New owners of Gold'n Plump chicken investing up to $80 million in company

COLD SPRING, MINN. – A few years ago, GNP had more orders than it could fill.

Now the new owner of the Upper Midwest's leading chicken producer plans to invest up to $80 million to increase production capacity.

The Cold Spring plant — home of the Gold'n Plump brand, a staple in Minnesota supermarkets — is undergoing a major expansion, which includes new equipment that kills birds in a more humane way. GNP also has built a new hatchery in Sauk Rapids.

GNP is riding a chicken boom, its sales growing 14 percent over the past three years, hitting $470 million in 2015.

"We have been fortunate the last four to six years to have had very strong demand," said Tim Wensman, executive vice president at GNP. "A few years ago, our demand exceeded our capacity."

Its demand for workers appears to be exceeding supply these days, as well. With a tight labor market, the company even sought to rent a former convent in nearby St. Cloud to house seasonal workers to be imported from other countries.

Although the U.S. broiler chicken industry is centered in the South — and Minnesota is the nation's biggest hub for turkey production — GNP is the nation's 19th-largest U.S. chicken producer, according to the magazine Poultry USA. The St. Cloud-based company is one of only a handful of sizable broiler operations in the nation's north half.

GNP has sales in most of the western U.S., but its core market is the Upper Midwest. The Gold'n Plump brand has gotten a lot of advertising mileage here in recent years with its comic "Mom Squad" television commercials, featuring a trio of women ridding the world of "bad chicken."

GNP, like the rest of the food industry, is changing to adjust to consumer tastes. The company, for example, is moving into antibiotic-free chicken.

GNP has two plants that slaughter birds and churn out finished chicken products — in Cold Spring and Arcadia, Wis. — and a third facility in Luverne. It owns four hatcheries and feed mills, and employs more than 1,700. Plus, GNP contracts with about 400 broiler farms in Minnesota and Wisconsin.

Founded as a hatchery by E.M. Helgeson in 1926, the firm was owned by the Helgeson family until it was bought in late 2013 by southern Illinois-based The Maschhoffs LLC, one of the nation's largest hog producers.

Family-owned Maschhoffs was aiming to diversify beyond pork, while GNP was looking for money to grow. The Maschhoffs have indeed been investing, particularly in Cold Spring, which is 25 miles southwest of St. Cloud.

The first phase of the expansion there — costing $35 million — is expected to be completed this fall. A second, $45 million phase is still in planning.

Phase one includes a gas stunning system to more efficiently kill incoming birds. GNP's Wensman said it also is "a more humane method."

The Humane Society of the United States agrees. It doesn't support the method used currently by GNP (and which will remain at its Arcadia plant). That common slaughter method, which GNP and other producers believe also is humane, involves running the chickens through an electric stun bath and then killing them.

The Humane Society objects to the method because chickens are fully conscious and struggling while being secured and put into the bath, said Paul Shapiro, the society's vice president of the farm animal protection.

Animal welfare activists have long urged chicken producers to switch to gas stunning systems where chickens are gassed with a mix of carbon dioxide and air while still in crates, knocking them out before they are shackled. "You are really improving animal welfare," Shapiro said.

Only a handful of U.S. chicken producers have adopted the gas system, and GNP appears to be the largest.

GNP's Cold Spring project aims to expand production and increase efficiency through more automation. If both phases occur, Cold Spring's capacity will increase 33 percent.

The expansion won't be a significant job creator, and that's not a bad thing for GNP as the company is already struggling to find workers. "We are not fully staffed at our plants," said Peggy Brown, GNP's human resources director, echoing executives at manufacturers of all sorts in rural Minnesota.

The Cold Spring plant, GNP's largest, has 700 employees who process 1 million birds a week.

Production workers' wages start at $12.75 an hour, and the average hourly wage at the plant is $15, the company said. Those wages reflect a 3 percent increase this spring.

Meat production is highly automated, but it's still a relatively labor-intensive form of manufacturing, requiring human handling and cutting at certain points.

At GNP, 105 to 210 birds whiz down the production line per minute, depending on the stage of processing and staffing levels.

In a recent unscientific survey by the Greater Minnesota Worker Center in St. Cloud, most of 38 GNP workers who participated said the line speed was too fast — dizzying, one said. It's a common complaint from poultry plant workers across the country.

GNP workers surveyed by the nonprofit St. Cloud worker center said high line speeds coupled with inadequate staffing exposes them to health and safety hazards.

GNP says its line speeds are "well within government maximum guidelines." Its injury/illness rates were above the industry average in 2015, but below it during the three previous years.

As is common in meat processing, GNP relies heavily on immigrant workers. Forty percent of its employees are people of color, and languages spoken in Cold Spring include Spanish, Somali, Laotian, Vietnamese, Cambodian and Karen (spoken by an ethnic group from Myanmar).

Earlier this year, GNP had plans to bring in 26 workers from Ukraine, Mexico and the Philippines to fill seasonal positions at Cold Spring. The company had a deal worked out with the Catholic Church of St. Anthony of Padua in St. Cloud to lease a former convent to house workers, who would have had H-2B visas — temporary permits for nonagricultural workers. But after assessing changing federal program requirements, the company said it decided that the U.S. Department of Labor's H-2B Program was unfeasible at this time.

As the labor market has tightened, GNP has attempted to attract more workers through partnerships with local high schools and technical schools, Brown said. Employees even get a discount on chicken.

"We are trying every idea we can think of recruit workers," Brown said.

Mike Hughlett • 612-673-7003