In 2011, the Foodservice division of our Dairy Foods business reported pretax earnings of $13 million. Five years later, business is booming. Foodservice is on track to post year-end earnings in excess of $42 million, a 200 percent increase from 2011.
Those kinds of numbers don't just happen on their own. Behind the success is a dedicated team of people who bring their A-game to work every day. Talent management, an increased focus on customers and market trends, and strong internal collaboration have all played a role in the division's meteoric rise.
Right people for the right job
"Ensuring our structure supports our strategy is really critical," says Greg Somerville, Foodservice sales director. "That means making sure our structure is staffed with the right people in the right seats."
Those people are Greg's sales team, the road warriors who help bring value-added products to three main sectors: commercial (independent and chain restaurants), non-commercial (K-12, hospitals, colleges and universities, senior living facilities and others).
These sectors encompass many customers. To amplify their reach, the sales team works with Waypoint, a national broker that works directly with the chefs, food service managers and cafeteria directors making the purchasing decisions for the customers.
"So much of it is consultative, solution-based selling," says Greg. "We have to do a really good job of training our broker and provide the tools necessary for them to sell our product to independent restaurants. And we have people working trade shows, making direct sales calls, demoing products and talking about product features, benefits and performance."
This also means aligning experts with experts—chefs with chefs, for instance. By sending our chefs into the customers' kitchens, we can show them how to incorporate our products into their menus. The result: instant credibility and increased sales.
Using products to problem-solve
Credibility is behind another part of the division's success, namely the Foodservice sales team's shift from being transactional vendors to consultative partners. Instead of simply selling items, they worked with operators to help them drive and grow their businesses.
"We studied dairy usage with our customers to understand how they use it in their operations and what challenges they face with dairy," says Catherine Fox, marketing director for Retail Butter and Spreads. "We then focused on those products that met the needs of those customers."
These are products that hold up well in a kitchen setting—cheeses that melt perfectly, sauces that don't break and butter that doesn't burn (i.e. clarified butter). Together, they make up the performance dairy products group. The products are reliable, consistent and save prep time without sacrificing quality.
"As a team, we took all the problems restaurant operators had and said this is the platform we are going to build our business on," says Catherine, who until recently was the marketing director for Foodservice. "Products that didn't solve these problems weren't included in our strategy. Since our flagship butter didn't do that, we decided not to keep it as a focus platform. That was a hard thing to do."
The strategy worked. So well, in fact, that it caught the attention of a well-known food distributor: Sysco. After a successful pitch, Sysco asked Land O'Lakes to act as their category captain of its processed cheese category.
"We over-delivered on their expectations and delivered great category growth of more than 16 percent," says Catherine, "helping both Sysco and Foodservice meet their objectives."
Sysco has recognized our partnership and its results with its Supplier Excellence Award, bronze category.
"It's tough to win that award with Sysco if you're not producing a private label for them," says Greg of the award's significance. "We're one of the few winners that is strictly a branded supplier."
The recognition by Sysco was a first for Land O'Lakes, a true reflection of the efforts of the entire direct and cross-functional teams.
Working together really works
The success of Foodservice wouldn't be what it is without strong team collaboration.
"Whenever we're faced with big opportunities in Foodservice, we don't operate independently as a sales team," says Greg. "We work as a broader collaborative team to make sure we're delivering the best solutions possible for our customers and the organization."
The team works cross functionally with marketing, customer service, supply chain, category and customer solutions, finance and others to best leverage the power of Land O'Lakes, Inc. For instance, Foodservice uses our supply chain strategy to help Sysco best optimize its own supply chain to distribute product. Foodservice also has begun to tap the expertise of our new SUSTAIN team to help set the sustainability agenda with Sysco, which is early in its sustainability journey.
"This unique operating company model works well for Foodservice," says Greg. "But really, it starts with people at the end of the day. I'll put my team up against any team in the industry in terms of knowledge and their ability to find and grow the business."
The future of Foodservice
The Foodservice team is at the point where they could coast a bit on their success. Instead, they are looking forward to continuing the division's success under the leadership of their new marketing director, Stacey Kearin.
"We're looking to grow our noncommercial channels—healthcare, colleges and universities, as well as business and industry in the future," says Stacey. "We're also going to focus on doing regional pushes by adapting our sales tactics to each region instead of taking a broad approach in our commercial channel."
Foodservice also plans to leverage all the great work the Retail team has done around the LAND O LAKES® master brand's "Add A Little Good" initiative. The Foodservice master brand campaign rolls out in 2017 and will touch web, print and trade shows.
Another area of focus for Foodservice will be improving its website for both the sales team and their customers. The team is again leveraging the enterprise model the way they did with the retail team and "Add A Little Good."
"We're looking at what Purina has done with CRM Salesforce tool and its website," says Stacey. "Purina's market approach operates similarly to ours. Now we're looking at how to take what Purina has learned from Salesforce and bring that into Foodservice."
With all that to look forward to, the team can't wait to see what the future holds.
"The best years of Foodservice are in front of us," says Catherine.