Not Just Chicken Feed

A born TV star Frank Perdue is not. He is bald, has an ample nose and speaks with a high-pitched, nasal twang. In the Northeast, where Perdue in white lab coat regularly appears in commercials, more than one viewer has noted his resemblance to the chickens he sells. Yet, thanks to some brilliant Madison Avenue copywriting ("It takes a tough man to make a tender chicken," "My chickens eat better than you do") and believably homespun performances by the unlikely actor, Perdue Inc. has become the fastest-growing U.S. chicken producer.

Since 1971, Perdue's output has grown 17% annually, and stands now at 1.6 million broilers a week. Yearly sales are just shy of $180 million, making the Salisbury, Md.-based company the seventh biggest chicken marketer in the U.S. Wall Street bird watchers think it could rise as high as fourth by year's end. The privately owned company does not report profits, but President Frank Perdue, 56, says that in nearly six decades, it has never lost money.

Chaotic Competition. That is another remarkable performance, considering the rather chaotically competitive nature of the $5.5 billion chicken industry. Some 190 companies, or 100 fewer than two decades ago, raise and sell the birds; the four largest firms account for only about 20% of the business. The nation's biggest producer, North Carolina's Holly Farms (weekly output: nearly 5 million broilers) is a subsidiary of Memphis-based Federal Co., a large flour miller, but other big companies have been unable to make a go of chicken raising. Ralston Purina, once No. 1 in the business, and Pillsbury both dropped out of the broiler game in the 1960s.

Somewhat surprisingly, this disorganized industry has a record of technological innovation. Because of improvements in feed and genetics, a broiler now takes only seven weeks to go from egg to slaughterhouse, less than half the time it took to reach eating size a generation ago. At Connecticut's Arbor Acres Farm, geneticists foresee a six-week broiler by the early 1980s.

The trouble is that since consumers prefer their chicken fresh (only 8% of broilers are frozen), the birds cannot be shipped any great distance to market. So the business has remained a regional one, in which most companies are too small to indulge in sophisticated market analysis or production planning. As a result, the industry regularly goes through an 18-month cycle: encouraged by high prices, growers produce too many chickens; prices thereupon tumble, and production drops.

Today, U.S. chicken consumption is at an alltime high. But so is output: some 3.3 billion broilers, or 40 Ibs. per capita, will be produced this year. Prices are falling: last week, at a convocation of poultrymen in Springfield, Mass., William Haffert, editor of Broiler Industry and other trade journals, predicted "39-c- specials in the late fall." Many companies will probably lose money in the next six months.

But not Perdue. Last week, when many chickens were selling for 49-c- per Ib. in New York-area supermarkets, Perdue broilers fetched 77-c- per Ib. Frank Perdue, of course, would claim that the premium is justified by the large and juicy breasts of his yellow-skinned chickens (he feeds them marigold petals), but clearly, something is also due to the appeal of his image on TV.

Cleaning Coops. If Perdue looks believable as a man devoted to raising tender chickens, it is no accident. His father Arthur, now 91, quit his job as a Railway Express agent and in 1920 set up a chicken house on Maryland's Eastern Shore. Frank, an only child, grew up with the birds: "I dug cesspools, made coops and cleaned them out." By the mid 1950s, the Perdues' well-bred chickens were winning top prices at auctions, but Frank realized that there was money to be made processing and marketing the birds as well. Eight years ago, he rescued his chickens from the anonymity of commodity marketing by putting his name on them. In 1971 he went to Madison Avenue. He devoured tomes on advertising, picked the brains of journalists and broadcasting executives and interviewed dozens of admen before choosing the firm of Scali, McCabe, Sloves Inc.

Today Perdue spends $1 million a year on advertising. In 1964 he employed 265 people, today nearly 3,200. Perdue Inc. supplies chicks and feed to 900 contract growers, who raise the broilers for a fee of about a dime each. "We mix our own grain," says Perdue. "We have our own poultry veterinarians and nutritionists. We leave no stone unturned in getting the best product."

Down-to-earth though he may appear on television, Frank Perdue is no bumpkin. He wears Gucci loafers and drives a blue Mercedes, lives in a condominium in Ocean City, Md. (he and his wife recently separated) and plays a plucky game of tennis when he can. Offscreen, he is even beginning to talk like an adman. He professes no fear of other firms that are beginning to emulate him by advertising brand-name chickens--because, he says, "nothing puts a bad product out of business faster than good advertising."

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