamburger, i.e., toppings, buns, size, etc."
Opportunities in the U.S.
Vienna Beef Ltd. has fared pretty well this past year, despite the struggling economy, says Howard Eirinberg. "Our sausage business is relatively a ‘cheap eat,’" he adds. "The growth we saw the past few years has flattened out a little bit, but we’re certainly not going backwards."
Eirinberg says Vienna works on expanding its retail business in the U.S. or its export business only on an opportunistic basis. "We spend most of our time building our core foodservice business in the U.S.," he adds. "A great deal of business we do is with hot dog stands. They’re places people still visit, especially during an economic downturn, which is good for us."
"We believe we have to constantly reinvent ourselves and keep adding new businesses to our portfolio," Eirinberg iterates. "In the last year, we’ve added Hot Dog University and Foods Across America as two brand new businesses, which are avenues for growth."
Regarding Vienna’s new Hot Dog University, Mark Reitman, PhD ("Professor of Hot Dogs") instructs classes inside the plant. Every week, six to eight students from the U.S. are instructed how to enter the mobile cart business. "It’s good for our business because we’re creating new customers," Eirinberg says. "We also have a separate class for opening hot dog stands. This has been an avenue of growth for us, too."
The company’s Web site, www. Viennabeef.com, is another growth engine for the company. The site allows consumers to buy Vienna products online, provides information on how to open a hot dog stand, features a menu for Vienna’s on-site Café, and more. "It is a relatively small part of our business, but we have seen it grow even though we haven’t put in a lot of marketing effort behind it to date," Eirinberg says.
Foods Across America is a new Vienna catalog business featuring "the best" regional food products in various categories from throughout the U.S. "We have the famous Carnegie Deli corned beef and cheese cake; Vienna Beef products from Chicago; the best regional sodas; the best pies;
Philly Cheese Steaks from Philadelphia; Anchor Bar wings from the famous Anchor Bar in New York where wings were developed, and more," Eirinberg says.
"The concept behind this catalog is food is still a great regional business, but some of these foods are hard to get because they’re regional. We started this business last November. It’s growing and doing pretty well," he adds.
Vienna is marketing this food catalog, which is mailed to consumers, to drive people to its Foodsacrossamerica.com web site, he adds.
When asked if Vienna plans to diversify into more new product categories, Eirinberg replies, "A part of me says we should stick to what we’re really good at. For example, we have done a hell of a business over the last few years just in pickled corned beef in some of the major clubs. Sometimes a product idea doesn’t have to be more complex to be a great idea."
Remaining a privately-held company has fueled the entrepreneurial spirit of Vienna. "We don’t have the short demands of being a publicly-traded company," Eirinberg says. "We think and plan long-term, which makes it a lot more fun. We still have a great family atmosphere here.
"We like to take on new customers and service the hell out of them. We have that ability, being a smaller company in an industry full of giants," he adds.
One major challenge remains staying relevant in a relatively flat hot-dog category, Eirinberg says. "We must be innovative and develop products people want," he adds.
Expanding geographically is another challenge – but also an opportunity.
"Many people in the U.S. have never tried Vienna," Eirinberg says. "The world is still our oyster."