Posted 2/4/2013 12:00 am
Updated 10 months ago
Last week, Cypress Valley Meat Co. of Vilonia installed a $60,000 vacuum stuffer at its Hot Springs plant, making it the most recent expansion of the custom meat processing company.
The equipment will be used to make Irish-style sausages for a startup, F Nolan & Sons Victuallers LLC of Memphis, said Steve Goode, an owner of Cypress Valley.
“We think it will provide two, three, maybe as many as five new jobs in our Hot Springs location,” Goode said. Cypress Valley recently added its 10th employee and was looking to hire another one soon.
Cypress Valley first started processing deer meat at its Vilonia facility in October 2010 and then expanded to processing beef and pork products when it bought a 5,000-SF meat processing plant in Romance in August 2011. In early 2012, the company leased a 2,300-SF plant in Hot Springs. The Romance and Hot Springs plants both have an important feature: a U.S. Department of Agriculture inspector on site to scrutinize and approve the meat.
The USDA stamp of approval allows Cypress Valley’s customers to sell their beef or pork products to restaurants or at farmers markets, said Andy Shaw, 34, another owner of Cypress Valley. Only five custom meat processing plants in Arkansas offer federal inspections, Shaw said.
Cypress Valley is bucking the closure trend among federally inspected meat processing plants in recent years, said Eric Mittenthal, a spokesman for the American Meat Institute of Washington, D.C., a meat and poultry trade association.
Mittenthal didn’t know exactly how many plants had closed during the last decade, but he said that he and others in the industry had noticed the trend.
The reasons behind the decline of federally inspected custom meat processors are varied and include a decline in the number of farmers producing livestock because of the rising cost of feed, Mittenthal said.
Shaw said he thought Cypress Valley would buck that trend because it produces its own sausages, as well as vacuum-sealing meats, which extends the shelf life of the product by about six months if frozen.
Cypress Valley has received assistance from Winrock International of Little Rock on running its business. Winrock’s advice has been “very important” to the growth of Cypress Valley, Shaw said.
In early 2010, Shaw was the meat supervisor at four stores that Goode had an ownership interest in — three Big Star Food & Drugs and a Cash Saver Food Outlet. But Shaw, 34, wanted to learn more about animals and “just see where everything comes from,” he said.
He said he thought the Vilonia market was underserved for processing deer meat and went to Goode with his idea about opening a processing plant.
Goode liked what he heard and found a location on Highway 64 in Vilonia. The startup costs were about $100,000.
“We anticipated doing 400 to 500 deer,” Shaw said. In 2012, they handled 1,000 deer.
The service proved to be a hit, mainly because Cypress Valley vacuum sealed the meat in clear plastic so customers could easily recognize the cut of meat, Goode said.
The vacuum sealing also kept the meat fresher by several months than if it had been wrapped in traditional white butcher paper. “People were happy with the deer quality,” Shaw said.
Customers started asking if Cypress Valley could process beef, hogs, lambs and goats.
To process those animals, Goode said, Cypress Valley would want to have USDA inspection. But to upgrade the facility to meet USDA standards would have cost about $350,000, which, for the Vilonia plant, would not have been cost effective.
So in early 2011, Shaw started looking for another facility.
Shaw said the owners of Goss & Son Meat Co. in Romance agreed to sell the plant, though Shaw declined to share the price. As Shaw was negotiating the deal with Goss & Son, he also was working with Winrock International.
Winrock helped Cypress Valley receive technical assistance from a USDA program in 2011 to launch its website, said Vicki Malpass, program officer for the U.S. Programs Unit of Winrock International.
Other assistance followed.
“We felt like with just a little bit of assistance that they could really expand the availability of USDA-inspected slaughter in the state of Arkansas,” said Annett Pagan, director of U.S. Programs at Winrock.
Hot Springs Expansion
After 75 years in business, the G.E. Hawthorn Meat Co. of Hot Springs wanted to exit the industry in January 2012. Mary Hawthorn, its former owner, said her husband’s health prompted the decision.
Winrock wanted to keep the plant open and considered buying a mobile slaughter unit. The plan was for Cypress Valley to operate the mobile unit, Shaw said. But the cost for the unit would have been $150,000 to $300,000.
“There was no way that was ever going to cash flow,” Shaw said. Winrock “came to us and asked if we could operate [the plant]. We said yes.”
Cypress Valley arranged to lease the facility from the Hawthorns and started in January 2012.
At first, business at the Hot Springs facility was slow, but it has been building, Shaw said.
In January, the Hot Springs facility had its best month processing 20 hogs and 15 cows, Shaw said. The previous monthly high had been 10 hogs and 10 cows.
Cypress Valley also made the arrangement with Fergus Nolan, the owner of F Nolan & Son, to produce Irish sausages, 1-ounce spicy pork sausage links that are almost an inch in diameter and 3 to 4 inches long, and other Irish-style products.
Nolan said he found Cypress Valley by looking through a list of USDA-inspected meat producers, and he and Shaw hit it off. Nolan said it was difficult to find a processor, but “Cypress was very responsive.”
Nolan couldn’t project, however, how much revenue his new business would be able to generate for Cypress Valley.
In 2012, Cypress Valley had $400,000 in revenue, almost three times what it had in 2011, Goode said.
Goode said Cypress Valley had a number of avenues for growth. It could grow on the retail side by processing meats and then selling them in stores.
Revenue growth also could come from Internet sales of Cypress’ own custom sausages or, down the road, possibly a line of Arkansas steaks, he said.
“We think there are tons of opportunities,” Goode said. “We talk about plans literally daily.” n