Perdue Chairman: Dealing With Perception is Good Business

4/12/2014 7:00 AM
By Jennifer Merritt Virginia Correspondent

“We have to continuously deal with perception.” That’s what Jim Perdue, chairman of Perdue Farms, told attendees of this year’s Virginia State Feed Association Convention and Cow College. “As a company, we have to deal with the perception, not the reality.”

Founded in 1920 by Jim Perdue’s grandfather, Arthur Perdue, Perdue Farms is the third-largest poultry producer in the U.S. and the country’s No. 1 brand for fresh chicken. Arthur Perdue started out selling eggs and guided his business through the Great Depression. Arthur’s son and Jim’s father, Frank, came home in 1939 to join the company.

“I don’t think the company would have grown under my grandfather, but what he did is establish the values, strong work ethic, high-quality product with eggs and then meat chickens, and frugalness,” Jim Perdue said. “My dad was the risk-taker.”

His dad was also perhaps best known to the general public as the face of the money-back guarantee. Started in 1973, the guarantee promised consumer satisfaction or they would get their money back. That commitment to “believe in better chicken” carries through to the company’s vision today.

The vision of Perdue Farms is “to have the most trusted name in food and agricultural products.” Doing that requires paying attention not only to the business of raising and processing chicken, but also to the perception of the consumer.

Most consumers, however, are at least three generations removed from the farm. They get their information from the media, and while they may trust farmers, they don’t trust agriculture.

“Four out of 10 consumers have lost trust in food. Forty percent of consumers don’t trust the food supply that feeds them,” Jim Perdue said. “It’s scary and we can’t ignore it.”

Regardless of their feeling about agriculture in general, surveys show consumers still trust the USDA. Perdue has entered into a voluntary agreement to have its chicken USDA Process Verified. Twice a year, the USDA audits the company to ensure that it’s living up to its claims that the chickens are fed an all-vegetarian diet with no animal byproducts, that they are cared for in a humane manner and that the chicken meets a certain level of tenderness.

“Consumers may be out of touch with farming, but we cannot be out of touch with our consumers,” he said. “If they don’t see it and you don’t tell them, they are going to come up with their own explanation or take what activists are selling.”

In fact, Perdue called consumers the new regulators because they are concerned with more than just a safe, abundant food supply. In addition to wanting to know how their food is raised and its impact on the environment, antibiotic use is one of consumers’ top concerns.

Perdue Farms doesn’t use antibiotics on a routine or daily basis to promote growth. They do, however, use them to treat sick or at-risk birds. They’ve found that consumers are comfortable with using antibiotics for animals in a manner similar to the way they themselves use the drugs for their children.

“If a child has an ear infection, the amoxicillin is coming out, but they aren’t okay putting antibiotics on their children’s cereal,” he said.

Consumer opinion has changed how the company has treated their animals in the past. Perdue Farms originally used a chemical compound to treat a parasite in the chickens’ gut. The compound contains arsenic, and even though the company spent two years explaining to consumers that there was “good arsenic and bad arsenic,” the perception was too strong.

“You’ve got the science, you’ve got the reality and then you’ve got the perception,” he said. “As a company, we’ve got to deal with the perception.”

Consumers and retailers continue to drive the business to provide new and different products. With Whole Foods declaring its intention to be GMO-free in five years and Chick-Fil-A stating that its chicken would be antibiotic-free in five years, it’s created a demand that Perdue Farms is stepping up to fill.

The acquisition of Coleman Foods and the Harvest Land brand has increased the organic foods component of Perdue Farm’s business, and it’s still growing. While the conventional poultry industry is growing at a rate of about 1 to 2 percent a year, Perdue said the organic side of the business is growing at a rate of 20 percent. It’s still a fraction of Perdue Farm’s overall business, but it’s worth paying attention to.

“If my dad saw organic chickens being raised, he’d say we are right back to where we started,” he said.

Perdue outlined the differences in how chicken is being raised today, including providing the birds with access to the outdoors, hay bales to perch on and the “time-out box” that lets the animals take a break when they want it. He said company employees are noticing a difference in how tender the meat is and how it comes off of the bone.

“The meat is different. Our own people are starting to drink the Kool-Aid,” he said. “We want to be a learning organization.

“We can blame the activist and media, but we in agriculture have failed to tell our story,” he said. “We have to engage our customer in order to gain their trust.”

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