Zacky Farms LLC



2020 South East Avenue
Fresno, California 93721
U.S.A.

Telphone: (559) 486-2310
Toll Free: (800) 999-8202
Fax: (559) 443-2706
Web site: http://www.zacky.com

Private Company
Incorporated:
1955
Employees: 1,100
Sales: $100 million (2003)
NAIC: 112330 Turkey Production

Zacky Farms LLC is a family-owned, Fresno, California-based poultry company that, after starting out in the 1920s involved in eggs and chickens, is now focused on turkey. The operation is vertically integrated: Zacky hatches its own turkeys, feeds the flock from its own granaries, then processes the birds in its own plants and delivers the finished product on a company-owned fleet of trucks. Since the 1950s, Zacky has avoided using hormones, preservatives, and additives and now offers free-range turkeys, which are allowed to roam freely and feed on a special diet of corn and natural grains. Zacky's turkey products include whole turkeys, fresh ground turkey, turkey patties, vacuum-packed breasts, skinless and boneless turkey parts, sliced turkey breast, turkey sausage, and turkey-based lunch meats. In addition, the company's Stockton, California, plant is able to process beef, pork, and chicken along with turkey to produce hot dogs and luncheon meats, either in bulk or vacuum packed. Zacky markets its products under the Zacky Farms and Westerner brands and also does private label work. In addition, Zacky offers a foodservice line of products.

Origins

Zacky Farms was founded by Samuel Zacky, who was born in Kiev, Russia, in 1897 and 11 years later immigrated with his family to the United States. They eventually settled in the quiet farm town of Los Angeles, California, around the same time that the fledgling movie industry was beginning to take root. As a teenager, Zacky peddled nuts and fruits. By 1928, he had saved enough money to enter the poultry business, opening Sam's Poultry Market, located at the corner of Slauson and Western Avenues in Los Angeles. He sold chickens, turkeys, and ducks on both a retail and wholesale basis. The birds were "dressed while U wait." Customers selected live birds bought from a local farm, and these were then killed, plucked, and gutted on the spot. To supply the store, Zacky eventually bought a ranch in Van Nuys, California, where in addition to hens and fryers he raised rabbits.

At that time, the poultry industry was undergoing dramatic changes. Previously the part-time occupation of women and children, the poultry industry came of age in the 20th century. Poultry science programs were launched at American colleges, leading to the development of mass production techniques that made small-farm chicken enterprises obsolete. Red meat rationing during World War II resulted in increased consumption of chicken, a demand met in large part by the introduction of battery cages arranged in rows and tiers. This arrangement became the standard way to raise chickens for both eggs and broilers. After the war, Americans continued to consume eggs and chicken at the same rate, although over the long term consumers began to cut back on eggs and ate more chicken, tipping the traditional balance in the poultry industry. Another phenomenon of the postwar 1940s was the rise of supermarkets and suburbs. When World War II ended, Samuel Zacky sold his ranch to buy a poultry market in Monterey Park, California, where his three sons (Albert, Robert, and Harry) began to help out. It was primarily a retail operation, but the younger Zackys correctly surmised that the emerging supermarket channel offered a tremendous growth opportunity. The family business now made the transition from a retail to a wholesale business and from being a local provider to becoming a state-wide provider.

Zacky Farms Incorporated in the Mid-1950s

In late 1953, the family launched a wholesale operations called Zacky and Sons, and soon afterward opened its first processing plant, located in South El Monte, California. In 1955, Zacky Farms was incorporated. Even then the family was beginning to think in "natural" terms and looking to develop a vertically integrated company. Bob Zacky's wife, Lillian, who went to work for the business in 1956, told Los Angeles Magazine in a 1993 profile, "We began raising our own chickens, building our own ranches, manufacturing our own feed." Much of this activity took place after the company's founder, Samuel Zacky, who had remained very much involved in the company until the end, died in 1964. Albert and Robert Zacky took charge and continued to build the poultry operation, with Albert responsible for raising the birds and Robert distributing the product. Zacky built a chicken hatchery in 1967.

One of the most significant steps taken by the company occurred in 1971, when Zacky acquired a larger poultry business, British-owned Balfour Guthrie, which brought with it the Fresno Feed Mill and extended Zacky's presence to central California. The mill was upgraded and expanded in order to provide Zacky and its multi-million-bird flock with the various types of feeds they needed. It was also during this period that the family business brought in experienced outsiders, Hank Frederick and Saul Brand, who played instrumental roles in Zacky's continued growth in the 1970s. A Southern California distribution center was established out of an El Monte rabbit operation the company acquired. Zacky ended the 1970s by opening a state-of-the-industry, 150,000-square-foot chicken processing facility in Fresno that was capable of processing more than one million chickens a week.

Zacky added turkey to the mix in 1984 with the purchase of Swift and Company's turkey assets, which included hatcheries, growout ranches, a processing plant, a packaging building, and a cold storage facility. A year later, Zacky added to its turkey business through another acquisition, this time buying Poppy Foods Company. As a result of these moves, Zacky was now a fully integrated chicken and turkey operation. The company raised its own flocks, fed from the products of its mills, and the birds were then processed in Zacky's plants and sold through its distribution network. The chicken products were mostly sold in state, but Zacky turkey products could be found throughout the West. Moreover, the South El Monte facility became a major California distributor of beef, pork, lamb, and fish products. Nevertheless, the focus remained very much on poultry, especially in light of shifting consumer tastes. In 1987, Americans, who were becoming increasingly more health conscious, ate more poultry than beef for the first time in history, a trend that would continue. Turkey in particular, which was once primarily reserved for holiday dinners, was now finding its way into the diets of Americans throughout the year because its low-fat, high-protein content.

It was during the late 1980s that Lillian Zacky became the voice of Zacky Farms and launched a successful, long-running series of radio spots. As she told Los Angeles Magazine in the 1993 profile the publication ran on her, after going to work for the family business in 1956 she did "a little bit of everything." "Somebody would call and ask for accounts receivable. I'd say, 'Just a moment, please,' wait 10 seconds and come back and say, 'Accounts receivable. May I help you?' " That was "probably why Bob suggested me for the radio spots. He knew I had a flair for the theatrical." Nevertheless, she had to audition for the job along with a dozen other people. The spots featured her pretending to talk on the telephone, lending a folksy charm as she regaled listeners with stories about Zacky Farms. Listeners responded well to the spots, leading many people to send her letters asking for personal advice. "I think people respond to that fact that I don't sound trained or fussed over." Regardless, the advertising campaign played a key role in Zacky Farm's steady growth in sales. By the end of the 1980s, the company was expanding once again to meet rising demand, committing more than $16 million to build a new protein conversion plant in Fresno; a new hatchery in Kerman, California, adding 300,000 chickens each week to the production cycle; and a new feed mill near Traver, California, the largest animal feed mill west of Denver. Not only did these additions help Zacky to satisfy the growing demand for its products in Southern California, they helped the company in its efforts to gain market share in central and northern California.

Facilities Added and Expanded in the 1990s

Zacky entered the 1990s as California's second largest poultry grower, processor, and supplier, trailing only Livingston, California-based Foster Farms. The company continued to enjoy strong growth, leading to the upgrading of current facilities and the addition of others. A new feed mill that Zacky opened in Traver in 1991 was one of the poultry industry's first automated operations. Later in the decade, the company bought a Stockton processing facility from the Safeway supermarket chain. With the help of a government incentive package, Zacky initiated a major expansion in Fresno in 1996. A 75,000-square-foot addition to a cold storage plant increased storage capacity by 13 million pounds, allowing Zacky to handle all of its storage needs internally rather than contract some out to a public freezer. The Fresno turkey processing operation also received an additional 5,000 square feet of space, a move that consolidated functions that had previously been divided between two buildings. Moreover, the new equipment that was part of the expansion was more energy-efficient and used less water.

Company Perspectives:

Whether you're preparing breakfast, lunch or dinner at home, entertaining friends, or enjoying a meal at a restaurant, you'll find our turkey and deli products of the highest quality, second to none. Over the years, our Company has become a major corporation, but we've never lost sight of our family heritage, and never will.

All told, the project cost $12 million, the first installment on $124 million worth of investment the company envisioned for the Fresno operation over the next 20 years. The next phase took place in late 1999, when Zacky launched a $10.4 million capital improvement project on two Fresno facilities. At a cost of $3.4 million, about 18,000 square feet of the turkey-processing plant was remodeled in order to permit the production of new turkey products: fresh turkey parts, sliced turkey breast, ground turkey, and turkey sausage. It was all part of an effort to tap into the growing market for fresh tray-packed turkey products. Zacky spent another $7 million to expand its Fresno chicken-processing plant, adding 40,000-square-feet of space to include a new weighing area, staging and shipping area, and boxing room, as well as an employee facility. Both projects were completed in the early weeks of 2000. Also during the course of the 1990s, Zacky added a new hatchery.

Focusing on Turkey

Zacky was not the only poultry company to ramp up production. Foster Farms followed suit, as did companies across the country. However, excessive expansion resulted in a market crunch in the chicken industry, which during the early years of the 21st century experienced the poorest conditions it had faced in 20 years. Zacky also had to contend with a misfortune that adversely impacted the company's ability to compete when, in April 2000, Albert Zacky, president of Zacky Farms, died of an apparent heart attack at the age of 71. Aside from the loss of his leadership, the family business faced a hefty inheritance tax bill, placing a financial burden on the company's operations.

In March 2001, Zacky Farms agreed to sell its chicken operations to Foster Farms, with Albert Zacky citing the federal inheritance tax as the compelling reason for the sale. Foster Farms took over Zacky's 35 live production ranches, feed mill, hatchery, the Fresno processing plant, and a Los Angeles distribution center. As a result, Foster Farms would move up the rankings in what was already a consolidated industry. Instead of being the tenth largest chicken producer in the United States, it was now number eight.

Zacky, its name long associated with chickens in the mind of California consumers, now focused exclusively on turkey products. The money received from the sale to Foster Farms was used to pay off the inheritance taxes and to invest in the company's turkey operations. As part of its commitment to the turkey business, Zacky moved its corporate offices from El Monte near Los Angeles to Fresno in 2003. The company's chief executive officer told the Fresno Bee, "Having our offices near our existing plant site will expedite daily operational issues as well as the flow of information to our employees. The offices were included in a new 12,000-square-foot structure that also housed a new kitchen where turkey recipes could be developed and tested.

In some ways, selling off the chicken operation gave Zacky a new lease on life. Lillian Zacky told the press that Zacky Farms took on the spirit of "a young company just starting to grow again." Controlling all aspects of the process, from the breeding of the turkeys to delivery, Zacky was well positioned to take advantage of turkey's ever-growing popularity with consumers, whether it be with a traditional whole turkey or a turkey frank. Moreover, most of the major turkey companies were located east of the Rocky Mountains, providing Zacky with an opportunity to enjoy strong growth in the western states, where the company's longtime, well-earned reputation for selling a quality product, combined with superior customer service, gave it a clear edge over the competition.

Principal Divisions

Consumer Products; Foodservice Products.

Key Dates:

1908:
Samuel Zacky immigrates to United States.
1928:
Samuel Zacky opens Sam's Poultry Market in Los Angeles.
1955:
Zacky Farms is incorporated for wholesale chicken processing business.
1964:
Samuel Zacky dies.
1971:
Balfour Guthrie is acquired.
1984:
Swift and Company's turkey assets are acquired.
2001:
The company's chicken operations are sold.
2003:
Corporate headquarters are moved to Fresno, California.

Principal Competitors

Foster Poultry Farms; Tyson Foods Inc.; Smithfield Foods Inc.

Further Reading

Andrade, Dereck, "Zacky Selling to Foster Poultry Deal May Involve 1,500 Jobs," Daily News (Los Angeles, California), March 29, 2001, p. B2.

Benjamin, Marc, "Zacky Farms chief Al Zacky Dies in Los Angeles at Age 71," Fresno Bee , April 27, 2000, p. C1.

Britton, Charles, "Zacky Farms . . . It IS No Turkey," Southern California Business , November 1, 1987, p. 6.

Gallagher, Erica, "Learning to Fly," Food and Drink , July-August 2004.

Haughton, Natalie, "Celebrate: Lillian Zacky Salutes the Fourth," Daily News (Los Angeles, California), June 27, 1996, p. H1.

Rodriguez, Robert, "Zacky Moves to Fresno," Fresno Bee , June 14, 2002, p. C1.

Russell, Jeremy, "Alive and Kicking," National Provisioner , December 2002, p. S29.

Smith, Rod, "Foster Farms Calls Acquisition 'Ideal' for Company, Consumers," Feedstuffs , April 2, 2001, p. 1.

Well, Jeffrey, "The Queen of Cluck," Los Angeles Magazine , August 1, 1993, p. 46.

—Ed Dinger



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