Acquisitions, product and process innovation help newly formed AdvancePierre Foods make a name for itself in frozen prepared meats, sandwiches.

Let’s face it: transformational, step change is not easy. But it can help to have someone coach you through the process. It starts with an imagined view of a better future and perhaps a phrase, such as, “Let’s paint a picture...”

Then there are times when you literally need to make it real.

For example, a Dallas hotel hosted the first face-to-face meeting of 150 executives from Pierre Foods, Advance Food Co. and Advance Brands LLC – shortly after the three companies merged in July 2010. The first night involved an ice breaker with paints, paint brushes and even painting smocks. A leader divided the group of 150 into teams of eight, including one member from each legacy business. Each team then followed directions to paint a small, 30-inch-by-30-inch canvas square.

When the group assembled the next morning, they found their 24 individual squares now joined as a horizontal, wall unit stretching 20 feet wide by 7 feet tall. It had the company’s new name AdvancePierre Foods, as well as its new logo, legacy company names and brand logos.

“We wanted a way to start this business meeting with something that would get people talking and interacting immediately,” says CEO Bill Toler. “We had designed the new company’s logo but nobody had seen it. It wasn’t until the following morning that we had a dramatic revealing on stage as a complete piece of artwork that everyone had contributed to. The ice breaker also fit our catch phrase for that meeting, which was ‘better together.’”

That’s how AdvancePierre Foods (APF) began just last year as a $1 billion-plus company comprised of three competitive-but-complementary businesses serving foodservice operators and distributors (Advance Food’s strength); clubs, schools, military and convenience stores and vending (Pierre Foods’ strength); and grocery retailers (Advance Brands’ strength). Against the broader meat and poultry industry landscape, APF is a distinct player specializing in value-added, further prepared frozen meat and poultry, hamburgers, sandwiches and Philly steaks.

Behind the scenes, APF’s three new divisions share a functional support network of marketing, R&D, operations, supply chain, I.T. and finance. It’s a structure orchestrated by Toler, a 25-year CPG industry veteran; and Los Angeles equity investor Oaktree Capital Management LLC. Toler and Oaktree led Pierre out of bankruptcy after they bought the business in 2008.

Toler recast Pierre’s operations structure (rationalizing SKUs, adjusting prices, emphasizing efficiency). Since then, he also has staffed both Pierre and APF with top internal and outside talent, including veterans from CPG and restaurant companies.

Toler says APF’s three-pronged business strategy involves . . .

… organic growth.  Toler says the “magic” in APF’s corporate model relies on salespeople taking each legacy business’ products into new channels.

“Besides straight-forward sales and profit, I look to see if we’re cross-selling products into other channels – and that is happening,” he says. “For example, our [Advance] bulk meat sales already are up in c-store and vending outlets and [Pierre] sandwich sales are up in both foodservice and retail.”

… acquisitions. Things went so well at APF that it was only 11 months (June 2011) before it acquired Barber Foods, a retail frozen stuffed chicken entree and specialties processor in Portland, Maine (see “Welcome to the family,” p. 41).

“Barber immediately becomes our No. 1 retail brand,” says Toler. “Meanwhile, we can take [the retail line] further into West and Midwest markets and we can test our cross-selling model. We believe we can sell Barber products into other sectors, such as convenience stores and foodservice.”

Toler says APF and Oaktree hope to make one or two more acquisitions during the next 12 months. He says ideal candidates are small- to mid-size companies (any channel) with value-added frozen proteins and/or sandwiches and entrees.

… innovation. Just 15 months old, APF already has demonstrated its product development and packaging capabilities everywhere from Smart Picks, a complete new line meeting school foodservice nutrition guidelines; to new frozen private label retail sandwiches. Here, Toler relies on senior packaged food and restaurant chain veterans Lisa Frick, senior vice president of marketing and product development; and Bernie Panchot, vice president of product development.

Both women are products of larger publicly traded food companies (packaged foods, restaurant chains) and say APF has a multi-dimensional, nimble organization to drive research and results.

For starters, Frick says corporate marketing uses a matrix structure whereby marketers’ roles and responsibilities are aligned with strategic short-term and/or long-term initiatives supporting each unit. Marketers also are organized by channels and by products (proteins, sandwiches). Still more are involved in original consumer insights research.

“We have some pretty sophisticated customers who also are some of the food industry’s largest operators,” says Frick. “I’m proud of how our teams have managed to stay nimble and responsive while keeping an eye on hundreds of projects. We also have visibility to see projects across the company to maximize the potential of these projects and balance our day-to-day work with building a three-year innovation pipeline that includes new ‘platform’ ideas that fit across our entire business. Given that we are also spending a lot of time right now on company integration activities, I think we’re just scratching the surface on what our innovation pipeline can produce.”

Panchot agrees.

“I think there is a magic to what we can accomplish by applying learning and driving insights through the organization with passion. We brought together a diverse range of skill sets and we already have consumer insights research and a solid process where our sales teams are aligned with customers. And from meats to bakery, we have technical team members aligned with manufacturing so we’re prepared to deliver from beginning to end. No grass grows under our feet.”

Welcome to the family

Family-owned Barber Foods extends AdvancePierre’s retail reach.

Already a leader in frozen, prepared beef and poultry products distributed at foodservice, AdvancePierre Foods (APF) acquired a complementary retail business this June. It welcomed Barber Foods, a Portland, Me., processor of frozen stuffed chicken entrées and specialty items for retail grocery and club stores.

Terms were not disclosed.

“By adding the Barber brand to our existing line of value-added poultry offerings sold under the Fast Fixin’ and Fast Classics trademarks, we have a whole new avenue for retail growth,” said Chris Kiser, president of AdvancePierre’s Brands Division. “The enhanced portfolio of products strengthens our leadership position in this key category.”

For the record, Barber produces more than 300 frozen raw and fully cooked items including stuffed chicken breasts, ranging from Chicken Cordon Bleu and Broccoli & Cheese Stuffed Chicken to Chicken Stuffed with Scallops and Lobster. The company also processes frozen chicken nuggets, chicken fingers, and chicken fillets. Officials say the Barber brand has a “significant” presence in retail grocery, club and foodservice channels, particularly along the East Coast and in Canada.

Barber’s Portland plant has four production lines and the company employs more than 500 area residents.

“As the food industry continues to consolidate and bigger players emerge, it was the right time for Barber Foods to join forces with a growing industry leader like AdvancePierre,” said David Barber, company president and son of the founder of Barber Foods. “Our products are a terrific compliment to their existing line, and we share similar philosophies about our priorities of food safety, quality, service and productivity leading to growth. It’s a great fit.”Officials say David Barber will serve on APF’s executive team.

AdvancePierre Foodservice Division unifies around customer service, new products.

It’s where educational reform meets educational foodservice. American philosopher and educational reformer John Dewey once said, “Arriving at one goal is the starting point to another.”

Perhaps there’s no better way to describe life at AdvancePierre Foods’ (APF) Foodservice Division.To meet new federal school foodservice nutrition objectives, researchers at Cincinnati’s Pierre Foods worked a full year to reformulate as many as 60 frozen center-of-the-plate proteins, sandwiches and entrees. By July 2010, Pierre completed that work and unveiled Smart Picks, a broad, better-for-you line with foods containing more fiber, protein and whole grains; reduced sodium and fat; and no hydrogenated oils or trans fats.

Of course, it also was in July 2010 that Pierre merged with foodservice competitor Advance Food Company and its sister retail business, Advanced Brands LLC. Shortly afterward, APF President Bill Toler came up with a new goal for Mark Allen, who had just come over from Advance to become APF’s new Foodservice Division president. As APF’s largest business – supplying more than 2,200 SKUs across all foodservice segments –Toler wanted APF Foodservice to stay in the spotlight and simplify customer’s lives. The new division would offer multi-unit chains and distributors the benefit of one order, one delivery and one invoice.

APF says it met that goal at the beginning of June 2011.

“It’s hard to bring cultures together when they used to be somewhat competitive,” admits Toler. “That ‘one order, one invoice’ objective rallied people around a key business goal and kept the focus there – instead of on a certain person or company. It was a matter of realizing, ‘We’re all on the same team now.’ We all learned to work across functional departments and although it was challenging, it was very rewarding.”

Allen, a member of one of the co-founding families, smiles when asked about APF’s first full year.

“We faced some distractions due to the merger, shifted our customers to two distribution centers and we had to raise prices a few times,” he says. “Yet our group still found a way to increase sales and – with the exception of just a couple of people – the entire group is intact. I’m very proud.”

While operations, supply chain and sales focused on “one order” simplicity, Allen cross-trained all foodservice salespeople on both companies’ complete product lines. Today, with newly acquired Barber Foods added to the mix, APF says its sales representatives now offer customers and distributors a single, comprehensive presentation across five frozen food categories: Philly steaks, breaded meats, fully cooked burgers, sandwiches and stuffed chicken breast entrees.

Allen says that during a period of unprecedented beef price increases, APF is working harder to offer “best value solutions” and fit operators’ price-point needs with everything from chopped-and-formed items to premium offerings. He notes, meanwhile, that all APF items are value-added and further processed.

Value-added new products are expanding beyond the school cafeteria trays, as well. Since Smart Picks’ school foodservice debut, APF has extended the better-for-you line to restaurants as well as hospitals, nursing homes, workplace and college cafeterias. Still more new offerings include a line of Mercato Grille Panini Sandwiches (where varieties include Chicken Parmesan, Asiago Chicken, and Three Cheese & Tomato) and most recently, two new Simply Grilled Chicken Dippers and Simply Grilled Turkey Dippers. Officials say these items meet school foodservice directors’ interest in proteins with minimal seasoning that can be used as a simple base for wraps and salads – or be paired with a dipping sauce.

Behind the scenes, APF is just as active developing custom products.

“I’m particularly proud of a turkey burger we created for a mid-size, regional restaurant chain,” notes Bernie Panchot, APF’s vice president of product development. “Chain executives brought it up – saying that this would be the right time and right place for their restaurants because consumers are more focused on nutrition. It’s become a market niche for them and us and they since have rolled it out to multiple locations.”

AdvancePierre Brands Division adds Barber, eyes more products, customer service.

Sometimes a new job isn’t everything you expect it to be. Actually, sometimes it’s better.

Just ask Chris Kiser. When Kiser joined AdvancePierre Foods (APF) last October as Brands Division president, APF’s frozen retail business had a broad line of frozen fully cooked prepared meats (beef, chicken, pork), Philly steaks, sandwiches and appetizers. The group also was just beginning to supply private label frozen products and sandwiches to mainstream retailers.

This June, just nine months later, APF bought Barber Foods, a 56-year-old processor of retail premium frozen stuffed chicken entrees and other chicken specialties (see “Welcome to the family,” p. 41).

“Our business was a certain size through May of this year. Just a month later – with the announcement – we instantly grew by about 40 percent which added immediate scale to our entire retail platform,” says Kiser. “Barber is now our largest retail brand and gives us a much larger market presence.”

Understandably, Kiser will have much more to discuss with retail buyers this fall at the National Frozen & Refrigerated Foods Convention and Private Label Manufacturers Association’s (PLMA) trade show. APF now is a sizeable supplier with more than 500 SKUs ranging from frozen prepared meats, Philly steaks, stuffed chicken breasts, hand-held entrees and appetizers.

“We’re big enough to matter but extremely flexible,” says Kiser. “We have diverse production facilities to draw upon and that gives us incredible capability to create unique and on-trend products. More importantly, we have a business unit structure and a corporate team mindset that lets us move quickly to take advantage of opportunities. This approach allows us to commercialize good ideas at speeds that are unprecedented.”

Speaking of speed, Kiser says APF’s frozen retail private label sandwich business is gathering momentum.

“This is an emerging new segment within the freezercase,” he says. “Retailers realize that consumers want more hand-held options beyond what has been available. They increasingly want offerings geared around various meal-times, such as breakfast, lunch and snacking to address these needs. We’ve been watching the category grow and I believe we’ve helped it to hit a tipping point. It’s become a meaningful business and we’ve been busy supporting it with new products and packaging.”

Kiser says APF’s depth of consumer insight influenced the company’s initial “core four” private label offerings: cheeseburgers, bacon cheeseburgers, breaded chicken sandwiches and spicy chicken sandwiches. This fall brings a second wave of complementary, on-trend items such as mini’s, flatbreads, paninis and expanded breakfast options.

“We’re seeing these taste trends come to life in restaurants,” says Kiser. “Because of our manufacturing capability there’s really little we can’t do when it comes to putting these popular items into a retail footprint.”

Of course APF has more news to share with retail partners.

For starters, the expanded Brands Division sales force that now includes Barber will give APF an enhanced portfolio of options for retailers: Barber, Fast Fixin’, Fast Classics, Pierre On the Go PB  Jamwich and Steak-EZE. Kiser believes the new APF can help the Barber brand achieve wider and deeper sales distribution in Midwest and western markets (Barber is strongest in the Northeast). Meanwhile, APF and Barber product developers can partner on value-added across fully cooked and hand held via differentiated line extensions.

Last but not least, Kiser says he is excited to bring customers more than just new products. He says APF is mobilizing to offer customers improved sales solutions including more consumer insights, and tools that simplify purchasing.

“Our deep heritage in foodservice helps us get in front of eating trends,” notes Kiser. “Meanwhile, we also have achieved a level of scale now that allows us to make targeted investments in research.”

New products, customer support help AdvancePierre Convenience Division drive c-store, vending sales.

Consumer trends favor your product line? That’s convenient.

Speaking of convenience, foodservice market researcher Technomic found consumers’ grab-and-go lifestyles accounted for approximately $10.6 billion in prepared food sales from convenience stores during 2010.

The Chicago researcher predicts c-store prepared foods will enjoy 2.5 percent nominal growth through 2013. Technomic also says hand-held entrées will drive that growth and account for up to 38 percent of total foodservice sales.

Considering that frozen hand-held sandwiches make up most of the 300 items in AdvancePierre Foods’ (APF) Convenience Division, those trend lines are welcome news to Convenience President Tony Schroder. A 20-year-plus company veteran (coming up through Pierre Foods’ operations and sales groups), Schroder believes APF clearly is in the right place at the right time.

“It’s no secret that breakfast sandwiches are one of the biggest trends at foodservice and that’s equally true for our customers,” he says. “Convenience stores sell lots of coffee and breakfast sandwiches match up well. Many operators want to offer a better value with a hot breakfast.”

Schroder takes a broader view and continues, “We’ve grown from being an entry-level player to the biggest supplier of frozen sandwiches for both channels – convenience stores and vending,” he says. “And although we’ve become the leader in the field, we still behave like a small company to take care of customers,” he says. “We’re flexible and react to their needs.”

What do c-store and vending customers want? Schroder says APF offers custom field research to help customers improve in-store sales and operations. Meanwhile, dedicated division personnel also assist with custom new products, packaging and promotional support.

Case in point. Schroder says APF needed just 10 weeks to develop a line of private label frozen breakfast sandwiches and packaging for a Southeast convenience store chain. That speed enabled the chain to optimize its own in-store and billboard marketing programs. In another instance, Schroder says APF gave a Midwest c-store chain a complete private label breakfast and lunch program – custom formulations and packaging included – in just 12 weeks.

Custom work aside, APF product developers are keeping c-store and vending customers on trend. Schroder says APF’s ongoing research involves spicier offerings (Big Az Kickin’ Jalapeno Cheeseburger), mini sandwiches and even artisan melts (Pierre Panini Style Melts).

He says there are more technologies at work behind the scenes – such as dual-ovenable butcher wrap packaging, controlled-melt cheeses and better buns and ingredients that hold up in display warmers.

Yet another new offering is APF’s complimentary “FEAST” or “Field Execution And Store Training” program. Here, an APF field expert will consult with a customer, audit a percentage of that customer’s stores and then provide a summary foodservice report complete with pictures and recommendations.

“Our biggest opportunity involves helping customers sell more products and increase turns per day,” says Schroder. “We might find that there’s not enough product in a warmer during peak hours. Stores also may not be fully using our point-of-purchase materials or headers to grab attention . . . No matter what, we’re happy to go out and help provide store-level training. In the end, this also helps us tweak and improve our merchandising, products and warming technologies.”

APF is equally busy in vending. In fact, the company sampled several new SKUs at the National Automatic Merchandisers Association convention in Chicago. Among them: a co-branded Double Deck Cheeseburger from Big Boy restaurants; Pierre Minis (nearly a dozen varieties), the Big AZ Kicken Jalapeno Cheeseburger and Pierre Panini Style Melts.

It’s a weekday afternoon and Mike Zelkind is a man on the move. Literally.

One hot summer July day finds AdvancePierre’s (APF) senior vice president of operations on a four-hour, 200-mile-plus journey from Cincinnati headed northeast on Interstate 71 to an APF frozen sandwich plant in Amherst, Ohio, near Cleveland.

Accordingly, Zelkind has plenty of time to talk to Refrigerated & Frozen Foods about life heating up at a company that’s also on the move.

“I’m incredibly proud of this team’s work,” says Zelkind, who has 20 years of food plant operating and supply chain experience from posts at CPG companies, a leading corporate consultant and a retailer. “I’ve worked in lots of operations environments. Yet I have never seen the speed with which our teams have produced and adopted a new culture. I’m amazed at the effort.”

Zelkind joined the former Pierre Foods in January 2009, shortly after APF President Bill Toler and Oaktree Capital Management brought the frozen sandwich business out of bankruptcy. Toler says Pierre’s quick turnaround largely involved operations as he and Zelkind cut Pierre’s product line, introduced new productivity measures and pruned Pierre’s operations network (closing an Atlanta-area plant).

Then it was time to go big. Really big. In July 2010, Pierre merged with Advance Food Company and Advance Brands and almost tripled the operations network to 11 processing plants from Enid, Okla., to Claremont, N.C. This time, Toler challenged Zelkind and his team to quickly coordinate sales with inventory demand, operations, supply chain and customer service. The goal? APF wanted to give its largest customers (those in foodservice, c-stores and vending) the simplicity of placing just one order, receiving one shipment and handling one invoice. Zelkind says he and his team established three national distribution and product mixing centers and completed the entire assignment in six months’ time.

Ready to grow again? Not even one year old, APF announced this June that it purchased frozen stuffed chicken entrée and specialties processor Barber Foods in Portland, Maine. With that, APF now employs approximately 4,500 people and its 11 plants produce more than 3,000 types of packaged sandwiches, fully cooked chicken and beef products, Philly-style steaks, stuffed chicken breasts and bakery products.

Speaking of effort, Zelkind quickly acknowledges that APF has much more to do involving capital projects, logistics and productivity initiatives and software systems coordination. Nevertheless, he sees his group making progress where it counts the most: corporate culture.

“That’s the biggest challenge,” he says. “It’s a matter of merging different cultures, building trust, establishing the right relationships and acting as a high performance team. It’s starting to feel like we’re getting there and I’m grateful for a company that supports us. It’s important to communicate the same message from the top and at our recent national management meeting, operations and supply chain had a seat at the table.”

When it’s come to communicating a singular message within operations, Zelkind says APF has embraced and shared each legacy company’s “best-of-breed” activities. Meanwhile, APF expects each site to take up the same core values.

“We follow a simple philosophy and there are two constant priorities,” says Zelkind. “One is food safety and food quality and the other involves employee safety. We discuss these issues at every meeting. If we can’t guarantee good, wholesome food, if we can’t guarantee a safe work environment for our people, we don’t have the right to be here.

“We also have established a productivity program because we have to improve each year to help buffer inflation in the meat industry,” Zelkind adds. “We focus, first, on our top priorities but a competitive cost structure is how we win.”

To that end, APF has a companywide operations business improvement team charged with identifying and sharing best practices; and inviting and addressing employees’ productivity suggestions.

“We want at least half of our in-plant activities to be focused on product improvements – not just cost-cutting measures,” notes Zelkind. “Meanwhile, I think it helps make your culture cohesive when you look at the same metrics and you solve problems – involving everything from purchasing to transportation – as a team.”

For that matter, APF team members already have been quite busy addressing …

… capital projects. Zelkind credits financial partner Oaktree Capital for funding a wide range of capital projects during the past two years. These projects are increasing APF’s sandwich-making capacity, automating packaging lines and improving process controls.

“We’ve found a nice sweet spot and are automating where we can, depending on the format,” notes Zelkind. “On the other hand, flexibility is more important because we work closely to customize and commercialize so many items for our customers.”

Some of APF’s largest projects have involved a new bakery and distribution center in Claremont, N.C.; expansion for increased sandwich capacity in Amherst, Ohio (near Cleveland); and expansion at APF’s Easley, S.C., plant for more sandwich and bakery foods production.

… systems and supply chain. “We have a unique niche,” Zelkind adds. “We’re not the largest processor and not the smallest. Meanwhile, we’ve laid out different market strategies – each with clear channel focus and a matrix involving our products… Behind it all, we have different supply chains to support our business,” he continues. “And, different customers have different needs. Some want lowest cost while others need product tomorrow.”

Talk about differences. Zelkind notes that each of APF’s four legacy businesses (including Barber) had different enterprise resources planning (ERP) software. As a result, APF is shifting to a single ERP platform and added common demand management, forecasting, deployment and transportation management programs.

“I’m proud of how we created a distribution network and used demand management to give our foodservice customers the simplicity of one order and one invoice,” says Zelkind. “Moreover, we did it in just six months with virtually no service interruptions.

“We saw the Barber acquisition coming so we did not execute a similar program on the retail side – but that’s coming,” he continues. “Most of all, it’s been great to see all of our people merge their skills and talents together. We’re truly operating like one national company.”