Bar-S Foods Company

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Bar-S Foods Company

3838 North Central Avenue, Suite 1900
Phoenix, Arizona 85012-1906
U.S.A.
Telephone: (602) 264-7272
Fax: (602) 285-5252
Web site: http://www.bar-s.com

Private Company
Incorporated: 1981
Employees: 1,500
Sales: $400 million (2004)
NAIC: 311610 Animal Slaughtering and Processing

Bar-S Foods Company is a leading manufacturer of meat products. Although headquartered in Phoenix, the company operates four plants in Oklahoma. Brands include Bar-S, President's Pride, Jumbo Jumbos, Old World Premium, and Chuck Wagon. With annual production of 40 million pounds, it is among the 40 largest meat processors in the United States. It is also one of Arizona's largest privately owned companies.

Origins

Bar-S Foods was formed in 1981 in a management buyout of the venerable Cudahy Company meatpacking business, which dated back to 1890. General Host Corporation, a conglomerate, had acquired Cudahy in 1970 but was looking to sell it due to structural issues such as dilapidated plants and 34 demanding labor unions.

The new owners paid General Host $28 million in cash, notes, and stock for the assets, which included processing plants in Seattle and Denver and nine distribution centers. It had a half-ownership of a facility in Clinton, Oklahoma. Bar-S Foods, named after one of Cudahy's major brands, started operations with 45 employees producing ten million pounds of meat products a year. Its first day of business was August 28, 1981. The company was led by Tim Day, a former General Host executive who had been in charge of downsizing Cudahy in the 1970s.

A foodservice unit was set up in 1986. By the end of the 1980s, production was approaching 70 million pounds a year. The company spent $1.6 million to expand its 75,000-square-foot facility in Clinton, Oklahoma, by a third. Bar-S was ranked the 40th largest meat processor in the United States by product sales volume and employed about 700 people. Distribution focused on the south and west of the country, but extended as far as Alaska and Puerto Rico.

To Oklahoma in the 1990s

Based in Phoenix, the company consolidated its operations around its Oklahoma facilities in the 1990s. This area was strategically located, and chicken, beef, and pork could be sourced from surrounding states. Water and power were also relatively cheap there.

In the early 1990s Bar-S added production capacity with a new hot dog plant in Altus, Oklahoma, and another, $7 million expansion to its existing Clinton, Oklahoma, facility. The town Altus adopted a sales tax to get their plant built.

Soon after, it also relocated its Denver ham operation to Clinton, whose central location was a key factor in the move. In addition, it was impractical to expand the Denver facility due to a lack of land, the building's age, and nearby power lines. The Denver plant dated back to the 1920s. It was finally closed in 1996 and most of its remaining 200 workers were offered jobs in Oklahoma.

Altus also served as a distribution center. It was expanded within a couple of years of opening. Bar-S's total sales were about $250 million a year by the mid-1990s. It offered 396 different products, but this would be streamlined to 119 by 2004, according to the National Provisioner. A new 85,000-square-foot wiener and sausage plant in Lawton, Oklahoma, and a 145,000-square-foot central distribution center in Elk City both became operational in 1998.

The meatpacking industry was notorious for dangerous working conditions, but Bar-S had implemented a safety program that had cut the number of accidents nearly in half. There was an attempt made to organize a union at the Altus plant in the late 1990s, which management vigorously opposed. At the time, employees made an average of $7 an hour.

Fit to Compete After 2000

Bar-S employed about 1,350 people in Oklahoma in 1999. Sales exceeded $300 million. The company had built a considerable foreign trade with Russia, but this was hammered by the devaluation of the ruble, competition from Canada and France, and a U.S. free meat aid program. Bar-S then focused on Puerto Rico for export growth, reported an Oklahoma City paper. Other major foreign markets were Mexico, Canada, Japan, Korea, and Hong Kong.

The company weathered a public relations crisis in April 2001, when it voluntarily recalled 14.5 million pounds of processed meat and poultry products from its Clinton, Oklahoma, plant due to a listeria threat. The recall affected several foreign countries as well as the United States. The plant was subsequently closed and most of the 400 workers there laid off. Fortunately for the little town of Clinton, where Bar-S was the largest employer, the plant reopened after the source of contamination was discovered inside some packaging machinery, which was cleaned and redesigned to avoid recurrences of the problem. Listeria could cause rare but serious infections; fortunately no one reported any problems from eating Bar-S products through the course of the recall, which did not involve any of the company's other plants. Bar-S later installed state-of-the-art ozone wash and ultraviolet pathogen reduction systems from The BOC Group.

Bar-S was manufacturing more than 100 different items, including cold cuts, sausage, hot dogs, and bacon. Total production was about 400 million pounds a year and was growing as Americans embraced low-carb diets.

The Altus plant was upgraded in 2005 at a cost of $40 million. Part of the upgrade allowed the company to produce its own corn dogs. About 50 new jobs were being added there. After the expansion, Bar-S had 360,000 square feet of production space.

Bar-S had top five national brands in lunchmeat, bacon, dinner sausage, hot dogs, and corn dogs. It had done little traditional advertising, but since the early 1990s it had been investing in large color graphics to promote its brands on the side of tractor-trailers carrying its products.

A key part of the company's philosophy dealt with employee fitness. Various incentives awarded employee achievements such as losing weight or quitting smoking. Workers began the day with a series of stretching exercises at 8:15 a.m. The regimen seemed to be working, with net income increasing fivefold in ten years. Company founder, CEO, and Chairman Tim Day told the National Provisioner, "Superior physical and mental fitness leads to a distinct competitive advantage, making us more effective, productive, and a tougher competitor in the marketplace." Phoenix's Business Journal attributed Day's discipline to his three years in the Marine Corps. Day was supported by president and fellow Cudahy Company alumnus Bob Uhl, who had been Bar-S's original treasurer and vice-president of finance.

Another incentive program rewarded perfect attendance with cash awards. A human resources official told the National Provisioner the company had reduced employee turnover from 88 percent to 40 percent in three years. Projects in 2004 focused on reducing waste and increasing efficiency; in 2005 Bar-S was spending $50 million on capital upgrades.

Principal Competitors

Hormel Corporation; Kraft Foods Inc.; Sara Lee Food & Beverage.

Company Perspectives:

Satisfaction Guaranteed: Powerful words that sell product, gain trust and build relationships. Bar-S brand packages display the Satisfaction Guaranteed seal up front and bold. Our promise is on the front of the package in plain, easy to understand language. Our risk free assurance of complete product satisfaction is just one more reason Bar-S is the Value Leader in processed meats. Webster's Definition: sat • is • fac • tion: the fulfillment or gratification of a need, desire or appetite. guar • an • tee: a promise or assurance as to the durability or quality of a product. The Bar-S Definition: Product replaced if not satisfied.

Key Dates:

1890:: The Cudahy meatpacking empire begins.
1923:: The Bar-S meatpacking plant is built in Denver.
1970:: General Host Corporation acquires the Cudahy Company.
1981:: Bar-S Foods is formed in a management buyout.
1993:: A hot dog plant and distribution center opens in Altus, Oklahoma.
1995:: Sales are $300 million.
1996:: The Denver plant is demolished.
2001:: The company recalls 14.5 million pounds of products due to a listeria threat.
2005:: The Altus plant is upgraded.