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Eggheads is the go-to podcast for egg industry professionals who are interested in leadership and innovation in the egg world. Host Greg Schonefeld explores the evolving world of modern egg farming, from the latest in cage-free innovations and organic certifications to navigating the economics of large-scale production. Whether you're an egg producer, supplier, or involved in poultry genetics, this show provides the insights and expert discussions you need to thrive in the industry. Crack open the science, strategies, and stories behind the egg industry’s biggest challenges and opportunities.
Greg Schonefeld:
I am Greg Schönefeld and this is Eggheads. Today we're returning to our special scramble format and welcoming to the show three veterans of the egg business. The three of them have a combined 125 years of egg experience, and each has their own unique perspective on how the business has evolved since they got their start. We have Mark Kleinsmith, formerly the National Sales and Marketing Manager for LubingUSA. Steve Kuykendall, a regional manager at LubingUSA, and Craig England, who spent decades on the breaker and greater side of the industry.
Today, these guys are tapping into their incredible wealth of knowledge about the egg business and sharing some great stories from the old days, when things were maybe a little bit more run-and-gun than they are today. In this episode, we get into everything. Including the value of personal relationships, how tech innovations have changed the industry, the evolution of cage-free farming, and what to do when someone hands you a bag with $100,000 cash inside? Yep. You heard that right. Let's get into it.
Certainly we have a lot of experience here together with us, and Mark, you're the one that brought us all together today, so I'd love to hear from you. How did you guys first meet?
Mark Kleinsmith:
Well, with Steve, it was pretty funny. He worked for a company, Ziggity and I worked for Chore-Time, and we both flew out of South Bend to go to conventions and shows, and one day I was sitting in the lobby waiting to take off and I could hear in the background someone say, "Hey, which one's Kleinsmith? Which one?" And the guy said, "Well, it's the guy over there." So Steve walked up and then he said, "Are you Mark Kleinsmith?" And I was reading a paper and I dropped the paper and said, "Why? Who wants to know?"
And from that point, Steve and I got to be friends. We ran around, even though opposing companies, but I learned what he could do, and then I actively pursued him to come to work for me at Chore-Time. Now with Craig. Craig and I had to bump into each other on several modes. His boss was a very, I would say, ferocious competition on the cages, but I started to work with Craig when he was with the greater companies, both Sanovo and Moba, because we had to coordinate on these large in-line complexes, and Craig's a wealth of information on the breaker and also the greater side. And so we worked hand-in-hand. And to be successful, you got to have relationships like that, and we gained each other's trust and worked together well for many years.
Greg Schonefeld:
So Steve, what made you think going to work with Mark at Chore-Time would be a good idea?
Steve Kuykendall:
Well, you know what, looking back, that's a really good question. No, Mark-
Greg Schonefeld:
Was it a good idea?
Steve Kuykendall:
There you go. No, it was a larger company that had more opportunity and being in the egg part only, working for Chore-Time was something that intrigued me. And Mark and I had, like he said, had been friends for two or three years already and felt like we could work together and still be friends, which we were most of the time. I think there was only one time ever, and you probably remember which one it was Mark, that we didn't close the deal. So as a team, we worked together well and we kind of gained confidence in one another and learned kind of our strengths and weaknesses between the two of us, and it just seemed to always work out really well.
Greg Schonefeld:
And then jumping over to Craig, I mean, Mark and Steve worked together in the same companies. You guys weren't working with the same company, but often interacted on sales, each holding different pieces of what was ultimately being sold. And what Mark said about you, Craig is just you were someone he could trust. Can you talk some about your working relationship with Mark?
Craig England:
Yeah, but I'm just learning here that I was probably out of a job three or four times and not once did Mark ever offer me a job to come work for him. So I think that was probably good foresight because I'm not sure that that would've worked in any case. But I think Mark kind of said it is, you develop relationships, even those that you don't work with in the industry. And Greg, this, it's a really interesting industry in that we've got a lot of competitors, but for the most part, the relationships are really friendly and you respect the competitors that do things right and that compete against you.
I think that's really unique in our industry that people are willing to help each other out even though they might not get any benefit from it. But that's worked for my relationship with Mark over the years, and it didn't hurt to see him at a trade show and he wasn't afraid to sit at the bar and kind of talk about what was going on and give some insights on what he saw from the production side and what I saw more from the processing side throughout the industry.
Steve Kuykendall:
And I can verify sitting at the bar talking about stuff.
Greg Schonefeld:
You were always there for that part, Steve,
Craig England:
I'm not sure you were talking.
Mark Kleinsmith:
We also, what was able to be done is by having these relationships, Craig knew some people really well, customers, more than I did, and I knew some customers better than he did. So we were able to exchange ideas, numbers, contact information so that we could help each other to reach that final goal with that end customer.
Greg Schonefeld:
Yeah, so you each kind of had the different pieces of the puzzle, but you were able to work together and present a complete look to the customer.
Mark Kleinsmith:
Yeah. One of the hardest things, let's take Craig and I or Steve, with our conveyors when we're at Lubing and their graders, if we didn't meet the expectations of the customer, whether they could do 500 or 600 cases per hour, it was one of us, and we were able to go in there and explain to the customer, so we weren't pointing fingers at each other. We were like, "Okay, we've got a problem, let's get it fixed." And we worked together. And I like that versus being combative. It was always the rule in the layer industry in the cage houses and that, the last guy that got there, it's his problem. It wasn't the feed, it wasn't the ventilation, it wasn't the case. It was the last guy there and it was his fault because he didn't have a chance to explain. But yeah, that was the industry.
Craig England:
True.
Greg Schonefeld:
Yeah. But when you were working together with people you trust, could you avoid that dynamic?
Mark Kleinsmith:
Yes. Yeah, because you know what? He had it in his best interest for the job and the customer, versus personal or what am I going to get out of the deal? And I think the three people on the screen that have been in the industry, that's what we did. We were in the best interest of the customer, whether they liked it or not at that time, there was some customers that didn't like it right away, so we got around that too.
Steve Kuykendall:
And the point that the customer isn't always right is the truth. I mean, sometimes to get the point across, you might need more than one person to get them to understand, and you need the backup for that.
Craig England:
True.
Greg Schonefeld:
And I've seen that too, where I've been on projects and it's always the fault of the person who's not in that particular room. So that part hasn't changed. Steve, you brought up something interesting in the pre-interview about how back in the early days when you were selling, a lot of times it took place at the kitchen table. Can you talk some to that?
Steve Kuykendall:
Sure.
Greg Schonefeld:
What that was like versus how things are today?
Steve Kuykendall:
Yeah, actually that's the very first thing on my list here, and that's the part that I probably missed the most about going out and being a salesperson for a manufacturer was, you had those personal relationships and the fact that when it first started, we would sell to this person and then the next thing you know we're selling to his son, and at the very end we're selling to his son. And through the years when you would sell something, you would sit down with the customer and you would actually build it out on paper right there in front of them. And then after everything is understood, maybe taking one or two or maybe three different trips, you would actually sign that deal at the table and his wife would be there and they would be drinking coffee and eating cake. I mean, it was a very personal thing.
Towards the end when it became the grandsons of the people that we visited back then, everything is now by committee, and so there's no real personal relationship like you had back then, but it had to be that way. Because back when cages and egg houses were 80,000 birds a house when we've actually kind of really got things rolling and it went to two or three 400,000 birds in a house, the people that were small then either got bought or they were out of the industry.
Greg Schonefeld:
Mark and Craig, did y'all have similar experiences?
Craig England:
It's a little different on the processing side because I still felt a lot of the personal relationships even later in the years. Yes, it definitely had changed. I mean, going back early on in a week, you'd go out and see 10 different customers and you were face to face with them all the time. And I think maybe that's the thing that Steve and all of us miss is just that being able to be face-to-face with them and having an hour discussion and really not even talking about equipment. Talking about the people and their family and what's going on in their lives and your lives. Now, one of the first things you have to do is figure out, okay, how does this person to be communicated with? Do they phone calls? Do they like texts? Do they like emails? And so to Steve's point, I think being able to go out and sit face-to-face with your customers regularly and have that relationship, it is really gone. And that for those of us that lived, it's something you miss.
And the younger guys coming up maybe never really experienced it. So when you try to say, "You really got to get face to face." They go, "Well, I texted him three times and I've emailed him twice and he hasn't responded. I don't know what's going on." "Well, maybe give him a phone call." Like, "Oh, I guess I could try that. I didn't know it was to that level of urgency." "Well, it's just a phone call." So that's changed. And yeah, I think all of us old timers miss that part of the business and the ability to, like I say, get face-to-face regularly.
Mark Kleinsmith:
We talk about Steve sitting at the kitchen table. Many times we would have a one-on-one relationship with the owner, and they had senses of humor too. And so we would go in, I had one customer in Texas, Ernest Mahard, and went in and went through and we had a four-page contract, and I went through each and every line item and he was sort of lagging. I gave him a copy of the contract, I took one, and then I learned later on, he had a hard time reading.
And so we went through the entire contract. He was in full agreement. He looked at me and he said, "Well, is there anything else you need?" I said, "Well, I need you to sign that if you would, and can I get a down payment?" And he said, "Sure." And he called his daughter and got the down payment, they brought it to the desk, and I was sitting there and he said, "Well, is there anything else you need?" And I said, "No, sir, thank you very much." He says, "Well, you disease carrying SOBs, get off my farm now." So he wanted to do business but he blended it in, and he was a very big character in the industry way back.
Greg Schonefeld:
Yeah. Mark, I was listening back on our first conversation and I noted, I mean even the one where you're climbing the tree house.
Mark Kleinsmith:
80 feet.
Greg Schonefeld:
Yeah. You noted that you stuck the contract in your back pocket and you climbed the tree house, and that's kind of notable, just picturing a salesman carrying around a piece of paper and you've got it in your pocket and you're maybe waiting for the right time to present it. I mean, can you paint a picture of that because it is a lot different today. I mean, I've done sales where I've never seen the person's face. I mean, we've talked on the phone, I get a set of drawings, we send a quote, you kind of have these multiple conversations spread over weeks or months, but I haven't really had that moment where, man, I've got a contract in my pocket and I'm about to take this trip and I'm either going to come back with something signed or I'm not. Can you talk through that feeling?
Mark Kleinsmith:
Yeah. Dave Rust was one of a kind. As I said, if they had the Mount Rushmore of egg people, you'd have Dave Rust, Anton Pohlmann and Jack DeCoster up there back in our time. But Dave was very, he would test you. He wanted the first time I signed a contract for a million bucks with him, he made me swim in the pool, do 30 laps at 5:30 in the morning with him and also his son John. And then immediately after that he says, "I want to sign that contract, but I can't." I said, "Why?" He goes, "You have a mustache." And I said, "Really? If I shave this mustache, you'll sign this?" And he goes, "Sure enough." I cut that mustache off with a small knife he used to give away, signed the contract, went back, happy as heck.
The second time I had a contract for six million and went down to see him at his home and he said, "Nope, we're going to meet somewhere else." Walked out in his backyard, and I looked up in the tree and 80 feet in the air there was a four by eight sheet of plywood sitting on the top, and he said, "That's where we're going to sign it." And I thought, this guy's challenging me again. So I stuck that contract in my back pocket, climbed up with a 67-year-old guy on the other side of the tree going up, did our little sat down like Indians with our feet crossed, and the guy signed a $6 million contract. And there were several things that he would challenge you just to see if you do. One of the best was when he pitted me against two other. He invited us to meet at the Holiday Inn in Seymour, Indiana. He had me, he had Craig's former boss, Jim Neale in a room, and he had a fellow from Big Dutchman. And at 7:000, he started knocking on my door and wanted to know what my price was. Then he'd go three rooms down, knock on the other door and ask Jim Neale what his price was. I opened the door and saw what he was doing, and then finally I said, "No, I'm not playing this game anymore."
But there were challenges by these customers that, you know what? I was like, this is fun. Why not do it and see? And you know what it took out, and we got a lot of business from it, so it was a fun time too.
Greg Schonefeld:
Craig, was that what it looked like for you too, that, I mean, ultimately you'd reach a point where you're carrying a contract and you're going to go out there and you hope this is the day you get it signed.
Craig England:
And Greg in your business, I'm sure you do it. There's nothing better for a salesperson than to get a signed contract, right? It's like a high for a drug addict. It just is. It's an incredible feeling. I had a time, one time when I was with Diamond, I went out to a customer and we were negotiating over a machine, and at the time, the company that owned Diamond was, they were pulling all the cash out of that business all the time. We were always fighting for cash. And this customer was really beating me up, beating me up on price, and ultimately I said, "Listen, I can do this, but you got to pay me 100% upfront, and it was a million dollar contract. As Mark said, it was literally $1 million.
He goes, "Okay. Okay." I'm like, "Oh, all right. This is great." So we get everything signed and that, and I go, "I need to get a check." And we go in his office and he had one of those old machines where they used to print the checks, you'd set the numbers up, and then it would go like that, and it would be you'd pull the handle down and print the check. Well, he goes over to make the check and he goes, "Got a problem." I go, "What?" He goes, "This only goes to $999,999 and 99 cents." I said, "You know what? I'll take that." So he prints the check, and you go back to the office and everyone, of course, "What happened? What happened?" For a company that was always looking for cash, you give the financial guy a check for a million dollars, and all of a sudden he liked the sales guys. 364 days out of the year he couldn't stand us. But you do that, and it was a success for all of us.
Greg Schonefeld:
To walk away with a paper contract or a paper check, I'm just imagining you hop on the plane and you're just kind of staring at that thing the whole way. Or maybe you take a nap with it as a pillow or something.
Steve Kuykendall:
Plane? You're usually driving.
Greg Schonefeld:
Yeah. Oh, driving. Yeah.
Mark Kleinsmith:
I was bouncing up and down in my Crown Victoria after I sign that big deal all the way back to Northern Indiana.
Craig England:
I have one that's better than walking away with a million dollar check. Down at the Atlanta show, used to be, it was a bigger event than it is now. I mean, now it's every other year, equipment companies are showing, and there were much more companies both on the selling side and the buying side, but this was about 25 years ago, maybe not quite. But I was down at the show and selling a machine to a customer from outside of the US and we were talking and I go, "Listen, we're going to need to do something. I need to have a down payment to get the date that you need." "Okay." He goes, "What do you need?" I said, "I really need $100,000." He turns over to his assistant, pulls out a bag, and he throws $100,000 cash down to me.
And I'm like, "Oh, okay." Downtown Atlanta with $100,000 cash. Well, this same financial guy that loved the million dollar check was at the show. He did not like the fact that I walked over with $100,000 cash and said, "Here, you need to take care of this and get it back to Michigan. I've got to take customers out tonight." So the next day I go, "Mr. CFO, what did you do last night?" I said, "People went out to dinner. And what'd you do last night?" He said, "I stayed in my room watching that cash because I couldn't leave it there alone." He says, "I've never been so scared in my life."
Mark Kleinsmith:
Craig was this customer from The Bahamas?
Craig England:
Yes, it was.
Steve Kuykendall:
Yeah, we know who that is.
Mark Kleinsmith:
Well, you know what's ironic here? Is he was buying cage equipment before, did the exact same thing, I told him I needed 50,000. He had a briefcase with a handcuff on it. He took it open, gave me 50,000 in a brown paper bag, and I did the identical thing. We had our financial woman there, and I walked over and said, "Here's the down payment." And then her eyes got this big and she couldn't believe it. But same way, I didn't want to have responsibility of that 50 grand cash, but he was very unique fellow from The Bahamas.
Craig England:
Yeah, yeah. He was unique. Yep. I mean, I was just worried that that 100,000 wasn't going to make it back to Michigan for many reasons.
Greg Schonefeld:
Yeah. Steve, you mentioned you and Mark, it sounds like y'all had a great track record. I think you said you only came back one time where you didn't get the deal close. So I imagine y'all had a lot of just victory moments together, it sounds like.
Steve Kuykendall:
Oh yeah. We kind of figured it out toward the end of our career, and he and I have traveled over 600,000 miles together. So-
Greg Schonefeld:
Wow.
Steve Kuykendall:
... you learn a lot about a person through that time. And those victories were always great. Winning is always great. Winning is everything for us. And the one particular time that we didn't get it is because our competitor gave them a six-year hold the price, and we told them we weren't going to do that. So yeah, winning's good. And over the years, all the fun we've had. When you sign a big deal and you happen to be sitting at the bar that night talking, it gets pretty deep. It gets pretty deep, and it was the best times of my life. I'm glad we all got to do it together as friends. And we have a million stories we could tell. I mean, we could all carry on for the next two or three hours and never miss a beat.
Greg Schonefeld:
Steve, also, you mentioned earlier that Mark brought you Chore-Time, but then he told me that you brought him to Lubing. Why did you feel like you needed him at that point in the juncture?
Steve Kuykendall:
Well, Lubing had gone through some changes and they didn't really have the direction on their structure like they maybe should have. And Mark is all about structure, that's for sure. So when he came over, I mean, they were better about doing the basic things you do to put a company in a situation where they can win. And then the relationships he brought with him just compounded that. So in a very short period of time, probably I would say within the two or three year period, sales probably tripled at that point. And then from that point, just continued to get bigger and bigger each year. Leadership, structure, relationships, it's kind of way you build a business, isn't it?
Greg Schonefeld:
Yeah. And so you brought him in to be your boss?
Steve Kuykendall:
You know what? I didn't really mean for it to happen that way. No, no.
Greg Schonefeld:
In hindsight?
Steve Kuykendall:
I like what I did. That's not really my forte, even though I've done that before. For me, I could do as well financially as he could in there, and I wouldn't have near the responsibility. So for me, I had more autonomy. I had more of my time where I only had to deal with me and not five or six other people. I kind of like it that way. For me, that was the best call.
Greg Schonefeld:
Yeah. That leads well into my next question. And starting with Craig, you've been in a position to witness some incredible tech advancements over your career. Can you share a couple of the most dramatic improvements you've seen?
Craig England:
Yeah, I think, and this will come from the processing side, I'll leave the production side to the more experienced guys, but back when I started, Greg, the grading equipment and the grading rooms was painted equipment that you were specifically told only put water in the egg washer. Don't use water anywhere else around the machine. And the hygienic aspects of the machine were not very high. And I think over time, it became much more of a food processing plant. And I think part of that is companies like Diamond bought a breaking company, and the requirements in the breaking plant, it's an open food product, so everything is required to the highest sanitation standards.
So a company like Diamond buying a breaking company and learning what was required there and Sanovo developing an egg grater that they took their years and years of experience in the egg breaking world and took that into the grading room. I think from a food safety standpoint, technology, whatever you want to call it, that really was a big, big difference, for customers to be able to wash, sanitize, clean the machines properly, and ultimately provide a better, more safe food product for the consumers.
Specific technology. I think the automatic crack detection system, the electronic crack detection system which Diamond developed in the late '80s, that really took egg grading to the next level. It solved probably the biggest problem in the grading room, which was being able to pull cracked eggs out without over pulling them. And that was really driven by Marcus Rust coming to Jim Neale at Diamond and saying, "Listen, this is our biggest problem. This is your biggest opportunity, and we'll work with you in any way you can, but we've really got to resolve this." And when Diamond introduced that, again, '89, '90, it turned everything in the industry from what was required. I mean, customers were buying complete brand new machines with that technology because the upgrade side of it was too long of a wait, but you could buy a new machine with that function and get it in place earlier. So that and the vision system for detecting dirts on the eggs, the shell, and being able to pull those out, huge, huge advancements in the grading side.
And then on the breaking side, the multi-row egg breakers, which just brought the capacities way up, and again, the sanitation, the cleanliness of them is second to none. I mean, the Sanovo machine that they have today, if you look at the technology that's on that and the sanitation capabilities of it, it's incredible. It's no wonder they've got 90% market share. It's just gone completely different levels. So from the processing side, those two areas I think were the biggest improvements.
Mark Kleinsmith:
And Craig, all that, in addition to growing from 200 cases an hour to, what are they at? 700, 800 cases an hour now?
Craig England:
800.
Mark Kleinsmith:
Yeah.
Craig England:
When I started in the industry in 1984, the biggest egg grader was 200 cases an hour, and today it's 800 cases an hour. And if you were to implement the machines today with all of the technologies and the automatic case packing and palletizing and all of those features, I don't know the exact number, but it probably takes as many people to run an 800 case an hour machine today as what it took for a 200 case an hour machine 40 years ago. So yeah, the requirements for higher capacity, higher capacity, I mean that's been driven by, as we talked about earlier, the consolidation in the industry and facilities getting bigger and bigger and the need to drive two million eggs through a machine today versus a half a million.
Greg Schonefeld:
Craig, those are great examples and we might have to get you back on to really walk through those. Those would be exciting to hear more about. Steve, you said something in the intro that caught my attention. You said something like nipple drinkers was a bad word that you couldn't say. Where did that comment come from?
Steve Kuykendall:
Well, initially all the nipple drinkers came out of Europe and they were extremely high flow watering nipples. And so if you talk to a customer in the states, that's all they knew. They didn't understand how they could actually set it at the flow rate that you needed it at. And so when I'd first go in to see a customer, well for instance, Dave Rust, he finally let me come in to talk to him, and I went in and explained everything, showed him how everything worked, and he listened to my 30-minute speil, and then he looked at me and goes, "That's the stupidest thing I ever heard of." And that was the end of that conversation.
But back in '86, '87, that was very normal to get that kind of reaction, and especially when you went into the broiler breeder turkey stuff because that was completely unheard of. Once they used it or once took them to a facility where they could see it, it changed everything. But the connotations of what came out of Europe at the time was so high flow that it was not manageable, and therefore it rusted cages. It got on broiler breeders and turkeys. It got the floors really wet. What they had back then was nothing like what they had now. Eldon Hostetler, out of Ziggity, probably is the one that turned all that around. He was a brilliant man with an eighth grade education, but he was an engineer for Chore-Time, helped him develop the Flex Auger, and he wanted to come out with a nipple drinker. And then when he brought that to Howard Brembeck, Brembeck said, "No, you're not going to do it." So he left and went and started his own company and he's probably, I would say, the godfather of the nipple systems that are used today.
Craig England:
I'd agree. Yeah.
Greg Schonefeld:
And Mark, we got to hear quite a bit in our prior recording about the evolution of cages through that timeframe and into cage-free, but I'm curious, each of you guys had significant time in sales. I'm interested, what's the salesperson's role any time the industry's going through an evolution? Mark, can you kick that off?
Mark Kleinsmith:
It was hard. When I first started, there was 6,500 producers. So if you look at today, you got about 69 companies producing 90% of the eggs. So you had to spread yourself thin. You had to go here, here and here when you started. And we were talking about buildings, a big house was 80,000, and then we came up with the idea going from three high to four high, and then four high to five high. And this was no belts. These were traditional A-frames, and we could get those... I remember the big house was 200,000 birds. And then as the activists got involved and said that we didn't treat our chickens right, which I never saw evidence in my 45 years. I mean, that was their livelihood. That's how they made money. They're not going to mistreat the hand that feeds them, but it necessitated changes and it necessitated changes from example, a lot of the birds back in the early '80s were housed at 48 square inches. Then they went to 53, then they went to 64, then they went to 112, now they're at 144 a square foot.
But I think that in that evolution, you got to realize that all the equipment manufacturers came in. In the '80s you had domestic suppliers such as Chore-Time and Dutchman, and also Favorite out of Pennsylvania. But then Favorite and Dutchman merged. Then when we started all these changes, these European companies, like Dutchman, had already done the work. They started on this cage-free years ago. They started on that. They were able to come over along with the Tecno, FACCO's, Fienhage's that bring in the other equipment, because that's what they started. As sales guys, we started 40 years ago, 45 years ago, now these guys started 20 years ago. So the evolution was not only selling the customer on that, we had some regulations we had to adhere, and that's like the cage-free mandate state by state and those type of things.
But now seriously, personally, I don't know what we gained by going cage-free, because my personal opinion is you've shifted the focus from the birds that you were able to maintain. Mortality rates were less, bird health was better, to where now cage-free, if you break with AI, it'll immediately, because of the co-mingling between the birds and that. So you've seen differences. You've seen conventional cages, and you know what? Let's put a dollar amount on that. When I started, you could put 120,000 birds in a house at 48 square inches for $5 and 60 cents a bird, 5.60. Now that's complete. That's equipment, building, installation, everything. Now you're 10 times that. You're 50 to 60 bucks a bird.
So again, the people who had money and made money and did a good job continued, they made acquisitions or they built themselves. And now we've got from that 6,500 years ago, we're down to less than 100 that produced almost 100% percent of our eggs for consumption here in the U.S.
Craig England:
Greg, I think your question to Mark was what was the salesman's role in that? And at the time when cage-free was really getting going was the time I was at Big Dutchman for a couple of years, and one of the biggest challenges I had was some of the older sales guys or the more seasoned sales guys maybe is better, didn't really believe in or buy into cage-free. They had seen it years before, before we got into battery cages and that, and they knew all of the challenges. So there was resistance from a lot of the sales guys that had been around for a while to even really go out and promote it. And I think the first thing we had to do was educate our sales team on this is coming right? And you're either going to need to get on board and understand this or your battery cage opportunities are going to dwindle and you're not going to be very successful as a salesperson.
So it was a really uncertain time because you had half of the industry, the producers, that wanted nothing to do with it. And then another percentage that said, "Well, our customers are asking for it. We need to figure out how to make it work." And then as suppliers trying to figure out, okay, how do we take our existing systems and modify them to work in a cage-free environment? Which for the most part turned out to be total disasters for those companies that tried to do that. And to Mark's point, the companies that were in Europe where it was the way of life over there really had success here in getting those implemented in that. And they had the background, they understood how to make it work for the customers, how the customers were going to be successful in it.
And Greg, the one thing I've learned over the years is if the salesperson does not believe in the product that they're selling, they can go out and they can make a pitch. They can talk about the bullet points they can go through. Customers see through it really quick. If you don't believe in it, if you don't-
Mark Kleinsmith:
Have you heart in it.
Craig England:
... truly think that what you're providing them is the best solution for them, the customers for the most part can read through that. And they'll either ask you probing questions that you can't come back with or they just have zero confidence in you and your product. So you've got to go back and get the sales team on board to understand what the benefits are so that they can translate that message because otherwise it's going to fail.
Steve Kuykendall:
And at the same time, there were companies and the market was requiring that if you don't have cage-free, we're not going to buy them. So the market was part of that. But as far as what Craig was saying about your salespeople have to believe, it's kind of going back to our conversation about Dave Rust. About we had a good product, but he didn't believe. Eldon Hostetler told me something one time. I went and sold a system to a guy that needed our system. I mean, he had environmental issues and everything else was going to be shut down. I knew I could fix it by putting our system in, and he didn't believe it, but he bought it anyway because I had my selling shoes on that day and it was a good day for me.
And when I got back, Eldon called me into the office and he said, "Steve," he said, "I need to talk to you about something." I said, "Okay." He goes, "I understand you sold the order." And I said, "Well, how do you know?" He goes, "Because he called me." And then he said, "I let him out of the contract." I said, "Eldon, why would you do that? He goes, "None of your fault." He said, "You did what you were supposed to do." He said, "Steve, I want you to remember something." And this was very early in my time in the industry, and he looked at me and he said, "I know that's what he needs. You know that's what he needs. He doesn't believe it will work." He said, "Always remember this. A man that is forced against his will is of the same opinion still." And he said, "No matter if it had been the best thing ever, it would've never worked for him."
Greg Schonefeld:
Yeah, that's a great note and I think applies to leadership as well in my experience. When you're asking a guy to use a method he doesn't believe in, it's not going to work. Maybe your idea is a 10, his is an eight, but he believes in that one. Well, you're probably better off going with the eight. I've got just a few more questions and I'd like to kind of hear from the room. What makes you worry about the future of the egg industry?
Mark Kleinsmith:
I'll take it up on that one. I tell you what, you've had other people, Glenn Hickman specifically, on your program, to talk about how he got decimated of six million. And just last week we had our first 3.2 million hit of a reoccurrence of AI. And we're not stupid people, and the whole industry knows that they need a vaccine. Back in the early '80s when we had Newcastle and we lost five million birds on the West Coast, that's what we did. We developed a vaccine and we administer it, and we still administer it today. But we have such opposition from the other protein sectors such as the broiler business, because it may affect their export of products.
But you know what? We've exhausted all the avenues that can possibly. If we want to keep our egg business, we have to approve that avian influenza vaccine. There's no question they have to do it. They are finding now birds like the little pipers that run in Arizona, not just ducks, not just swans, but sparrows that are dying from AI. And you know what? The only way to combat that is to have a vaccine that will fight against that, or we're going to see another 30, 40 million this year because the migratory file is on its way, it's going to affect farms and on a big nature. In my opinion right now, that's the biggest thing for the egg business to handle and get done.
Greg Schonefeld:
Yeah, I would think if there was a silver bullet, that'd be the thing to use it on today. Craig or Steve, do you have any other thoughts on just looking out at the future of the egg industry?
Steve Kuykendall:
From a sales perspective, it goes back to a little bit about what we've already talked about. Emails, texts, Zoom meetings, all these things are way of life now in the industry. However, if you do not have a personal relationship with the company that you're working with right now, you're just a number. And if all you have to offer is, I have a quote here, "You'll just be sold out by the next cheapest person." You don't have a relationship. They don't really have the understanding. You really don't get a chance to go out and explain what your benefits are. If you can't do that personally, then it's the cheapest bidder. And I think, I mean, you're going to get a certain amount of business, but you're never going to be a leader in the industry unless you have some kind of relationship.
Greg Schonefeld:
Yeah.
Craig England:
I think from the relationship standpoint, my concern that gets lost there is, listen, all of the innovations that have come through and all the technologies that I touched on a little bit, those start at the customer. Those start at solving problems that the customer is really facing or providing them something that allows them to provide a better product to their end customer that. And to Steve's point, communicating via what I call a task-oriented communication, which is, here's your quote, send me back a response. But you're not going to solve a lot of technical issues or things that are facing the industry either today or going forward. And that really comes from, we joke about it, but it comes from sitting at a bar and talking with a guy about, "Hey, what's going on in your business and in your world, and what can we do as an equipment supplier to help you?"
And as the relationship becomes more transactional and task oriented, I think you lose that. And equipment companies may argue with me or not want to hear it, but they don't come up with the good ideas. The ones that come up with the good ideas are the ones that have the problem that needs to be fixed. Boy, if you guys-
Mark Kleinsmith:
I agree. Yeah, absolutely.
Craig England:
... could just do this, it would really help me. And when those relationships become more one-off or distant, as we've talked about, you lose that. So I think that will definitely affect innovation in our industry. And the guys that were the mavericks and that were doing things wrong and that we're always on the edge, they're gone. They haven't survived. As our industry has integrated, those people have been pushed out or have gotten out. What we have is a group of farmers that are really, really dedicated to providing our country the world with the safest, best products out there and doing it in the most humane way that's known and continuing to develop different ways of improving that.
And unfortunately, as every generation gets further from the farm, they don't have an understanding of it. And it really takes somebody to educate them. My grandpa had a farm. I saw him, we'd go down for Thanksgiving and we'd be out looking at the turkeys, and next thing you know, we'd go, well, we're going to get that one and that one for dinner. And it'd be like, okay. You understood it, right? Today, the kids that live in my neighborhood, they're understanding of animals is going to the petting farm, and every one of them has a name, and that's okay, but they also have to understand our side of the food providing world. And I don't know how to do it, but I think that's a real concern of mine going forward is how do we get people to understand where this all comes from and the good parts of it.
Mark Kleinsmith:
That's a great point.
Greg Schonefeld:
And maybe just one sentence from each of you. What makes you feel hopeful about the future of eggs?
Craig England:
In my opinion, it's the people that are driving the industry that have survived all of the changes that are putting the industry going forward. I have a lot of faith in the companies and the people that are setting the path for our industry.
Greg Schonefeld:
Great.
Mark Kleinsmith:
The egg is still the best protein by the pound of any protein available, and that's why they will continue to want to buy eggs.
Greg Schonefeld:
That's a good one.
Steve Kuykendall:
And I think we've gotten up to a place in our industry where a lot of the people that were driving, a lot of these changes are all fairly satisfied. So I think we have something we can stay with a while. And as far as cages and equipment and all that, innovation will continue, but I think we've come to a place where I think everyone is in a good place or where they think this is equitable among all the others.
Greg Schonefeld:
Good. Well, one last question. How do you prefer your eggs?
Craig England:
Over medium.
Steve Kuykendall:
Over medium.
Mark Kleinsmith:
Over easy.
Greg Schonefeld:
Man, almost three peas in a pod here. Man, what a cool opportunity to hear from three industry legends, guys who put the customer first, made the industry better, and clearly had a whole lot of fun along the way. Once again, I want to thank Mark Kleinsmith, Steve Kuykendall, and Craig England for joining us on the show and sharing their stories and insights. If you enjoyed this episode, please share it with a colleague or friend. Word of mouth really helps us to grow the show. And to make sure you don't miss an episode, follow us on Spotify or Apple Podcasts. Until next time, I'm Greg Schönefeld and we'll talk to you soon.