Submitted by Fox First at Ten on July 9th
By MICHAEL FELBERBAUM
AP Business Writer
RICHMOND, Va. (AP) - Pork producer Smithfield Foods Inc. is opening a hometown restaurant to showcase its products.
The company, still based in Smithfield, Va., where it was founded in 1936, is opening the Taste of Smithfield on Tuesday to help boost its packaged-meats business. In addition to its namesake Smithfield brand, the company makes Armour and Farmland pork products.
Taste of Smithfield shares a new two-story, 8,700-square-foot building with the Genuine Smithfield Ham Shoppe, which sells Smithfield products, gourmet specialty foods and other Virginia-made items. In the restaurant, customers will be able to buy salads, ribs, burgers and sandwiches made with Smithfield pork. The company says there'll even be vegetarian options.
CEO C. Larry Pope said in a statement that he hopes the restaurant will attract more visitors to the historic southeastern Virginia town of about 8,100, as well as give the company a place to show off its products.
The company's share of the market for deli meats, bacon, sausage and hot dogs has increased in recent quarters as it boosted marketing and promotional spending. Earlier this year, it also opened a research and development facility in Smithfield that "will produce innovations that drive growth," Pope said when releasing company's fourth-quarter financial results last month.
During a conference call to discuss the results, Pope said recent gains gave Smithfield "a lot of comfort that this packaged-meats business is where we want it to go. ... I think there's more good to come here, and we are extremely pleased about that."
Pork producers are caught in a tug-of-war with consumers. They need to hike prices to offset rising costs, mainly for the corn they use for feed, but consumers are still extremely sensitive to price changes. So Smithfield risks cutting into its sales should consumers cut back or buy other meats, such as chicken.
The new restaurant could serve as a testing ground for Smithfield for recipes it can offer consumers, restaurants and grocery-store chefs, said Phil Lempert, a food marketing expert known as The Supermarket Guru.
"This is a fabulous venue to experiment, to really find out what people want. With beef prices and chicken prices going up, pork really has the very unique opportunity to steamroll ahead," Lempert said. "What you're really going to see here is more of a laboratory.... This could really help them reinvigorate their brand and get more consumers to think of pork in a very different way."
Similar promotions by other packaged-foods companies include Kraft Foods Inc.'s Oscar Mayer "Wienermobiles," which have been traveling the nation promoting its hot dogs and meats for about 75 years. In 2010, Hormel Foods Corp. took over a Los Angeles area restaurant for a day to promote its Jennie-O Turkey Store brand. And Bob Evans Farms Inc. has gone the opposite direction, starting as a diner in Ohio in the 1950s and later packaging its pork products for sale in grocery stores. Bob Evans now operates 715 restaurants.
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Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.
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