Article published November 09, 2008
READY TO COMPETE
Maumee's hickory farms revamps itself
CEO Mark Rodriguez led an effort that included reducing the number of products and redesigning packaging and labels.
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THE BLADE/JETTA FRASER
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By JON CHAVEZ
Blade Business Writer
CALL IT Extreme Makeover: Maumee edition.
Someone who hasn't seen Hickory Farms products lately may not recognize them.
Goodbye, Beefstick. Hello, Summer Sausage.
The company, which depends on the holiday season for up to 50 percent of its annual sales, has revamped to better compete in what is shaping up as one of the toughest retail seasons ever. Experts have predicted a weak 2 percent growth in consumer spending overall.
In a yearlong effort, the fabled metro Toledo purveyor of specialty meats, cheeses, and assorted other foods has transformed into a sleeker, slimmer, classier, and tastier version of itself.
Teams of employees have:•Reviewed every product the company sold last year and conducted extensive marketing surveys in six major U.S. cities to define its target customer;
•Changed the brand names - and in some cases the ingredients - of dozens of products and taste-tested every product;
•Created a new logo and labels, switched to more eco-friendly packaging, and changed the look of its gift boxes and its catalogs, which now emphasize the food rather than the gift wrapping.
Last week the company, headquartered in Maumee, rolled out its new slimmed-down inventory. Its updated catalogs arrived in mailboxes, and the first 150 of 700 seasonal kiosks planned for the nation's malls opened.
"If you're going to compete in today's marketplace … then you have to be aggressive," Mark Rodriguez, 55, the new chief executive officer at Hickory Farms Inc., said in explaining the company's makeover.
Mr. Rodriguez, whose career stops include Olympia Brewing Co., Cadbury Schwepps PLC, Groupe Danone, Evian, Atkins Nutritionals Inc., and a food conglomerate he founded, Acirca Inc., was hired in October, 2007 by private-equity firm Sun Capital Partners Inc. of Boca Raton, Fla., to restore Hickory Farms' reputation and profitability.
Ron Tanner, vice president of communications and education for the National Association for the Specialty Food Trade, a nonprofit trade group in New York, noted that Hickory Farms helped pioneer the specialty foods industry.
But lately, he said, many in the industry considered its business model to be "old-fashioned."
"I think it's pretty common for companies that have been around a long time, like Hickory Farms, to finally start to look at how the market has changed over time," Mr. Tanner said. "And it's actually changed quite a lot in just the last 10 years."
He said consumers want what Hickory Farms is realigning to sell: upscale, more natural foods with high-quality flavor.
Becky Williams, of Adrian, Mich., who has been with Hickory Farms 19 years, said, "The customers have noticed the change. It's easier for the customer now to select their products."
Ms. Williams, who sets up kiosks in malls in Michigan and Ohio, also said, "The other merchants have noticed it too. Some people from Williams-Sonoma [in Westfield Franklin Park] stopped by and said, 'We love your new packaging.'•"
Mr. Rodriquez, who revived bankrupt Atkins Nutritionals, a diet meal company, by cutting lackluster products and streamlining costs, said he was excited at the idea of giving Hickory Farms its makeover.
Breathing new life into Hickory Farms, which traces its origins to 1950 when Toledo businessman Richard K. Ransom sold cheese at a local home show, has meant first figuring out what went wrong.
"Hickory Farms had been losing a considerable part of its customer base," said Mr. Rodriguez, who recently moved his family to Toledo.
"When you think about Hickory Farms, this great American icon … it should differentiate itself through customer understanding of what it represents."
But, he said, "We were all over the place. And our research revealed that the packaging of our gifts was so outdated that that was the number one reason for rejection when it came time to decide on a gift."
Also, some products contained artificial ingredients, and that also detracted from the quality image the company was trying to convey.
In short, he said, Hickory Farms had lost its "authenticity" - a word Mr. Rodriguez used frequently while describing the company's new course.
The number of products has shrunk from 2,500 to 335, the number of gift-box sizes from 38 to six, and the number of summer-sausage flavors from 16 to six.
Hickory Farms has increased some prices or changed sizes on some of its items. For example, a $20 summer sausage now weighs 2.5 pounds; last year it was 3 pounds. And the popular 3-pound Apple Pie Cheddar cheese wheel is $25; last year it was $20.
Mr. Tanner, the industry expert, said of cutting the number of offerings: "If people want to buy Hickory Farms products, 335 is still a lot to choose from."
Fewer products is more efficient, especially with online sales, Mr. Tanner said. "It helps them make more money and also helps them keep the costs of their products down. In this economy that's really a wise thing to do."
The logo was redesigned to resemble the company's early insignia and give a more upscale impression. The label for the company's popular summer sausage dropped the word "Beefstick" because surveys showed it gave a negative image.
Possibly the biggest thing the company did this year was determine who its main customer is. Mr. Rodriguez said research revealed that person is a married woman, age 44 to 55, with a family income of $75,000 and children living at home.
That woman, he added, is "a keeper of tradition" and first tasted Hickory Farms products at a family celebration when she was between the ages of 7 and 14.
"Tradition is very, very important to this woman. And we found that the way women described that first memory was nearly identical no matter where in the country we went," Mr. Rodriguez said. "She is the gatekeeper of the household and she buys our products for the men in her life."
The big task is to get her to buy more cheeses, summer sausages, and other items. "If we do our work right, that's exactly what we think will happen," Mr. Rodriguez said.
Contact Jon Chavez at:
jchavez@theblade.com
or 419-724-6128.
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