Clougherty Packing Company

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Clougherty Packing Company

3049 East Vernon Avenue
Los Angeles, California 90058
U.S.A.
Telephone: (323) 583-4621
Fax: (323) 584-1699
Web site: http://www.farmerjohn.com

Wholly-Owned Subsidiary of Hormel Foods Corp.
Incorporated: 1945 as Clougherty Packing Company
Employees: 1,200
Sales: $420 million (2004 est.)
NAIC: 112210 Hog and Pig Farming; 311611 Animal (except Poultry) Slaughtering; 311612 Meat Processed from Carcasses; 424470 Meat and Meat Product Merchant Wholesalers

Clougherty Packing Company is the West Coast's leading pork packer, making products sold under the Farmer John brand name. These include bacon, ham, sausage, and wieners. The company sells more than 400 million pounds of pork a year. The extra-long Dodger Dogs the company sells at Dodger Stadium are a baseball legend. Family-owned for generations, in late 2004 the company was sold to Hormel Foods Corp., which was expanding its presence in the Southwest. Clougherty has a 900,000-square-foot plant on a ten-acre site near downtown Los Angeles and hog farming operations outside of California.

Origins

Francis and Bernard Clougherty began by curing pork bellies and smoked hams for sale out of their home. Born in Los Angeles to Irish immigrants, the two entered the meat business working for a meat producer and a railroad shipper.

According to the Los Angeles Times, they progressed to leasing space at the Woodward-Bennett Packing facility and entered the crowded Los Angeles meat business in earnest in 1931. They had one employee and no money, Francis's son Bernard told the paper.

Clougherty Brothers Packing Co., as the business was known, bought the plant in 1941. During the war, sheep and cattle products were included in the lineup. Clougherty Packing Company was incorporated in California at the end of 1945.

A New Brand in the 1950s

The company focused on the pork market in the 1950s. In 1953, the Farmer John brand was introduced, said to be more pronounceable than the family's Irish surname. The brothers promoted the new brand by sponsoring a local television show, Polka Parade.

The Cloughertys bought the Harry Carey Ranch in California's Santa Clarita Valley around 1953. However, plans to raise pork there did not pan out due to the hot, dry weather. This site was used for a time as a retreat, then sold to a residential developer in 1998.

The pork plant, located south of Los Angeles in Vernon, became a tourist attraction in 1957 when set painter Les Grimes was hired to decorate one of its walls with a farm scene.

Clougherty needed a new local advertising vehicle when Polka Parade shifted to national distribution in 1964. It shifted to sponsorship of radio broadcasts of Dodger baseball games. This led to stadium sales of Farmer John's famous "Dodger Dogs." However, the extra-long wieners did not become the Dodgers' official hot dog until around 1990. Dodger Stadium sold about two million of the "eastern grown, western flavored" wieners a year. In 1999, the National Hot Dog and Sausage Council ranked Dodger fans as baseball's top consumers of hot dogs. Famed sportscaster Vin Scully pitched Dodger Dogs to great effect in his broadcasts. Clougherty also supplied other area sports venues, including the Rose Bowl Coliseum.

In 1962, Clougherty's operations expanded into Tucson, Arizona.

For several years the company supplied beef for its West Coast plant and for local supermarkets from this location. The Tucson plant was also decorated with a farm mural, which became a local landmark.

According to the Los Angeles Times, there were a dozen slaughterhouses and more than 60 meat packing plants in Vernon in 1970s. Fewer than 20 percent of these would survive into the 1990s.

Developments in the 1980s and 1990s

Bernard Clougherty died in 1982, followed two years later by his brother Francis. The company was subsequently run by Francis's four surviving children: Bernard, Joe, Anthony, and Kathleen Regan.

Clougherty was well placed to benefit from Southern California's postwar population boom. By the mid-1980s, Clougherty was the last large meat packer remaining in the region after its competitors had all relocated to the Midwest. Revenues were $300 million by 1989.

Clougherty experienced a two-month meat cutters strike in late 1985. The company also had contentious labor relations with the union in the 1990s, when more than 1,000 workers worked for several years without a contract.

There was a significant positive development in the late 1980s. "The best thing we ever did was to secure our own source of hogs," president Joe Clougherty later told the journal Meat & Poultry. In 1988, the company formed a partnership with a California hog farmer, then took over the entire operation in 1994. It also started raising pigs in Arizona in 1992. By the late 1990s, Clougherty was supplying 30 percent of its own hogs.

Clougherty was also upgrading its production line. The company brought in a master sausage maker from Germany to oversee the shop. An X-ray system was added to the sausage line in 1988 to scan for bone fragments. Three years later, the company installed a small lab to speed up nutritional analysis of their product.

In the early 1990s, Clougherty was California's largest meat packer and ranked as a top 100 U.S. food company. The value of concessions at Dodger baseball games went beyond sales of the hot dogs themselves. It was a cornerstone of the company's marketing strategy, a reputation lamented to the Los Angeles Daily News after the 1994 season was cut short. In April of that year, the hot dog operation experienced another setback when a fire wiped out the production area. State-of-the-art processing and packaging machinery was subsequently installed.

Sales were about $325 million a year in the late 1990s. The company had to contend with consolidation among the area supermarket chains, reducing its major client list from more than two dozen to five. At the same time, distribution had expanded to Washington State, Las Vegas, and Hawaii. Clougherty also paid attention to the smaller retailers and ethnic groceries that placed a high priority on freshness.

To improve its margins, Clougherty was developing value-added products. The company erected a new cooking plant in 1997.

Beyond 2000

Clougherty's revenues rose about 10 percent to $365 million in 2000. The company employed around 1,500 people, including several hundred butchers and 300 farm workers in California, Arizona, and Wyoming. It shut down its ten-year-old Tucson beef-grinding operation, Arizona Meat Products Co., in 2001. The unit had sales of up to $50 million a year but was unable to compete profitably against industry giants.

In late 2003, Clougherty hired Atlanta's AmeriCold Logistics, LLC to build a 120,000-square-foot distribution center next to its Vernon plant. AmeriCold was under contract to manage the warehouse for ten years.

Family-owned for generations, the company was acquired by Hormel Foods Corp. for $186 million in December 2004. Based in Austin, Minnesota, Hormel was the fifth-largest pork packer in the United States. It owned several leading national brands, including SPAM, but was looking to increase its business in the Southwest. The region's Hispanic population consumed higher than average quantities of pork products, an analyst explained in the Los Angeles Times.

Company Perspectives:

Today, twelve Cloughertys spanning three generations work together to insure Farmer John products are in keeping with the past. They closely supervise every detail of the packing process. Quality control is foremost. So, consumers are always assured fresh delivery daily. What's more, the Farmer John family responds to consumer demand with a growing selection of wholesome meat products. They include: a full line of lean, fresh-cut pork, savory sausage, wonderful wieners, franks, Polish sausage, bacon in two thicknesses, boneless smoked fully cooked ham, as well as a full assortment of pre-packed ready-to-eat luncheon meats, liver spreads and more. Hot or cold, for breakfast, lunch or dinner, Farmer John products always reflect high values and low prices. On the holidays, every day, families who know what's best put Farmer John products between their knives and forks.

Key Dates:

1931:: Brothers Francis and Bernard Clougherty enter the pork packing business.
1945:: Clougherty Packing Company is incorporated in California.
1953:: Farmer John brand is introduced.
1957:: Set artist Les Grimes paints a historic mural on the company's Vernon, California, plant.
1962:: Operations expand to Tucson.
1985:: Meat cutters' stage a two-month strike at the company's Los Angeles plant.
1989:: Revenues rise to $300 million.
1994:: Wiener line is rebuilt after a fire.
2004:: Hormel Foods Corp. buys Cloughtery Packing for $186 million.

Company president Joe Clougherty and several other family members remained on board after the sale. According to Hormel officials, Clougherty was expected to reach $420 million in sales in 2004, up from $370 million in 2003. It was processing more than 1.6 million hogs and selling more than 400 million pounds of pork a year. The company then had about 1,200 employees.