(upbeat music) - [Announcer] This is "Carolina Business Review."

Major support provided by Colonial Life, providing benefits to employees to help them protect their families, their finances, and their futures, High Point University, the Premier Life Skills University, focused on preparing students for the world as it is going to be, Sonoco, a global manufacturer of consumer and industrial packaging products and services, with more than 300 operations, in 35 countries.

- The Thanksgiving holiday is less than a month away, but the race toward the holidays began seemingly before the summer heat dissipated.

Welcome again to the most widely watched and the longest running program on Carolina business policy and public affairs, seen every week across the Carolinas for more than three decades.

In a moment, we will start this week's discussion, and look at the issues that, of course, affect us.

And later on, speaking of the holidays, no doubt we'll put a smile on the face of the chief executive officer of turkey giant, Butterball.

Jay Jandrain joins us, and we hope you stay with us.

- [Announcer] Major funding also by Blue Cross Blue Shield of South Carolina, an independent licensee of the Blue Cross and Blue Shield Association, and Martin Marietta, a leading provider of natural resource-based building materials, providing the foundation on which our communities improve and grow.

On this edition of "Carolina Business Review," James McQuilla from the Orangeburg Chamber of Commerce, Brannen Edge III of Flagship Healthcare Properties, and special guest, Jay Jandrain, President and CEO of Butterball, LLC.

(compelling music) - Hello, welcome again to our program.

Brannen, good to have you here.

Thanks for joining.

- It's great to be here.

- James, you know, I'm always in awe that you drive up from Orangeburg with a smile on your face, coming through all that traffic.

- That's every day.

(Chris laughs) So, I'm glad to be back.

Yep.

- Thank you.

Good to have you here as well.

James, when you're talking, and not just your constituents, or members of the chamber in Orangeburg, but in general, these conversations you're having, we're heading into the holidays, you know, there's an increased anxiety around the workforce, around the economy.

Now we have wars, and the thought and the threat of that.

Is there some level of increasing anxiety?

What's the sense you're getting?

- Actually, I think, right now, we're at the beginning of anxiety.

People are starting to think, well, you just had, as you just mentioned, the conflict and war.

It's not conflict anymore.

- Yeah, right.

- The war over in Israel, and how is that gonna affect us?

But is it gonna cause prices to be inflated any more?

Is it going to cause the United States to put other monies places other than within our own borders?

So, I'm not exactly sure if the real effect of what is happening right now is taking hold with our families.

But what I do know is that the recent inflation, the cost of gas, the cost of food, - Right.

- those things do matter, and I have been hearing a lot.

And folks are wondering, "When are prices gonna come down?"

- Yeah, so, Brannen, you know, you're in the commercial real estate space, healthcare, and you could argue, and this is my term, sir, but, you know, the healthcare space, the healthcare REITs, the healthcare commercial real estate, it seems like Goldilocks scenario right now.

But as James just mentioned the inflation word at least a couple of times, is that a real headwind?

Does that create anxiety in commercial real estate, and specifically what you see in healthcare?

- 100%, I mean, the healthcare real estate world in which Flagship operates is recession-resistant, no question.

People need healthcare in good times and in bad times.

But over the last 18 months, as the Fed has raised interest rates 500-plus basis points, it is absolutely impacting all sectors, regardless.

It's more expensive to borrow money, it's more expensive to operate buildings, it's more expensive to pay employees.

So it is absolutely having an impact on what's going on in the commercial real estate field.

- Is there a price sensitivity that healthcare developers, and this is a specific question for you.

Is there a real price sensitivity with interest rates up, or are a lot of these cash deals you're seeing?

- No, you know, our company is 50% levered, approximately.

So, and most buyers of commercial real estate are using leverage.

And so it absolutely is impacting prices.

- Yeah.

- Yeah, yeah.

- Okay, James, same question, but maybe in a different way.

If we look at workforce housing, or affordable housing, has all of this been a slowdown for that as well?

- A major slowdown.

I mean, I talk with our real estate folks, and no one's buying right now.

And no one's really selling right now, right, because they're thinking to themselves, "If I buy now, hopefully the interest rates are gonna go back down, and if the interest rates go back down, I'm paying more than I really should."

So, people are kinda waiting to see, are the interest rates going to come back down, before they make a major, major purchase like that.

- So, what do you think your single biggest issue is?

When you're looking, 'cause we're getting close to the end of the year now, what's gonna happen in 2024, and what do you see?

- Well, for us, I mean, when I say us, I'm talking about Orangeburg, and even in South Carolina, our focus is still on improving our education, - Right, sure.

- right?

You have to have intelligent folks to make intelligent decisions going forward, and to have a brighter future.

I think that there's gonna be both economic development from industry coming to South Carolina.

I think we're going to see more housing starts happen.

I really do, even though things have slowed down.

We absolutely need it.

But our focus for us right now, and even though it has been this way for a while, is to make sure that the next generation is educated properly.

And then also, to understand that maybe there needs to be a change in how we think about work.

So, a cultural shift, in thinking, again, that work is good, work is necessary, and work is actually the next step in life, from being, you know, a young person, or being a college grad, or whatever.

But we have to focus on education, and I think that that's gonna help us solve a lot of our problems.

- So, let me take it to a little bit closer to what you do.

You hire people, right, Brannen?

- We do, we do.

We got about 110 employees.

- So, how hard is it to find the right talent that you want sitting in the seats?

- It is hard.

I mean, unemployment is low.

And so, that's why, you know, we've been hearing, you know, the pundits talk about, we're heading to a recession, for two years.

It's not here.

Unemployment is in the 3% range.

And so we're desperately looking for talent, and it's hard to find.

- So, again, I think we have to be creative in this.

We can't pull talent from one place where it currently exists, and place it someplace else.

- So who's doing it well, James?

Do you have anybody within your sphere that's doing it well that you can point to?

- Not really, I get a lot of phone calls.

Everyone needs talent.

- Right, sure.

- Again, my thing is that we have to look at, whether it's immigration reform, to assist.

The numbers of people are here.

How do we put them to work legally, if they wanna work?

And I think they do.

I think we need to, again, go back to the generations that are coming, and get them to understand how important working is to a stable economy, a stable community, a stable family.

When we can do that, we'll have the people, and then there's also automation, right, for a lot of things.

- Yeah, sure.

Well, that would be AI, right, the buzzword now, that everybody wants to talk about.

- Well, AI, but also robots, that do things that humans could do.

Are they gonna be taking place?

And we have to ask ourselves, honestly, are they gonna be taking some of the jobs that some humans could perform?

And if they do, what are we gonna have people doing?

- Yeah, we had a CEO of a hospital, his name, Doctor Bill Roper, from UNC Health, sat in that chair two minutes ago, and said that there will be massive changes in healthcare.

Do you think there are gonna be massive changes with AI, in what you do, in commercial real estate, and valuations, and selling, and moving, and?

- I certainly think so.

I think AI will drastically disrupt and change so much of what happens in our society, mostly for good.

I do think there are some of the more mundane tasks, some of the simpler processes, that can get replaced by AI.

- The analysis, et cetera, et cetera, yeah.

- Yes, just things that are kind of redundant, and lower-level tasks.

I don't think it's gonna be replacing, you know, making major decisions.

And, yes, there will be jobs lost, no question.

There always are, with innovation.

- Right.

- But it helps move us forward.

- Yeah.

- So, I think, ultimately, it'll be a good thing.

- Okay, 30 seconds, go ahead, 30 seconds.

- Well, again, that's what I was saying.

I think we do need to focus on education and what we're going to, you know, what are we gonna train students to do?

- So, let me just stop you there.

Literally, 30 seconds, James.

Are you bringing to bear, is your organization bringing to bear to the State House in Columbia, that point about education?

Pay teachers more, more money to the system, et cetera, et cetera.

- Yes, I mean, choice, pay teachers more, enforce discipline.

- [Chris] Ah, yeah.

That's a big one.

- And because the teachers are leaving the system, and I think people gloss over the fact.

And I've been a substitute.

I've worked on committees with schools.

The chairman of our board is an assistant superintendent in the school district.

And we have to make sure that the discipline is there, so that teaching can occur, and that people don't wanna leave their job.

- Yeah, okay, that is more than a reoccurring theme.

We talk about it on every program.

So, gentlemen, thank you.

We're gonna bring our guest on this program.

Before we do that, coming up on this program, is there was a pretty big splash in North Carolina around Toyota Battery putting a stake in the ground, and will be manufacturing batteries for, not just their cars, but others.

Sean Suggs is the North American president.

He will be joining us also.

And we're gonna unpack this a little bit more.

Since the pandemic began, in Q1 or Q2 of 2020, restaurants have been at ground zero around finding talent, revenue, the cost for going to a restaurant, and many other things.

We're gonna unpack what this proxy for what restaurants are now, and where they will end up.

Thanksgiving is a bad time for a turkey, but it's a great time to be the president of the largest producer of turkey products in the US, producing more than, and I wanna get this right, one billion pounds of turkey products every year.

Butterball, headquartered in Garner, North Carolina, is sold throughout the US and 45 countries.

Joining us now is the president and chief executive officer of Butterball, Jay Jandrain.

Jay, welcome to the program.

- Thank you.

- You're smiling, right, going into the holidays?

- Yeah, we're always smiling.

- This is good.

- (chuckling) We're always smiling.

It's a busy, certainly a busy time for us.

But, you know, really, for the holidays, we really start that right after the previous holiday.

And we're starting to put those turkeys in the freezer all year long, in addition to all the other products that we produce.

But the thing that we're really excited about is now, post-pandemic, we're seeing people back to normal celebrations.

We're seeing the sizes of the get-togethers being larger.

There's usually gonna be about nine or more people at each Thanksgiving table, and turkey is still gonna be the centerpiece of the meal.

So, things are good for us.

- Yeah, well, they seem good.

Can you sell more than a billion pounds this year?

Are you expecting to have a higher revenue because of it?

- We'll sell about the same amount this year, and that's by design.

I mean, we plan to produce that many turkeys.

We try to measure that with exactly what the needs will be for the marketplace.

And so, we'll have about the same amount this year as we did last year.

- Yeah, okay, James, question?

- Sure.

What about food security?

Because we've seen opportunities for folks to do bad things.

So, what does Butterball do about securing, from the farmer, through distribution, to the consumer?

How do you handle that?

- Sure, well, you know, certainly, the supply chain was massively disrupted during COVID, and we all experienced some of that.

But, you know, every part of our business is critical in how it works together.

Our growers are contract growers.

We don't grow our own turkeys.

So we've got a very unique relationship with the farmers who grow our turkeys.

It's a very special relationship.

We need them as much as they need us.

We work hand in hand to make sure that they raise the birds and the meat in the way that we intend them to be raised.

In fact, we're the only company, only turkey company, that participates with American Humane Association, and we're certified by them.

So we've got a third party auditor that comes in, and for the last 10 years, has looked at our operations, looked at our farms, looked at how we grow our turkeys, and how we handle our turkeys, to make sure that we manage that part of the process in the best way possible.

And it's certainly good business for us.

We want happy, healthy turkeys before we bring 'em into our facilities.

If they perform better, it's better economically for us.

So it's not only the right thing to do, it makes good business sense.

And then, as we've looked at, you know, through the infrastructure, in our facilities, and what we can manage, and then the areas where we can't manage, the distribution part of the system.

We don't own our own trucks.

We've got partners here that we have to work very closely with to make sure that that works well.

It was a struggle during COVID, but now, actually, our numbers are phenomenal.

We look at our fill rates, we look at our on-time deliveries, look at our quality.

All of these things are measurable, that we constantly keep an eye on, and they're doing as good or better than they ever have before.

- Brannen?

- I'm curious about, kinda the employment side of things.

Obviously, in the Carolinas, we're blessed with low unemployment.

And you employ a lot of people.

Has that been a challenge, finding and retaining workers, to make sure you've got the turkeys taken care of?

- Yeah, it has been.

And that's not something new.

I mean, that's something that's been a struggle for our industry.

Manufacturing in general tends to be tough, as far as from a labor standpoint.

And it was, again, really difficult during COVID.

And you think about it, a lot of folks were able to work from home during COVID.

You can't do that in a turkey plant.

We've gotta have people there in the facility, manufacturing the products.

And folks were scared, you know, no doubt, for what they were feeling.

So we had to do a lot to make sure that we had enough people actually in, physically, in the buildings.

We also took that as an opportunity to really invest in our people.

And the thing that we really worked on is to make sure our folks understand that they have a voice, they have an opportunity to be a part of the organization, on a much broader scope than just doing their job that day.

And we've spent an awful lot of time, over the last three years, to make people feel appreciated, to let them know they can be a part of the organization, to actually retain that talent.

'Cause it's one thing to get 'em in the door, but then we've gotta hold onto 'em.

And that's working.

I mean, we see that in our performance numbers, we see that in our retention numbers, and we see that, really, in all measurables that I was just talking about a moment ago.

Those things don't happen just by accident.

They happen because you've got great people who are skilled, know what they're doing, they feel good about what they're doing, and we're doing everything we can to make sure that they have that opportunity to be a bigger part of the organization.

- Jay, I don't wanna be too dramatic about this.

I'm gonna give you a chance here, sorry.

- Okay.

- I don't wanna be too dramatic, but we, having a conversation before the show, and you said your improvement, your turnover has gotten better, and it's improved.

And I heard you say this, it's 95%.

That would choke most businesses, to have that kinda cost embedded.

How do you do that?

That's almost the whole company turns over.

- Yeah, so, what you'll find is, you'll have some people who may last a very short period of time.

It's just not for them.

It's a difficult environment.

I grew up in this business.

I literally, as a teenager, I worked summers in a turkey plant.

So I know how hard it is.

I know the demands of being on your feet all day and doing these jobs.

You know, they're very important jobs, obviously.

These folks are feeding people.

So, there's a tremendous sense of nobility in what they're doing.

But it's not for everybody, and we recognize that.

So, we have some people who may last a month or two, and then they leave.

And then we have others who have been with us for 20, 30 years, which is phenomenal.

And it's great to see those people.

And it's great to see those people retire, you know, from that position.

But it is difficult.

But that's somewhat of the nature of food manufacturing.

We're not alone.

That's not just a Butterball number.

Those are numbers that are consistent with the industry as a whole.

And you were speaking earlier about labor challenges and immigration reform.

- Mm-hm.

- That is certainly an opportunity that we're looking at.

And that's something that, every year I go to DC, and I talk to our legislators, and we beat that drum over and over and over.

We need a comprehensive system that will allow these people to work in our operations, but make it also where we've got, you know, safe borders, secure borders, we've got safety for our people in the United States.

There's ways that that can work.

It can be done.

The interesting part about that, for the last several years, going into DC, and talking to the legislators, whether you're a Republican or Democrat, the issue was always the other side, right?

It's the other side of the aisle.

This year, for the first time, I heard both sides say, "The issues are within my party.

They're the extremes of my party."

They're not across the aisle anymore.

So- - You think that's the beginning of a change?

- I hope it is.

And, you know, that is a paradigm shift.

And that's something that, you know, is encouraging.

When you hear that, then you think, "Well, maybe there is an opportunity for these coalitions to get together, from both sides, to come up with something that is reasonable, that works for the entire country, and works for all of our people."

- Yeah, go ahead, James.

- I was gonna say, Jay heard me say this earlier.

I have a kind of a motto.

Success is simple, when we work together.

Once they work together, we will get to the success that we all know is there.

But before we get to that point, because it's tough to get everyone to work together, does automation, or do you have any plans for automation to help in what you're doing right now, with that type of turnover?

- We are.

We're always looking for automation.

We're finding every opportunity we can to put it into our plants.

And when we talk about automation, we're not talking about replacing jobs.

We're trying to fill jobs that people don't want to work in.

- There you go.

- Or make the jobs easier for the people who are there.

So, you know, I don't see anything in our future that says we're gonna put in a piece of automation, and we're gonna lay people off.

That's not what's gonna happen.

We've always got opportunities for people to move into other jobs.

And again, if we can make their jobs easier, that's another opportunity for us to retain those folks.

But your point about togetherness was interesting.

That's actually the core of what Butterball is.

And when we look at our overarching philosophies in our company, togetherness is the core word, or the key word, about what Butterball's about.

So it's interesting that you bring that point up.

- Yeah.

- Jay, I don't know if this is a marketing question or a customer service question, and that's part of what I'm gonna ask.

Other than this program, one of my favorite shows was, "The West Wing."

- (laughs) Well said.

- And "The West Wing" had an episode right around Thanksgiving, where the president, President Bartlet, calls up the Butterball turkey line, I think what they referred to as the Butterball turkey line.

You have this line, that's existed for decades.

Is that a customer service feature, or is that a marketing gimmick?

- It's not a gimmick.

It does service a lot of folks.

And yes, it's the Butterball Turkey Talk Line, and it's over 40 years old, and every year, it's a big deal.

We've got a group of folks who, for a few months outta the year, participate in this, and they love it.

They love getting those phone calls from people to help them get through the most important meal of the year.

And it really is incredible.

I mean, (clears throat) excuse me, you hear some of the stories that people talk about, and people that they've talked to, and how they've really bailed them out of a tough situation.

And, you know, it's always entertaining, but there are also some that are just phenomenal.

In fact, every year, we do a celebration with those folks who work on that talk line.

And one of the gentlemen who's on our talk line told the story about a man who had called, and he wanted to make sure that this meal was absolutely perfect, 'cause this man had been homeless for years, and he was now in a shelter, and they gave him the responsibility of cooking the meals for all the other people who were living in that shelter.

And he wanted to make sure that this was right.

He was so grateful, he didn't wanna mess this up for the people that he was living there with.

That's quite a story.

- Pretty neat, yeah.

- How many people are on the line?

How many people answer the calls for you?

- We have about 40 people, I believe, that are on those lines.

- Wow, all year long?

- No, it's just as we get toward the holiday.

- Just for the holiday?

Yeah.

- But it is, they're there on Thanksgiving Day.

I mean, a lot of these folks are not at home with their families.

They're there on that talk line, because they know somebody's gonna have an emergency that morning.

- Obviously, a turkey is an important product, through the retail food system.

When you, Jay, when you see, when you feel, when you hear the rate of inflation, when people go into a grocery store, it doesn't matter if it's an Aldi, or in a Harris Teeter, or a Wegmans, or a Publix.

Is it concerning to you that those rates continue to be that high?

And I'm not just talking about a turkey product, but I mean, across the board.

Are we gonna, are we headed toward a tipping point, somehow, some way, with the rate of inflation in food?

- Well, we have certainly experienced the impact of inflation, like everybody else has.

And as much as we can, we try to absorb that, we try to find ways that we can overcome that, through other efficiencies in our operations.

But at some point, we do have to pass on pricing, and we have, every food company has.

People do have to eat.

And it is, you know, it is tough when you look at it and you see the cost of food rising in general.

And that's that much more of a burden on people, for the necessity, you know.

They need shelter and they need food.

So it is something, you know, as someone running an organization that feeds people, it is something that concerns me, and it's something that we look for every opportunity to try to defer that impact as much as possible.

The one thing that's unique about the Thanksgiving holiday though, that a lot of people don't really realize, during that period of time, the turkeys are discounted heavily.

So, you know, a lot of retailers, they'll have sales for the turkey product.

The turkey that you buy during Thanksgiving is actually an incredibly economical product to buy, when you look at, especially you look at it compared to any other protein that's out there.

But that, for that very specific meal, for that very important meal, and opportunity for people to get together, that's actually gonna be one of the most economical meals that they can have, which does make me feel good, being on this side of the business, where there's times you do have to pass on pricing.

But there's still an opportunity for people to have a very, very good meal for the holiday.

- And you mean like turkey sandwiches for the next two weeks after Thanksgiving.

- Absolutely.

That's the best part, right, the leftovers.

- That's the best part.

- Fantastic.

- Yeah, sure.

We have about two minutes left.

Quick question.

- So, I try to be health conscious, right?

And you were just talking about the proteins, but for, and turkey is a big part of what I eat.

Can you talk a little bit about whether or not you use any antibiotics, or other things with your meats, and how that is helpful, or relates to what you do?

- Sure, yeah, we do have products that are antibiotic-free, where the turkeys are not fed any antibiotics at all - Okay.

- throughout their lifecycle.

There are some that are fed antibiotics, only when necessary, only when we need to administer 'em.

And really, I think there's a misconception in that.

You know, we're in charge of making sure the turkeys stay healthy.

- [James] Right.

- And sometimes turkeys get sick, just like people get sick.

And what do we give ourselves?

We give ourselves antibiotics.

- Right.

- So we do things to make sure that those birds have the best life they can while they're on the farm.

But we're also required to make sure that there are no residual antibiotics in those birds by the time we process 'em.

So, nothing that we feed our turkeys are gonna get to the consumer, that's gonna have an adverse effect.

So there's nothing to worry about that.

But we do, for folks who want products that are absolutely antibiotic-free, from the beginning to end, we have product offerings - You have both.

- there as well, sure do.

- We are just about outta time.

Do you ever change it up, and get a ham for Christmas?

- Never.

- No.

(all laughing) - Never, absolutely not.

- Why am I not surprised by that?

Jay, thanks so much for being on our program.

Thanks for making the trip.

I mean, you hauled it over here from Garner.

- Glad to do it.

- Put a suit and a tie on, which I suspect you probably wear some.

But thanks for making the commitment.

We appreciate that.

- Sure, thank you.

- And best of luck this holiday.

Careful going home.

Brannen, good to see ya.

- It's good to see you.

- Thanks, come back to the, hope we didn't scare ya off.

- No, this is great.

Thanks for having me.

- I mean, James keeps coming back, so, we've gotta be doing something right.

- They said I get paid today.

(all chuckle) - Glad to see ya, James.

- Thank you, thank you.

- Come back when you can.

Thank you for watching our program.

If you have any questions or comments, of course, CarolinaBusinessReview.org.

Until next week, we hope your weekend is good.

And, oh, by the way, Happy Holidays.

Goodnight, bye.

Thanks for watching.

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For more information, visit CarolinaBusinessReview.org.

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