It would be as easy as taking candy from a baby were it still not unclear whether consumers will spend additional money for a Smithfield or Tyson value-added processed meat product. "Two years ago, we fell into the lack-of-differentiation trap by not providing the additional value needed to drive interest and sales of this underdeveloped category," Tyson marketing director Mike Stout told FOOD PROCESSING last June.
However, misbegotten ventures, particularly in evolving categories, can be costly. In the case of case-ready meats, items such as anti-microbial films, oxygen-scavenging laminates, CO2 emitters, UV-light inhibitors, and active packaging constructions all play key roles in product development, manufacturing and packaging -- and they all add up. As Tyson and Smithfield learned.
Now that the dust presumably has settled on Tyson's merger with IBP, Tyson is expanding production and storage capabilities at one of the acquired plants. A multi-million-dollar project just under way at the Storm Lake, Iowa, pork plant includes land acquisition and a two-story, 14,000-sq.-ft. addition, primarily to increase cooler space and box storage. The work, expected to be complete in October, will increase finished product volumes, including boneless pork loins and hams.
It's a similar story at Smithfield. There, too, pork processing shows no signs of slowing and capacity is strained, even with the Farmland acquisition of late last year. So plans are moving forward on an addition to Farmland's Monmouth, Ill., plant.
General Mills apparently is dealing with its acquisition of Pillsbury in a different, racier way. Big G recently closed manufacturing facilities in Minneapolis, Lithonia, Ga., and Johnson City, Tenn., in order to improve distribution, trim excess production capacity and consolidate operations. But, as one company executive put it, supply chain management at General Mills ultimately relies less on closures and consolidations than good, old-fashioned innovation in this case, some quality time with NASCAR crews.
That's right. In an effort to reduce product changeover time at a Betty Crocker plant in Lodi, Calif., the cereal maker dispatched an operations team to work with a Winston Cup pit crew. The result was a significant savings in product changeover time , from 41/2 hours to 12 minutes. The time-saving changes have since been implemented throughout General Mills' manufacturing network, saving the company "millions and millions of dollars," Randy Darcy, senior vice president of General Mills' supply chain operations, told the Associated Press.
Intent on saving no less than $800 million in the next 10 years, General Mills currently is studying the techniques of the mechanics who fix stealth bombers. Who says it isn't rocket science?
Food's 20 biggest construction spenders in 2003
1. Kraft Foods, Northfield, Ill.
2. Pepsico Inc., Purchase N.Y.
3. General Mills, Minneapolis
4. Tyson Foods Inc., Springdale, Ark.
5. Anheuser-Busch Cos., St. Louis
6. Archer Daniels Midland Co., Decatur, Ill.
7. Sara Lee Corp., Chicago
8. Campbell Soup Co., Camden, N.J.
9. Coca Cola Enterprises, Atlanta
10. ConAgra Foods, Inc. Omaha, Neb.
11. Kellogg Co., Battle Creek, Mich.
12. McCormick & Co., Sparks, Md.
13. Adolph Coors, Golden, Colo.
14. Smithfield Foods, Smithfield, Va.
15. Hormel Foods Corp., Austin, Minn.
16. Del Monte Foods Co., San Francisco
17. Pilgrims Pride Corp., Pittsburg, Texas
18. Smucker Co., Orrville, Ohio
19. Dreyers Grand Ice Cream Holdings, Oakland, Calif.
20. Ralcorp Holdings Inc., St. Louis
Source: ENR Magazine. Rankings are based on construction in progress and the capitalized amount for construction that has not been completed during the year.