Perdue Farms shares insights into 4th generation family dynamic
For Jim and Chris Perdue, the success that Perdue Farms has enjoyed over its history can be summed up in four words – or values – that it crystallized in 2005 and 2006: quality, integrity, teamwork and stewardship.
“The first two, quality and integrity, came from Arthur Perdue and Frank Perdue,” Chairman (and advertising spokesman) Jim Perdue and son Chris told a crowd of about 65 people at the Small Business Development Series: Family Business of Delaware event in Long Neck on May 7, explaining that teamwork and then stewardship were added later.
“But trust was the No. 1 value that we had in the company. We actually elevated that into our vision, which is in the second line, “To be the most trusted name in food and agricultural products.”
“Today, with the new generation and millennials, trust is a really big deal. Baby boomers trusted brands; they trusted companies. Millennials are very skeptical. Transparency is important. And so, the whole idea of trust has turned out to be a big idea, and something that is very important for the Perdue organization.”
Salisbury, Maryland-based Perdue Farms is split into two parts -Perdue Foods, which is the $4 billion chicken business, and AgriBusiness, a $3 billion operation, which is the largest grain company on the East Coast that sources, purchases, and processes a diverse selection of agricultural commodities such as soybean meal and edible oils.
“The nice thing about AgriBusiness is it’s counter-cyclical to the chicken business,” Jim Perdue said. “Back in 2012, when the chicken industry had its worst year in history and 12 companies went bankrupt, including Allen Family Farms in Delaware and Townsends in Delaware, one thing that really helped us is AgriBusiness had their best year ever that year. So it’s nice having that, and for the bankers in here, that’s a good thing, right? To have a counter-cyclical business that is a part of that.”
After an extensive discussion about Perdue’s business interests, Director at Perdue AgriBusiness Chris (Jim’s son and one of four members of the fourth generation of Perdues working for the company) talked about the company’s impact on Delaware, with plants and operations in Georgetown, Milford, Blades, Seaford and Bridgeville.
“We have more than 500 family farmers who grow grain for us and more than 250 poultry farmers who grow our chickens and deliver them to our processing plants,” Chris said. “We have more than 3,000 associates working in the state of Delaware for us. Overall, that total economic impact for everyone that we touch, totals up to almost a $580 million impact on the state of Delaware.”
Some other highlights from the event, most of them about the challenges and opportunities of being a family-owned business:
Chris: “A lot of people don’t realize that when you’re talking about the history of the modern chicken industry, the broiler industry, it all started here in Delaware.”
Jim: “One thing I try to instill in the company is to be a learning organization, try to learn something every day. We bought Niman Ranch in 2016. It’s a terrific brand. The way they grow their pigs in pasture, no confinement, all the piglets with their moms. It’s just a fascinating way to do business. Everything is about meat quality with Niman. They pay their farmers based on the meat quality of the pigs. So it was really an interesting transition, again, “˜How can we make chicken meat better using a concept like Niman has?’ “
Chris: “At the end of the day, while Perdue has become a large company, we’re still a company comprised of small individual family farmers raising chickens on the family farms in smaller amounts all over the country.”
Chris: “Trust is a big part of being a large company. Even though we’re family-owned, we still are perceived as being a large company. The only way that we can combat that image is through trust and transparency. I think transparency is the key word there. We have a lot of initiatives in the house right now to pull back that cover, let everybody see what’s going on.”
Jim: “We’ve done a lot work trying to understand role. What is the role of the family? What is the role of the board? What is the role of the family counsel? Because we get confused sometimes. If you’re the family, you’re going to make decisions (but only if) it’s the family in the business. This really comes from Frank, who set up everything to make sure that it’s a business and not a family.”
Jim: “Each member [of our fourth generation] is assigned a mentor, so Chris has a mentor. They’ll go to lunch once a month and report back. We’ve gotten a lot of really good ideas. Because, you know, family business problems are not unique; they’re the same everywhere you go.”
Jim: “My dad [Frank Perdue] used to say, “˜suffers from a disease called NETMA, nobody ever tells me anything.’ It’s kind of interesting just the whole family dynamics. When dad turned things over to me, we were lucky because a lot of strong entrepreneurs like him would not allow that to happen, but he did. My hats off to him for doing that because it wasn’t easy for him to do.”
Chris: “When you have younger generations coming up, you need to make sure they get exposed to the business. In our family, my dad’s sister didn’t live in Salisbury, so it’s harder for their kids. But I know with me, there were tons of days after soccer practice that we picked up a pizza and went by the barge shocks that were working weekends unloading a barge full of grain. Those sorts of things that you get exposed to really young, like waist-high age. As you get older, we have kind of an unwritten family policy that, “˜If you are a family member and you’re a shareholder in our company, you have a responsibility to learn where this business came from, how it operates, and how it works.'”
Chris: “It’s not a crazy idea, this whole internship thing. We put enough structure around to get it mean enough and hard enough, that it was a great way to learn and understand how the business comes together. I think it equips us to say, “˜This is something that I’m interested in because I have a very good grasp of how this business works now.’ Or it’s, “˜This is intimidating, and I don’t want to be here.’ I took 10 years before I came.”
–By Peter Osborne and Renee Plaza