Building on 'Corps' values
June 16, 2010
As principal founder and chairman of Phoenix-based Bar-S Foods Co., Timothy Day has also served as the company’s CEO since the business began in August 1981. Day has proven to be an extraordinary leader , in large part, to his experience as a U.S. Marine.
Before Bar-S was founded, Day was executive vice president of General Host Corporation and president of its largest subsidiary, Cudahy Company. He served 13 years with General Host in various executive positions including group vice president of operations; vice president and treasurer; and vice president of acquisitions and corporate planning.
He graduated from Deerfield Academy in 1955; earned a B.A. from Wesleyan Univ. in 1959; and an M.B.A. from Harvard Business School in 1964. Day served as a line officer in the U.S. Marine Corps from 1959 to 1962, attaining the rank of Captain. Marine influence
Day’s experience in the Marine Corps had a profound impact on his values and personal traits, and that influence continues to guide his conduct to this day – including the management of Bar-S. “That influence shows up most prominently in our leadership style; our strong culture of excellence; our clear statement of values; our high sense of discipline; our emphasis on teamwork; our decisiveness; and our ability to move with speed and impact,” Day says.
Several business strategies and employee programs currently exist as a result of his Marine experience. “Our ‘Fit to Win’ fitness program (a health and wellness program designed for employees) is modeled after the Marine Corps. In addition, our basic strategy is to excel in the basics – like Marines – to build a strong foundation for the future. That strategy is visually depicted in our Value Pyramid” (See graphic Page 28 ). Bar-S employs 469 people (29 percent of its total employees) who are either military veterans or reservists.
His devotion to the Marines goes beyond company boundaries. Last year, the Semper Fidelis Memorial Chapel was completed at the Marine Corps Heritage Center in Quantico, Va. Building this non-denominational chapel was made possible by a $5 million donation from Day and his wife, Sandy, and the Timothy T. Day Foundation Inc. of Phoenix, Ariz. The Chapel is designed to serve as a contemplative space where Marines and visitors can remember the sacrifices made in the defense of freedom and honor those who have served the nation.
“Sandy and I and my foundation have been long-time supporters of the Marine Corps Heritage Foundation and the National Museum of the Marine Corps, and we funded the large Tarawa exhibit in the main entrance gallery,” he says. “In September 2007, we visited Quantico to determine how best to contribute to the Phase II Capital Campaign, and the Chapel Project was presented to us. We both were deeply impressed with the concept, but I was somewhat hesitant because the commitment was far larger than anything I had been contemplating. But Sandy quickly understood its significance and pulled me aside and said, ‘This is very important to the Marine Corps and will be very important to your legacy.’ So, we took a deep breath and stepped up. Sandy and I were very involved with the design of the Semper Fidelis Chapel and met with the architect many times. Our entire family – including recipients of our Marine Corps Entrepreneur Fellowship at Harvard Business School – were part of the dedication ceremony, which was attended by most of the general officers in the Marine Corps.” The Bar-S advantage
Bar-S measures its performance primarily in pounds, not sales dollars. The company has seen about an 8.2 percent compound annual rate of growth of branded product sales since its inception, Day says. “Our 2010 plan calls for continued sales growth of about 5 percent vs. the prior year, and fiscal year 2009 sales were approximately $550 million,” he adds.
Recent data from Nielsen SCANTRACK for equivalent pound volume sales in supermarkets over $2 million reveals Bar-S is the:
• No. 1 national brand in hot dogs;
• No. 2 national brand in lunchmeat;
• No. 3 national brand in corn dogs;
• No. 4 national brand in dinner sausage; and
• No. 6 national brand in bacon.
Despite the recession in 2009, Bar-S achieved record sales that year with a 10 percent growth in branded products. “The consumer is increasingly more focused on value these days, and there is substantial research that indicates this is a permanent shift in behavior,” Day says.
Last year, the company’s international sales volume grew to more than 37 million lbs., about 7 percent of its total sales. “Sales have declined this year with the current trade restrictions imposed by Russia,” he adds.
Being a privately held, management-owned company allows Bar-S to function differently from many of its publicly traded competitors.
“First, we are not concerned about Wall Street or meeting quarterly expectations for continued growth. Our decisions are based on what is best for the company in the long-term, even if it depresses short-term profitability,” Day says. “Second, we don’t have all the legal expense or excessive governance procedures associated with public companies. Third, as ownermanagers, we are more prepared to take calculated risks without worrying about having to explain possible mistakes to a public market. And, we are a lean, action-oriented company that can move with speed and impact – far more agile than most public companies.”
Bar-S never rests on its oars. It recently entered into a long-term agreement with a major hog slaughtering operation. “New slicing equipment is on-line in a start-up mode. We are slicing smoked bellies right off the fabrication floor with no freight and little shrink, which should enable us to be very competitive with highquality product. This first phase will cover about 30 percent of our requirements. If this arrangement works out as expected for both parties, we will expand this operation and build a very robust bacon business,” explains Day.
Looking at the bigger picture, Day adds, “We have improved our operational capabilities substantially in recent years; our current capacity is about 10.7 million lbs. per week.” Bar-S operates production plants in Altus, Clinton and Lawton, Okla., and a central distribution and service center in Elk City, Okla.
“Our 2010 Plan calls for about 515 million lbs. of production, or about 92 percent of capacity,” Day says. Food-safety leader
In 2009, Bar-S became certified to SQF Level 2, the highest foodsafety level, as part of the Global Food Safety Initiative. “We were also certified to SQF Level 3, the highest food-quality level, which is now an integral component of the company’s Quality First Process,” Day says. “We are constantly reassessing our quality and food-safety processes, but most of the changes are small refinements.”
Becoming more efficient and effective is an ongoing company goal. To this end, Bar-S has implemented several systems in its manufacturing plants and distribution center in recent years, including one to collect and report downtime for its manufacturing equipment; production display boards that display real-time production information for plant employees and management; automated bar-code label printing and application systems; and high-speed, robotic, corn-dog pack-off lines.
“We have also implemented back-office systems, including a new Human Resource Management and Payroll system; and an employee self-service system that allows employees to retrieve payroll, 401K and medical claim information – and the ability to update personal information,” Day adds. “Bar-S has also expanded video conferencing and Web meeting systems for better meeting collaboration with remote locations.” New products
Bar-S recently introduced Bun Length Meat Franks, which is currently the No. 10 best-selling frank item in the U.S., according to Nielsen.
“We also introduced a line of 1.5 lb. Corn Dogs – Classic, Beef, and Turkey & Cheese, the only corn dogs packed in a freshness-sealed vacuum package,” Day says. “We added a new line of 9-oz. Deli Shaved Ham & Turkey products and 10-oz. Deli Thin Cut Ham & Turkey items in the best-selling flavors.” This year, Bar-S plans to roll out three new frank items: Bun Length Beef Franks, Jumbo Jumbo Beef and Meat Franks in a consumer-friendly , 16 -oz. package. In 2008, Bar-S redesigned its product packaging and refined it further in 2009. “It is now a very attractive and contemporary family line with a prominent tag line, ‘Only The Best Is Branded Bar-S’, and impactful ‘Satisfaction Guarantee,’” Day says.
Bar-S has also executed several brand awareness initiatives during the past several years for new and existing products. “Our on-site grilling and product-sampling events in select markets have proven to be very successful among Hispanic consumers,” Day says. “Last year, we hosted more than 150 events primarily in the Los Angeles market, and this year we’re estimating to host more than 300 events in several Texas markets, St. Louis and other markets.”
Bar-S’s Web site has been updated with new content and consumer promotions, including sweepstakes and online coupons. “In 2009, we started running national, full-page, free-standing inserts to boost brand awareness,” Day says. “This year, we are planning two national full-page FSIs that will reach approximately 44 million households. The first one (dropped) May 16 and promoted franks and bologna to jumpstart the summer selling season. The second FSI will drop in the fall.”
Bar-S also recently stepped into the social-media world to promote brand awareness and consumer engagement. “Our social-media campaign has involved everything from engaging college fans in a hot dog eating contest at the Fiesta Bowl to sponsoring Super Bowl parties at select military bases to hosting ‘March Madness’ contests targeted at college kids,” Day adds. “Plus, Bar-S can now be discovered on other cyber places other than its Web site (www. bar-s.com ),” including Facebook, Twitter, and on YouTube.
The company is fully committed to sustainability. Bar-S’s biggest sustainability initiative was converting all shipping containers to corrugated material made with recycled board. In terms of trees saved and monetarily, “That was a major savings,” Day explains.
“We have also done things to reduce our energy usage,” he adds. “This involved putting in hot-water systems that reduced natural-gas usage vs. going through regular boilers; improving our air make-up units, which are now much more efficient; installing capacitors throughout the plants to reduce energy use; and replacing motors with more energy-efficient ones wherever we can. We’ve also done a lot to reduce waste hauloff and water conservation. For example, instead of cooling equipment with water that goes down the drain, we are using recirculation tanks.” The future
Bar-S’s biggest opportunity is to increase distribution of its full product line in the U.S. “ACV [all-commodity volume data from Nielsen] distribution of our full product line is where we have tremendous growth potential,” Day says. “Even through we have a leading market-share position with franks, our ACV is only 77 percent – so there is still a lot of room for growth in that category. But think of the potential of our other product categories that still have much lower levels of distribution than franks. And, in many retail chain accounts, we don’t have 100-percent distribution of a given item even though they are authorized. That’s an area we call ‘low-hanging fruits.’ We believe that you could almost double the size of Bar-S by achieving 100-percent distribution of the full product line. Since Bar-S is the only national brand serving the value segment of the marketplace – and is the clear value leader in the processed meat industry – we are very optimistic that this is an achievable objective.”