Wednesday, March 11, 2009
The poultry industry's secret ingredient
The March 16th edition of FORTUNE Magazine has a suggestion for coping with the recession:
"Sanderson Farms had to make a crucial decision last year about corn feed, one of the poultry seller's major costs. Chairman and CEO Joe Sanderson looked at several metrics, then had "a big prayer meeting" about whether or not to lock in feed prices, which had then skyrocketed to $8 a bushel.
Sanderson decided not to lock in prices - and now corn is $3.50 a bushel.
That decision, along with a $300 million credit line the Laurel, Miss.-based company took out last May, helped it avoid the fate of its more secular competitor, Pilgrim's Pride, which filed for Chapter 11 last fall.
Fittingly, Sanderson (SAFM) president and COO Lampkin Butts opened the company's annual meeting in February with a prayer, a long-standing tradition. "Thank you, Father, for this company and the many lives affected by the operations of Sanderson Farms," he said.
Of course, Sanderson is also running a good business - but it's not the only faith-filled poultry purveyor doing well. Chick-fil-A, a chain known to many a Southerner as "God's chicken" because it's closed on Sundays, reported that "God has blessed our results," in the words of President Dan Cathy.
Same-store sales for 2008 rose 4.6%, and the chain grew by 83 stores, including one in New Jersey, where many of the chain's disciples camped out all night before it opened. The camp-out is a tradition for all Chick-fil-A openings - Cathy typically camps with them, too - and the first hundred in line get all the chicken-biscuit sandwiches they can eat for a year. Turns out it's good to have religious customers, too."
Maybe a recipe for success .........