Meat + Poultry - September 2016 - 30

COVER STORY

Sausage remains a core competency, but
"is Bob Evans going to be selling breakfast
sausage in California anytime soon? Probably
not," Townsley says.

DELIVERY DECISIONS

Manufacturing facilities were consolidated
and restaurants in many markets were closed,
going from 589 locations to about 527 today.
Owen's brand sausage in Oklahoma and
Texas was almost regarded as a staple in the
diets of consumers. But because Bob Evans' side
dish business was the fastest-growing segment
at that time, the decision was made to focus on
a singular brand. It also became obvious that the
inefficiencies of duplication between the two
companies could no longer be ignored.
"There was a lot of opportunity for
synergies by rolling the two companies
together," Townsley says.

ON THE SIDE
Many might be surprised to learn that Bob
Evan's mashed potatoes and macaroni and
cheese products make up over 50 percent of
Bob Evans Foods' annual revenue today. Bob
Evans enjoys a 50 percent market share in the
refrigerated side dish category and outsells its
nearest competitor by nearly 3 to 1.
In its core market, Bob Evans breakfast
sausage is the leading brand (Jimmy Dean
is the leading national sausage brand).
That core market extends to 18 states, not
coincidentally, where Bob Evans restaurants
are doing business. Three years ago, when
volatility riddled the hog industry, Bob Evans
surrendered some market share, but in the past
two years, sow prices have stabilized and the
company recouped its leading position.

30

MEAT+ POULTRY | 09.16 | www.meatpoultry.com

Pete Barreras

Mike Townsley has had a
front-row perspective as
Bob Evans has restructured
its corporate structure. He
served as co-CEO prior to
the company hiring Saed
Mohseni as president and
CEO this past January.

In 2007, the company owned and maintained
nearly 200 delivery trucks. "We were primarily
a DSD (direct-store delivery) operation,"
Townsley says. This wasn't a sustainable model
once the decision was made to begin shipping
to distributors and to customers' warehouses.
Shifting to a national distribution strategy and
abandoning DSD operations required two years
(beginning in 2007). That retail segment is
critically important to Bob Evans, constituting
about 80 percent of its business vs. foodservice
and institutional customers. Of that remaining
20 percent of business, about one-third
supplies Bob Evans restaurants.
During the transition, sales forces were
downsized, plants were consolidated and
the company became leaner. Townsley and
the leader of the company's supply chain,
Richard Hall, are two of the survivors of the
reorganization and upheaval at Bob Evans.
"He and I are the only two left in senior
management [from that era]."
The new strategy reflected a change in
the meat industry and moved away from
the era when door-to-door delivery was
required to preserve what was then a limited
shelf life. Technology improvements and a
refined cold supply chain has allowed for the
national growth. "That day-to-day contact
with the store wasn't as necessary," he says.
Sales-minded route drivers were transformed
or replaced by category managers to work
directly with retailers.
However, says Townsley, "Just because you
have national distribution doesn't mean you
have a national brand."
The Walmarts and Krogers of the world
have lofty expectations of their national brand
providers. One of those expectations is being
sophisticated enough to provide category
management data; they expect help in making
good decisions in terms of product mix and
placement in their stores.
"Our goal is to help them sell as much as
they possibly can because if they do and our
brand resonates with their customers, we're
going to succeed," Townsley says.
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