Growing Pains
by Larry Aylward, managing editor
Fear engulfed George Fullard when bills amassed and debts began to accumulate."I was into debt up to my eyes," recalls Fullard, president of Medina, Ohio-based Country Custom Meats Inc. "I was scared stiff."
Louis Colameco III understands. He and his father, Louis Jr., have been operating Rio Grande, N.J.-based Yorkshire Farms for more than two years. The two invested most all they had-about $420,000-in the business.
"It's like a hole," Louis III says. "You keep throwing money into it."
Fullard and the Colamecos are not alone. The three men and many other small processors are trying to make a living in a deeply competitive industry. Big bucks to them is chump change to the ConAgras and IBPs of the world.
Most of the industry's Goliaths have deep pockets. But most processors and packers don't resemble such giants. According to the American Association of Meat Processors, 75 percent of the companies in the industry have under 15 employees. About another 10 percent employ 15 to 50 people.
Roll of the dice
John Pekarski, owner of South Deerfield, Mass.-based Pekarski Sausage, runs a two-man retail operation with his son, Mike. Other family members assist with the business in the evenings and on the weekends.
The Pekarskis took their chances and reopened a business that had been on hiatus for nearly 11 years. John's father, T. Walter, started it around 1950, but shut it down in 1980 because he could not afford the incurring costs spurred by federal regulations.
"We decided to reopen the business in 1991," John says. "We kept the building and all of the equipment. We spent about $100,000 to reopen it. We pay our bills, have some money left over and are slowly making improvements to the plant."
Fullard, born in Great Yarmouth, England, also revealed the nerve of a Las Vegas gambler when he quit his job at a Cleveland-based meat provisioner in 1982 to start Country Custom Meats. Fullard had two children in school, and little money.
But Fullard had a house. He took a second mortgage on it, and removed the home's two-car garage door and transformed it into a tiny butcher shop.
"I couldn't afford employees," Fullard says. "I would cut and sell meat during the day, and deliver at night. In the morning, I would start all over."
If he was lucky, Fullard would catch a few winks of sleep during his 20-hour workdays. Sometimes he wouldn't sleep for three days, he claims.
After almost a year of doing business out of the converted garage, Fullard applied for a loan to purchase a building to house his operation. He was rejected by 11 banks before he finally received backing.
Fullard purchased an old concrete stamping plant with no water or sewage. He had it up and running as a meat plant within five weeks.
There was a major fire two weeks after he moved in. There were bill collectors. There was apprehension.
"There were many days I had to rob Peter to pay Paul," Fullard, 49, admits. "I would sit there on Friday and say to myself, 'Who can I afford to pay today and who can I afford to put off for a day?' "
The Colamecos spent 15 years in the excavating business. They ditched the business to start Yorkshire Farms, processors of ham and bacon.
"I didn't know anything about processing," Louis III, 36, admits. "Neither did my dad. This business is like fishing. Everybody tells you a story, but you don't believe anything until you see [results]."
The Colamecos purchased a smokehouse and began developing their products. Louis III says they spent six months testing product in the smokehouse.
They weren't sure how to market it, though. "I never really figured on the marketing end and what it would entail," Louis III notes.
Their products did not sell well near Philadelphia, where Hatfield Quality Meats and Dietz & Watson have a foothold. But the Colamecos found success further north of the city and closer to New York City, where residents are more affluent.
The Colamecos have relied on demonstrations to promote their product. "I can afford to do the demos," Louis III says. "It's the old-fashioned way, but I have no money to put together a big ad campaign."
The Colamecos expect a return on their business by December, Louis III notes. Although he researched application, ingredient and cooking procedures thoroughly, Louis III admits business would be better if he had marketing experience.
Despite marketing difficulties, Yorkshire Farms has a niche customer base: well-to-do consumers who desire high-end, specialty products.
Besides its cured line of products which feature real honey hams, Yorkshire Farms also offers a line of natural pork and turkey products free of preservatives. In September, it introduced a line of preservative-free marinated products.
Country Custom Meats' Fullard has also discovered a niche. The company processes its line of full portion-control meat products, and ground beef and patties mostly for distributors.
"We don't do anything special, but we do it exceptionally well," Fullard says. "The few meat companies in our area sell to the end-user. [By selling to distributors], we can grow with a minimal amount of trucking. We don't have any salespeople. We can put our money into the processing end of the operation."
'Going federal'
While there have been setbacks in Country Custom Meats' short life, implementing federal inspection was not one of them. "Going federal" was the best move he ever made for the business, Fullard claims.
"I listen to some of the horror stories some people go through with federal inspectors," Fullard says. "I have never seen any. We have had about 15 inspectors. They have been a big asset."
Because Pekarski's operation is not federally inspected, he is operating strictly as a retailer. "[Area restaurants] would love to have our hams and smoked pork chops on their menus," he claims."
Pekarski says his business can't comply to federal inspection regulations, mainly because of costs. "We refuse a lot of business every day because we are not federally inspected," he adds.
Yorkshire Farms is federally inspected, but Colameco admits he's worried about future inspection regulations and how they could impact the cost of his business. He is not alone.
Eight days a week
Pekarski rarely takes a day off. Twelve-hour work days are the norm.
"I have little free time," Pekarski says. "But I enjoy it. I look forward to getting right to work."
Fullard is up at 3:30 a.m. He is at work at 4 a.m., unloading trucks. He walks to his job; Country Custom Meats is 18 feet from Fullard's home.
Fullard works until about 6 p.m. He will work on the weekends if he's not off racing his 560-horsepower Corvette.
Louis Colameco III sleeps in until 4:30 a.m. He has about a 90-minute drive to work. He puts in more than a full day, as well.
The men are working their lives away, but they don't seem to mind.
"I like to be my own boss," Pekarski says. "I couldn't stand somebody telling me what to do."
Fullard seemingly knows no other lifestyle but hard work. "We have come a long way in a short period of time," he says. "But we have a long way to go."
Fullard is no longer scared stiff. Business has been "phenomenal," he claims, choosing not to reveal annual sales. Country Custom Meats has accounts with Fleming Foods, Giant Eagle and Sam's Club. In 12 years, the company has had 12 building additions. Fullard says his company has knocked heads with a few giants, including Excel, and beat them out for accounts.
Is Fullard lucky? Was he in the right place at the right time? Probably not. The 20-hour workdays and quality products are paying dividends. Besides, Fullard really doesn't believe in luck.
"Luck is preparation meeting opportunity," he says.
Sitting in his modest office, clad in a white working jacket and protective helmet, the unassuming Fullard puffs a cigarette and recalls the days when bankers laughed in his face.
His business is still small, but it is growing healthy-and rapidly. "I'm no genius," he says. "I barely got through high school. But I know how to make money, even though I learned the hard way."
Despite the growing pains, which led to lost sleep and a light wallet, the English-born Fullard says he could only do what he has done in America.
"It is the land of opportunity," he says. "I believe in the American dream, 100,000 percent."