The Sanderson Story – Celebrating 70 Years of Sanderson Farms
The year was 1947. The setting was a small town in south Mississippi called Laurel. After operating a family grocery and fresh produce business for several years in Hazlehurst, Mississippi, a father and his two young sons decided it might be time to try another business venture of a different variety.
D.R. Sanderson, better known as Mr. Bob, had introduced his two sons, Dewey and Joe Frank, Sr., to the concept of hard work at a very early age. According to young Joe Frank Sanderson, Mr. Bob brought his sons to work in the store as soon as they were old enough to “make change,” as Mr. Bob called it. “Our father taught us honesty, he taught us industry, he taught us to treat people fairly and taught us to work,” said Dewey Sanderson.
“He [Mr. Bob] had a very strong work ethic, and he saw to it that everybody who surrounded him, all his family and all his children, had that work ethic instilled into them,” said Joe Frank, Sr.
For the Sanderson family, the grocery business was the start of a long legacy of hard work, conservative business practices and savvy operations, but it wasn’t until the family opened up a Purina feed and seed franchise in Laurel, Mississippi that the legacy of Sanderson Farms as we know it today would begin. In 1947, the Sanderson’s farm supply business in Laurel sold feed, seed, fertilizer and other farm supplies to the local and surrounding communities with the help of Mr. Bob and Dewey.
In 1951, Joe Frank, Sr. joined the farm supply business after training in the poultry industry at a hatchery in Meridian, Mississippi. Joe Frank introduced Mr. Bob and his brother Dewey to the chicken business by incorporating the sale of baby chicks at the feed and seed store. As time passed, chickens became a popular commodity at the farm supply business.
After nearly eight years of operation in the farm supply industry, the Sandersons made a strategic business change by closing the feed and seed store and focusing strictly on the chicken business. At the time, the Sanderson family didn’t realize just how big of a step that change in business
Together, Mr. Bob, Dewey and Joe Frank, Sr. helped grow the chicken business from the ground up. In 1955, the first feed mill and hatchery were built and the business was incorporated as Sanderson Brothers Farms.
Several years after the feed mill and hatchery opened, Mr. Bob’s brother, Tom, constructed a broiler processing plant in Hazlehurst in partnership with Durr Wise, a local banker and automobile dealer. Ground was broken in December of 1957 for the poultry processing facility, named Miss Goldy, Inc., and the first broiler was dressed on August 13, 1958. Within a year, the plant was up to dressing nearly 3,600 birds per hour.
At that time, the Miss Goldy processing plant had no supporting feed mill or hatchery and baby chicks had to be purchased from two different hatcheries. Recognizing the need for added production capabilities, Miss Goldy leaders began to evaluate different approaches to vertical integration. After much discussion, it was determined that a merger with Sanderson Brothers Farms in Laurel would be the best way to achieve vertical integration for both businesses.
Six years after constructing the processing plant in Hazlehurst, Miss Goldy, Inc. and Sanderson Brothers Farms merged in 1961, forming a company with both poultry production and processing capabilities. That company was called Sanderson Farms.
After the merger, the Hazlehurst plant’s processing capacity increased up to 4,800 birds per hour, providing the company with adequate production and a regular market for their broiler chickens. “We were never worried or anxious about being the largest chicken company, but we did want to be the best, or one of the best,” said Dewey.
Over the next several years, demand for the company’s chicken products spiraled and the Sandersons began looking for a way to expand the company. In 1964, the opportunity for growth came in the form of a bond issue passed by the citizens of the city of Laurel.
The bond issue enabled Sanderson Farms to build a $3 million poultry complex in the city of Laurel, Mississippi, the very same place where it all began at the feed and seed store only 17 years earlier. The Laurel facility, which quickly became a major employer for the area, opened its doors in 1965, marking the beginning of a close relationship between the city of Laurel and Sanderson Farms.
For Sanderson Farms, the construction of the Laurel complex set the stage for a new era in the company’s development. As the company began to grow and expand, the Sanderson family purchased the remaining stock owned by the Wise family in Hazlehurst, giving the Sandersons sole ownership of the company. At this time, the company was processing up to 6,000 birds per hour at both processing facilities in Laurel and Hazlehurst.
In 1969, another generation of the Sanderson family was brought into the business as Joe Frank, Sr. introduced his son, Joe Frank, Jr., to the business as his dad had done for him many years before. Throughout his career, Joe, Jr. watched Sanderson Farms grow from a local chicken producer and processor that his father, uncle and grandfather founded to a major regional poultry supplier.
For the first forty years of the company’s operation, Sanderson Farms’ growth was achieved partly through the acquisition of other companies. In 1974, Sanderson Farms purchased an existing processing plant in Hammond, Louisiana. In order to supply chicken for the processing facility in Hammond, the company built a new feed mill and hatchery located in Hazlehurst in 1978. These production facilities were designed and built with the capacity to supply feed and baby chicks for both the Hazlehurst and Hammond processing plants.
Sanderson Farms continued its history of prudent growth with the acquisition of another processing facility in 1981. The company purchased the Collins Chill Pack Division in Collins, Mississippi, which had previously been a part of a company called MFC Services. Shortly after the purchase of the Collins facility, Joe Frank Sanderson, Sr. succeeded Mr. Bob as president of the company in 1982.
Joe Frank, Sr. served as president of the company for two years before Odell Johnson was named president in 1984 and Joe Frank transitioned to the role of Chairman of the Board. Like both of the Sandersons before him, Odell, who had begun working for the company back in 1958, identified with the Sanderson family’s emphasis on integrity and treating people right.
“One of the things that Joe Frank told me the day he hired me was that at any point if I felt like the company was doing anything that was not right and that would affect my conscience, that I ought to leave,” said Odell. “I never had to leave. They’ve always believed in treating other people like they want to be treated.”
The naming of Odell Johnson as president was sadly followed by the ending of an era for Sanderson Farms as one of the company’s founders, Mr. Bob Sanderson, passed away in 1985. At the time of his death, Mr. Bob was credited with developing the company from a small feed and seed store to one of the larger poultry companies in the United States.
Ever since Mr. Bob’s start in the grocery business, he had been an advocate for savvy operational tactics and conservative fiscal policies. The elder Sanderson was fondly known for keeping a tight rein on expenses and incurring little debt.
Long-time family friend Dr. Walter Washington, former president of Alcorn State University, recalled the following incident with Mr. Bob as a defining moment in his own career and a true testament to Mr. Bob’s conservative fiscal values. “One day at the feed and seed store, Mr. Bob ran out of Purina chow,” said Dr. Washington. “A similar business in Brookhaven, Mississippi carried the same kind of feed so Mr. Bob told me to get in the truck and come go with him to Brookhaven.”
“Going down Old Highway 51, there was a long, steep hill and then valleys,” said Dr. Washington. “He [Mr. Bob] would get to the top of the hill, cut the motor off and cruise down the hill. I said, ‘Why do you do that, Mr. Bob?’ and he said, ‘I’m saving gas. You can never be a success unless you cut the cost.’”
Over the years, those closest associated with Sanderson Farms attribute much of the company’s success to sound financial management, which traces back to Mr. Bob’s business philosophy of “cutting the cost.” As a result of the company’s fiscal responsibility, Sanderson Farms continued to grow and prosper throughout the late 1980s and early 1990s.
In 1986, the company’s sales had shot up to more than $150 million, poising the company for the opportunity to expand the business yet again. That same year, the decision was made to branch out a little further into the chicken business by purchasing a prepared foods plant.
National Prepared Foods in Jackson, Mississippi was purchased in 1986, opening up the company to the prepared chicken, beef, pork and seafood segments of the market. Until the purchase of the prepared foods plant in Jackson, the company had not operated within the further-processed or value-added segments of the poultry market.
Diversification of products along with continued expansion provided a strong foundation for Sanderson Farms that allowed the company to take quite a significant step in 1987. For more than 40 years, Sanderson Farms had been strictly a family-owned business that funded growth internally, and they had been pretty successful at it.
In 1987, for the first time in company history, Sanderson Farms made the decision to go public and trade the company’s stock on the Nasdaq stock exchange. The initial public stock offering raised more than $16 million in capital. Over the next several years, Sanderson Farms utilized the capital generated from the sale of stock to finance long-term growth for the company.
Two years after the company went public, yet another generation of Sanderson leadership emerged when Joe Frank Sanderson, Jr. succeeded Odell Johnson as president in 1989 after Johnson retired. As the third generation of the Sanderson family to lead the company, Joe, Jr. brought with him more than 20 years of experience with the company as well as a keen alignment with his family’s legacy of unparalleled growth, quality products and responsiveness to customer needs.
“Now perhaps at this time, with a fairly big expansion in progress, we’re taking bigger steps than we ever have,” said Joe Frank Sanderson, Sr. “And we’re taking them with younger people than we ever have. We think right now that those people are going to prove to be much better than we were. We have a great deal of confidence in our people, and they’re doing a grand job.”
Under Joe, Jr.’s leadership, the company invested heavily in future growth by expanding existing operations in Laurel, Collins, Hazlehurst, Jackson and Hammond, Louisiana between 1991 and 1994. In that nearly three-year time span, Sanderson Farms invested nearly $125 million in expanding its operations, including building a new $40 million retail poultry complex in McComb, Mississippi in 1992.
In addition to increasing production and distribution capacity, the company diversified into new product lines including the introduction of frozen entrees featuring popular dishes such as chicken primavera, lasagna and seafood gumbo. By the early 1990s, more than 95 percent of all chicken products sold by Sanderson Farms were considered value-added products.
“When my grandmother wanted to serve chicken, she caught a chicken, wrung its neck, plucked it, cut it up and cooked it,” said Joe Sanderson, Jr. “When my wife wants to serve chicken, she goes to the supermarket, buys chicken already cut into pieces- often boneless or skinless, takes the chicken home and cooks it. When my daughter wants to serve chicken, she buys it already cooked, takes it home and serves it.”
Expansion and diversification of product offerings pushed sales and profits to new highs at Sanderson Farms during the early 1990s. Annual revenues climbed to $210 million in 1992 with operating profits averaging approximately $16 million per year. By 1992, Sanderson Farms employed a workforce of over 2,500 people.
With the opening of the McComb complex, revenues jumped to a record $269 million in 1993 and $372 million in 1994 with operating profits at more than $32 million in 1993 and $43.8 million the following year. In 1994, Sanderson Farms was processing more than 160 million chickens, creating nearly 522 million pounds of dressed meat. Consumption of chicken in the United States continued to rise with per capita chicken consumption climbing from 30 pounds in the 1960s to approximately 80 pounds in the early 1990s.
By 1995, Sanderson Farms was employing more than 4,000 employees and operating five processing plants, four hatcheries, three feed mills and one byproducts plant. At this time, the company was also contracting with more than 600 growers and breeders that supplied its chicken.
As a result of increased demand for poultry products, Sanderson Farms expanded yet again in 1997, but this time, the expansion was in a whole new territory for the company. For the first time in company history, Sanderson Farms expanded its operations outside of the 135-mile radius it had traditionally operated within surrounding the states of Mississippi and Louisiana. By 1997, Sanderson Farms was officially Texas-bound.
That year, the company opened a new retail poultry complex in College Station, Texas that included a processing plant, hatchery and feed mill. The company’s milestone expansion into Texas was followed by several other, not as pleasant, milestones over the next two years with the passing of Joe Frank Sanderson, Sr. in 1998 and Dewey Sanderson in 1999. Yet another era of the Sanderson family had come and gone for Sanderson Farms.
Over the next six years, Sanderson Farms continued to thrive under the leadership of Joe Sanderson, Jr. In 2004, Joe Sanderson transitioned to the role of Chairman of the Board as his father before him had done when Odell Johnson was named president.
In 2004, Lampkin Butts was named president of the company, marking the company’s fifth president and second leader of that stature from outside the Sanderson family. Lampkin had joined the company back in 1973, working in a variety of capacities within the company including National Sales Representative, Shift Manager, Division Manager, Director of Processing and Sales, and Vice President of Sales.
Under Joe and Lampkin’s leadership, Sanderson Farms entered a period of steady growth over the next ten years beginning with a 2005 expansion into Georgia. Similar to the Texas expansion back in 1997, the new Moultrie, Georgia poultry complex marked the company’s first expansion into the state of Georgia.
In 2006, Sanderson Farms built a new Corporate Office in Laurel followed by a 2007 return to the state of Texas with a big bird deboning complex located in the city of Waco. Four years later, the company expanded yet again to another state, but this time the state was a little further north of the company’s existing operations. In 2011, Sanderson Farms expanded to North Carolina for the first time, marking the company’s fifth state to build operations within.
Sanderson Farms’ latest fully operational complex addition was built in 2015 in Palestine, Texas. This $140 million facility includes a big bird deboning plant, wastewater facility, hatchery and feed mill. In 2015, the company also announced plans to build another $140 million big bird deboning complex in St. Pauls, North Carolina. Operations in St. Pauls are scheduled to begin in early 2017.
Since 1993, Sanderson Farms has built more poultry complexes than any other company in the nation. 70 years later, the company has built eight poultry complexes and acquired four processing facilities. The company’s operations, now spanning five states and 16 different communities, encompass 11 processing facilities, nine hatcheries, eight feed mills and one prepared foods division.
As it has since the Sanderson family first founded the company, Sanderson Farms has prided itself on maintaining a low level of debt and operating under a fiscally conservative management philosophy. Even today, the company still continues to execute that plan of prudent growth and fiscal responsibility. In fact, for the first time since 1991, Sanderson Farms is completely debt free in spite of building two $140 million poultry complexes in the past two years.
Now more than 13,000 employees and 800 independent family farmers strong, the company remains a family-oriented business much like the feed and seed store where it first planted its roots over 70 years ago. With more than $2.8 billion in annual sales and a weekly processing capacity of more than 10.625 million chickens, Sanderson Farms is still a family business in almost every sense of the word. After three generations of Sanderson leadership, the nation’s third largest poultry producer has hardly forgotten its humble roots.
Today, under the direction of Joe Sanderson, Jr. and Lampkin Butts, the company maintains an enviable position of strength in the market and continues to look forward to future growth. Sanderson Farms has come a long way from the small-town feed and seed store Mr. Bob and his family opened in 1947, but the principles on which Mr. Bob built the company still remain consistent more than 70 years later.
Hard work, honesty, integrity and respecting the dignity of each person are all principals that have served the company well throughout its long history. No reason to change what has worked so well for over 70 years.