Emge Packing Co., Inc.

views updated

Emge Packing Co., Inc.

W. Red Bank Road
Fort Branch, Indiana 47648
U.S.A.
(812) 753-3214
Fax: (812) 753-3248

Wholly Owned Subsidiary of Excel Corporation
Incorporated: 1947
Employees: 325
Sales: $260 million
SICs: 2011 Meat Packing Plants

The Emge Packing Co., Inc. provides packaged meats, including bacon, sausage, ham, and lunch meats, to grocery stores throughout the Midwest. Overseen by members of the Emge family for 90 years, the company was sold in 1990, becoming a division of the Kansas-based meat packing company Excel Corporation, which oversees plants primarily in the Southwest and is a wholly owned subsidiary of Cargill Inc.

The Emge family entered the meat business in the late nineteenth century, when Peter Emge began working at the sausage market of his uncle, John Knapp, in the southwestern Indiana town of Fort Branch. There, Emge learned the slaughtering and processing trades, and, in March of 1900, he and his wife Barbara purchased their own butcher shop in Fort Branch, at 110 North Railroad Street. After their first four years of operating a successful retail business, the Emges funded the construction of a new, brick building on the site of their original shop, portions of which were designated for the meat shop and the Fort Branch post office, while the Emge family moved into apartments upstairs.

During this time, the company also began a small wholesale operation, supplying shops in nearby Princeton and Oakland City with Emge sausage, bologna, and wieners, which were delivered via horse and wagon, or by rail in inclement weather. In 1906, Peter Emge purchased 40 acres of land on the southwest edge of town, to which all the company’s operations would eventually be moved.

In 1910, Peter Emge’s sole proprietorship was redesignated a partnership, called Peter Emge & Sons. The following year, the Emges began construction of a feed barn and two silos on the land Peter Emge had purchased, and, in 1914, the first Emge slaughtering and manufacturing facility was erected on that site. The emerging complex of buildings featured the most modern construction techniques available at that time, including the use of concrete blocks, which had to be poured at the building site. Moreover, the Emge facilities were equipped with modern machinery, such as the company’s first refrigeration system, which consisted of state of the art “ice machines.” Further additions over the next several years included a building designated for curing meats as well as a brick home, completed in 1917, where the Emge family established permanent residence. During this time, Peter Emge & Sons became Fort Branch’s largest employer, a legacy that would continue into the 1990s.

In September of 1922, a fire broke out at the Emge complex, destroying much of the original plant. Operations were halted completely until January of the following year, when processing began on a limited basis, as rebuilding efforts neared completion. During this time, the company began to focus increasingly on wholesale operations; the retail shop on North Railroad Street was closed in the spring of 1924, and a sales staff of two employees was established to concentrate on bringing Emge meat products to the larger Indiana communities of Vincennes and Evansville.

As a result, Emge meats became widely popular in southwestern Indiana. In 1925, the company, consisting of nine partners, shortened its name to Emge & Sons. Facing increased demand in a widening sales territory, the company made plans to update its facilities so that operations would comply with standards set by the Federal Meat Inspection Act. Meat inspection for companies engaged in interstate commerce had become mandatory in 1906, and, as Emge considered the potential for marketing its products outside of Indiana, it had to ensure that its facilities would meet with federal requirements and standards. Toward that end, the company employed a Chicago architect skilled in the layout and design of packing plants, and, in June of 1928, construction began on a new plant.

In addition to the main plant, other new buildings were erected, including an inspection office and a facility in which administrative and personnel duties could be performed. By 1935, Emge’s facilities were in compliance with federal regulations, and the right to government inspection was granted. That year, the inspection process began, and Emge meats bearing “Federal Inspection No. 205” stamps became eligible for sale throughout the United States. Emge’s first move outside of Indiana was to establish sales territories and delivery routes in southern Illinois and western Kentucky.

By 1941, Emge & Sons had expanded to include 17 partners. During World War II, Emge saw its workforce significantly depleted as large numbers of employees left to serve in the armed forces. Meat rationing among civilians went into effect in the spring of 1943, and Emge remained in business, shifting operations to accommodate the demand for packaged meat among U.S. soldiers abroad. After the war, production for domestic consumption resumed in full. Emge sales territories were expanded in Illinois and Kentucky and were established for the first time in Tennessee.

In December of 1946, Emge obtained Articles of Incorporation from the State of Indiana, and in January of the following year, the company began doing business as the Emge Packing Co., Inc. with Peter Emge’s son Oscar serving as the company’s first president. In 1949, Emge expanded its operations, purchasing an existing meat packing plant in Anderson, Indiana. Much of this plant was torn down, and new buildings were subsequently erected, providing increased space for the cattle and hog slaughtering, rendering, and manufacturing processes. Both the Anderson and Fort Branch plants were continually updated and added to over the next two decades, as product lines expanded and demand increased.

In 1973, Oscar Emge handed his responsibilities as president over to his son Walter, while retaining a seat on the company’s board of directors, until heart problems forced him to retire ten years later. Under the leadership of Walter Emge, the company survived the effects of a national meat boycott organized by consumer groups in response to rapidly increasing food prices. Despite the boycott, employment at Emge’s two plants had increased to 950, and the company began serving retail customers in Ohio and Michigan in addition to its established sales territories in Indiana, Kentucky, Illinois, and Tennessee. Moreover, a fleet of 85 trucks was maintained to deliver Emge meats to the increased customer base, among whom Emge sliced bacon and cured and smoked hams became especially popular. In Fort Branch, some 2,400 acres of land near the Emge complex was designated for farm use, and grain crops were raised to feed up to 1,000 head of cattle.

In the late 1980s, however, Emge Packing began experiencing some financial setbacks. The meat packing industry, in general, faced increased competition from newer companies that had implemented state-of-the-art production lines. Using high-tech instrumentation to speed up production with a lower wage scale and decrease a company’s dependance on human labor, such new systems led to an overcapacity in many of the country’s meat packing plants, according to some industry analysts. Moreover, economic recession during this time resulted in a sluggish market for meat products, and sales at Emge fell.

In the fall of 1989, Emge management announced that it was entering into sales negotiations with Dinner Bell Foods, Inc., a northwestern Ohio supplier of pork and beef to retail outlets and food service operations. Under a preliminary sales agreement, signed by the two companies on October 9, 1989, Emge proposed to sell its plants in Fort Branch and Anderson. One week later, Emge’s 900 employees received notices of termination, indicating the company’s intention of ceasing operations at the end of the year. As a result, rumors began to circulate that the company would be forced to close its Fort Branch plant, a move that would have devastated the town of Fort Branch, where 440 of the 2,500 residents were employed by Emge.

Officials at Dinner Bell were quick to respond to the growing public concern, stating that the notices of termination simply represented Emge’s compliance with the Federal Worker Adjustment and Retraining Notification Act. In fact, Dinner Bell executives indicated that they would maintain the plants, moving only the cattle slaughtering operations, which would be consolidated with established plants in Ohio. However, Emge’s negotiations with Dinner Bell broke down in December of that year, as Dinner Bell had not complied with a term of the sales agreement specifying that the deal be completed before January 1, 1990.

The future of Emge remained uncertain through much of 1990. The company was forced to lay off 100 of its Fort Branch workforce, after closing down the beef slaughtering facilities there. While slightly improved market conditions allowed the company to recall 19 of the 100 employees in May, the likelihood of future recalls and a return to the stability and success of previous years remained doubtful.

Then, in September of that year, Emge management announced that the company would be sold to Excel Corp. for an undisclosed sum. Excel, a meat processing and marketing company with $5 billion in annual sales, ranked third in the country among packers of beef products and fourth among pork producers. Since Excel was then primarily involved in supplying bulk meats to retailers, Emge would become Excel’s first name brand product line.

Upon taking over Emge’s operations on November 19, 1990, Excel focused on streamlining operations and cutting costs. More than half of the work force was not rehired after the takeover, and employment was cut from 400 to around 150 at each of the two plants. Emphasis was also placed on improving the packaging techniques at Emge, which, the company hoped, would allow for a longer shelf-life for Emge products, which would, in turn, enable wider distribution. Toward that end, Excel suspended Emge’s slaughtering operations, while plans were made to modernize the facilities. In 1991, these plans were forestalled by another downturn in the meat market and inflated prices of pork.

Having sold the Fort Branch farm property and buildings at public auction on January 25, 1991, the Emge family discontinued its ties with the Emge Packing Company. However, as a division of Excel Corp., the company continued to produce meat products under the Emge name, which remained popular in midwestern supermarkets.