“One of the strangest calls I have received was from a Hutterite colony in South Dakota,” says Robert W. Schwartz, a consulting nutritionist in the poultry industry. “They wanted to know if frogs were toxic to turkeys. It seems a creek flooded and the frogs were jumping into the turkey barn, and the turkeys were eating them as fast as they could. I told them I had never fed frogs to turkeys so I did not know. The turkeys did not die, so it appears that frogs are not toxic to turkeys.”
Dr. Schwartz is among the cadre of professional consultants who advise the poultry industry on every imaginable type of challenge – few as whimsical as the one involving the frogs in the turkey barn. A practicing poultry consultant may be called on to travel to the ends of the earth to render advice on problems difficult or weighty enough to stump the client and on-staff advisors.
What does a poultry consultant do? It depends on the consultant, but there’s probably a consultant somewhere in the world for virtually any job.
One of the industry’s best-known consultants, Paul W. Aho, works around the world with poultry managers and government policy makers. Dr. Aho says, “Some examples of the work I have done include inspecting a bombed poultry processing plant in Kosovo for the U.S. government (and following the little flags in order to not step on a land mine); conducting a study of the Chinese broiler industry for the U.S. Poultry and Egg Export Council; trying to persuade the government of Morocco at the highest levels to allow the import of U.S. leg quarters; working with the National Chicken Council on U.S. policy issues; working with the U.S. Grains Council teaching mid-level Russian poultry executives capitalism 101; working with individual U.S. chicken companies on specific marketing issues (usually international issues); providing recommendations to reorganize the Argentine Poultry Extension Service; calming nervous Wall Street investors during the bird flu media frenzy; and working with the Iowa Development Group to deal with the low price of layer spent hens, among many others.
“I do turn down some jobs,” he adds, “such as going to Iraq (no thank you) and trying to sell things. I must admit I have never been able to convince anyone to buy anything other than my consulting services. Among the things I once tried to flog without success were high-oil corn, a tilapia farm, a working Bulgarian processing plant and an abandoned Argentine processing plant.”
Poultry consultants and their engagements have grown increasingly specialized and more global over time. Some typical examples, each requiring a different consultancy, range from developing new product formulations in further processing plants in the USA, or leading companies through an acquisition process as far away as Asia, to troubleshooting a drop in live-production performance in a flock in Brazil. Consulting disciplines include food science, veterinary medicine, economics, finance, marketing and more.
Consultants and technical advisors, in fact, are an integral part of the poultry business. They exist to complement or augment the talents and resources on staff at client companies. Often consultants are a “new pair of eyes” brought in to see problems and solutions that are not apparent to clients. In other cases, they are retained for large projects which would otherwise overwhelm the client’s available staff resources.
Gary R. Blumenthal of the agricultural market analysis and strategy consulting firm World Perspectives, says, “Consolidation and globalization have greatly advanced the sophistication of the poultry industry. With this increased breadth and intensity of operations comes a larger requirement for long-range planning, operational improvements and risk management. Under this more complex scenario, a poultry operation that solely manages with internal assets is at a disadvantage to the poultry industry executive with access to a broader range of both internal and highly specialized external assets that can be absorbed and applied based on what optimizes the operation.”
The role and value of consultants in the poultry industry are changing with time, according to Blumenthal. “Oftentimes the consultant merely provides external affirmation of what the poultry industry manager already knows, which certainly has its own value. Sometimes the consultant brings a unique value that might have been overlooked or underestimated from within the nativistic environment. The change over time is that consultants have become as specialized as the world of the poultry industry has become complex,” he says.
Dr. Jim Dawe, whose independent poultry consultancy spans live production and processing, described the challenge facing poultry consultants and their clients: “As poultry production in this country has grown more sophisticated and ‘corporate’ in nature, so has the culture of problem-solving become more data-driven. For certain issues, good data generation, retrieval and organization are essential to problem-solving, but weakness in any of these areas can result in un-usable data or even worse, misleading data leading to the wrong solution. Separating good data from bad, casting out the bad, and generating trustworthy information are essential to problem-solving, and is a daily challenge for live operations managers. This often requires direct observations in the field or plant that most managers can no longer perform themselves, due to the scope of their increasing responsibilities; and yet they are challenged with health, management and processing issues that are costly and need solutions.
“Sometimes late night hatchery visits are required. Sometimes hen and rooster feeding needs observation at 5 a.m. Sometimes the condemnation barrels need a night shift correlation. Sometimes every DOA needs to be posted on the back dock to find out why they are dying, and sometimes post-mortem field postings must be done on 15 to 20 farms to solve a health issue or adjust a vaccination program.
“While many integrated poultry operations have veterinary staff to supply this need, many of them are spread between five to 10 complexes separated by great distance, and other integrators have no regular and dedicated veterinary support outside the university or state lab systems. It is for these reasons that there exists such a need and great demand for specialized, experienced consultants in our industry,” Dawe said.
Matching consultants & needs
Consultants should, in fact, be matched to their clients, according to Dr. Simon Shane, emeritus professor, Department of Epidemiology and Community Health, School of Veterinary Medicine, Louisiana State University. “There are few consultants who can offer broad services including nutrition, prevention and control of disease, marketing and economics. Unfortunately, current training programs tend to compartmentalize the knowledge and experience base of students and young professionals.”
Veterinary consultant Dr. Lloyd Keck agrees that today there are fewer consultants able to offer broad services to the industry. He notes that industry consolidation and the increasing complexity of the business bring more specialization requiring companies in many cases to use multiple consultants.
Poultry industry consultants bring varied experiences, training and approaches to their work. Jerry Dyer, a leading independent consultant in the processing field, views consulting practices as being of two basic types: consultants, whose function is relatively comprehensive in nature, and technical specialists.
“Consultants who are ‘specialists’ have huge value in working on very specific areas. Formulations, mission facilitators, HACCP specialists and retort specialists are examples of consultants who are specialists,” Dyer says.
Consultants in the more general category, he explains, consult with a broader agenda. About this group, he says, “Consultants, in my view, are more for assembling plans to change a company. This requires close work with people with different disciplines and helping to make the compromises understandable as budget, space, by-products or personalities interfere with the ‘ideal’ that was the initial mission.
“The most effective way companies use these consultants is also different,” he adds. “Specialists can work with the people who are most intimate with the area involved with little guidance. Consultants, however, are normally attached to many people who are considered to be the main contributors to the change. They must have free access to wander among departments and seek inputs. The ‘plan’ must be a company plan, and not a consultant plan.”
In practice, such distinctions are often blurred. Most of the industry managers with whom the authors spoke defined “consultants” very broadly. They included not only independent, full-time consultants but also university extension personnel, vendor technical service representatives as well as employees of other integrated companies.
How consultants are paid is another distinguishing factor. There are independent consultants, whose fees are paid by the client, and allied industry consultants, whose fees are paid by industry suppliers. The former group, independent consultants, smaller in number, includes consultants like Dr. Schwartz and Mr. Dyer. Allied industry consultants are more numerous, and they include technical service veterinarians and nutritionists working for pharmaceutical, biologics or primary breeder companies. The services of these technical consultants are offered free as an added-value feature of doing business with these companies.
Hector Cervantes, manager of poultry technical services for Phibro Animal Health, notes that pharmaceutical, biologics or primary breeder companies may also sponsor the services of independent consultants, when their customers request this. In some cases, arrangements are made for an independent consultant not to consult for companies that compete directly with the company employing the consultant. For example, a consultant may be paid a monthly retainer in order to insure that he or she will not consult for a company that competes directly with the company using the consultant.
University consultants form an important group of industry problem solvers. Typically, university consultants and extension personnel provide consulting services at no cost to poultry companies if those services are provided within the state where the institution is located. Faculty members, however, are allowed to consult for a fee when they consult outside the state where their educational institution is located.
Professor Charles L. Hofacre, at the University of Georgia College of Veterinary Medicine, explained how university consultants working outside their home states benefit both the consultants and the industry. “My consultancy work is as a professor at the University of Georgia. We are given two days a month to consult outside the state of Georgia. This is an opportunity for clinicians to work in parts of the industry where they are not normally involved. For me, it has provided learning opportunities as I helped companies with their health or food safety issues on which I may not normally have the opportunity to work,” he said.
“I have worked in broilers, breeders and turkeys throughout the USA and in many parts of the world,” Dr. Hofacre continued. “Much of my work outside the USA involves teaching or providing continuing education lectures to veterinarians and production personnel. In many countries, they aren’t as blessed as we are in the USA to have the universities working on poultry health, so information from the University of Georgia can be very beneficial.”
Finally, there are part-time consultants, many of whom are professionals who have retired from a poultry or allied industry company but still maintain a relationship with the industry through consulting. Because they have retired from gainful employment in the poultry or allied industry, they are often recognized as seasoned experts. Oftentimes, these individuals consult part-time to supplement their retirement income.
Benefits & costs
Most consultants with an extensive experience base to make a meaningful impact on clients charge between $750 and $1,000 per day plus expenses. This fee is consistent with the salary of a board-certified veterinarian with approximately 10 years experience working with a pharmaceutical or poultry company.
Fees are negotiated in a variety of ways depending on the service. Sometimes a flat fee for a specific project is appropriate for a project like a publication or research study. Sometimes a retainer is most appropriate for a service that may come at regular intervals. Many projects are negotiated for a fee per hour basis.
“The cost per day of a consultant may seem to be high compared to the cost per day of a full-time employee,” explains Paul Aho. “However, the economic facts of life for a full-time consultant impose severe lower limits for consulting fees. A successful consultant can expect 100 billed days per year. Take the daily fee of a consultant multiply it by 100 and subtract approximately 50 percent for overhead, both sides of social security (employer and employee), and taxes and you have the yearly take-home pay (without considering health insurance or retirement).”
Industry clients apparently believe they are getting their money’s worth for the consulting fees paid, and trends suggest that the industry will continue to rely on consultants as heavily as ever – perhaps even more heavily – in the future. These trends include continued consolidation and downsizing at industry firms and the growing complexity of the poultry business.
Steven R. Meyer of Paragon Economics says, “The main benefits of using consultants are focus and flexibility. Where full-time employees frequently must perform multiple duties, a consultant can be retained to do most any one job and be particularly well-suited for that job. My business is an example. As a small firm, I do not have other employees but instead hire specialists to perform business functions and form ‘virtual’ consultancies to work on individual topics. The members of each virtual team differ depending upon the issue at hand. I also join such teams organized by others.”
Real world considerations
Economic justifications aside, success in “real world” consulting engagements depends on people. Rick Kleyn, a consultant based in South Africa, has written, “Consultants and consultancy are here to stay. There will always be room in our industry for qualified, ethical professionals. The effectiveness of consulting interventions often has more to do with the people involved rather than the skill level of the consultant or for that matter the client.”
Processing sector consultant Jerry Dyer sheds light on how people, or corporate culture, and economics interplay in consulting engagements: “All companies have ‘personalities’ which become obvious in the first 20 minutes of any meeting on a ‘change.’ Some are focused on pursuit of the next opportunity and go hard and fast. Others try to imagine every barrier that could conceivably enter the equation. It seems that the latter has become more the norm, but for good reason. We can remember when there were $200,000 projects that had consequential returns. We have become so space-jammed in the processing facilities, and with so much equipment in every square inch, that anything we touch now involves several million dollars of investment.
“This has a profound effect on the way consultants are used, and, who are trusted to be advisors in such delicate decision-making times,” Dyer continues. “Consultants cannot be general in what they do unless they are the facilitators. They must also have a deep background in their stated focus. What we see over and over is that there are always some truly sharp people in companies, and that they already know at least 85 percent of what is needed to do whatever is on the table as the mission. The role of a consultant must be to inject some really good ways for the ideas and needs to match, along with filling the black holes that squeeze out of every project.
“It is a huge step for a company to change product forms, like traypack, batter-breading, heat-and-serve cooking, and even bigger if it changes from foodservice to retail or export. It is an even bigger step for a company to do any of this with by-products. We have found that the longer a company has been in business, and the more successful they have been, the more difficult it is for them to make any consequential changes. This has a simple explanation. There are masses of people who evolve into a thought process to prevent failure. This, simply put, is to avoid or even attack, anything outside the present ‘success model.’ The amount of this that is in place determines how easy it is to pursue opportunities. There are such high levels of regulatory demands and internal reporting in some companies that new things just never make it past the discussion phase. My view is that these are where consultants are particularly useful in making the risk bearable, getting it defined, and keeping the fuse lit after the first match. Consultants should also have a pretty good rule of thumb about things like project sizes and costs to be viable in the industry. If it has little chance of being valid, numbers within 20 percent can expose this before paying a study group for weeks to find out how many pipe fittings are needed,” Dyer says.
Leonard W. Fussell, a DVM whose veterinary consultancy is limited to customers and potential customers of Cobb, also focuses on the human dynamics in his practice. “I diligently seek out the opinions and observations of service staff and their bosses in approaching any problem. I spend a lot of time with these people and want them with me when assessing a situation or problem. I make sure that they know what I am thinking and as much as possible make them a part of the observation and solution finding process. Why do I do this? These people are key to execution of whatever action plan is initiated. You are ‘dead in the water’ if these people do not embrace the action plan,” Fussell says.
Dr. Fussell lays out an action plan, involving all parties that may be involved in execution before he leaves a complex. If possible, he includes timelines, responsible parties, etc. He may lead this discussion or may turn it over to the manager. “The manager over the unit and I agree who will do this in advance so as not to cause any conflict,” he adds.
“I am quick to get the opinions of others when needed. I try to get these opinions via phone call before I leave a complex and if possible have the local team listen in to the opinion via speakerphone,” Fussell says.
Trends & challenges
Consolidation, specialization, regulation and globalization are all having an impact on the industry and its use of consultants. Different consultancies are affected in different ways. For some this simultaneously calls for greater specialization and a more integrated view of problems in the poultry enterprise.
Consulting nutritionist Robert Schwartz describes how this has affected his practice: “The primary role of a consulting nutritionist in the past was to supply least-cost formulas that would result in the lowest cost per pound of meat or dozen eggs. Today, when I start working with a broiler or turkey company, the first thing I do is meet with the sales and marketing groups. We discuss their sales and marketing objectives and the tolerances they can live with. Then, I meet with the processing group to determine their requirements and current concerns.
“Today, each processor has unique demands and has a need for several different product types. The percentage of whole birds, cut-up birds and deboned birds varies dramatically between companies. I now formulate more for ‘processability’ than ever before,” he says.
Dr. Schwartz adds that the production of antibiotic-free and organic broilers and turkeys is also increasing rapidly, as is cage-free and organic specialty egg production. “I now spend almost as much time on specialty products as conventional products,” he says.
“After processing, I meet with live production to make sure they are using the correct breeds and feeding programs. The management programs must fit well with their breed selection and feeding programs,” he says.
Donna Hill, the international director of research for HatchTech and an experienced field consultant, agrees about the need for more focus on integrated decision making at the poultry complex. Dr. Hill says there is a need to evaluate the bottom-line impact of all phases of vertical integration. “With my focus on incubation technology, I work in an area that does not have a direct measurement that correlates to the company profitability. I believe that to meet the challenge and be the world leader in the future, the USA must learn to connect all the pieces of the vertically integrated system to the company profitability. With the emphasis on the lowest cost at segregated levels, the industry is often slow to recognize the true cost of problems in the system. This is the true value of a consultant – to look at the whole and offer a different perspective,” she says.
Gordon Butland, president of Global Poultry Strategies, says that many poultry companies, especially in the developing world, do not have planning, costing and control systems at the same level as their technical capabilities. This, he says, is especially true in the processing and further processing areas.
“Over the past few years, companies have become more and more integrated. Before, they were integrated but often did not act that way and do not have planning and controls integrated. Obviously this does not apply to the major companies in the world, but there are dozens of companies that are not in the league of Tyson, Sadia, LDC, CP, etc.,” Butland says.
In one respect, the trends of consolidation, downsizing and cost-cutting are impacting university and allied industry consultants differently than independent consultants. While these trends tend to enhance the demand for all kinds of consultants, they may potentially limit the availability of university and allied industry consultants.
In the case of university consultants, reduced public funding for many universities means fewer teaching, research and extension appointments and less funding for poultry-related departments. Fewer university consultants may be available over time.
Allied industry consulting may also be threatened indirectly by these same trends. The trend on the part of integrators toward corporate purchasing potentially means, in some cases, operational managers no longer are in a position to reward allied industry vendors for value delivered in the form of technical consulting. How should companies factor in the value of “free” technical advice? What happens over the long term to the availability of these technical resources if operational managers are no longer making the purchase decisions? The potential limitation on the availability of allied industry consulting services is less direct but does concern many in the industry.
Choosing a consultant
How does one go about choosing a consultant? Consulting environmental engineer Steven Woodruff stresses the importance of selecting the right consultant, saying, “Choosing the wrong consultant, or a consultant who does not fully understand a client’s business, can be a very costly mistake for both the client and the consultant.”
Dr. Paul Aho, agrees and says, “The poultry world is a relatively small world. The poultry consulting world is even smaller. It doesn’t take too many phone calls to determine who does what and what kind of reputation they have.”
Gordon Butland, president of Global Poultry Strategies, says consultants should always be completely transparent in their dealings with clients. “If you even think that there could be a conflict of interest, inform both sides before you start. I rarely have a conflict between companies, but in this protectionist world a country conflict of interest can occur,” he says.
Dr. Hector Cervantes echoes this thought, saying, “My approach to consulting is very simple: Always do what is in the best interest of the customer. Always be ethical and professional and prove to the customer that you are an expert in your field and bring a lot of value to doing business with your company.”
Continued role for consultants
Consultants are an integral part of the poultry business and often are involved in many of the most crucial decisions at poultry companies. They also fill in the gaps where in-house staff is spread thin. As continued consolidation and downsizing at industry firms occur, and as the poultry business grows in complexity, the industry probably will rely even more heavily on consultants in the future.
“As the industry has grown and consolidated, leaders are recognizing they cannot effectively do it all themselves,” says Michael Cooper, managing director of the Phoenix offices of Kincannon & Reed. He says this applies not only to the executive search consulting services that his firm supplies but applies to virtually every phase of the industry’s operations.
Mr. Cooper says that from his vantage point there does not appear to be any reduction in the use of professional consulting services. “The leadership is wise enough to know when to reach outside their organizations to add value. They are also wise enough to know what to keep in-house,” he says.
“The wise leaders in the industry – those more forward-looking managers – continue to invest to leverage internal resources with consulting services, even during the down cycles, to fill strategic gaps. The leading companies in the industry realize you cannot do it all and be as effective as when you focus on your core strengths. They also realize that, over time, they must continue to build strengths in areas identified as weak, but of strategic significance to the future. Even in the down cycles, they reach out for talent and resources, knowing the opportunities have increased and the cycle will come back,” he says.
