View from the Top
August 1, 2007
View from the Top
In an interview with Stagnito Communications’ Refrigerated & Frozen Food magazine, John Beadle, corporate senior executive vice president and chief operating officer of The Schwan Food Co., gives the bigger corporate picture of the company today and where it’s headed in the future.
Question: In what ways has Schwan changed since we last profiled the company in 2003?
Answer: We continue our strategy of frozen food as our core focus. Schwan is now the fifth-largest frozen food company in the world, and we have great pride in our growth from that very small beginning back in 1952.
In keeping with our strategy, we’ve made more acquisitions, including T&N Foods, Inc. (a frozen pizza and focaccia processor in Montreal, Canada) and Holiday Foods, Inc. (a frozen hors d’oeuvres processor in Hollywood, Fla). When you last visited, we had just acquired the Mrs. Smith’s frozen dessert business. Since then, we’ve accomplished the integration of that business into Schwan’s Global Food Service.
To further ensure core focus, we have also divested Explore Information Services (a specialist information technology provider).
We have also moved into Mexico. After a significant review of the market, we felt that the frozen food sector was underdeveloped. We also noticed that most American imports were packaged with white labels and black print to comply with local market regulations. We told our customers that we would develop [Spanish language] packaging specifically for Mexico.
Since then, we’ve successfully begun marketing and selling an extensive range of branded quality pizzas and desserts. Also, a key component of our success in Mexico has been our partnership with La Huerta, which is the frozen vegetable brand leader in Mexico, and has an excellent logistics and sales infrastructure.
Question: Let’s look back at 2006. What are you most proud of?
Answer: We’ve received strong recognition for what we’ve been doing in the industry. An important strategy is to focus on innovation. Today, our products are scoring high, above many of our competitors, and we believe that our new products are not only advancing our sales, but also increasing total market performance. Recent new product awards support the fact that we’re responding to today’s consumers’ requirements, as well as serving as a strong partner to our many customers.
Question: What are a few of your goals for 2007?
Answer: We want to continue our momentum. Growth is one of our core values, and our business plan is to outperform the market in terms of growth. That means doing better than the industry by adding more value and dynamic innovation.
We will continue to invest in our people. Our senior executive development program works to identify key people with high potential and provide them with accelerated, focused development opportunities to be future leaders of the business.
We will also continue to drive total efficiency in every aspect of our business, from manufacturing to logistics to sales.
Question: Having integrated Mrs. Smith’s, can you talk about Schwan’s ongoing interest in acquisitions? What companies fit your portfolio?
Answer: It’s all about developing strategic brand positions. Mrs. Smith’s had a No. 1 market position when we acquired them, and Edwards was the No. 4 brand in the United States [frozen pie market] when we acquired that company. Now those brands are No. 1 and No. 2 in the overall category. And that’s our goal across the larger market: to establish No. 1 and No. 2 brands.
Our acquisition of T&N (in October 2005) was strategically important because we had low market penetration in Canada. We decided to enter the market by acquiring a company, and T&N is perfect with its expertise in frozen pizza and focaccia.
I can’t share specifics about the future, but acquisitions will continue to be an important part of our future development and, quite clearly, acquisition considerations would be frozen food-related — and in line with our focused strategy.
Question: Any major capital improvement projects to note?
Answer: There have been some major investments recently that involve our Consumer Brands business. Strong sales led us to put a new Freschetta Brick Oven pizza line in one of our plants, and we’re proud of the automation and quality of that line. We also invested in a new state-of-the-art distribution center in Salina, Kan., which enhances our efficiencies when shipping our pizza products out, nationwide to various locations. That facility (opened in June 2006) was a $15 million investment.