We’ve been studying some intelligent fanatics in the food industry. One of the things they have in common is their obsession with quality, cleanliness, and the attention to every detail.
By 1967, the Perdue Company had become one of the biggest producers of live chickens in the country and was supplying 800,000 chickens a week to commercial customers. But up to this point Frank wasn’t yet into processing chickens, which was something he needed to do to really control the quality of his chickens at every point of the supply chain. He was hesitant to get into processing because it was a complicated process where he had no experience. It would mean managing a large labor force and also finding buyers in urban markets. He not only had to process the chickens, but he also had to create the demand for them. Finally, an opportunity arose in the fall of 1967 to purchase a processing facility out of bankruptcy. In a later post, I’ll describe how he created the demand, and in the process those famous TV commercials which would make Perdue one of the most recognized brands in the world. But first, he needed to process a superior product, and it wasn’t easy.
Here is an excerpt from, Tough Man, Tender Chicken written by Frank Perdue’s wife, Mitzi Perdue:
Frank had always cared about quality in both the feed business and the chicken business. But when he got into the processing business, quality became a full-blown obsession. To the end of his days, Frank would shudder at the memory of his first day processing chickens.
The first day there were two absolutely intolerable defects. The grease on the old overhead conveyor belt, which was not part of the pre-opening renovations, would drip down into the chickens, and the steel shaving from the badly fitting new screw conveyers would fall on the freshly processed birds.
Frank was traumatized, “My God,” he thought, “our first day and we’re ruining the Perdue name.”
Of course, he didn’t sell a single Perdue chicken until the problems were fixed. Meanwhile, it was an agonizing experience.
Ellis Wainwright, who became a Perdue Supervisor of Grading for the next 23 years, also had vivid memories of the plant start-up. He had been a government grading inspector when Frank had initially bought the plant and remembers that for the first few days, none of the chickens were good enough even to consider for the Perdue label.
Frank had told him that the standards he wanted were higher than the Government Grade A standard. By the third day, the problems were mostly fixed and Wainwright started his grading, “We graded all morning,” said Wainwright, “and I found only five boxes that passed what I took to be Frank’s standards.”
Franks standards literally were higher than the government’s. According to Wainwright, you could have torn skin on a Grade A chicken, but not with Perdue; or you could have a discolored wing, but not with Perdue. A small bruise the size of a pencil eraser wasn’t acceptable to Frank even though this was acceptable by government standards.
Wainwright was afraid Frank was going to raise Cain that he had accepted so few. Then, to Wainwright’s surprise, Frank came through and rejected half of the ones that Wainwright had approved.
The rejects weren’t a loss and could be sold at commodity prices, but they couldn’t be marked Perdue. Of the 10,000 chickens processed that day, most passed the USDA standards, but only sixty of them met Frank’s criteria for quality. Sixty chickens were not enough to sell separately, so they, too, were sold unlabeled at commodity prices.
Within a few days, the production issues were fixed and the Perdue name could be put on them.
“Quality was the backbone of the success of our company since its inception.” Frank said, and then referring to this period, “Every two weeks, the company had a team of people who anonymously would check Perdue products and the competitition’s. The product is coded so the checkers do not know which is which and therefore can’t be biased by the name.”
According to a plan instituted by Frank and Culver, the competitors’ product samples, together with Perdue samples, were brought back every two weeks from the marketplace. In checking fifty-seven factors (bruises, hair, feathers, breast width, etc.), Perdue associates checked what the consumer sees and what the first receiver gets, and also what the chain stores and the distributors who distribute to the small chains and butcher shops get.
For the distributor or chain receiver, Perdue associates checked box quality, so the bottom box didn’t collapse and have everything fall to the floor. Markings on the box had to be legible. The processing date had to be visible so that rotation schedules could be effective. The amount of ice had to be adequate.
“In the fifty-seven quality checks,” Frank said, “we never lost in comparison to our competitors. We always come in first.”
Mitzi Perdue, widow of Frank Perdue, contacted us wanting to write a case study for us on her father Ernest Henderson, co-founder of Sheraton Hotels. Members can access this case study [HERE].