Mike Townsley began his career at Bob Evans Farms in 2003, as president and COO of Owens Country Sausage. Over the past 13 years, his leadership role has expanded and he is now president of BEF Inc.
The Premium Standard days
After Manly had recruited Townsley to lead fresh pork sales at Smithfield Packing Co. in 1994, Manly departed in 1996 to assume the top leadership position at Premium Standard Farms, based in Kansas City, Missouri. About six months later, Townsley packed up his young family and moved to Kansas City, after being offered a position by Manly. Within a year of their joining, Continental Grain acquired 51 percent of PSF and remained majority owner until Smithfield Foods acquired PSF in 2006.
“Those were some pretty exciting times at Premium Standard,” Townsley says of the 100 percent vertically integrated pork company, which allowed the company to realize maximum benefit from its business model. After six years living and working in Kansas City, Townsley was offered a job by Stewart Owens as part of then-Columbus, Ohio-based Bob Evans Farms. Townsley jumped.
The only constant
The Bob Evans business today compared to when Townsley joined the company in 2003 is a sharp contrast. He began as president and COO of Owen’s Country Sausage, which was then an independent operating company of Bob Evans that later became Owens Foods. When Steve Davis joined Bob Evans as CEO in May 2006, Townsley was appointed executive vice president of BEF Inc.’s food products division and relocated to Columbus, Ohio. Two years later, Townsley was promoted to president of BEF Foods Inc.
In the early 2000s, the Bob Evans and Owens businesses were split geographically – the Bob Evans branded products were available from Kansas City and eastward. “Everything south and west of there was Owens products….same products, two different brands,” Townsley says.
That strategy shifted when it was decided to have a unified, national brand, part of a restructuring strategy rolled out about six months after Davis came on board. 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.
Mike Townsley has had a front-row perspective as Bob Evans has restructured its corporate structure. He served as co-CEO prior to company hiring Saed Mahseni as president and CEO this past January.
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.
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
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.
