In Australia, lamb is king.
Australians consume more than 15 times as much lamb and mutton as Americans consume annually. In 2018, the US Department of Agriculture’s Economic Research Service reported lamb and mutton consumption in the United States was 1.1 lbs per capita. In the same time frame, Australians ate 16 lbs of lamb per person, according to Meat & Livestock Australia.
Australia is the second-largest producer of sheep meat and the largest exporter of the proteins – 66% of its total lamb production was exported in 2018-19, 21.8% of which went to the United States.
But US consumers have yet to truly embrace lamb as a top protein choice.
“Lamb consumption has been flat in this country,” said Michael Forrest, chief executive officer of Thomas Foods International, USA. “But, its penetration into the market is growing, which will lead to increased consumption.
“Historically, lamb has been a foodservice item – I think because US consumers are unfamiliar with the protein…With COVID, and more home cooking and home meal subscriptions, more people are getting exposed to lamb than they have been historically…they are feeling more comfortable with it than they have previously.”
As a vertically integrated importer, processor and distributor of Australian lamb and other proteins, Swedesboro, NJ-based Thomas Foods International, USA is doing its part to increase lamb consumption in the United States.
“We work with our retailers to try and promote lamb and make it more user friendly to the consumer. For example, we recently developed a series of recipes featuring ground lamb, chops and racks that can be prepared in under 40 minutes, showcasing how lamb is just as versatile and easy to prepare as beef.”
Aussie roots
Thomas Foods International, USA’s American roots can be traced back to 2010, when the company started doing business in South Jersey, importing meat from Australia. But its parent company, Thomas Foods International, has its origins back in Australia starting in 1988.
Chris Thomas, a self-described “jackaroo” – an Australian cowboy – spent his early years trading cattle. In 1988, Thomas joined forces with a partner, Bob Rowe, to form a business, initially called T and R Pastoral, to buy and sell livestock. The company did contract slaughtering at different facilities in New South Wales, Victoria and South Australia for years until it purchased an abattoir in Murray Bridge, South Australia, in 1999.
The company further expanded with the acquisition of additional abattoirs around Australia. By 2008, the Thomas family took over control of the business – it was renamed Thomas Foods International in 2013. At that time, the company was Australia’s largest family-owned meat processing business, slaughtering 5,000 cattle and 120,000 lambs weekly at its four facilities around Australia.
Chris’ son, Darren, took the reins to lead the company as CEO in 1993.
As part of Thomas Foods’ further expansion, the company worked to grow its exporting business. Seventy percent of the Thomas Foods meat production is exported. Today, the company exports to 82 different global destinations, including the United States.
“In exporting, the US was always a strong market,” Forrest said. “2010 was the year we had boots on the ground in the US marketplace.”
To enter the US market, Thomas International partnered with Foodcomm International to form a food import, processing and distribution business.
“The driving force [for the entry into the US] was to get further down the value chain and closer to our customers,” Forrest said. “We wanted to better service a growing market in the US for Australian lamb and beef.”
After a few years of importing products and using third-party processors to process meat for its customers, Thomas Foods International decided to take a more firsthand approach by building its Swedesboro facility.
“We simply realized we could not provide the level of service we wanted for our customers without a processing plant of our own,” Forrest said. “So, in late 2012, we decided to build our own facility in South Jersey. By early 2014, we started operations. We wanted to take our destiny into our own hands by building our own processing and distribution facility.”
While still under the umbrella of its parent company in Australia, Thomas Foods International, USA has a separate management team and structure.
“We work closely with the Australian operations to try and maximize the benefits for our customers,” Forrest said. “As an entity, the US business stands independent in terms of its operations – from administration to plant management.”
The new plant was built in Swedesboro, just 30 minutes from the Port of Philadelphia where a large portion of US red meat imports are brought in.
“We built a facility that we thought would take us 10 years to grow into,” Forrest said. “After 12 months, we realized it was going to be too small.”
The company has continued to add on to its 250,000-square-foot facility, realizing that soon an additional plant will be needed.
“Unfortunately, we are going to max out and have to find a new site – which is a good problem to have,” Forrest said. “We can build another 60,000 square feet at this location before we will have to go elsewhere. It is inevitable that we’ll be looking for a new production site in the near future.”
Production capabilities
The Swedesboro plant, which is a more than $500 million a year operation, includes cold storage, processing, packaging, shipping, office space and employs more than 400 people. Production runs three shifts – day, night and sanitation – at least five days a week. The warehouse and distribution department runs three shifts, six days a week.
There is currently 50,000 square feet of processing space, with a 20,000-square-foot addition set to be operational in 2021. The cold storage portion of the facility features 17,500 temperature-controlled pallet positions available for refrigerated and frozen storage.
When Thomas International branched into the US market, vertical integration was the end goal.
“It was very much about being vertically integrated and capturing that cold chain from the processing plant all the way through to our customer’s door,” Forrest said.
Vertical integration means managing every stage of the production chain.
“We own our entire production and cold chain,” he said. “The product comes through the Port of Philadelphia, we pick it up with our own trucks, transport it to the facility, unload the containers into our own cold storage, USDA inspect it, process it and then deliver it ourselves to our customers.”
The company goes to the port every day to pick up shipment containers from Australia and around the world. They receive 60 to 100 shipment containers – holding 3 million to 5 million lbs of meat – at the plant per week.
Less than 5% of Thomas Foods’ product sold in the United States is processed outside of its New Jersey operation. Included in the 5% is Australian lamb that’s sold in a major club retailer. That product is processed and packaged, retail-ready, out of one of its Australian plants.
The New Jersey plant has two separate processing rooms – one dedicated to ground beef processing, the other to cutting steaks, chops and other meat cuts. The ground beef room features four processing lines – two exclusively for ground beef bricks, the other two are used for patty production.
The new 20,000-square-foot addition, going online in February, will be a fifth ground beef line for processing ground beef bricks. After it’s operational, the plant will be processing in excess of 1 million lbs of ground beef per week.
The second production room is where the steaks and chops are cut and packaged – some of which are fixed weight depending on customer requirements.
Included in its line of meat cuts are lamb shoulder chops, loin chops, leg steaks and rack chops; pork loin, shoulder, tenderloins and chops; veal scallopini and Osso Bucco; and a full line of beef products.
Each week the plant processes around 1.4 million lbs of finished case-ready products that go to retail, foodservice and direct to consumer through subscription service companies – more than 50% of which are ground beef products. After the new line is running in 2021, the production capability will climb to 2 million lbs per week.
Thomas Foods utilizes a variety of packaging formats for its ground and cut proteins. For ground beef, the company packages in chubs, 1-lb bricks in rollstock and grounds and patties in modified atmosphere packaging. The plant has IQF (individually quick frozen) capabilities for use with its patty production as well.
For its steaks, chops and other consumer-ready meat cuts, rollstock and MAP are the most common packaging formats with some products being packaged in VSP (vacuum skin packaging).
“We are moving into different packaging formats where there is a big push to reduce some of our use of plastics – we are trying to cut down on our footprint around the use of non-recyclable plastics,” Forrest said.
International input
More than 90% of the lamb sold out of the Swedesboro facility is sourced from Australia.
“We’re an Australia company – our DNA is quite Australian. We are procuring proteins globally to meet our customers’ requirements with a heavy slant to our heritage and origins in Australia,” Forrest said. “One of our strengths is global sourcing and importing products.”
More than one-third of the all the products sold from the New Jersey facility are sourced from the Australia-based parent company. The company also purchases some lamb from New Zealand and Chile.
“The lamb business gave us the entre here,” Forrest said. “But, the rising popularity of grass-fed and organic products really allowed us to grow our beef division.”
The company’s sales today are 40% beef, 40% lamb and 20% other proteins.
“We have filled the grass fed/organic beef niche with our retail and foodservice customers and that’s where we’ve expanded the business and where we perform very strongly,” Forrest added. “We see that organic is not going away and grass fed continues to grow in popularity, so we think that is positive for our business.”
Milk-fed veal is imported from the Netherlands and pork is usually domestically sourced from various farms and suppliers in the United States.
Thomas Foods is also a Certified Angus Beef (CAB) house, cutting and distributing CAB products to retailers around the country.
“We are primarily a private-label producer – 80% or more of our production is private label,” Forrest said.
Some of the private-label production includes meats for top retailers in the United States.
Pandemic adjustments
The coronavirus (COVID-19) pandemic has had an impact on all meat processors around the country, and Thomas Foods is no exception. While the company avoided major closures or outbreaks, it still had to make adjustments to its production facility.
“With a bit of good luck and a small amount of agile management, we did avoid any major disruptions from COVID,” Forrest said.
In addition to plant adjustments, the company was forced to make a few changes to its customer mix. Traditionally, Thomas Foods is a 60/40 retail to foodservice operation.
“Due to the pandemic, we saw a drift away from traditional foodservice customers. But thankfully we had a foot in each camp prior to COVID, we were able to maximize our relationships,” Forrest said.
In April, when stay-at-home orders were prevalent around the country, the company saw an uptick in its retail business. This created a need to run production two shifts a day for seven days a week for a short time.
Alongside stay-at-home orders were temporary restaurant closures and the inevitable reduction in the need for foodservice products. However, the company was fortunate to shift the business to new opportunities such as direct-to-consumer.
“We’ve been fortunate to have long-standing relationships with our customers before the pandemic hit; and, we’ve managed to be nimble and ramp up production,” he said. “So, we’ve gone from a traditional foodservice customer, to more direct-to-consumer business. New opportunities have offset the drop in our regular traditional foodservice business.”
The plant managed to maintain operations during the pandemic and continues to make adjustments to the layout and procedures on the production floor to ensure worker safety.
“If you go into our processing rooms, there are protective screens spacing the workers and everyone has full PPE,” Forrest said.
In addition, a thermal scanner takes everyone’s temperatures as they enter the facility. Anything abnormal sounds an alarm requiring the person to be checked further before being able to work.
The company’s investments in worker safety precautions go together with its continued investments in food safety throughout the facility.
“We designed and built our processing facility with food and worker safety in mind – we get a lot of commentary around the cleanliness and the design of our facility,” Forrest said. “Thomas Foods has a strong commitment to food safety, continuously pushing our teams to improve the high standards we have established.
“Our leadership team is committed to be best in class in how we operate. And, Thomas Foods has a goal to be recognized as best in class for the products we produce and the customers we service.”
