Clemens Food Group, one of America’s largest pork producers, is now in its sixth generation of family ownership and leading the way in humane practices. And the strategy is bringing home the bacon.
By Chloe Sorvino, Forbes Staff
A sweet smoke wafts around Brad Clemens as he maneuvers past a forklift hauling a pallet of freshly cured bacon at his family’s Pennsylvania pork plant. Around the corner, millions of ham steaks roll off the line and bins full of slabs of pork bellies enter the industrial-sized smoker.
The 41-year-old president of the 129-year-old company—a former mergers and acquisitions lawyer, who is just as comfortable in the smokehouse as he is fly-fishing—adjusts the back of his helmet so his foam ear plugs are wrapped around a knob on the back and don’t get caught on any machinery, or, worse, fall into the bacon bits: “I grew up in the business, but there’s a lot to street cred,” he says. “You earn it in really little ways, and some of it is things like that.”
Then again, plenty of people in the Clemens family grew up in the business. Some 403 relatives currently own shares and Clemens Food Group has a plan to remain private for the long term. The company has also charted a more humane strategy that’s at odds with the rest of the industry—and succeeded.
Chris Crisman for Forbes
So why have America’s largest pork producers been losing market share to Clemens? In 2023, California started enforcing Proposition 12, which legally bans farms from keeping pregnant hogs in crates barely larger than their bodies—a practice that animal care expert Dr. Temple Grandin compares to forcing a person to spend months strapped in an airplane seat. (There are now 14 other states with some sort of crate law.) But competitors, including America’s largest pork processor, Smithfield, have fought the new regulations, even shutting down plants rather than comply. Those openings helped double Clemens’ market share last year, rising from 2% of the U.S. fresh pork market to 5% and going from 1% of the bacon market to 2%. In all, 2023 revenue at the fifth-largest fresh pork producer in the U.S. topped $2 billion.
“We are not afraid,” says Clemens, inside the company’s newest plant, while passing its recently installed $40 million bacon production line.
Farm Team: Clemens employees in the 1940s with founder John C. Clemens (fifth from the right), whose early slogan was, “Never an empty wagon."
ClemensWhile the family bacon may sizzle in the kitchen, margins in the industry do not. Clemens and its competitors have struggled during a recent dip in pork commodity values. Clemens’ operating annual profit margin is an estimated 5%—on par with U.S. turkey and pork producer Seaboard at 5% but less than the 8% of Smithfield’s Hong-Kong-based-owner WH Group. In addition, the new crate-free laws “introduced volatility” to the category. says Goldman Sachs’ Adam Samuelson, who covers Applegate Farms parent Hormel. He adds that less than 10% of all U.S. pork producers comply: “That volatility I would not say was helpful.”
Still, Clemens doubled-down on crate-free production, and reinvested more than $1 billion back into the business in the past five years, thanks to $500 million in total debt. He explains that journey as he leads the way into a $230 million state-of-the-art 307,000 square foot smoked pork plant—where a trio of family-hunted deer heads welcomes visitors and, on the way out, a Bible verse above the door serves as a reminder of what’s truly driving the family. (About 10% of company profit is given annually to nonprofits, and another 10% is given at the direction of the family shareholders, who often decide to tithe profits to their local churches.)
“There is no IPO. We’re not for sale,” says Clemens from the second floor of the plant, where inside his bright office is a stuffed turkey from a family hunting trip atop his bookcase. “It’s about building value long-term.”
The value is certainly there. Forbes estimates the Clemens family, now in its sixth generation, is worth at least $1.1 billion. The majority of that fortune comes from owning 94% of Clemens Food Group—longtime employees and charities own the rest. The clan also owns $200 million worth of real estate around the East Coast, including developments around their headquarters in Hatfield, Pennsylvania, as well as other investments.
In addition, Clemens owns a lot of its supply chain, including a feed mill in Indiana, another under construction in central Pennsylvania, and a fleet of 156 trucks. Every year, Clemens raises 2.7 million hogs, from an additional 110,000 sows under Clemens subsidiary Country View Farms. The rest of its annual 1.6 billion pounds of pork comes from a network of 20 family farms from Indiana, Ohio, Michigan and North Carolina.
That’s given Clemens Food Group flexibility with its customers, which include McDonald’s, U.S. Foods, Sysco, Wegmans, Wendy’s, Kraft, Publix, Target, Walmart and Jersey Mike’s. Increased demand—because of the new crate bans—has also expanded Clemens’ market in the West. “They’ve been able to do a lot in California by capitalizing on the opportunity,” says Rod Brenneman, Seaboard’s former CEO and decade-long director on Clemens’ board. “Everybody says they have a Prop 12-compliant product, but it’s hard to get a handle on how much they really have. Clemens is earlier and farther along than most other major processors. They have product available where others might not have.”
Back in 1895, farmer John C. Clemens brought his horse-drawn wagon filled with pork to a market in Philadelphia. His slogan was “Never an empty wagon.” Within his Mennonite family and their business, religion was paramount.
By 1982, his great-great grandson, Brad Clemens, was growing up down the road from his family’s pork processor as revenue crossed into nine figures for the first time. Brad spent Sundays with his cousins at their grandparents’ house, down the street from headquarters, often eating ham sandwiches for lunch after church. (While only part of the family remains Mennonite, faith remains important.) By 1986, revenue rose to $151 million as Clemens, under the family’s third-generation, which kept adding hogs.
The business grew to $246 million in revenue as it entered the tumultuous 1990s. Hog prices cratered to lower than during the Great Depression and farm bankruptcies soared. Clemens didn’t want to lose any sources, so in 1998, it implemented a price floor for producers.
Revenue peaked and profitability dipped. During the downturn, Brad Clemens’ father, Thomas, left as the business brought in new blood. As a high school student, Brad realized he shouldn’t count on the family business for a career, so after attending Bucknell undergrad, he enrolled at Villanova to become a lawyer. That legal training proved valuable later on when he was asked to join the rebounding business, and worked through several departments, including food safety, product development and sales. (His father also came back to develop the family’s real estate portfolio, and retired in 2019.)
Clemens and the team soon discovered that farm experiments of raising hogs with higher standards like implementing group housing were starting to work—so they began opening up pens and dismantling crates.
No hog plant had been built in America in the decade prior, but in 2014 Clemens broke ground on 650,000 square feet in Coldwater, Michigan to grow Clemens’ fresh business as it competed with cheaper Midwestern pork producers. After opening in 2017, volume doubled, and Clemens created a pipeline for crate-free pork. It was just before Proposition 12 was voted into law, and the initial investments made it easier to meet higher standards later demanded.
The bet has paid off. “Clemens was willing to identify a marketplace that wanted animal welfare standards,” says Sara Amundson, chief government affairs officer for Humane Society of the United States. “They built around that marketplace, and because of those early investments, they are reaping the rewards. These producers got out front and found a sweet spot.”
All Clemens pork adheres to Ohio’s standard, which requires an “open-pen” environment once a hog is confirmed to be pregnant, without dictating a minimum square feet of space per sow. About 20% complies with California’s Prop 12 which requires at least 24 square feet each. Clemens says its crate-free pork that doesn’t meet Prop 12 standards is still raised in pens where sows each have an average of 18 to 22 square feet of space.
Admittedly, Clemens lags behind Perdue-owned Niman Ranch, which has 100% crate-free that goes further than Prop 12—with at least 35 square feet for pregnant sows. Niman is also 100% antibiotic-free, while just 8% of Clemens’ 2023 production was. Since Clemens doesn’t go as far, Clemens can undercut Niman—offering “crate-free” products at a lower price.
Niman goes past minimum standards in other ways, too, such as not using crates when sows give birth, requiring bedding, and not cutting off tails. While Niman is among the largest producers of Prop 12-compliant pork, it hasn’t been able to take full advantage of opportunities like Clemens and sales have been relatively flat—save for a few larger deals secured in the past few weeks, amounting to a small recent uptick. “We don't have farms that we can convert,” says Niman general manager Chris Oliviero. “That takes a long time, and the current economic climate is brutal.”
Citing high costs, pork producers have been deterred from going crate-free for years. But Clemens’ success proves it can work. And a 2021 study by the University of California Davis found that a pork consumer’s bill would only increase $8 per year per person, because of the new measures. Still, the National Pork Producers Council filed a suit over Prop 12—sounding alarms that changes would make pork too expensive. Last year, the fight reached the U.S. Supreme Court, which upheld California’s crate ban.
Balancing a crate-free future with potential profits won’t be an issue for the business as Brad Clemens doesn’t answer to public shareholders. And Clemens Food Group has strict rules to keep it family-owned for generations to come. The complex design includes voting common shares, non-voting common shares and 10 tranches of preferred shares. Taking a page out of the book of America’s largest private company, 159-year-old agribusiness giant Cargill, the structure allows retirement-ready family members to convert non-voting common shares to preferred shares so they get a higher annual dividend. Finding creative ways to give back more liquidity to shareholders is a top priority, says Clemens.
And there are other guardrails: No one can own more than $10 million worth of non-voting common shares, which appreciate as the business grows in value, unlike preferred shares. Shareholders can also only redeem stock to pay for education, buy a home or donate to charity. So far, the business has enticed 20 relatives to work full-time towards their extended family’s future. Says Clemens, “We're in it together.”
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