Kurt Loudenback, CEO and co-owner of Grand Prairie Foods in Sioux Falls, South Dakota, employs a few hundred people in one of the country’s tightest labor markets.
South Dakota is one of four states (along with Nebraska, Utah and Vermont) with an unemployment rate less than 3%. As a manufacturer of pre-cooked eggs, breakfast rolls and other packaged foods, primarily for hotels and convenience stores, Grand Prairie Foods is also inextricably linked to the hospitality sector, which was one of the industries hardest hit by COVID-19.
Loudenback spoke to “Marketplace” host Kai Ryssdal about pent-up demand, vaccination of employees and what the tight job market in South Dakota means for his company. The following is an edited transcript of their conversation.
Kai Ryssdal: So we talked to you Last JuneAnd one of the things you said, I asked when I asked everyone back then, how long is it going to take? And how long will it take to get back to normal? And you said, “Oh, I don’t know, six to twelve months.” So here we are at the eight- or nine-month mark. How are you doing at Grand Prairie Foods?
Kurt Loudenback: Well, I think we will get back to normal within my predicted six to 12 month timeframe. We’re not there yet, but only hear tremendous feedback and reports from my customers that bookings for the summer months have increased significantly.
Ryssdal: What I hear you say but not use the actual words is “pent-up demand”, right? There are business trips, there are private trips. I mean, we should, we should remind people of what you are doing, and that’s the thing that sticks in my mind on the visit we had with you a few years ago, the big egg machine where you prepackaged them Make eggs that can be done in self-service containers in hotels and buffets, right? Do you have a bank in a hurry?
Loudenback: Yes I am. I don’t think it’s going to return to the level it was before the pandemic because I find that many customers in the hotel industry who have gotten off the breakfast buffet are in no real hurry to come back. But luckily we do a lot of prepackaged items like sandwiches and the like that a lot of these hotels have switched to and business has gone crazy for us at the moment.
Ryssdal: It’s good. Now people need to get all of that food in these packages. Talk to me about the recruitment situation because [South Dakota]as you know for sure has [one of the] lowest unemployment rate in the nation.
Loudenback: Yeah, we’re back downstairs, but as you probably remember, my wife is in charge of this [human resources] Department here at Grand Prairie Foods, and she and her team did an amazing job finding and hiring the people we need to grow our business. So it’s not easy, but we didn’t have any problems filling production sites.
Ryssdal: One of the reasons we wanted to speak to you was because we were interested in speaking to a businessman who deals with vaccinating his employees and that you set up all of the staff [to get vaccinated]But lo and behold, it was [going to be] Johnson & Johnson and we know how that went. What are you going to do?
Loudenback: Well, we’re still doing it, except now we’re doing two. A local hospital comes in and they’ll give the vaccine to as many staff as possible who are ready. Then in about 30 days they will come back and do it all over again.
Ryssdal: You won’t ask your employees to do so?
Loudenback: We are not. We discussed this at length. At the end of the day we decided to just join in and volunteer. And we’ll have vaccinated well over half of our workforce, maybe close to 60%, which I think is pretty much in line with what I’ve heard Voting on a national basis.
Ryssdal: Let me just ask one more question about the labor force, which is about just paying people more. I mean one of the things as you for sure know that [Federal Reserve] is concerned and many economists say they are concerned is inflation, wage inflation, if the labor supply is warmed up somehow. Granted, there are 8 million fewer jobs in this economy, but I wonder if in a place like Sioux Falls with such a tight job market you have to just cowboy and people pay more.
Loudenback: Yes, I think that will affect our pay scale. It seems like we’re starting more businesses here, which further exacerbates this problem. I therefore assume that we as a community and also in our company will experience wage inflation. We just have to do it. You know we can’t stop making food.
Ryssdal: That’s true. Last thing, and then I’ll let you go – and I’ll get back into the prediction game from where we started from. Even if you don’t go back to where you were because of the changes your customers made, assume if we call you in another eight months you’ll be back where you were producing in terms of sales – whatever the size of the workforce concerns?
Loudenback: You know, I can’t really predict the future, but we’re pretty optimistic for 2021 that we’ll get back to pre-pandemic levels.