Bullish on the Meat Industry
Hormel's Johnson: Stop paying attention to the flakes; start paying attention to the scientists
by Larry Aylward, managing editor
Joel Johnson, Hormel Foods Corp. CEO, believes that American consumers should keep their faith in the meat industry.
In an exclusive interview with MM&T, the Austin, Minn.-based company leader insisted that the United States has the healthiest meat and food supply in the world.
"We have to convince the consumer that meat is a great nutritional bargain," Johnson says. "Consumers and the media have to stop paying attention to the flakes-the Jeremy Rifkins of the world-and start paying attention to scientists."
Although he admits "a few bad players" have marred industry's image, Johnson says industry has taken "more than its share of unfair public relations shots."
For instance, Johnson is a staunch supporter of meat irradiation, which he claims has been unjustly criticized by politicians with "knee-jerk responses." USDA recently announced it will support a petition for federal approval of irradiation as a way to improve food safety.
"We have to offset the talk of pseudo scientists who are scaring American consumers away from trying anything new," Johnson says.
Johnson adds that consumers need to be reminded that irradiation is just another word for electronic pasteurization. "The terminology is wrong," Johnson claims. "Consumers are not afraid of the word 'pasteurization.' "
Johnson became Hormel's CEO about nine months ago, succeeding Richard L. Knowlton, who remains chairman. Besides keeping up-to-date on industry-wide issues, Johnson must also concentrate on running the world's sixth largest meat company and filling the shoes of Knowlton, one of the industry's most liked and respected executives.
"(Knowlton) is a very challenging act to follow," Johnson admits. "It's tough to fill those shoes, especially in a community like Austin where Dick is so well known."
Johnson joined Hormel in 1991. He was previously executive vice president and general manager for Oscar Mayer Foods Corp. and its subsidiaries. He says several of Hormel's strategic initiatives started under Knowlton are continuing.
"We'll continue to focus on nutritionally improved products and convenience," Johnson notes. "We'll also emphasize ethnic products."
Johnson adds that Hormel has positioned its advertising "behind ideas that grow our franchises."
"I don't believe in advertising for maintenance," he stresses. "That's wasting a company's resources."
'Tasteful' products
Johnson says manufacturers should not focus strictly on decreasing fat in nutritionally improved new products.
"There have been a number of nutritionally positioned products that have failed throughout the food industry," he admits. "The common denominator in all of the failures has been [lack of] taste in the products."
Johnson says new products must deliver an "eating enjoyment."
"Consumers might say they're interested in (nutritionally improved) products, but that's with the fundamental assumption that there will be taste delivery," he stresses.
Up and down
There are no simple assessments in regard to the overall success of case-ready meat, although Johnson says Hormel's line of case-ready pork products are selling well in the marketplace.
Case-ready beef has not lived up to its billing. Some industry experts note that it has failed at brand recognition, price and product color.
Johnson, though, is not ready to write off case-ready beef as a failure. He claims consumers should pay heed to a company's brand label.
"Look what poultry, especially chicken, has done in terms of brand-name products," Johnson points out. "And its working for us in the market with our pork products."
Johnson holds stock in brand-name products. "What trademarks say to the consumer is the manufacturer is proud enough to put its name on the product and stand behind it," he says. "If there's no name on a product, that's a sign of 'buyer beware.' "
Case-ready meat is intended to reduce retail labor costs. But some retailers claim they are not seeing the savings.
Still, Johnson insists retailers need to take a closer look at the philosophy behind case-ready meat. He claims manufacturers like Hormel can trim and package product with a shelf life of 12 to 14 days. In addition, the process frees up retail labor resources to do other jobs that add more value to a grocer's operation, Johnson notes.
Shelf-stable microwaveable products, too, have been up and down in the market place. But Hormel has found success in that category and owns 44 percent of market share.
"Shelf-stable meals no longer mean just microwaveable meals to us," Johnson says. "It also includes products like Hormel Chili, Dinty Moore beef stew and Spam luncheon meat that come in more traditional cans."
Johnson admits the microwaveable market for shelf-stable meals has been "somewhat disappointing," but he claims it will be an enduring business.
"Right now, it looks to be a two-horse race (in the category) between us and Chef Boyardee ," Johnson adds.
Meal time
When he has the time, Johnson likes to settle down to a country breakfast of bacon, sausage, eggs and pancakes. When he has the time, that is.
And Johnson knows that most of today's consumers also don't have the time to prepare such an early morning meal. At lunchtime, too, consumers are more on the run. That's why Johnson believes dinner poses the biggest challenge to the industry in terms of marketing to consumers. It also presents opportunity.
Recognizing this, Hormel has taken aim by striving for more quality and convenient products.
"We have made our pork products leaner," Johnson claims. "Every pound of meat coming out of the Austin plant is trimmed to one-tenth of an inch."
Hormel will continue to exercise foresight in creating new products in its ethnic line for the dinner occasion.
"When you look at our tradition, especially in dry sausage like pepperoni, we have a vested interest [in ethnic foods]," Johnson says. "Hormel was in ethnic foods when Italian foods were still considered ethnic."
In 1992, Hormel purchased The House of Tsang, a small Oriental company, to help it create sauces in the foodservice area. Johnson says today's consumers are more willing to experiment with ethnic foods because they are intrigued with them.
"Ethnic foods provide taste sensations," he adds. "Down the road, you'll see even more growth in Hispanic and Oriental foods."
Hormel, known as a packaging innovator, will strive for continued improvement in that area.
On the horizon
Johnson says the North American Free Trade Agreement will create opportunity for processors in Mexico.
"Mexico is a country whose citizens enjoy eating pork," he adds.
Shelf-stable products should also achieve success in Mexico, Johnson says. "When you get into the less developed markets, products that don't require refrigeration have more appeal, especially in temperate climates."
Hormel is involved in a joint venture with Zwanenberg de Mexico, a leading meat company in Mexico.
Johnson says Hormel plans to increase its presence in other foreign countries, such as South Korea, the United Kingdom, the Philippines, and Japan, where it is already active.
Domestically, Johnson has some concerns. He says state legislatures that are not friendly toward swine production and ban corporate hog and independent farms from joining together "have their heads in the sand."
"If they're not careful, they'll wake up one day and find that the pork industry has moved to states friendly toward pork production," he insists.
Hormel gets most of its hogs from independent farmers in Minnesota, Iowa and Nebraska.
Johnson is all for nutrition labeling, and Hormel was quick to comply with regulations. But he does believe that there is an overemphasis on fat.
"If people like the taste of a product, they'll continue to eat it," Johnson says. "People do not read nutrition labels and lick their chops."
On a personal note
Johnson, 50, was raised in Staten Island, N.Y., one of the world's most populated areas and a far cry from Austin, Minn. But he enjoys the sereneness of Austin-population estimated at 20,000-for work and play.
"The intensity of this business is the same inside the walls of this office as it would be in an office on Fifth Avenue," Johnson says. "And Austin is a family-oriented town and a great place to raise children."
Johnson is an avid golfer, runner and cross-country skier, as well as a Civil War buff and baseball fan. In his office hangs a framed autograph photo of legendary New York Yankees slugger Joe DiMaggio.
CEOs of major food companies don't have a lot of time to play 18 holes, but Johnson doesn't think in those terms.
"The business is half-vocation and half-advocation," he says. "If you like the competitiveness of it and the people you work with, you are less inclined to compartmentalize your schedule into work and free time."