Go To Businessweek.com

BW Mall - Sponsored Links

Buy a link now!

text size: T T Features September 15, 2011, 6:00 PM EDT

Battle of the Pork Rind Heavyweights

How rival companies, low-carb diets, and changing demographics are making pork rinds an economic indicator for our time

It's all about the mouthfeel, say both No. 1 pork rind producers

It's all about the mouthfeel, say both No. 1 pork rind producers Jamie Chung

By

http://images.businessweek.com/cms/2011-09-15/porkrinds39__01__190.jpg

42 markets served by swine Alamy (34); Bloomberg (2); Corbis (1); Getty Images (6). Source: Pig 05049

This Issue

To make Baken-ets pork rinds for No. 1 client Frito-Lay, the $13 billion-a-year snack arm of PepsiCo, Rudolph Foods uses what it calls a secret two-step process at its flagship plant in Lima, Ohio—“the pork rind capital of the world,” Rudolph claims.

Pork skins, removed from slaughtered pigs by mechanical skinners at meat packing companies, arrive at Rudolph’s plants in 20-ton lots aboard refrigerated 18-wheeler trucks. Precut into roughly one-by-three-foot rectangles, they are trundled around in metal bins holding up to 1,800 pounds each and fed into mechanical cutters that dice them into one-inch squares.

Other pork rind makers send these squares directly by conveyor belt into a succession of cookers and renderers that wring out most of the fat and water; Rudolph smokes them first—though exactly what wood or curing spices it uses on what are now called pellets is part of a closely guarded recipe at the family-owned company. “I only have half of it,” deadpans Jim Rudolph, 49, Rudolph’s chief executive officer. “My brother Rich [who serves as president] has the other half.”

After smoking and curing, Rudolph’s rinds are rendered at 240F. They’re inspected by an optical sorter that kicks out misshapen and discolored rinds, or any foreign objects—pig bones, for example. Rudolph then fries its pellets for one minute in 400F lard, where they fluff up like popcorn. Cooled and seasoned on conveyors, the finished rinds are ready for bagging six to eight hours after the process began: featherweight, crunchy, hint-of-bacon snacks that are one of the bright spots in the snack food industry. Frito-Lay sold almost 49 million bags of Baken-ets over a 12-month period ending May 15, up 11 percent over the previous year. Not bad in a sputtering economy.

Rinds are also the object of an intense rivalry, with Rudolph’s claim to being the “largest pork rind manufacturer” hotly contested by Chicago’s Evans Food Group. “No question, we are the No. 1 pork rind maker in the world,” says Alejandro Silva, Evans’s CEO and principal owner. Privately held Evans sells two of its mainstay brands, Mac’s and LaTonita, to Wal-Mart Stores and has a brisk business making private-label brands for about a dozen well-known snack concerns, including Pennsylvania-based Utz Quality Foods. Last year, Evans processed more than 100 million pounds of raw pork skins, raking in more than $100 million in revenue. Rudolph? Well, it also reports more than $100 million in revenue, on similar volume.

If either company is to be the King of Rinds, both agree, it will be because it’s shrewder than the other on distribution and more effective at cultivating the taste of the fast-growing Hispanic market. Hispanics consume more rinds by volume than any other ethnic group in the U.S., and, following an endorsement by George H.W. Bush and the popularity of low-carb diets such as Atkins, constitute the greatest force bringing pork rinds into the mainstream. Silva believes rinds will hit $500 million in retail sales by 2013, better than twice where they were two decades ago. “The Hispanic demographic augurs well for the future,” says Mary Gotaas, a snack food analyst for IBISWorld. “The pork rind business is a very good business to be in.”

Mark Singleton agrees. Eight years ago, Rudolph’s Dallas-based vice-president of sales and marketing says he “leapt in with two feet and never regretted it.” While rind sales may seem slim next to the $7.6 billion a year potato chips pull in, he says, “That’s just an opportunity to educate millions of new people around the world that they need to give rinds a chance.”

 

Each year, 100 million to 120 million pigs go to their slaughter in North America, producing roughly 650 million pounds of skins. In 2009, according to the U.S. Agriculture Dept., 110.3 million head were killed in the U.S. alone. The gelatin industry buys up about 60 percent of the skins to make products for the drug and cosmetics industries, as well as Jell-O. About 5 to 10 percent go into making leather goods. (Not footballs, though. Early footballs were made from inflated pig bladders and somehow got the name pigskins. Today’s footballs are either synthetic or fashioned from cowhides.)

READER DISCUSSION