Empire Beef shooting to hit $1 billion in sales

Empire Beef Co. Inc. is finishing a $17 million expansion, launching it deeper into the full-line distribution market and closer to its goal of reaching $1 billion in sales.
The third-generation company has evolved from a beef slaughterhouse to a full-line distributor, shipping everything from scallops and fruit salad to cheesecakes and Tabasco sauce.
Last year the company, which employs 300, posted sales of $552 million, a dramatic jump from 1985, when sales were $27 million.
“I think we’ll reach close to $1 billion in sales in the next seven to 10 years,” said Steven Levine, president.
The expansion has doubled the size of Empire’s facility at 171 Weidner Road, off Scottsville Road. The 200,000-square-foot facility, mostly refrigerated warehouse space, was expanded to enable the firm to reach its sales goals and accommodate new business.
Empire ships more than 6 million pounds of products a week to 28 states east of the Mississippi River. That includes 125,000 pounds of steaks, chops and roasts that are cut each week at its Rochester and Easton, Pa., facilities.
Meat remains the company’s mainstay, making up some 80 percent of its sales. Empire ranks third in the nation in meat distribution after Sherwood Food Distributors and Wolverine Packing Co., both in Detroit, Levine said.
His wife, Lori Levine, vice president at Empire, said the company aims to increase business to where its 2-year-old redistribution division makes up half of Empire’s total sales.
“Our goal is to get it more like a 50-50 balance (between meat and other products),” she said.
The company has evolved considerably from humble beginnings.
Steven Levine’s grandfather, Harry Levine, converted an auto-parts junkyard into a small slaughterhouse in 1937. The business killed seven head of cattle a week.
When Steven Levine’s father, Sidney, took over in the 1960s, he expanded operations to where they were slaughtering 125 head a day. He then switched to processing carcass beef.
“They brought in carcass beef from the West, first by rail, then by tractor trailer,” Steven Levine said. “(The beef) was on hooks, swinging-just like in the movie ‘Rocky.'”
In the 1970s, Sidney Levine shifted the company again by introducing vacuum-sealed packages of beef or “boxed” beef because they were shipped in boxes rather than hanging on hooks.
“(Initially) they would do 50 loads of swinging beef to one load of boxed. Then it got to one load of swinging to 50 boxed,” Steven Levine said.
His father expanded the company from the local market to a three-state area.
Steven Levine took over the business with its 35 employees in the mid-1980s. He first concentrated on expanding its main course products by adding pork, poultry, lamb, veal and seafood to its beef offerings.
“I took the business to a center-of-the-plate distributor,” he said.
Under his leadership, sales jumped from $27 million in 1985 to $717 million in 1999.
The higher sales mainly came from two developments. In 1996, Empire bought a Pennsylvania plant that has 50 employees. It fit well into the company’s core business. In addition to cutting meats, the plant also marinates, tenderizes and seasons cuts to order.
Also in the mid-1990s, Sam’s Club, a division of Wal-Mart Stores Inc., contracted with Empire to be its perishable distributor in the Northeast from North Carolina to Maine.
The contract meant more than $200 million in annual sales for Empire until 2000 when Sam’s was ready to use its new distribution network.
“That’s when we decided we could maintain what we were or expand into a wider range of markets,” Lori Levine said.
They chose expansion and in spring 2000 added the redistributor division.
As a redistributor, the company sells vendor products to other companies that sell to restaurants and other food-service companies.
Redistribution allows a customer to stock smaller quantities of a greater number of items.
“It allows them to turn over their inventory quicker,” she said.
Today, Empire ships products for 59 vendors, including H.J. Heinz Co., Nestle SA, McIlhenny Co., Mrs. Smiths Bakeries LLC, Schwan’s Sales Enterprises Inc., Campbell Soup Co. and Bumble Bee Seafoods Inc.
More than 90 percent of the products require refrigerated warehouse space varying from 32 degrees to below zero.
The new division inspired the 100,000-square-foot expansion project that began a year ago.
The expansion included a $2.5 million automated warehouse system that dramatically speeds up the product selection process from 150 cases an hour to 500 cases an hour.
Fleet Capital Corp. provided Empire a $39 million secured credit facility to replace its existing credit facility and finance the new automated warehouse system. The financing plan also provides working capital.
“We’re pleased to provide this new credit facility to Empire Beef, a company with a long history of profitability and an outstanding management team,” said Robert Rubino, senior vice president of Fleet Capital, which is part of Boston-based FleetBoston Financial Corp.
Steven Levine hopes the automated system will enable the company to attract more business because it speeds delivery time. On average, competitors need four days to deliver. Empire is striving for next day or two-day delivery service with its fleet of 100 tractor trailers.
“The strategy is to continue to get better market penetration to existing accounts and increase the number of redistribution vendors that we partner up with,” Levine said.
On the redistribution side, Empire’s main competitor is Illinois-based Dot Foods Inc. Dot offers more than 30,000 products and represents 350 manufacturers nationwide. The family-owned company had sales of $1.25 billion in 2001.
Empire offers roughly 12,000 products and represents 59 vendors.
“The goal is to get 200 vendors,” Lori Levine said.
Empire used to compete with another New York food redistribution firm, Drescher Corp. The firm was a wholly owned subsidiary of U.S. Foodservice, which is owned by Koninklijke Ahold N.V. But two months ago, Dot acquired Liverpool-based Drescher.
Feedback from the acquisition has played in Empire’s favor. Vendors like the competition and do not want just one redistributor, Steven Levine said.
“(Plus) they (Dot) don’t carry meat. They don’t have the center-of-the-plate,” he said. This also gives Empire an edge, offering the customer more of the products they need.
Another recent development expected to boost sales is that Empire became the approved Northeast redistributor for UniPro Foodservice Inc., a network of 328 independent distributors that have combined annual sales of $16 billion.
Empire’s redistribution division is growing by more than 70 percent a year, while the meat division is holding steady, Steven Levine said.
One key to taking the old family business to new levels is Empire’s friendly and laid-back atmosphere.
“We run it like a family rather than like a big company,” he said.
([email protected] / 585-546-8303)

08/09/02 (C) Rochester Business Journal