Peterson Ready to Crow

Peterson Farms Inc. is the self-proclaimed best-kept secret in Northwest Arkansas. But its roosters can be heard crowing all around the globe.

The fully integrated poultry processor has retained its small-town location for 63 years, and Peterson’s size will never be confused with the likes of nearby Tyson Foods Inc. Nevertheless, Lloyd Peterson’s foresight built a company during the toughest of economic times and maintained it through the industry’s recent crippling environment.

Headquartered in Decatur, Peterson Farms actually makes the majority of its revenue from its broiler chicken production. According to the Jan. 2001 edition of Watt PoultryUSA, a monthly trade journal based in Cullman, Ala., Peterson Farms’ 2000 broiler meat sales revenue was $113 million.

That did not include revenue from Peterson Farms’ other divisions, and the company did not submit 2001 financial information to Watt PoultryUSA. Still a closely held private firm, Peterson Farms does not regularly release its financial information.

Broilers may pay the bills, but there’s no mistaking the company’s identity as the Peterson Male. The rooster, through the company’s renowned genetic research, found the company its niche during the 1960s and 1970s. During those boom days, Peterson controlled about 90 percent of the domestic market and 40 percent of the world market for male breeders.

The Peterson Male is actually a result of more than 50 years of cross-breeding that has the company internationally famous, even if it still remains somewhat obscure in its own county. Lloyd Peterson, 90, began experimenting in genetics in the 1940s out of his garage, often just to enter his chickens in the Chicken of Tomorrow contests run by universities across the country.

The work obviously paid off. Peterson International was organized in 1960. And at one time the Peterson Male was in about 50 countries from Ireland to Israel, Pakistan to Nigeria and Chile to Italy. But increased competition within the industry has lowered Peterson’s presence to about 30 countries today.

Peterson’s genetic research houses on the campus of its headquarters are under extremely tight security.

Kerry Kinyon, named the new chief operating officer in January after 21 years with the company in various roles, said it is doubtful that more than “two or three” outsiders have been allowed access to the houses in the last 20 years, and even those were very big customers of Peterson’s.

“We are very confidential,” said Kinyon, who is also the executive vice president who now runs the company’s day-to-day operations. “Bio-security is critical. You have to be highly secretive in the field of genetics.”

The rumor that Peterson’s executives fly in prop planes and its roosters travel via Leer Jet may be a bit overstated. But it is safe to say its chickens receive first-class status travel accommodations when possible.

The company owns four planes, including one seven-seat jet, and has a 3,800-foot runway bordering Crystal Lake (the company’s brand name) on the back of the Peterson Farms campus.

“As soon as our breeders are hatched, they’re usually transported by air,” Kinyon said. “That way, we can accommodate customers in a timely fashion. It’s also good for the birds. If we need to get some to Pennsylvania, well, by truck it’s 17-18 hours. That’s pretty rough on the birds.”

Lloyd Peterson bought his first airplane in 1947 and immediately learned to fly it, although he has now given that up in favor of the company’s two pilots.

As many as 7,500 birds can be transported on one flight.

Peterson also uses commercial flights to fly internationally out of New York, Miami and Atlanta.

New Guidance

Under his leadership as COO, Kinyon said, the company will redefine its goals and strategies.

“I want to put a good quality product out there for our customers,” said Kinyon, who graduated with a business management degree from the University of West Florida. “We just want to become as efficient as we can and at the same time not stop being progressive.

“[The market] hasn’t been very strong the last three or four years. When you’re a private company in the western part of Benton County, it’s more easy to get stagnant and resistant to change. Timing is everything.”

Janet Wilkerson, vice president over human resources at Peterson Farms, even suggests the company “rested on [its] laurels a lot.”

Kinyon said the company wants to try and retain about 5 percent of the male breeder market, with that increasing to “10-15 percent” in the next five years.

“As COO I want to get back to the fundamentals,” Kinyon said. “And that’s in all areas, both breeder and broilers. I consider it a work in progress.”

Peterson, Arkansas

Decatur may still be small — the 2000 census population was 1,314 — but where would the town be without Lloyd Peterson?

He is chairman of Decatur Bancshares Inc., the holding company for Decatur State Bank. He owns 76.4 percent of the bank. He also owns Grand Federal Savings & Loan in Grove, Okla., and its two locations. He opened his first bank in Decatur in 1954 with $304,000 in deposits on the first day. Decatur State Bank has assets of $252 million today.

Peterson started LP Gas Co. and for about 50 years owned the Chicken House restaurant in Decatur, something he kept for as long as he did solely for the convenience of the employees.

In 1954, Life magazine chose Decatur as one of its All-American towns, pointing out its potential and what was happening at Peterson Industries.

Still in town is the Decatur General Store, Peterson’s version of a small Wal-Mart. He had asked his friend, the late Sam Walton, to put a Wal-Mart in Decatur, but Walton, founder of Wal-Mart Stores Inc., informed him the town was too small to support such a store.

Today, Peterson Farms has 1,500 employees, 52 percent of whom are Hispanic. The total is up 7 percent from the 1,400 employees the company had in 1999.

Those employees are enjoying the fringe benefits of working at Peterson Farms, too. One of the Decatur offices has a state-of-the-art fitness center, complete with basketball and racquetball courts, a weight room, an aerobics area, SwimEx (a swimming treadmill of sorts) and a sauna.

Wilkerson said the company has a program in which employees can reduce their insurance deductible by half. There are also wellness classes, Spanish classes and a regular meeting called FISH — Fresh Ideas Start Here — where employees are encouraged to voice their ideas and concerns about the company.

“I see Lloyd as a visionary that is 10-20 years ahead of his time,” Kinyon said. “He sees things out there, and they’re going to happen years later. He does like to stay involved in the company. People still look to him as a good teacher. You can talk to the Tysons, Simmons or Georges, and there’s no doubt that they have very much respect toward Mr. Peterson.”

Wilkerson called Lloyd Peterson, “one of a kind.”

Peterson, who still lives on the company’s campus, plays golf as much as four days per week when possible and often shoots his age or lower.

Depressing Days

John Terry, a Peterson historian, began working at the company in 1948. He had come to Decatur as the pastor of the First Baptist Church. But Terry said there was no money and he needed a job.

“There was no money at the church; there was no money in Arkansas in those days,” said Terry, a native of Illinois. “The first time I drove through Northwest Arkansas I thought it was the most hideous-looking place I’d ever seen. The orchards were dying. The chicken industry hadn’t dug its roots just yet. It was a pretty sorry mess.

“But I remember Lloyd saying he wanted to see every old house replaced with a new house and green on every hillside.”

Peterson’s father had been in the real estate business.

Lloyd Peterson had been manager of the Farmers’ Market in Decatur from 1933-39.

“The chicken industry was beginning to show its face around that time, so [Lloyd] bought a few chicks and sold them to people,” Terry said. “He began raising broilers and hatching chicks. All growers were independent in those days.”

Peterson had soon built a company that was recognized throughout the industry. By 1960 Ralston-Purina Co. of St. Louis was interested in buying out Peterson, who wouldn’t have any part of it.

“Never, never,” Terry said of Peterson’s interest in selling. “[Lloyd’s] answer was always, ‘What would happen to all my people?'”

There are still offers to acquire Peterson Farms today.

“I wouldn’t say they’re pouring in, but I would say they are trickling in,” Kinyon said. “It’s sad, but I think you’ll probably in the years to come see maybe 10 major players. But I don’t see Peterson Farms as one that will be acquired.”

Peterson Farms has never made an acquisition of another poultry company. It’s had four official names over the years, becoming Peterson Farms in 1990.