The 21st century food manufacturer tries to manage a continuous struggle between yesterday and tomorrow. Ongoing are the battles for balance: continuity vs. innovation; institutional memory vs. the need to shed overhead or bring in new blood; maximum utilization of existing assets vs. investment in new technology and facilities; increasing productivity while lowering cost; maximizing profits on established brands while opening growth avenues with new and innovative products.
Such are the poles today’s food processor operates between as manufacturing and operations heads attempt to resolve challenges that test wit and wile even more than industrial muscle. Successful companies are able to drive innovation from a base of healthy established brands.
Hog Butcher to the Hormel World
Few companies illustrate this truth better than Hormel Foods, the quiet giant that seems to move with ease through today’s manufacturing and economic challenges.
Walk the headquarters halls and it becomes clear how this food industry mainstay has kept pace with every challenge it has faced through what has been, arguably, the most turbulent period in the history of food manufacturing in at least two decades.
History is on its side.
More than 15 percent of the Hormel workforce has logged 20 years or more. The company is built on manufacturing principles that appear to be as relevant today as they were in 1937 when three of its cornerstone products/brands had been introduced.
Take the principle of “sustainability,” a trend driven by environmental conscience today but with a familiar ring in the hallowed halls of Austin, Minn.’s largest employer. In fact, when Wal-Mart asked its customers to respond to its “Sustainability Scorecard,” Hormel was the first major food processor to respond.
“We have a long history of ‘sustainability,’ ” says Phil Minerich, vice president of research and development. “George Hormel called it ‘waste.’ Here sustainability shares sisterhood with cost savings.”
Depression-era products Spam, Dinty Moore stew and Hormel Chili still generate enormous profit – enough to drive ambitious new product ventures, often anchored in new or emerging technologies.
“We’re not a fad company,” says Minerich. “Spam, Dinty Moore, Cure 81 hams…all our products are valuable, recognized trusted brands that consumers can count on in times like this. We want lines of products with longevity.”
Hormel has demonstrated its technological leadership in recent decades with product and process innovations ranging from pioneering ventures in shelf-stable tray entrees to high-pressure pasteurization (HPP), which drives the popular new Natural Choice line.
That leadership stems from a willingness to bear with products and lines with foreseeable upside even through extended periods of slow to stagnant sales.
Case in point is the company’s shelf-stable microwaveable entrees. The first sealed, retortable tray products were released in 1987 under the name Top Shelf. A concept clearly ahead of its time, the line was hailed for its innovation. And unlike most of the frozen dinners and entrees it competed with, it was produced on efficient, automated production lines.
Sales lagged, however, for reasons ranging from product positioning to quality difficulties with some early flavor varieties. Convenient and cost efficient (Top Shelf did not require refrigeration), the concept had enough internal champions to remain afloat under new identities – Dinty Moore American Classics and Hormel Microwaveable Meals. Still, it could do little more than tread water until its re-release under the name Compleats in 2007.