Nation’s largest refrigerated prepared foods processor embraces new branding, products and categories – and the start of a historic new chapter in its story.
Sure, you know 3G phone. Now meet 3G food. A third-generation family company, Reser’s Fine Foods last year introduced more than 300 new items, completed two key acquisitions and built two large facilities. Along the way, this Beaverton, Ore.-based company also crossed the $1 billion annual sales mark and claimed its spot as one of the nation’s largest private food processors.
Of course, there was a time when Reser’s was small potatoes. It was in 1950 that Mildred and Earl Reser started making refrigerated potato salad – by hand – in their Cornelius, Ore., farmhouse. By the end of 1951, the start-up business was supplying all of Safeway’s Oregon supermarkets.
The Reser’s 25-year-old son, Al, became president in 1960. He incorporated the business, moved it to Beaverton and then led Reser’s for the next 46 years. Although the company had its share of twists and turns (including a battle for control while it was publicly traded), Al led Reser’s onward to growth, diversification and expansion. In 2006, he handed a $600 million business – firmly back under family ownership – to his son, Mark.
Today’s company employs approximately 3,700 people at nearly 20 facilities in the United States and Mexico. Those operations produce more than 2,500 refrigerated, frozen and shelf-stable items for nearly every North American sales channel. Core product lines include refrigerated cold deli salads and kits; dips and spreads; heat-and-eat side dishes and entrees; fresh-cut produce and fruit; and Mexican foods (corn and flour tortillas, chips and salsa).
In his first face-to-face interview since the recent acquisitions, it’s clear that a soft-spoken Mark Reser prefers to keep a low profile. Having spent most of his 22-year career in operations, Reser says he’s “a behind-the-scenes guy” who’s more comfortable with process equipment – than the interview process.
Then again, he has a lot to say.
“Private label will always be an important business for us. However, we think there’s room for both (private label and branded products) to give consumers more choice,” says Reser. “We’re becoming more brand- and category focused. We’re anxious to control our destiny, create and drive excitement and help customers grow . . . We’re already thinking about Reser’s branded initiatives for next fall (2012) and ways to refresh product categories or create new ones.”
Like Nike, its neighbor across the street, Reser’s is enhancing its product line with more power, flexibility and customer service. Specifically, Reser’s says it strives for at least 10 percent year-over-year sales growth through new products and packaging as well as branded marketing and promotion. Behind the scenes, the company looks to drive down production costs – even during an aggressive time of investment in new operations (see “Forward focus,” p. 32).
And then there’s growth by acquisition. For the record, Reser’s bought as many as 12 companies between 1992 and 2006 – and then nothing during the past five years. Then last year brought two deals that were too good to miss.
Last November saw Reser’s buy its next largest salad competitor and a 59-year rival: Orval Kent. Reser’s submitted a $69.2 million bid to buy the assets of Orval Kent which were in Chapter 11 bankruptcy proceedings.
Reser’s purchased Orval Kent’s refrigerated deli salads, side dishes and prepared fresh-cut fruit at plants in Delphos, Ohio; Vista, Calif.; and Linares, Mexico. The company has an affiliated distribution center in Hidalgo, Texas. The company has employed more than 1,000 workers.
“Both companies are working diligently to ensure that Orval Kent customers experience a smooth transition as we integrate their operations,” said Mark Reser, in a public comment after Refrigerated & Frozen Foods’ visit. “We’re confident that the increased breadth and depth of our combined North American product portfolio, product innovation and customer service will benefit all of our customers.”
Although he was not prepared to say much more about Orval Kent products and brands, Mark Reser did note that company’s fresh-cut fruit operation (Linares) represented an important new in-house capability.
Officials say fresh-cut vegetables also represent another new competitive category – coming with Reser’s $18.25 million purchase of Vaughan Foods Inc. last September. Vaughan, Moore, Okla., supplies foodservice and retail operators with fresh-cut vegetables, fresh-cut fruits, salad kits and prepared deli salads. A second facility in Fort Worth, Texas, processes dips, spreads, sauces, side dishes and soups (another new product line for Reser’s).
“Deli sales have shifted more to pre-packaged self-serve items. Yet deli operators also are buying more fresh, short shelf-life salad kits for behind the glass,” says Mark Reser. “More than half of Vaughan’s fresh cut produce sales involve fresh produce salad kits and they’re known for broccoli slaw and cole slaw. That really intrigued us.”
And this is something of an intriguing time for food-processor suppliers such as Reser’s. That’s because recession-minded consumers want it all. They’re eating more at home and demanding value, family-friendly convenience and a little bit of taste adventure. Meanwhile, foodservice operators likewise need back-of-the house food safety, consistency, cost savings, convenience … and unique menu items.
Some product development steps take place behind the scenes. Barbara Jordan, director of R&D and quality assurance, says Reser’s invested millions in 2009 to create a 10,000-square-foot Customer R&D Center with new development labs, kitchens and presentation areas. It also hired more culinary experts and has assigned them – right along with sales – to key national accounts.
Jordan says Reser’s invites foodservice and retail customers to visit for quick, custom new product development projects or product training. Reser’s is sending more people into the field to work side-by-side with customers’ employees -- whether it’s in a retailer’s R&D lab or the back kitchen in a chain restaurant unit.
Reser’s also converts its customer and consumer insights – into foods that everyone can see.
“Consumers need prepared meals that can be served to the whole family, particularly on busy weeknights,” Jordan says. “They’re also looking for more international-inspired foods as well as contemporary twists on trusted classics.
“Deli shoppers don’t want to take too many risks with edgy product concepts,” she notes. “These [edgier foods] are relatively expensive on a per-pound basis and shoppers want to know they’ll taste good, but also deliver value. Comfort foods also are enjoying a resurgence with more restaurants featuring items such as grilled cheese, mac and cheese, hamburgers, etc.”
Jordan says Reser’s latest offerings target …
… comfort foods / quick meal solutions. Last year saw Reser’s dramatically recast its refrigerated side dish line with four dinners and four sides. Officials say each comes in a patent-pending “Top Bake” dual-ovenable tray that delivers “home-baked taste right from the microwave.” New Main St. Bistro Baked dinner varieties include Three Cheese Rigatoni Bolognese, Penne Toscana with Italian Sausage, Pasta Alfredo with Chicken & Bacon and Pasta Florentine with Chicken. New baked sides include Scalloped Potatoes, Mac & Cheese, Hash Brown Casserole and Twice-Baked Potato Casserole. Reser’s offers both lines for merchandising in the retail meat case and deli department.
Reser’s also punched up the graphics and artwork for Reser’s Sensational Sides, a line of more traditional heat-and-eat items such as Creamy Mashed Potatoes, Homestyle Stuffing, Mac & Cheese and even Mashed Sweet Potatoes.
… health. Debuting this January at the Winter Fancy Food Show (San Francisco) are new Stonemill Kitchens Greek yogurt dips. Each of three new varieties features Greek yogurt with fewer calories and less fat than traditional sour cream-based dips, Jordan says.
… taste adventure. Last spring brought eight new bulk salad kits for behind-the-glass deli sales. New chef-inspired flavors include Tandoori Chicken and Curry, Mediterranean Orzo, Thai Peanut Yakisoba with BBQ Pork, Buffalo Chicken, Loaded Antipasto, Chickpea Curry and Fruit & Nut Couscous.
… better taste, value. Reser’s says it reformulated its four best-selling Reser’s American Classics protein salads (Chicken, Ham, Seafood, Tuna) with more and/or better cuts of meat and fewer ingredients.
Are people aware of Reser’s product development capabilities and new offerings? That’s where David Lakey, vice president of marketing, comes into the picture. Reser’s hired this 20-year packaged food and nutrition marketing veteran to champion the company’s brands and activities to customers and consumers alike.
Like Jordan, Lakey notes that Reser’s has invested in behind-the-scenes resources – everything from in-store merchandising materials to sophisticated perishables category sales data and consumer insights research.
“We want to be the category captain,” he notes. “Category management is well established in the center of the store but not as common on the perimeter”
Lakey talks more about the relationship of national brands and private label: “When we look at how consumers buy products, we see that every retail category – bleach, crackers, ice cream, you name it – has a “two-brand strategy” involving a national brand and a private label. Consumers like to have a national brand choice, and offering both maximizes sales.”
“Reser’s is a true national brand: every time deli departments have merchandised our branded items in addition to their own – it grows their category,” he adds. “We have the data to support it. Moreover, in the future, retail customers can leverage our increased consumer marketing.”
Case in point. In the past, Reser’s has supported brands with coupons. Starting last year, Reser’s embarked on stronger national campaigns to build awareness and brand value. It took to the streets and city parks last year as an official sponsor at more than 40 national barbecue cook-off events judged by the Kansas City Barbecue Society. At many of these venues, Reser’s sampled potato salad including the Kansas City Royal and the Jack Daniel’s World Championship Invitational Barbecue competition (“The Jack”) in Lynchburg, Tenn.
In addition to national print media, Reser’s also is reaching more consumers in the electronic world. Efforts here have included a new consumer Web site and appearance on more than seven national episodes of Food Network’s “Unwrapped” series. This year finds the company planning to engage more loyal fans on Facebook and other social media sites.
“We’re focusing on our Reser’s consumer brands and will better coordinate efforts across all of our categories,” says Lakey. “Those include Main St. Bistro (dinners, sides), Reser’s (deli salads), Stonemill Kitchens (spreads, dips) and Don Pancho (tortillas). We’re determined to get more ‘share of mind’ with side dish and deli salad shoppers.”
Meanwhile, Mark Reser admits to shopping more aisles within his own Portland neighborhood grocery.
“I love innovation,” he notes. “Our baked products are a new platform – dating back to when we went into hot side dishes seven or eight years ago . . . Now we’re looking for the next category. It’s fun to visit stores, walk through the frozen and dry departments and think about new fresh (refrigerated) offerings we could bring to our customers and consumers.”
At a glance: Reser's Fine Foods
Headquarters: Beaverton, Ore.
Top exec: President and CEO Mark Reser
Annual sales: Approximately $1 billion
Products and package brands: Reser’s American Classics (cold deli salads), Main St. Bistro (baked dinners, sides) Reser’s Sensational Sides (mashed potatoes, mac & cheese, etc.), Stonemill Kitchens (dips, spreads), Don Pancho (tortillas, chips)
Distribution: Reser’s supplies all North American sales channels
Family ties: Pat Reser (Mark’s mother) is Reser’s chairman. One brother, Mike Reser, is vice president of customer services and logistics. Marty Reser, another brother, is a national account representative. Fourth-generation family member Nikki Reser, (Marty’s daughter) is a Reser’s marketing team member. A second cousin, Jerry Reser, manages Reser’s direct store delivery route truck operations.