A Zoom Thanksgiving Leaves Big Turkey in a Tailspin
Inside Butterball’s plight to save the holiday — and its business
Rebecca Welch remembers all too well the Thanksgiving Day she pulled the turkey out of the refrigerator to prep it for the oven and, with a crowd of in-laws standing around watching, realized it was still frozen solid. “I tried to remember everything I knew about thawing, but I was panicking,” she says. Finally, Welch did what some 100,000 other people do every year around Thanksgiving: She called Butterball’s Turkey Talk Line for help. The person at the other end talked her through the warm-water fast-thaw hack, and Thanksgiving was saved.
Many years later, Welch remains a little embarrassed about the experience. After all, as senior brand manager for Butterball, the company that produces Butterball turkeys, she might be expected to be above that sort of turkey trouble. But during those high-pressure holiday moments, even the pros can lose their cool.
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Folks might need more than a little help this year, and with questions that are more existential than turkey thawing. Questions like: Will there be anything like a real Thanksgiving this November, in the middle of a pandemic? If so, what will celebrations look like? Outdoor feasts or broken into mini-dinners? If gatherings are dramatically smaller — or on Zoom — will anyone even bother with a giant turkey?
No one knows, of course. We could have a devastating second wave of Covid-19 infections that all but shuts down much of the country, and Thanksgiving along with it. That’s why about half of Americans think holiday plans will be canceled this year, according to a study by data intelligence firm Morning Consult. On the other hand, there are signs that Thanksgiving will be the line that Americans draw in the sand when it comes to all the things we’ve given up over the past several months. “People may be thinking, ‘This is the year that everything went crazy, but at least we can look forward to Thanksgiving,’” says Victoria Sakal, managing director of brand intelligence at Morning Consult. “And they want their turkey.”
The plans for this Thanksgiving were pretty much wrapped up by mid-March, just as outbreaks of coronavirus began spreading in the United States.
No single food has dominated the spirit of a holiday the way turkey has Thanksgiving. And Butterball is by far the dominant player when it comes to turkey — it’s the only brand most people can name, sells well over a billion pounds of turkey a year, and accounts for about a third of the birds eaten on Thanksgiving. That outsized role is leaving the company feeling the pressure to ensure that whatever complications befall the holiday this year, a lack of turkey in the supermarket won’t be one of them. “If it can be done safely, this will be a big opportunity for us to help people feel normal for a day,” says Jay Jandrain, Butterball’s CEO.
To do so, Butterball has, for the first time in its 60-plus-year history, had to largely wing it, as it tries to figure out how pandemic-wary consumers are likely to celebrate the holiday, what that means for turkey, and how to meet those needs — even as it wrestles with its own internal coronavirus challenges.
When the Turkey Talk Line opened in 1981, it was a cutting-edge-technology call center. At the time, it had just six home economists — experts on homemaking — working the six phone lines, each with a Rolodex of turkey-cooking information at their fingertips. Today, 51 experts—composed of a mix of chefs, dietitians, food stylists, and, yes, home economists (mostly retired)—handle calls, texts, emails, and social media messages that together number into the six figures.
Many of the callers are panicked, as Welch once was, and usually for the same reason: The turkey-thawing process isn’t going as planned. Typically, it’s nothing that warm water can’t handle, but sometimes the bigger problem is what the caller did to try to solve things on their own before calling. Nicole Johnson, who heads the team and works year-round for the company, ticks off a list: bathing the turkey in the bathtub alongside a baby; wrapping it in an electric blanket; leaving it sit in a hot garage for two days; running it through the dishwasher. And on and on. “They’re frantic by the time they call, but the answer is usually pretty simple for us,” she says.
But things are a little different this year. The team members will all be working from their homes. “Turkey U,” the training course they all have to take, was virtual; the company sent them each a frozen turkey that they could practice on during the course.
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Another difference: The team is ready to handle a larger-than-normal flood of first-time Thanksgiving cooks, as a raging pandemic could drive families to stick to smaller gatherings, leaving more rookies tackling the bird and fixings.
A plethora of turkey newbies wasn’t on the agenda when the Butterball management team first met in June to discuss the upcoming Thanksgiving. June of 2019, that is. “We start planning well over a year in advance,” Welch says. “But I’m always thinking about Thanksgiving.”
No wonder. “The holiday business is more than a quarter of our business,” says CEO Jandrain, who’s been with Butterball since 2006.
All told, the company’s 7,300 employees put out more than a fifth of all U.S. turkey production.
The plans for this Thanksgiving were pretty much wrapped up by mid-March, just as outbreaks of coronavirus began spreading in the United States. Over the following weeks, as the dimensions of the pandemic became clearer, and more officials were talking about potential lockdowns and a long-term viral siege that could stretch into fall and beyond, it was suddenly hard to picture 15 people merrily crowded around a living room with plates of turkey on their laps, shouting at a TV football game. “We realized we probably needed to go back to the drawing board on Thanksgiving,” Welch says. For a company used to thinking 18 months ahead, it was more than a little jarring to realize there were few clues to what the holiday might be like seven months down the road.
Having Thanksgiving itself thrown into doubt was pretty much unprecedented in the company’s history. That history traces back to 1940, when a deli in the small town of Wyoming, Ohio, started calling its turkey Butterball and trademarked the name. In 1951, food-industry researcher and entrepreneur Leo Peters was casting about for a name for the Grand Rapids, Michigan, company he had formed to develop a yellower margarine and heartier turkey breed. Stumbling on the Butterball trademark, which worked for both sides of his business, Peters bought up the rights. But a few years later, he decided his future lay solely in butter, and in the late 1950s, he leased (and later sold) the name Butterball to meat manufacturer Swift for its turkey business, marking the beginning of Butterball turkey appearing in supermarkets. (Peters retained the right to use the name Butterball for his thriving butter business, Butterball Farms, which to this day sells actual balls of butter, among other items.)
Since then, the Butterball turkey business has bounced around between food conglomerates. Swift’s meatpacking business, including Butterball, was acquired by food industry giant Conagra in 1989. In 2006, Conagra sold the Butterball business for $325 million to Carolina Turkeys, jointly owned by Smithfield Foods and Goldsboro Milling, which quickly renamed the company Butterball LLC. In 2010, food and transportation conglomerate Seaboard Corp. bought out Smithfield’s 50% share for $175 million, and now Butterball is jointly owned by Seaboard and Goldsboro Milling, a family-run business in Goldsboro, North Carolina, that produces feed, hogs, and turkey.
Given the perpetual shuffling of ownership over the decades, it’s hard to claim that Butterball has an enduring corporate culture. The meatpacking industry is a brutal, gritty one that doesn’t readily provide the stuff of inspirational business legend. Still, to its credit, the Butterball brand has consistently managed to fetch a modestly premium price, with its frozen birds — most people buy frozen — usually selling around $1 per pound in the weeks before Thanksgiving. That’s steep compared to the 50 cents or so per pound that various off-brand frozen turkeys sell for, though organic and free-range turkeys often go for around $3 a pound. Butterball’s reputation for a juicy cooked bird — dry turkey being every turkey cook’s boogeyman — comes from a healthy dose of factory brining, or soaking in salty, mildly spiced water. (So don’t additionally home-brine your Butterball; you’ll get a salty mess — and no, Butterball turkeys aren’t injected with butter.)
Today, Butterball operates six plants, but the flagship facility is a 3,000-employee sprawling behemoth plunked down in the farmland that makes up most of the small town of Mount Olive, North Carolina. Train tracks run down the center of the town’s main street, but the nearest passenger station is half an hour away. (The company’s headquarters used to be there, too, but after the 2006 acquisition, executives relocated to the considerably larger, more urban and upscale Garner, an hour’s drive away.) All told, the company’s 7,300 employees put out more than a fifth of all U.S. turkey production.
But in recent years, the company has been struggling in part due to consumer shifts toward more prepared foods, as well as more natural foods. Butterball doesn’t disclose revenues, but given how much turkey it sells and average prices, revenues are likely in the vicinity of $1.5 billion. Over the past three years, publicly held Seaboard has reported its growing losses from Butterball as $4 million in 2017, $16 million in 2018, and $21 million in 2019. (Presumably, total Butterball losses are twice those numbers, since Seaboard owns only half the company.) Butterball has also seen increased competition; to catch up, it’s been introducing more prepared turkey items, such as ground turkey, turkey franks, turkey snack packs, as well as an antibiotic-free line.
When the pandemic hit, it quickly became clear to Butterball’s management that the first and possibly biggest challenge would be keeping employees safe and the plants open. That proved difficult for all types of companies, but it was particularly tricky at large food processing plants. At Butterball, thousands of people who handle, package, and ship turkey were on fixed production lines, mostly in close proximity to one another. Jandrain lists among the safety steps Butterball took: screening every employee every day for fever and other symptoms, providing every frontline employee with full personal protective equipment, extensive new sanitation procedures, and — though it required slowing production—more physical separation. The company also started doling out modest “appreciation” bonuses for staying on the job.
Whether the precautions the company took were sufficient and effective depends on whom you ask. Some frontline employees were quoted in North Carolina press reports accusing the company of failing to distribute enough protective equipment, provide enough physical separation, and allow workers who didn’t feel well to stay home. In fact, accounts of poor safety have been dogging the poultry industry for decades, and Butterball has been the target of some of those complaints, though its long-term reportable injury rate beats the industry average by 50%. (Like most major poultry producers, it has also drawn accusations from PETA on animal rights issues that the company insists have been addressed.)
According to one Butterball June survey of 1,000 adults, a fifth of the country had “no idea” what they’d do on Thanksgiving, and another quarter said it had “some idea” but that the idea could completely change.
Memos from Butterball executives leaked to a North Carolina TV station indicated there were 52 Covid-19 cases in the Mount Olive plant in April. (The company also confirmed in May that an employee died, but the cause was reported as unknown.) Jandrain notes that its facilities have remained continuously operating at fairly high levels of production, suggesting the company may have done better with Covid-19 than many others in the U.S. meatpacking industry, whose employees have reportedly suffered more than 40,000 cases and 200 deaths since March.
Early on in the pandemic, Jandrain instituted daily calls with the entire executive team and weekly calls with the company’s 200 managers to evaluate and adjust response measures. Next on the agenda after employee safety: the sudden shortage of truck drivers nationally, which threatened to choke off the shipping of feed to the turkey farms. It takes about four or so months to bring a turkey from poult (the turkey version of a chick) to slaughter, so a prolonged disruption in feed could quickly become a long-term disaster for the industry. To avoid it, the company worked through the National Turkey Federation, the industry advocacy group of which Butterball is the largest member. The NTF was able to win emergency waivers for the industry in trucking regulations limiting drivers’ hours, getting the turkey industry placed in the same waivers category as medical equipment.
Ultimately, the company managed to keep the entire production chain going. “The supply side has been in pretty good shape,” Jandrain says. The demand side, on the other hand, has been a mixed bag. Even before Butterball executives fully recognized the impact of the oncoming pandemic in mid-March, sales first started climbing. “Right away, we saw a big jump in retail sales,” Welch says. “That’s when we realized something big and different was happening.” But that bump was quickly outweighed by the growing wave of restaurant and institutional cafeteria closings as outbreaks spread. That food service business normally constitutes about a quarter of Butterball’s revenues, Jandrain says, and it plummeted almost overnight by more than half.
As consumers began cooking more at home, some of that demand shifted to retail sales — but not enough to cover the gap. On top of that shortfall, Butterball wasn’t able to quickly shift its production to the particular turkey products that consumers suddenly demanded — namely, packaged products like deli slices, and especially ground turkey. “People were stockpiling and filling their freezers with those products,” Jandrain says. “But we can’t flip a switch and shift our infrastructure to move products we usually make in 20-pound food service boxes and distribute them in one-pound retail packages. We took a big hit.”
That hit took the form of $14 million in losses during April, May, and June, as reported in Seaboard’s earnings report for the quarter ending June 27. (Again, Butterball’s full loss was likely twice that number.) Predicting what would happen for the rest of the year, Seaboard noted, was impossible due to the pandemic, other than that profitability wasn’t in the cards for the rest of 2020. And then there was the critical wild card of Thanksgiving.
Back when brand manager Welch thought 2020 would be a normal Thanksgiving, her team landed on a theme for its holiday branding campaign: the joys and challenges of co-hosting Thanksgiving, emphasizing how larger groups of people could all share the meal responsibilities. Oops. “We realized that wasn’t going to work if people were more likely to stay home on Thanksgiving and keep things to immediate family,” Welch says. A new theme suddenly suggested itself: the joys and challenges of hosting a smaller Thanksgiving.
But while smaller celebrations seemed like a reasonable bet in early April, it was a guess. Just a few weeks into the pandemic in the United States, who knew what things would be like nearly eight months later? Guessing wrong would have consequences. Retailers make their commitments for Thanksgiving turkeys in April, and the company quickly builds its production plans around them, including how many turkeys it’s going to have ready and what form the products will take: Frozen whole birds? Fresh, oven-ready whole birds? Turkey breasts? Prebaked turkeys? The wrong calls would be a huge financial risk, not to mention the reputational hit of letting consumers down on the one day of the year dubbed Turkey Day. “We need to know what consumers want before they know it,” says Jandrain.
Butterball is prepared to hold the hands of a new legion of first-time turkey cooks who won’t be able to safely get together for the holiday with parents or other family members who usually run the show.
To bolster its guesswork, Butterball turned to both an internal research and analytics team and outside consumer-opinion companies. The company even sent people into consumers’ homes to examine what they had in their refrigerators. According to one Butterball June survey of 1,000 adults, a fifth of the country had “no idea” what they’d do on Thanksgiving, and another quarter said it had “some idea” but that the idea could completely change. Still, there was some clarity: A quarter were already saying they expected smaller gatherings, and a third said they were going to keep it to immediate family only.
Morning Consult, the data intelligence firm, saw a similar pattern when it researched consumer Thanksgiving plans in September. “They’re worried about travel and about spending money,” says Morning Consult’s Sakal. Still, the company found that 79% of Americans plan to celebrate the holiday, though 71% expect to depart from past traditions in some way, especially in terms of being in smaller groups — an expectation that’s been growing in recent months. Perhaps sadly, Sakal adds, about half the country thinks the celebration might be virtual.
But Butterball’s Jandrain expresses confidence that consumers will come through. “If anything, they’ll grab onto the holiday more than usual to get that sense of normalcy,” he says. “We’re not expecting a drop in demand.” The fact that football is back on TV will help, he adds. But that’s likely optimistic, and a more realistic question is whether the inevitable decline in demand can be kept to noncatastrophic levels. (Not to mention the fact that a growing number of NFL games are being postponed as more players get the virus.)
Smaller gatherings will change the picture in some ways, Jandrain concedes. The obvious adjustment would be a shift toward smaller turkeys, but Jandrain downplays that possibility, insisting that it’s just as easy to cook a large bird and reap the benefits of extra leftovers. Maybe, but he also admits that Butterball, along with other turkey producers, can’t just whip up smaller birds on request, even with several months’ notice. (That requires longer-term breeding efforts, and not just slaughtering the birds when they’re less mature.)
What consumers who want smaller birds can get instead, Jandrain offers, are packaged turkey breasts and prebaked turkeys, for which he expects to see a surge in demand. “We’ve been getting the processes to produce more of those products into place for a while,” he says. “So, making even more of them for Thanksgiving isn’t really a big swing for us.” To fine-tune the mix as closely as possible to what consumers end up wanting, he notes, the company is closely watching real-time data on what’s moving off supermarket shelves. If unexpected trends emerge soon enough, the company can shift some of its production—for example, preroasting more of its birds.
Marketing, too, has been recalibrating for the quirks of a Covid-19 holiday. Those who plan to host, Welch says, won’t want to spend a few risky hours in the supermarket carefully picking out all the ingredients, only to have to go back a few more times to get things they missed. So the company’s messaging will focus on precise, all-bases-covered, simplified menu planning, she explains. Smaller gatherings with full-sized birds will likely also mean more leftovers, so the company is also stepping up its joy-of-leftovers chatter, churning out recipes for turkey nachos, quesadillas, and the like. And after seeing in its survey that a third of consumers were considering an outdoor celebration, it has added more grilling recipes and tips.
Meanwhile, thanks to the Turkey Talk Line, Butterball is prepared to hold the hands of a new legion of first-time turkey cooks who won’t be able to safely get together for the holiday with parents or other family members who usually run the show. For many first-time cooks, just picking out a turkey can be a baffling task. Callers will get as much time as they need, promises Talk Line head Johnson, even if that’s half an hour, and even if they’re standing in the supermarket and yelling at their kids when they call.
But will winning over this horde of first-time customers carry into future years, perhaps helping to get Butterball’s sales back on track? Jandrain says that’s possible but concedes that the pandemic has brought the company, along with everyone else, into completely unprecedented territory: “No one knows what normal is going to be.”