Robert A. Mamis

Frank Perdue

 

That same spirit carried over into the business. In four decades, Arthur Perdue never borrowed a dime. "He was a checkbook-balance man," says Perdue. "If he had money in the bank and didn't owe any, it didn't bother him how much we lost. But if he owed money, it didn't make any difference if we were making a million a week -- we had to get that paid off before we expanded. Which, of course, is not a proper use of money; I came to understand that slowly."

To a certain extent, the realization was slow because business was good. After the Depression, the company pretty much grew by itself. But the egg business had limited profit potential. So the Perdues decided to phase out of egg production and into an integrated breeding operation, which required hatcheries and feed mills. "I wanted to build a soybean plant," Perdue recalls. "When we finally borrowed money, I was 41 years old, he was 76. Knowing the nature of the individual, I have to be appalled in retrospect that he put his name on a $500,000 note. I guess he decided that he'd seen enough of me to believe that maybe I wasn't crazy. Now we have long-term debt, and we have rarely failed to grow because of lack of money."

Indeed, the company has rarely failed to grow for any other reason, either, and the motivating force has been Perdue. "I wanted to enable the company to grow to the maximum extent possible. I wouldn't be satisfied with number two. I have driven very hard to increase production, because the business was there. But I will spend money on our quality quicker than I will to decrease production cost."

As a case in point, Perdue recently put several hundred thousand dollars into a machine that would increase shelf life by a single day. "One day's shelf life!" he exclaims. "Well that's important to me, because I don't know what happens to my chicken when it gets off my trailer. The woman picks it out of a case which may not be cold enough, because they're trying to save money in the store to keep from going broke. Boy, it's trouble. It was stinking when she got it, let alone when she took it out of the refrigerator three days later. So she writes a letter: 'perdue chicken stinks! I want my money back!' And we give it back. We write her a letter thanking her for her attention to detail. So I've got to get that extra day. I don't waste my time thinking about something like that. It might be the difference between stinking or not stinking." Not all capital expenditures work out so propitiously. Perdue once bought a fleet of live-haul trailers. Each had 30 motors designed to circulate air. It seemed a kind thing to do for a doomed flock. "But," complains Perdue, "you'd have chickens in there packed tight, and suddenly they'd all be dead. The transformer blew out, and the motors quit. It would have taken an MIT graduate to keep the thing running. My God, if you're going to have a hundred [trailers], you'd need a hundred MIT graduates! It was a cool million dollars wasted. I mean, everybody. makes mistakes, but some things are just ludicrous."

Although Perdue claims to possess no particular business genius, it is his undeniable instinct for marketing that is costing more and more roasters and fryers their brief lives (14 weeks and 9 weeks, respectively). "I saw what advertising could do in the third year," says Perdue, referring back to 1968 when the decision to go retail was made. In that third year, the company spent $80,000 on television and another $80,000 on radio, and the premium tripled. "That's when I decided we needed the best advertising company in the business. I knew we already had a superior product in the chicken, but we more than 40 firms, and finally hired Scali, McCabe, Sloves, a small, New York City-based agency that showed the good sense to put the shy, rather shrill but unflaggingly sincere, Perdue on the air.

The rest is history: Perdue has since appeared in over 70 spots, and sales have doubled every two years. Meanwhile, his success has encouraged a number of prominent chief executive officers to flood the airwaves in similar pursuit. Perdue's favorite is Eastern Air Lines Inc.'s Frank Borman, who comes across as "the most real," he says. Chrysler Corp.'s Lee Iacocca, though, is "very tough. I don't think I would say, 'If you can find a better chicken, buy it.' It's not my style. I'll tell you why it's good and how it's better, but I'm not going to challenge you. . . . Well . . ." He pauses. "I might say it with a little smile and take the onus out of the hardness. You've got to have humility in your delivery."

With less than two years to go until the traditional age of retirement, Perdue already forswears quitting. His father came to work every day until his death at age 91, and at least one perdue associate predicts that Frank will, too. Perhaps it is his diet: "I like chicken," he chirps -- quite credibly.

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