The Sustainability Vision of Sheldon Lavin, CEO of OSI Group

Under the leadership of Sheldon Lavin, the OSI Group has made a commitment to sustainable food production. This effort is built on the company’s long history of embracing the challenges and rewards of cutting-edge technology. Being an innovator in the food sector is not a new ordeal for OSI.

Today, OSI Group is one of the largest food producers in the world. Its growth from a neighborhood butcher shop in Chicago to a primary supplier of McDonald’s initial network of chain restaurants in the American Midwest and a global food conglomerate has been one of the most impressive businesses stories of the last century. And since the mid-1970s, Sheldon Lavin has managed that spectacular growth.

In the twilight of his career, Lavin guided the OSI Group towards embracing new strategies and technologies in order to increase the efficiency and decrease the environmental footprint of the company’s operations. Sustainability is now one of the core prisms through which OSI management makes operational decisions.

As is the tradition with OSI, new techniques and strategies are being developed and adapted as the company faces the global need for more sustainable and environmentally friendly food production. This has led to OSI, and Lavin himself, receiving several prestigious sustainability awards, including the Global Visionary Award, the North American Meat Institute’s Environmental Award, the British Safety Council’s Globe of Honour, and the California Green Business Award.

For Lavin, the awards are the crowning achievement of a long and illustrious business career.

Sheldon Lavin

Lavin’s leadership role at OSI – as the company’s Chairman and CEO – has been decades in the making.

In 1970, he was still active in his previous career as an investment manager and bank executive. At that time, Otto & Sons – the predecessor of OSI Group – was seeking funds so they could carry out aggressive expansion plans. Lavin played a key role in arranging their financing – so key a role, in fact, that the bank backing Otto & Sons requested that he have an ownership stake in the company. He declined, but did come on as a consultant after the deal was struck.

But his role at Otto & Sons continued to grow, and in 1975 – when international investment funds were being sought for further overseas expansion – Lavin was made a partner. This is also the year that the company became OSI Industries.

A few years later, OSI’s primary client – McDonald’s – asked Lavin to make a full-time commitment to OSI. McDonald’s management knew their company was on the cusp of international growth and wanted a trusted hand guiding one of its key suppliers. In quick order, Lavin became Chairman and CEO of OSI.

OSI continued its strong growth – in tandem with McDonald’s – under his leadership. When a partner chose to retire, Lavin was left with one half controlling interest in the corporation. In the early 2000s, the last remaining partner retired and Lavin gained full voting control of OSI. Lavin explained to an interviewer that he would have returned to his career in finance if he weren’t in a position to grow OSI into “something big.”

The OSI Group Becomes Something Big

Today OSI is certainly a large company. It has over 20,000 employees worldwide, working at more than 65 facilities in 17 countries. Forbes ranked it as the 58th largest private company in 2016 with a net worth of $6.1 billion.

OSI’s commitment to sustainability turns on technological innovation, which is a throwback to a key moment earlier in the company’s history. The adaptation of new technology was one of the vital factors that positioned OSI to enter an era of spectacular growth.

Beginning in the 1950s with the first McDonald’s chain restaurant – which opened in 1955 in Des Plaines, Illinois – the then-named Otto & Sons hitched its wagon to what was to become one of the world’s most-known companies. At first, Otto & Sons grew as a crucial regional supplier to the McDonald’s chain restaurants that were opening throughout the Midwest. But in the late 1960s that growth went into a higher gear.

The technological breakthrough of liquid nitrogen cryogenic freezing brought new opportunities in food production, storage, and transportation. Otto & Sons was an early adopter of this new technology and the decision to seek the funding that would allow its integration is the basis for both Otto & Sons transformation into the OSI Group and Lavin’s leadership of the company.

By the time the transition was complete – which included the 1973 construction of a facility in West Chicago, Illinois that was the first to be fully devoted to producing products for McDonald’s – Otto & Sons was one of four primary suppliers to the still rapidly growing fast food empire. Only a few years earlier there had been over a hundred meat suppliers feeding into the McDonald’s supply chain.

Keep Reading: A Century of Innovation at OSI Group

Sustainability Efforts by OSI Group

The willingness to take on risk in order to get on the leading edge of new technology is at the core of OSI’s current efforts to create more sustainability in its operations and those of its suppliers. This is one reason why, over the past decade, Lavin has ensured that OSI’s pursuit of sustainability strategies is supported by robust research and development efforts. The company has created two Culinary Innovation Centers – one in the United States and one in China – and a separate R&D Center in the Chicago area.

These facilities are at the heart of developing new techniques that will lessen the environmental impact of OSI’s far-flung operations. They represent a significant investment in developing a more efficient supply chain and consumer-friendly product lines. They have become one of the core aspects of OSI’s operations. As a large and very experienced food processor, OSI can focus resources on developing best practices that can then be shared throughout the supply chain.

In 2017, OSI’s commitment to sustainability was codified within the corporate governance structure with the creation of a chief sustainability officer as one of the core leadership positions at OSI, with Nicole Johnson-Hoffman joining the role. The position oversees global sustainability strategies and helps develop and guide “strategic intent relative to the various dimensions of sustainability” throughout the OSI supply chain.

Johnson-Hoffman was already a senior vice president at OSI and also vice president of the Global Roundtable for Sustainable Beef (GRSB) before becoming the CSO.

The GRSB is a consortium of food production entities whose stated mission is to better manage natural resources, respect the communities that host food production, institute practices that increase the welfare of animals, safeguard beef safety and excellence, and help spread best practices in efficiency and innovation in order to curtail waste and better the long-term economic viability of the beef industry.

Recently Johnson-Hoffman was named the president of the GRSB. She explained her philosophy to the editor of National Provisioner: “Sustainability doesn’t come from focusing on just one thing. Sustainability is not a buzz-word. It’s not an initiative. It’s not a program. Sustainability is holistic. Sustainability is progressive. And the need for our work in sustainable beef only grows. GRSB is working to connect dots and drive best-in-class learning and thinking that prioritizes our planet, people and animals. We expect to see further growth in our organization in the coming months and we welcome those who are committed to sustainable beef to join us in this important work.”

This kind of broad-based commitment to sustainability spans all of the operations of OSI, which is now a global supplier of not only value-added protein products but also vegetables and fruit. It now has a broad client base, as the company is no longer focused solely on McDonald’s brand products.

But the sustainability goals of McDonald’s are certainly a factor in OSI’s efforts. The decision by McDonald’s to focus on green initiatives and sustainable food production has coincided with – and reinforced – OSI’s own corporate decisions.

In 2011, McDonald’s helped launch the GRSB. McDonald’s is also an active supporter of the United Nations Sustainable Development Goals.

Since it is such a well-known global brand, McDonald’s willingness to push environmental and sustainability issues to the forefront has activated efforts in a wide range of localities. The company dubs this push a “Scale for Good” strategy. With its 2014 Beef Sustainability Report, McDonald’s has committed itself to supporting sustainability best practices, forest conservation, water quality, and greenhouse gas emission reduction.

These goals and efforts mesh with OSI’s corporate philosophy, which is dedicated to furthering common goals in the food production system.

“We believe that the core elements of sustainability are distinctly aligned with the values that guide our business conduct,” explains Lavin in a statement on the webpage of Amick Farms, an OSI subsidiary.

“Responsibly managing our business within the social, economic, and environmental area in which we operate makes us a stronger company and a better partner to our people, our community, our environment and leading brands across the globe.”

Awards and Achievements

The sustainability efforts that Lavin has incorporated into the daily operations at the OSI Group have been noticed. A number of prestigious accolades have been received by the company and Lavin personally over the past few years. They recognize both OSI’s sustainability efforts and Lavin’s long career as a businessman.

McDonald’s Best of Sustainable Suppl

It’s not surprising that in 2012 four OSI subsidiaries were highlighted by McDonald’s in its Best of Sustainable Supply report, which is an effort to recognize innovative efforts by companies to “improve food sources, the environment, communities and employee wellness across the world.”

The OSI Group companies which won accolades include:

• Philippine-based GenOSI, which aided the efforts of animal welfare officers to become better trained
• Taiwan-based K&K Foods, which developed an innovative system that recycled and repurposed wastewater
• Vista Processed Foods was recognized for two initiatives, one focused on water conservation and another that provides farmers with an education program regarding the handling of chemicals and pesticides
• A European effort – part of the OSI Animal Welfare program – that was an initiative dedicated to reducing footpad lesions that affected chickens

California Green Business Award

In 2016, OSI Riverside – a vegetable and salsa production facility – was a recipient of the California Green Business certification. The award recognizes efforts by plant management to conserve resources and implement more efficient operations. Efforts to curtail pollution were also cited, as was the company’s commitment to annual third-party energy audits. These create a level of oversight that guarantees long-term efficiency efforts.

Specific physical-plant initiatives included the installation of high-efficiency lighting, motors, and boilers; putting a steam recirculation system online; and implementing a wastewater reduction program. Its automated, continuous cook-and-chill production line is a state-of-the-art energy conservation system.

The facility also holds “zero waste-to-landfill” designation. In addition, the company actively manages a ride-share program in this location so that fewer vehicles are involved in transporting employees.

Globe of Honour

Also in 2016, OSI Food Solutions UK was the recipient of the British Safety Council’s Globe of Honour Award. It was given out in order to recognize “exemplary management of environmental risks.” Only 18 organizations received the award in 2016, which required earning five stars on the environmental management audit carried out by the Safety Council between August 2015 and July 2016.

The award is also premised on an independent panel finding that excellent environmental management schemes are being carried out throughout the organization, from upper management to the shop floor. The primary OSI facility in the United Kingdom is a plant in Scunthorpe that processes beef and pork for restaurants. OSI also won the Globe of Honour in 2013 and 2015.

North American Meat Institute (NAMI) Environmental Awards

In 2018, NAMI named two OSI facilities as winners of its annual award-recognizing innovative environmental practices that are implemented via Environmental Management Systems.

Also, Sheldon Lavin received NAMI’s Edward C. Jones Community Service Award in 2016 for “his dedication to, and active participation in, charitable organizations in the Chicago metropolitan area and the international communities in which OSI operates.”

Representing companies that provide most of the red meat and turkey consumed in the United States, NAMI is a trade association with headquarters in the nation’s capital. It also conducts research and provides educational outreach to beef and poultry producers.

In 2018, NAMI recognized the Geneva, Illinois, OSI facility with a Tier I Environmental Recognition Award stemming from its development of policies to become a better environmental citizen. A Tier II Award went to the Fort Atkinson, Wisconsin, facility for continuing to advance its environmental programs.

The NAMI awards begin at Tier I and culminate with Tier IV, which includes completion of the previous three tiers and meeting ISO 14001 and auditing requirements.

In previous years four other OSI facilities had been recognized by NAMI, including two in Chicago, one in Oakland, Iowa, and another in West Jordan, Utah.

The OSI Group has been a strong supporter of NAMI’s sustainability agenda. Since 2013 it has provided annual sponsorship for its Animal Care and Handling Conference.

Global Visionary Award

In 2016, Lavin was the recipient of the Global Visionary Award from India’s Vision World Academy. The award recognizes individuals who have shown perseverance in pursuing and accomplishing goals. Lavin was recognized for guiding the transition of Otto & Sons into the OSI Group – a transformation from regional U.S. meat supplier to a leading global food production company – that now has eight facilities in India and puts environmental concerns at the forefront of its operations.

Conclusion

The work of OSI’s 20,000 worldwide employees is strongly imprinted by the beliefs and commitments of Sheldon Lavin. The concept of sustainability has more than one meaning at OSI.

“We have a culture at OSI that is rather unique – it’s very family-oriented, and we have a tremendous amount of longevity in our workforce,” Lavin said in a 2013 interview. “We have very little turnover and, to me, the people are the most important part of the business.”

Bringing that same kind of long-term thinking to environmental sustainability is therefore not surprising. It also fits in with Lavin’s charitable work, including his involvement with the National Fish and Wildlife Foundation.

Lavin has been involved with a number of other national and Chicago-area charities. He is a member of the board of trustees of Ronald McDonald House Charities. Other philanthropic organizations that he’s been active with include the Rush University Medical Center, the Sheba Foundation, the Inner City Foundation of Chicago, the Jewish United Fund, the Evans Scholarship Fund, the Boys and Girls Clubs of Chicago, the United Negro College Fund, the National Multiple Sclerosis Society, and the Goodman Theatre.

In 2015 Lavin was the recipient of the Lifetime Achievement Award from RSM US LLP. It recognizes business leaders from the Chicago area who have demonstrated a long-term commitment to civic involvement.

Both internationally and locally, Sheldon Lavin has been recognized for his years of philanthropy and business savvy. With regards to environmental sustainability, he has merged those two parts of his life, leading the OSI Group to pursue policies and procedures that focus on both the financial and ecological bottom lines.