West Liberty Foods CEO credits customer partnerships for growth

WEST LIBERTY - It's not every day you hear a business claim it doesn't care about its brand.

"We're not worried about our brand because we don't have a brand," said Ed Garrett, president and CEO of West Liberty Foods. " Four or five years ago, we were under the radar screen and the industry really didn't know a lot about us.

"We don't have a West Liberty Foods brand, and we're not planning to have a West Liberty Foods brand. Our brand is Subway, Costco and Walmart, and as long as we focus on maintaining that, everything will be fine."

Garrett credited partnerships West Liberty Foods has developed with customers such as Costco, Subway and Walmart for the growth that has all three plants running at or near capacity.

"I know the term 'partnership' is overused in our industry, but we really have developed true partnerships with our customers," Garrett said.

Although West Liberty Foods is owned by the Iowa Turkey Growers Cooperative, Garrett is quick to say it produces much more than turkey meat.

"We are a sliced meat company," he said. "Turkey is probably only about 37 percent of our business. We actually do a large amount of chicken, pork and beef.

"We are a full-service supplier to Subway. We run their turkey, chicken strips, chicken patties, roast beef, ham, pepperoni and Genoa salami.

"Even though we slaughter turkeys and our core business is producing turkey, we also supply Costco and Walmart with their ham and beef items. We are a fully scaled supplier of lunch meat."

Last month, Subway named West Liberty Foods its top vendor of 2012 in recognition of its work in the area of product improvements and food safety initiatives, as well as its commitment to social responsibility. The company  is committed to sustainability in the areas of energy, water and waste reduction - its Mount Pleasant and Tremonton plants have been certified by NSF International as landfill free, diverting more than 99 percent of all waste from local landfills.

Gerald Lessard, vice president and chief operating officer of West Liberty Foods, said employee committees also are working to reduce the amount of electricity and water used at the plants. He said a committee is working with restaurants in communities where the company has plants to replace Styrofoam carryout containers with alternatives that can be recycled.

ALMOST QUINTUPLE GROWTH

From 400 employees and a single plant in West Liberty in 1999 when Garrett joined the company, West Liberty Foods has grown to 1,900 employees with additional plants in Mount Pleasant and Tremonton, Utah. It also owns a plant in Sigourney, which is not producing product at this time.

But while West Liberty Foods is operating at or near capacity today, the company's early years were filled with challenges.

Shortly after more than 40 turkey farmers formed the Iowa Turkey Growers Cooperative and bought the former Louis Rich Foods plant in West Liberty in December 1996, the turkey industry became mired in a devastating slump.

Overproduction had severely depressed turkey prices. Grain supplies were extremely tight, forcing feed prices to levels that were shockingly high for the period.

Shortly after West Liberty Foods began operating, the European Union closed its borders to American turkey products, depriving the company of its No. 1 market for turkey breast meat and further depressing turkey prices.

When processed turkey breast sold for $1.60 to $1.65 per pound in 1996, the turkey industry in general could operate comfortably. But in January 1997, processed turkey breast prices fell to $1.25 per pound and later in the year plummeted to $1.07 per pound.

West Liberty Foods and the industry struggled for 18 months until the turkey market rebounded. Subway, which was experiencing strong growth, became West Liberty Foods's largest customer, and the company was able to grow and prosper.

West Liberty Foods received a $500,000 forgivable loan from the Iowa Department of Economic Development to help launch the Mount Pleasant plant in June 2003.  The 85,000-square-foot plant, which employs about 550 working three shifts, produces 2 million pounds of lunch meat each week.

Lessard said the Mount Pleasant plant was one of the first meat processing facilities in North America to incorporate processing cells that operate as individual meat slicing facilities. Before anti-microbial flooring was poured, the cells were erected with stainless steel anti-microbial walls built into the floor.

"Thanks for Ed Garrett's leadership, we were able to engineer food safety into the design of the building," Lessard said. "West Liberty Foods happened to be in the right place at the right time, and saw a need for this equipment."

A 68,000-square-foot Millard Refrigerated Services facility is located adjacent to the Mount Pleasant plant.  The two facilities are connected, and product is immediately transferred by conveyor from the plant to cold storage when packaging is complete.

In October 2006, West Liberty Foods broke ground in Tremonton, Utah, for a 217,000-square-foot processing plant. The facility, which employs about 500, is the first plant in North America to cook and slice 10-foot-long logs of processed chicken meat.

A 50,000-square-foot Millard Refrigerated Services facility is located adjacent to the Tremonton plant for warehouse storage of refrigerated and frozen products.

The national economic downturn in 2008 and 2009, combined with higher feed prices, provided more challenges for West Liberty Foods and the turkey industry.

The price of corn used for feed rose to $8 per bushel, and Subway experienced a sharp decline in demand for turkey sandwiches as consumers cut back on eating out.

So in the second half of 2008, West Liberty Foods cut turkey production by 50 percent and picked up additional turkey suppliers as competing processing plants scaled back production or shut down. Exports of dark turkey meat to Mexico and a $60 million turkey purchase by the U.S. Department of Agriculture helped the industry ride out another tough period.

Feed costs are rising again due to the drought that has savaged the nation's corn crop. Garrett is confident that West Liberty Foods will overcome these challenges.

"Everybody knows that $8 (per bushel) corn is not good for anybody," he said. "Is there going to be $8 corn forever? No, but we will need to learn how to manage around that.

"As the political winds change, we've got to understand what they are and get some help from the

National Turkey Federation and the

National Chicken Council. As long as we keep doing what needs to be done and not bury our heads in the sand, we can overcome just about any obstacle that will come our way."