At Perdue Farms Inc., it takes only 42 days to grow a fuzzy, yellow baby chick into a fryer.
It sometimes seems that the Salisbury-based company is growing just as fast: Sales have doubled to $2.1 billion from $1 billion in 1991, making Perdue the world's second largest poultry processor.
By comparison, it took Perdue -- founded as an egg supplier in 1920 -- 71 years to reach $1 billion in annual sales.
And James A. Perdue, the third-generation chief executive of the family-owned business, predicts the company will double in size again over the next five years.
But the company's Maryland operations won't share equally in the growth, the principal reasons being the supply of grain on the Eastern Shore and the maturity of the Northeast market, which is served primarily by Perdue Farms' Delmarva operations.
There was a time when Eastern Shore farmers grew all the corn and soybeans needed to supply poultry processors on the Delmarva peninsula. But not anymore.
Ten years ago, Perdue Farms was forced to start importing grain from the Midwest to feed its growing flock of chickens. That added to the cost of doing business.
The company estimates that it costs 10 cents a bushel more for corn shipped from outside the Eastern Shore. While that may not seem like a lot, poultry processing is an industry with very slim profit margins.
"Controlling costs is extremely important. We don't make nearly as much money as people think," said Perdue, noting that the company's profit margin ranges between a penny and two cents per pound of chicken processed.
"Our costs have to be competitive or else we'll end up like Maine," he added.
Maine once was one of the nation's largest poultry producing states. But dependence on more expensive grain from the Midwest slowly made it difficult for processors there to compete. And eventually, the industry in Maine disappeared.
The Delmarva plants are the closest to the big Northeast market, and they enabled Perdue Farms to establish a strong presence in supermarkets from Baltimore and Washington to New York and Boston.
The company entered the New York market in 1968. By 1973, the Perdue brand could be found in Philadelphia, Boston and Providence, R.I. Three years later, the company began promoting its chickens in Baltimore, and in 1980, the expansion reached Connecticut and Washington.
While the Northeast market fueled Perdue Farms' growth for more than two decades and accounts for a big slice of the company's total sales, it doesn't hold the promise for the same rate of growth that new markets do.
It wasn't long ago that the company was headed in the wrong direction. Indeed, its outlook was questionable when Jim Perdue, now 47, took over the day-to-day operations from his father, Frank, who is credited with making Perdue a household word at dinner tables from Baltimore to Boston with his "It takes a tough man to produce a tender chicken" commercials.
"When I took over as chief executive in 1991," Perdue said, "we had gone through a three-year period of no growth while the industry was growing at a 5 percent annual rate. Becoming a smaller entity in a bigger industry is not a good thing."
Jim Perdue huddled with his top executives to come up with an ambitious five-year strategy designed to boost sales by 15 percent annually and double the company's size.
The strategy came amid intense competition in the industry. It was era of "get bigger or get out," said Mark A. Dekich, a former executive with Perdue Farms who recently moved to Carroll's Food Inc., a pork processor in North Carolina.
And that's what happened. Nearly one of three U.S. poultry processors has disappeared since 1984.
Perdue Farms' five-year plan involved acquisitions and the construction of new plants, expanding the company's retail business by adding warehouse clubs, and introducing products such as fish feed and soybean oil.
The company also found new domestic markets and significantly expanded its export business, which included finding a lucrative market in China for chicken feet.
The strategy worked.
In 1992, Perdue Farms had 12,600 employees, 14 hatcheries, eight feed mills and 10 processing plants producing 24.6 million pounds of chicken. By the end of last year, employment had risen to nearly 18,000, and the company now operates 20 hatcheries, 13 feed mills and 17 processing plants -- turning out 45.3 million pounds of poultry.
Counting its turkey output, Perdue Farms is the world's second largest poultry processor, according to Broiler Industry, a trade magazine. But it still trails industry leader Tyson Foods Inc., by a big margin. Tyson had sales of $6.45 billion for the last fiscal year.
To maintain its healthy 15 percent annual growth, which compares with 12 percent for the industry as a whole, Perdue Farms last year established footings in the Detroit; Louisville, Ky.; and St. Louis, Mo., markets.
In preparation for the move, it built a hatchery and a processing plant in Cromwell, Ky., that opened in February 1996.
