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Beef 20/20 Program Tours HEB
And Standard Beef Company

By Colleen Schreiber

PLANO ó Since 1991, more than 2000 beef producers have attended the popular "Beef 706" program. Another 600 or so have gone on to the advanced "Beef 808" course, and the new "Beef 20/20" program has recently been launched. The first 20/20 program was held in September and more are scheduled for the coming year in several different geographic regions across the state.

The concept for these programs was developed by the Texas Beef Council and Texas A&M University. The focus of Beef 706 was to identify the problems in the beef industry. The National Beef Quality Audit has been used as the road map. The program, as were others to come, was also designed to serve as an information bridge over the chasm between the post-harvest industry and the production industry.

After several hundred producers went through Beef 706, they began asking for more. Once the problems had been identified the next natural step was to find solutions for these problems. The result was Beef 808.

The format for this program was roundtable discussions between producers and the post-harvest industry. This program was also well received with some 600 producers participating. The one problem was that the pool of producers was large and rotating constantly, but the pool of post-harvest participants was much smaller.

As a result, coordinators have decided to do away with Beef 808 and go instead to the new Beef 20/20. This program continues to focus on solutions, but it also gives a lot of attention to the philosophies of total quality management and beef quality assurance.

In this first 20/20 seminar, participants heard about various TQM programs from companies in and outside the beef industry. The message, however, was always the same. Another part of the program was what organizers called "virtual video tours" to some of the different post-harvest manufacturing facilities. Logistics prevented the class from touring the facilities in person, so the facility came to them via video. Two such operations toured were HEB's warehouse distribution facility located in San Antonio and Standard Meat Co. headquartered in Dallas.

David Lusk, beef category manager for HEB, walked participants through his companyís warehouse video tour and presented to beef 20/20 participants an overview of some of the things HEB is doing to sell beef.

HEB has a warehouse in San Antonio and another in Houston that have both dry and refrigerated storage. They also have a produce warehouse here. The warehouse in San Antonio encompasses about a million square feet. Contained within, Lusk said, is a dairy plant, a milk bottling operation and a poultry manufacturing center as well as a commercial bakery, salt and snack manufacturing plant, ice plant and an ice-cream plant. HEB is also in the process of building a carbonated beverage plant.

Some 200,000 square feet is allocated just for meat storage. When full, the warehouse will hold about 150 loads of meat product.

"That sounds like a lot of meat, but weíll turn that in about three days. We receive about 50 trucks a day. We only have eight bays to work with, so we end up receiving about 22 hours a day, and we never seem to get caught up."

The marinated meat plant is also located in San Antonio. Every single item in HEBís marinated meat category, Lusk said, is created in San Antonio by HEB meat partners, designed by HEB designers, and every item is consumer validated in South Texas by HEB customers.

Muscle cuts from both beef and pork are also prepared in San Antonio at their case-ready plant.

Once the raw product is unloaded at the San Antonio warehouse, it first goes to the fresh meat quality inspection station. Here inspectors look at the age of the product, its temperature, and because HEB has so many items that are specifically fabricated for their stores, they also check for trim and grade specifications here.

HEB looks at five percent of every load that comes to their warehouse. If there is a defect, a digital picture is taken of the defect and itís e-mailed to the appropriate supplier plant.

"We have a very elaborate relationship with our suppliers," Lusk remarked. "We show them why itís important to have a consistent product. They come to our warehouse in San Antonio and we go to their packing houses."

HEB keeps a database of each supplierís performance by name, plant and even by shipment. That way they have a record of each plantís performance over time, and that record is used in making procurements.

HEB has a fleet of 1800 trailers and 370 tractors. Last year, drivers drove 42 million miles delivering groceries around South Texas and only had four accidents, the speaker noted.

Once a storeís order is selected and palletized, it goes from the meat warehouse to a common collection point. Prior to shipping, a storeís complete order is gathered. The order for meat, floral, dairy and other refrigerated products is all combined on one truck that goes to one specific store. Most stores, Lusk said, get six deliveries a week.

HEB has been recognized as an innovative leader in the retail industry. One of their greatest advancements is now every one of HEBís retail cuts comes with cooking instructions, something which their customers have requested for many years, Lusk said. This one advancement, he told listeners, has redefined HEB's relationship with their customers.

"It gives our meat cutters and wrappers a tool to talk to our customers about how to prepare fresh meat.

"This is not a one-size-fits-all kind of program," he continued. "Every single item has unique cooking instructions based on the thickness of the cut and quality grade."

At the top of the label in big bold letters is the recommended cooking method ó grilled, braised, oven fry, etc. Beneath that are temperature recommendations. In the upper right-hand corner is the time it takes to prepare that particular cut.

"Feedback from our customers indicates surprise that there are so many beef items that can be prepared in less than 10 minutes," Lusk told the group. "Weíve changed the consumerís perception about beef from being a difficult to prepare category to one of convenience. Without fail, every item that cooks in less than 10 minutes has increased in sales."

This one program, Lusk said, has also changed HEBís meat cuttersí view of their job responsibilities.

"Our meat cutters now understand that theyíre cutting food. Twenty years ago, culinary wasn't even in their vocabulary. Back then, they took a big piece of meat, put it on the saw table and cut it into smaller pieces."

HEB has 207 stores, which means that they also have 207 individual processing centers because each store cuts its own product. That alone makes the margin for error great. To lessen that error, HEB works hard to train their meat cutters. Because every single item cut at retail has cutting thickness specifications, each meat cutter uses a ruler at the saw tables to ensure accuracy, proof of just how critical these specifications are.

One category that has put HEB on the map is its fully cooked line. Three years ago there were only four items in the fully cooked category. Today the fully cooked line comprises 70 items and 70 consequential items.

"Fully cooked to us is not just a name; it's a brand," the speaker pointed out. "We have fully cooked burgers, chicken fried steak and fully cooked brisket, the anchor of the category. There is also the fully cooked ground beef crumbles, which come in three flavors in a 12-ounce bag. All of our products are guaranteed to deliver."

Fully cooked products, he said, are actually entree replacements.

"Our customers are looking for a very quick meal, but they still want to have some ownership in the preparation of that meal."

The majority of HEBís new products, fresh, seasoned and fully cooked, Lusk told listeners, are coming from the chuck and the round.

"The creation of value-added beef, no matter which category," he continued, "is not about selling less for more; itís about what makes the product better for the customer."

In fact, HEB, Lusk said, actually makes less on most of their value-added items than they do on fresh beef.

"We use value-added to grow our beef business."

Beef sales at HEB have, in fact, averaged double-digit increases every year for the last 10 years. Furthermore, beef sales are growing at a faster rate than the corporate rate.

Lusk also pointed out that their value-added line has actually helped HEB sell more in their fresh meat category as well. HEB sells, on average, 400 to 500 loads of fresh briskets a year. Sales of their seasoned brisket, which has been on shelves now for two years, have been incremental to the fresh. Then they created the fully cooked brisket. Its sales have been incremental to the seasoned.

"As long as the original product is growing at its normal historical average, that greatly expands the brisket sales at HEB. This model works effectively for every value-added item weíve done," Lusk noted.

The speaker concluded by telling listeners that he is excited about the way beef is positioned at HEB.

"Weíre growing at a rapid rate, and weíre positioned to continue that trend. HEB has a commitment to the beef industry. We are going to continue to develop unique and creative ways to fabricate and merchandise beef subprimals, high quality seasoned items, and great quality fully cooked products.

"What we need from you," he told producers, "is a promise to continue to find ways to deliver to us an even more consistent product than weíre receiving today."

Sam Beebe, general manager of Dallas-based Standard Meat Company, gave an overview of that operation as well. The company was started more than 50 years ago by the Rosenthal family. Essentially, the company was a purveyor providing steaks for many of the local and surrounding restaurants. The company sold some 20 to 25 years ago and since then it has changed hands many times. Only recently did the Rosenthals get back into the business. Five years ago, Outback Restaurant asked them to be their supplier.

At that time, Beebe told the group, Outback had two suppliers, an IBP plant in Chicago, and an IBP plant in Booneville, Arkansas. They were growing so rapidly that they wanted a third supplier, and they were interested in an "independent" supplier.

Currently Standard Meat Co. is supplying steaks for 164 Outback Steakhouses and 28 Carrabas Restaurants.

"We started out five years ago with 12 employees and 15 Outback Steakhouses. Now we have 85 employees, and we supply 170 Outback Restaurants. Our sales went from about $5000 a week to $1.3 million a week," Beebe told listeners.

Because of the growth brought on by this new relationship, Standard Meat Co. built a new plant. It is state-of-the-art. At the same time they formed a partnership with Freedman Food Service.

"Because we only had one customer, we did not want to hire sales service just to move our byproducts, so we partnered with Freedman so we would have an outlet for the byproduct," Beebe explained.

Standard's facility encompasses 70,000 square feet. Their coolers go five pallets high, and they have 1200 pallet spaces.

"We can store approximately 1.5 to two million pounds of product on sight."

They buy the majority of their product from IBP and Excel and a small amount from Monfort.

Standard Meat Co. has a unique storage system on rails.

"We can push a button that will move the stacks any way we want. We can create an aisle anywhere we want. That gives us 40 to 50 percent better utilization of our storage," Beebe told listeners.

When the product arrives at the warehouse, everything is scanned and palletized, one product per pallet, one date per pallet. Everything is bar coded and every product is in a perpetual inventory system.

"We know exactly how old the product is, when it was produced, the weight of the product, age of the product and the establishment that it came from," Beebe noted.

All product is aged from 21 to 28 days depending on the specifications from Outback, and also depending on whether itís a strip, Porterhouse or sirloin. The aging cooler is kept between 30 and 31 degrees.

Once the product is aged, itís pulled out of inventory and issued to production. In the deboxing area the product is loaded onto conveyers which carry it to the processing area. The product is never exposed outside the package before it gets to the processing floor.

Each processing line is identical with eight cutting stations per side, 16 per line.

"When we built the facility we did mock cutting stations. We would roll them out and let our people cut in them for a day to see what was the most comfortable for them," he noted. "All the components at the cutting stage will interchange. For example, the cutting table will move over, as will the scales, to accommodate either right or left-handed cutters. We also have unique lighting. The better the lighting the less fatigue. Our cutters are spending eight to 10 hours a day in a 38-degree room. Itís a relatively hostile environment, so we want them to be as comfortable as possible."

Because Standard has only one customer, they can afford to have large and long production runs. A production run for, say, top sirloin is 25,000 to 30,000 pounds. In contrast, Freedman might have 15 to 20 different cutting stations doing 15 to 20 different products with different cutting specifications. Freedman supplies several national restaurant chains and restaurants. They also do a lot of grinding for On the Border and Chilis. They also do bulk ground beef and patties for Outback.

"We didnít want to get into the grinding business because we did not want the liability," he told listeners.

Standard Meat Co., Beebe said, has long practiced total quality control.

"When we hire employees, we make sure they know that they are the quality controls of our whole operation."

Individual yields and productivity are run on all steak cutters so that at the end of the day, within five minutes of the last piece of meat that goes down the line, each cutter knows how much raw material they cut, how many finished goods they produced and how much byproduct they generated.

Once processed, every cut is mechanically tenderized. Tenderloins are run through a skinning machine which removes the silver skin.

"We try to limit the time to no more than 45 minutes from the time itís issued to the debox room until itís reboxed back in the processing area," Beebe said.

The most experienced steak cutters cut the higher-dollar products, the pealed tenders, for example, for which Standard Meat Co. pays about $8 a pound in the raw form.

On any given day, Standard cuts 25,000 to 30,000 pounds of sirloins, 12,000 to 13,000 pounds of tenderloins, 8000 to 10,000 pounds of strips and 8000 to 10,000 pounds of short loins.

     



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