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Miller Poultry named supplier of the year by Whole Foods

As published in The Marketplace Magazine Nov-Dec. 2018

GOSHEN, IND — Miller Poultry has enjoyed remarkable growth in recent years. Its focus on quality and animal welfare has been honored by Whole Foods, its largest customer.

But the Orland, Ind.-based poultry processor is quick to stress that it is a small niche player in a massive US market for what has become American’s favorite meat.

 

“People around here think we’re quite large, 800-plus employees and a total of about 750,000 birds (processed) a week, but that’s less than two percent of the size of (industry leader) Tyson (Foods),” which processes over 40 million birds a week, says company president Galen Miller.Galen CV pack picture 5 09Company president Galen Miller

More than 165 million chickens a week are processed in the US., about half a chicken per person for each person in the US. Since 1970, the amount of chicken Americans eat has nearly tripled, with beef consumption falling by close to half, US Department of Agriculture statistics suggest.

Miller has been a supplier to the Whole Foods chain since the mid-1990s, when the retailer had only a handful of stores in Chicago.

Now one of three main US suppliers of fresh poultry for Whole Foods, Miller supplies about 100 Whole Foods stores in five regions.

Earlier this year, Whole Foods honored Miller as its perishable food supplier of the year.

“The reality is, it is a pretty big deal,” Galen Miller admits. “I kind of poo-pooed the thing, but it is a pretty big deal. We should celebrate that.

“They’re looking at the quality of the product, they’re looking at the relationship, at customer service.”

Miller Poultry is a family-owned business dating to 1942, when Galen’s parents and an uncle bought a Goshen feed mill and changed it into a turkey processing plant. They hatched and processed turkeys until the early 1970s. After a series of difficult years, they got out of turkeys, moving into hatching chicks and growing chickens for live markets. In the early 1990s, they purchased a custom processing plant from a failed firm, gradually transitioning that operation to fresh tray pack chicken, with increasing success.

The company is vertically integrated, owning their birds from birth. They grow 1,500 acres of crops for most of their own feed, have their own feed mill in New Paris, and a breeding facility in Vandalia, MI. They hatch their own chicks in Goshen and have about 150 contract growers (over half of them Amish farms, most within 250 miles of Miller operations) who raise those birds, which are later processed at their Orland plant.

“Where we play, it’s the story (of) quality, animal welfare, relationships,” he said. “We take the intangibles and double down on those. Where the big guys play, it’s how many pounds can I come in at a more competitive cost at retail?”

Miller sells under five brand labels, for Whole Foods, Kroeger (the largest supermarket chain in the US), Meijer’s, Busch’s (a Michigan grocery chain) and other customers. Miller Poultry, the name used since 1992, is the primary legacy brand. The company used the Pine Manor brand from the 40s through the 90s. Its plant and real estate still operate under that name.

Katie’s Best (named after Galen and Sue’s daughter) is used in Meijer stores in Michigan, Indiana, Ohio and Illinois. Miller also produces two private label lines.

The market niche Miller sells in, antibiotic-free birds, is increasingly one that its competitors have embraced. Tyson Foods has gone 100 per cent in that direction. Half of all chickens in the US are now grown without use of antibiotics.

That change in Miller’s approach, and several others, was prompted by Whole Foods. Air-chilled production for most of its birds, and certification that no genetically modified organisms are used, are among these measures.AirChillMost of Miller Poultry's production at its Orland plant is air-chilled

Air chilling involves hanging birds in large chambers that blow cool air through to chill the chicken. The advantage this has over the more common process of chilling by immersion in cold water is that air chilling results in less water retention, giving the chicken a firmer texture and richer flavor.

Miller has also adopted global animal protection, a third-party audit system to ensure consumer confidence that things are being done appropriately. Most recently, Miller has embraced CO² gas stunning. Controlled atmosphere stunning is a more humane way of harvesting birds than traditional methods. Animal rights expert Temple Grandin, upon touring Miller’s facility, concluded that controlled atmosphere stunning is the best system available.

The Global Animal Partnership, a non-profit that seeks to promote the welfare of farmed animals by rating the welfare standards of various farmed animal products, has also endorsed the Miller approach.

“I never imagined that we would have the kind of success that we have, and there would have been room for the small niche players, because that was not the case in the ‘70s, and even early ‘80s,” Miller says in reflecting on the company’s growth.

“There was barely any room for the small niche guys. Everything was price. Over time, late ‘80s, early ‘90s, what used to be a small co-op model became a national model.”

Miller deliberately operates below capacity, says Galen’s son, Clayton, who works in sales and marketing. Its existing plant could process another 150,000 birds a week.

“We have existing customers and grow with them,” Clayton said. “We always leave something on the table for our existing customers, so we can grow with them.”Galen Clayton BB 4 21 17Galen and Clayton Miller
That philosophy also allows flex room if new customers arrive. This summer, Clayton was frequently travelling to promote the firm’s expansion into Minnesota and Wisconsin.

Like most businesses, Miller faces its challenges. Online giant Amazon’s purchase of Whole Foods has led to changes in Miller’s relationship with its largest customer.

“They went to a bid program, which is totally new for us,” Galen said. “That just means, you give ‘em your best price, and they decide who they’re going to use.”

All the major chains take a similar approach, he conceded.

Miller has managed to maintain its workforce in the face of stiff competition from a booming recreational vehicle industry, which the area around Goshen is known for.

“Even if they would go to the RV industry, it could be three weeks and they could be looking for a job again (due to the boom and bust nature of that sector).”

Eight major nationalities speaking 11 different languages work for the company, including many Asians and Hispanics.

One of the reasons for their success in retaining workers is that employees know that even though there are difficult times in the poultry industry, Miller takes steps to ensure workers are physically safe, rotating people through tasks to minimize repetitive work that would stress their joints.

Strengthening the benefits that accompany vertical integration, Miller Poultry started a breeder program in the past two years to produce its own hatching eggs.

“We’re trying to consolidate, and build depth, and evaluate what the next step would be,” Galen said.

He has had suitors who wanted to buy the firm but has no desire to cash out and retire. “I don’t know what I’d do, and there are still some things to be done.

“The entrepreneurial spirit thrives on activity and deals, and growth and success.”

He also feels a responsibility to people in his organization — families and leadership-“folks who have been here a long time.”

Galen hopes his legacy will be “that we put people either before, or equal to profit. That we gave back to the communities that we are in, that we produced a high-quality, premium product that was raised in a humane way.” ◆