Stock Yards Packing Co., Inc.

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Stock Yards Packing Co., Inc.

340 North Oakley Boulevard
Chicago, Illinois 60612
U.S.A.
Telephone: (312) 733-6050
Toll Free: (800) 621-1119
Fax: (312) 733-0738
Web site: http://www.stockyards.com

Wholly Owned Subsidiary of U.S. Foodservice
Incorporated: 1893
Employees: 115
Sales: $78.20 million (1998)
NAIC: 311611 Animal (Except Poultry) Slaughtering

Stock Yards Packing Co., Inc. is one of the largest suppliers of choice and prime cuts of beef to restaurants, resorts, hotels, and private clubs. The company also supplies lamb, poultry, pork, and desserts in the United States and worldwide. Through the years, Stock Yards has pioneered such distribution concepts as shipping by train, offering meat as specified by the customer, offering hand-cut individual portions, and vacuum-packing. The largest concentration of customers are in Chicago, Las Vegas, and Atlantic City, but the company supplies meats to the world market and to individual customers via mail order and the Internet. Owned by the Pollack family for five generations, the company was sold to U.S. Foodservice in 2000.

The Early Years

In the early 1890s, Chicago was known throughout the United States, and the world, as the butcher capital. In 1893, Bernhard Pollack opened a retail butcher shop on Halstead Street. He took inspiration for the stock yards of the area to name his shop Stock Yards Packing Company. With his son, Gus, as an assistant, Pollack expanded the business to include the wholesale markets of restaurants, hotels, and clubs. Gus took over the company in 1902 and moved the shop to Wells Street as business increased. The younger Pollack felt the potential from wholesale business was so great that when he moved the company, he discontinued the retail portion of the business.

Just as World War II was breaking out, Gus’s son Bernie joined Stock Yards in 1939. Father and son moved the company yet again, to the Fulton Market area of Chicago. The war years were difficult for Stock Yards, as the U.S. government instituted rationing. During those years, the company covered the display windows of the coolers with paper, so people in the streets could not see the large quantities of meat that, because of rationing, the company would be unable to sell them.

Postwar Growth

The end of World War II saw the push for Stock Yards to become a national company. Bernie Pollack headed the company and brought on his two brothers-in law, Harry Katz and Stanley Katz. With each man overseeing his specialty—Bernie, administration and sales; Harry, merchandising and sales; and Stanley, purchasing and production-the company’s sales out-side of the Chicago area began to grow. Harry Katz began to drive throughout the Midwest, Texas, and Oklahoma, visiting restaurants, clubs, and hotels to push for business. Many customers were gained with the company’s promise to deliver meat that met the customers’ selection for specifications and aging. In fact, Stock Yards was one of the first meat companies to allow customers to order specific grades and cuts of meat. Stock Yards shipped its orders outside the Chicago-metro area in wooden barrels and “church containers” packed with dry ice.

In the early 1950s, Stock Yards continued to look for new and innovative ways to provide customer service. The company hired sales people outside of the Chicago area—first in Texas and Louisiana—so they could offer hands-on service for customers. Stock Yards began shipping customers individual portion-sized cuts of their meats at this time, again becoming one of the first companies to do so. When the USDA designated grades of meats and required that they be cut in separate rooms during this time, Stock Yards designed two different rooms at their facilities, for U.S. Choice and U.S. Prime, and became one of the first companies to win approval from the USDA for such labeling.

It was at this time that Stock Yards re-entered the retail business. As one of the first wholesalers to offer meat directly to consumers, Stock Yards began selling meats via mail-order in gift packs and for home consumption. The retail business took off and Stanley Katz produced a newsletter, Prime Times, for mail-order customers. The newsletter offered recipes (later put together in a cookbook) and showed the best of what Stock Yards had to offer consumers.

Pushing westward, Harry Katz made some sales trips to Las Vegas. After World War II, the tourism industry in Las Vegas grew rapidly, and the city became that area’s largest employer. The postwar period saw immense growth in the hotel industry, as casinos were built and resorts and restaurants sprang up to accommodate out-of-town visitors. The tremendous growth in the Las Vegas market soon resulted in Stock Yards sending refrigerated trucks to the area twice a week. Over the next two decades, business grew at such a rapid clip that Stock Yards built its first non-Chicago area distribution facility in Las Vegas in 1970.

Due to growth in the late 1940s and early 1950s, and with an eye towards future growth, Stanley Katz located and purchased a new site for Stock Yards in 1953. Located three miles from the Fulton Market area, the Oakley Boulevard headquarters would continue in use through the 1990s. Originally encompassing some 30,000 square feet, the new site was the first meat packing plant designed specifically for customers in the hotel, restaurant, and resort business. Through the 1970s, several expansions were made to the plant, the first being a 10,000-square-foot addition in 1960, which was used for coolers that dried aged beef. Demand for dried aged beef fell during the 1980s, and the coolers were converted to cryovac age beef. The last addition to the Stock Yards plant was in 1978, bringing total freezer, storage, and office space to 60,000 square feet.

In 1965 the fourth generation of Pollacks joined the company. Bernie’s son, Dan, first spent ten years working in all departments, learning every aspect of the business. He then concentrated on sales, working under Stanley Katz. Recalling the boon the casino resorts in Las Vegas had been to the company, Dan Pollack made sales trips to the Atlantic City, New Jersey, casinos in the early 1980s. By the end of 1982, business in Atlantic City had grown to the point that Stock Yards built a distribution center in the area.

International and Internet Expansion in the 1990s

Not content with a growing and thriving U.S.-based business, Stock Yards began branching out internationally. By the early 1990s, restaurant and resort sales had been made in Jamaica, the Bahamas, Japan, Mexico, and Hong Kong. To develop more island-based business and to better service existing customers, Stock Yards hired a Caribbean sales person.

The fifth generation of Pollacks came on board in 1994. Dan Pollack’s son, Matthew, joined the company after a brief stint working for an insurance company after college. By 1997, at age 27, Matthew took over the running the company’s day-today operations from his father. His goal in the first years was to reorganize and modernize the company. To that end, he expanded on the retail side of the business, by establishing a web site for customers to order their gifts and meats. By early 2000, four percent of sales were coming through Internet orders. The company also signed up with some portals on the Internet, considering it an important part of its Internet strategy. About one-third of Stock Yards’ Internet sales came from portals. Net sales for the company in 1999 was approximately $108 million.

In the late 1990s, the challenge facing the beef industry was primarily one of nutrition. Health experts had been telling consumers for years that too much red meat was bad for their health, and the message was getting across. By 1997, the consumption of beef was down 30 percent from 20 years earlier. Other meat producers were quick to offer their meats in convenience packages and in pre-cooked, individual portions to consumers. Beef producers were behind the curve in that regard.

A Beef Forum held by the Cooperative Research Farms in 1997 defined the problems and explored solutions to the industry’s problems. Cattle feeders were encouraged to raise high-quality meat, as most packers paid a premium for higher-quality meat. It was also suggested that producers needed to focus on international marketing, as demand for beef was higher internationally than in the United States.

Company Perspectives:

Just as our USDA Prime beef gets better with age, we owe our reputation as the premier provider of gourmet steaks to the test of time. From the day Bernhard Pollack founded Stock Yards Packing Company in the stock yards area of Chicago in 1893, we were clearly focused on providing the highest-quality products with unparalleled service and utmost integrity.

Key Dates:

1893:: Stock Yards Packing Company is founded by Bern-hard Pollack as a retail butcher shop in Chicago.
1902:: Gus Pollack takes over and concentrates on the wholesale side of the business.
1939:: Gus’s son, Bernie Pollack, extends sales to Wisconsin and Michigan.
1948:: The company begins shipping meat in barrels packed with dry ice.
1964:: With new USDA grading requirements, Stock Yards has its beef cut in separate rooms.
1970:: A permanent facility is opened in Las Vegas.
1982:: A cooler-freezer distribution center is built in Atlantic City, New Jersey.
1990s:: Stock Yards cultivates business in the Caribbean, Mexico, and Asia.
2000:: Stock Yards is sold to U.S. Foodservice, a national food distribution company.

The third quarter of 1999 saw good times for meat packers, as the price of beef soared. Cattle feeders, responding to demand, raised the price of cattle, and packers, in turn, passed along higher prices to restaurants. In October 1999, the whole-sale price of tenderloin was $10.55 per pound, up from a price of $7.50 to $8 per pound. Increased demand was attributed to the continued growth of the U.S. economy, leading to higher demand for better-quality meats, and to the upcoming millennial New Year’s Eve celebrations.

In February 2000, Stock Yards Packing was sold to U.S. Foodservice, one of the largest food distributors in the United States. With annual sales of about $8 billion, U.S. Foodservice supplied over 143,000 restaurants, hotel, cafeterias, and sports arenas in the United States. The company distributed national, private label, signature brand items—over 143,000 of them.

U.S. Foodservice owned seven other custom meat cutters at the time and wanted to add a company with a solid reputation to its mix. Other pluses in acquiring Stock Yards were that company’s strong management and labor force; their excellent customer service; reputation for high-quality products; and the fact that Stock Yards was a Certified Angus Beef distributor. Dan Pollack stated at the time of the acquisition that he hoped to use Stock Yards’s expertise to streamline and standardize the meat cutting operations of U.S. Foodservice.