How the Culvers Found Their Niche
This former Long Island family migrated to Indiana where it learned to produce leaner ducks at premium prices, and to network in Chinatown.
The early morning scene in the Middlebury, Indiana, farmhouse, just 10 miles from the Michigan border, could have been painted by Norman Rockwell. While Marilyn Culver, 61, bustles about her modern kitchen, whipping up a breakfast of scrambled eggs, bacon, biscuits, and coffee, her 65-year-old husband, Herb, chats in the adjoining room with son Burt, 39. Herb is talking about a proposed new ultrasound device that could take the guesswork out of duck farming: "The day will come," he says, "when you can hang ducks on a line, point a machine at them, and it'll tell you which ones have the best ratio of meat to fat."
Burt mentions a new truck driver they've just hired for the farm: "He plays classical piano!" The Culvers' son-in-law, 33-year-old Tim Rouch, arrives to announce that a heifer on his farm is having difficulty giving birth, which means that Tim may have to make the 23-mile run back home before the morning's out. On this muddy, early spring morning, both Burt and Tim are dressed in heavy work clothes — and stockinged feet, in keeping with an unspoken Culver household ritual: Family members arrive in pickup trucks, enter the house through the garage, wipe their workboots in an entry passageway, and then remove them in a second passageway before entering the living quarters proper.
Just another morning in the life of a typical Hoosier farm family? Hardly. This foursome who gather in the Culver dining room for breakfast most mornings constitute the management of Culver Duck Farms Inc., the nation's third largest duck-production company, with 120 employees and annual sales of some $7 million. What's more, Herb and Marilyn Culver are not native Hoosiers at all, but born-and-bred Long Islanders who 30 years ago shook off four generations of Westhampton family and business tradition, and moved to the Midwest. The move, in their minds, held out the best hope of keeping both their business and their family intact.
Even as the four Culvers — president Herb, vice-president Marilyn, farm manager Burt, and processing plant manager Tim Rouch — sit down to breakfast at 8:30, workers at their plant just a few hundred yards away, have already been slaughtering ducks on a mechanized processing line for two hours. By noon, the Culver plant will have killed close to 7,000 ducks; by late afternoon, the ducks will have been cleaned, plucked, packaged, and sent on their way via truck and air freight to wholesalers and Chinese and French restaurants from Boston to Honolulu, ready to be eaten within 48 hours.
By that time, too, the Culvers' breeding houses and incubators will have produced a new batch of 7,000 baby ducks which, a day later, will be distributed among some 40 nearby private farms that have contracted with the Culvers to raise and keep ducks until they're ready for processing. When the ducks reach six weeks they are collected for the next day's processing by a fleet of Culver trucks that ply the surrounding countryside after midnight.
This operation, with all its ebb and flow, must constantly battle two much larger competitors — and that struggle itself takes place within an industry that must struggle against the vastly larger chicken and turkey industries. The U.S. duck industry consists of just nine companies which together process 24 million ducks annually. Culver Duck Farms, which produces somewhat more than 1.5 million, ranks third behind Maple Leaf Farms Inc., of Milford, Indiana, which accounts for 10 million ducks, and Concord Farms Inc., of Concord, North Carolina, which weighs in at 6 million.
Concord, a unit of the Nickerson Group of Great Britain, was formed in 1979 and sought to penetrate the market with low-priced ducks, but the resulting industry expansion from 11 million ducks annually in 1975 to more than twice that number today has led to a price depression, which is now the Culvers' primary business headache. With flock production temporarily curtailed throughout the industry, the Culvers have sought to boost their profitability through innovative breeding, new growing techniques, and nutrition advances that will lead to leaner, less fatty ducks and reduce the time necessary to grow full-bodied ducks. Culver spends some $50,000 a year on research, and Herb's innovations include computer-controlled, self-cleaning duck houses and the use of hot wax on the processing line to remove feathers — an idea he introduced on Long Island after discovering it during a tour of duck plants in Holland.
"Dad's the leader in the industry," says Herb's admiring son Burt. "He comes up with ideas that other companies copy."
Where Maple Leaf and Concord are geared to seek profit through increased volume, Culver charges premium prices by tailoring its ducks to the needs of fussy customers — especially Chinese restaurants. Where Maple Leaf and Concord employ nationwide sales forces, Culver relies on Marilyn Culver, a single assistant, and word of mouth.
"Herb and I get into networking with Orientals, who have relatives throughout the country," says Marilyn. "When we travel to New York, San Francisco, or Hawaii, we walk the streets of Chinatown and give away free samples. Eventually, some restaurant tries our duck and hangs it in the window. Then someone else sees it, and a year later they start buying."
Given all these competitive pressures, perhaps it's just as well for the Culvers' domain that it's hard to tell where the family ends and the business begins. Herb, a fourth-generation poultry farmer, is a tinkerer and gadgeteer whose mind constantly races with new duck-rearing ideas. "Once Herb gets going on the subject," laughs Marilyn, "it's hard to get him to stop. He can sit and watch ducks drink water from a nipple by the hour."
The guests in the Culvers' five-bedroom ranch house, as often as not, are customers from across the country or duck researchers from such countries as Australia, Denmark, and China. Their six children — like Herb himself — all played and worked with ducks from the time they were toddlers. "As long as they were around," Herb reasons, "they had to do something."
All of the Culver's six children have worked for the duck company as adults. Although Burt and brother- in-law Tim Rouch are the only family members now actively involved, the Culver farm exerts a strong pull on siblings who seek their fortunes elsewhere. Burt, for example, returned four years ago after an 11-year hiatus in Florida, where he ran scuba diving programs for cruise lines. "I didn't want to raise my family in Miami," he says. "I wanted to get back up here where my kids could be with their cousins, get a good education, and hopefully have fewer hassles and run-ins with drugs."
Burt's sister Julie, now 35, started washing down her father's duck buildings as a child. After returning from college in New York in 1977, she worked as a secretary in the Culver Duck Farms office; the following year she married Tim Rouch, a resourceful machinist and farmer who at that point was already well on his way to becoming manager of the processing plant (and who won the approval of Julie's four brothers by beating them in one-on-one basketball games in the family's driveway).
In many respects the mechanically inclined Tim was the ideal in-law for a duck farmer As a machinist's son, he was adept at designing and building equipment which can't be bought commercially (the duck industry is too small to have products manufactured especially for it, so most duck producers must use equipment intended for chickens or turkeys). He also built all of the Rouches' white pine living room furniture. Tim seems remarkably free from hangups about his role as the boss's son-in-law: "I grew up two miles from here, I came to work here, and then I married the boss's daughter," he says cheerfully.
When the first of the Rouches' four children was born 10 years ago, Julie dutifully retired to the Rouches' farm in Three Rivers, Michigan — the closest property they could find to the Culver Duck Farm. In theory she was to spend all her time raising the Rouch kids; in practice, her principal home activity with her kids has been the raising of, yes, ducks for her parents' company — some 160,000 a year, or about 10 percent of Culver Duck Farms' total output. Thus today Julie is still washing down duck buildings. ("It's really not a bad job," she insists. "It gives you a break from routine and lots of time to think.") When the Rouches visit Herb and Marilyn for Sunday dinner, the conversation invariably turns to what Julie calls "duck talk." Other grandparents take their grandchildren to the movies; the Culvers take theirs on visits to prospective duck farmers or breeders.
This job-training-by-osmosis is more than a natural consequence of the Culvers' love of duck farming: It's also an important competitive tool in an industry that requires sensitive and specialized instincts. "A duck farm is not like a factory," Herb says. "If the market goes bad, you can't stop production: The breeders go right on laying mote eggs."
What's more, the killing and processing of ducks is not for the squeamish — and an urbanized society raised on images of lovable Donald Ducks and Ugly Ducklings tends to be more squeamish than most. "The first year we operated the processing plant," Marilyn recalls' "we only had 50 employee positions, but we must have filed 450 W-2 forms. People would come to work in the morning and quit that afternoon."
Thanks to their farm upbringing, no such misgivings plague the Culvers. "My basic value," Burt says, "is that you should kill what you eat — that is, you should understand where your food comes from. In Miami, my friends thought their food came from supermarkets." Although the two brothers-in-law came to the work with different experience behind them, they both believe that duck farming is the best of all possible worlds.
"Growing up, my friends watched cartoons on TV and I did chores," Burt says. "Now they all hate their jobs and I love mine. The quality of life in the country, the family values ... I'd like to offer this to my kids. Tim wants to offer it to his kids. With super-highways these days, you're never that far from a big city or an airport anyway, when you need excitement."
Tim isn't above creating his own excitement at home, either. He once proclaimed his love for his wife Julie by writing her name in a pasture in manure letters 200 feet long, which he photographed from a private plane. "I thought it was pretty romantic," he grins.
The Culvers' values have been passed down through four generations of Long Island poultry farmers — a line that began in 1892 when Herb's great-grandmother started putting duck eggs under chickens in Westhampton. Her son, Herb's maternal grandfather, A.J. Hallock, started the Farmer's Commission House (source of the "FCH" label on processed ducks) and became the world's largest duck grower in the thirties.
Like most Hallocks and Culvers, Herb grew up working with ducks. His father and his uncle operated C & R Duck Farm in Westhampton, a hatchery which bred and hatched ducks for sale to duck farmers in the area. Herb joined the operation as a 17-year-old in 1942 and subsequently ran it in partnership with his brother-in-law. A few years later, he married Marilyn, whose father, a former banker, had changed careers and started selling poultry feed on Long Island. In the late fifties, Herb concluded that Long Island's booming development would ultimately drive duck farmers elsewhere in search of the open spaces and fresh air needed to produce a healthy and robust product. He and Marilyn headed for a fresh start in Indiana in 1960, when the oldest of their six children was ten years old and the youngest only six months. (Herb's hunch about Long Island proved correct, although it took longer than he expected: C & R continued to operate on Long Island until 1985, when the hatchery was closed and the land was put up for sale.)
"We knew the Midwest was the best place to raise ducks," Herb says. "Long Island is overgrown now, and grain is cheaper here — no small concern for a company that buys 20,000 tons of feed a year.
When they first arrived in Indiana, the Culvers grew ducks on a farm for Maple Leaf, the industry leader (and others). In 1970 they moved to Middlebury and slowly began constructing their own processing plant, and then went into competition with Maple Leaf and Concord. While those two companies relied on supermarkets for the bulk of their business, the Culvers thrived by carving out a special niche for themselves dealing with distributors to the Oriental trade — especially Chinese restaurants which now account for about 50 to 60 percent of their total business. "We'd like to increase our upscale restaurant trade," Marilyn says.
Their children were growing up while Herb and Marilyn were establishing themselves in Indiana. 'We never picked and chose who'd be in the business," Marilyn says of her children. "If they wanted to be in, they'd be in."
Burt recalls the process somewhat differently. "'Dad gave us a choice in school," he remembers. "Either play sports after school or do chores, but no banging around town." As a result, all the Culver kids became athletes and duck fanciers. "In eighth grade everyone had to do a science project," Burt recalls, as he walked with a visitor through the Culver hatchery, thousands of baby ducks poking their heads out of eggshells as they passed. "Mine was the egg. I still haven't figured out which came first."
Herb, meanwhile, set up a low-overhead operation that would maximize the expertise of his family and employees alike. For example, he and Tim personally designed the headquarters space to have no closed offices. Instead, the office staff works in a series of interconnected U-shaped alcoves, with Herb seated in the central one.
"He wanted to be in the middle so he could hear everything that's going on, and everyone could hear him," says his son Burt. 'We're learning from Dad to think as he thinks, and this layout means everyone's in tune with Dad. Of course, when you have something delicate to talk about with him, you have to go out in the parking lot and sit in a car."
Although Herb and Marilyn seem unlikely to retire, they've already shifted much of the management responsibility to Burt and Tim. "Herb couldn't stand to be retired," Marilyn says. 'We're sort of retired now; we're working indoors instead of outdoors. We like to travel, and we do more of it now. Of course," she adds, "that's when we see our customers."
Under a carefully thought-out estate plan which Herb and Marilyn recently drafted in consultation with their six children (see below), Burt and Tim will jointly inherit controlling interest in the company while the Culvers' four other children will share a minority interest.
As for the sixth generation, Herb and Marilyn have 10 grandchildren, the oldest of whom is 19. Among Tim's four children and Burt's two, the oldest is 10. "You can't know if our kids will get along," Tim says. "Only time will tell."
Herb shows less concern about the future of his company or his family than the future of his industry in an age of growing animal-rights activism. "Some day," he predicts, "it'll be considered barbaric to grow animals and eat them. The only place you'll see ducks is in the zoo. I hope I don't live to see it."
A fair division for Culver's future
You've built a thriving business that constitutes virtually all of your worldly assets. You'd like to pass it on to your children. But some of the children are active in the business and some are not. What's the fairest way to divide it up?
Herb and Marilyn wrestled with that question for years. All of their six children have worked for Culver Duck Farms Inc. at some point, but today only son Burt, 39, and son-in-law Tim Rouch, 33, are active. The Culvers' oldest son, Russell, 40, is a sports handicapper in Las Vegas, with a syndicated column that appears in some 100 newspapers nationwide. Son Herb Jr., 37, is a carpenter-plumber in Arkansas. Son Wes, 32, is a successful real estate broker in nearby Goshen, Indiana; and daughter Nancy Nylund, 31, is a special education teacher in San Jose, California.
Burt and Tim are already receiving small amounts of stock from Herb and Marilyn. But who'll get the rest when Herb and Marilyn die?
In 1987, after two years of huddling with estate planners, and after consulting with their six children, the Culvers set up the terms of their will. The four non-active siblings had indicated the unlikelihood of their returning to the company, so Herb and Marilyn set up a plan under which, upon their death, Burt and Tim will each hold 30 percent of the stock thus enabling them jointly to exercise control. The four inactive siblings will share the remaining 40 percent equally. To assure Burt and Tim's continued control, the will gives them an option to buy the siblings' stock at a given price and within a given time period. "My father said, 'If you leave a business, leave it so it can run,"' Herb reasons.
The theory behind leaving disproportionately large shares to Burt and Tim, according to Marilyn, is that "our children should share equally in what we earn, but not in what Tim and Burt have contributed to the business."
What happens if one or more of the inactive siblings returns to the company — as Burt did in 1986? It will be up to Burt and Tim to decide. If for some reason the good chemistry between the brothers-in-law sours, the will provides a formula for one to buy out the other assuming one is willing to sell.
Herb shrugs off such concerns. "We can always change the will," he says. "But at least now we have something to work on. Before, we had nothing."