Whether it’s a flawless 6-4-3 double play in baseball, a perfectly timed alley-oop pass in basketball or a surprising onside kick in a football game, executing a strategy that requires teamwork and timing to achieve a common goal is a thing of beauty. Likewise, in the corporate world, when one company pulls off an acquisition deal of another firm and millions of dollars change hands, the amount of effort, dedication and planning is nothing short of stunning. Just ask David Van Eekeren, president and CEO of Land O’Frost, whose 53-plus-year-old sliced lunchmeat company announced on Dec. 21 that it was diversifying into the hot dog and sausage segment with the acquisition of Wimmer’s Meats, based in West Point, Neb. The deal was one of the steps in executing a reinvented business plan that was developed after the 2001 death of Paul Van Eekeren, David’s father, who worked his way up to lead the company he joined in 1961. Acquisition was a key part of the new strategy that began under the leadership of his mother, Donna, who took the reins after the passing of her husband.
“In 2003 we said ‘we are going to retool this company to be lean, mean fighting-machine branded,’” which meant abandoning its private-label focus in favor of branding the Land O’Frost name, David says. He gives credit to his mother for getting behind the new direction. “Donna actually started the new aggressive growth plan. She bought in before I ever said a word about growing,” he adds.
With annual sales expected to be about $380 million this year, the Van Eekerens are confident the acquisition of Wimmer’s Meats will push the company toward the next goal that was established when David and Donna committed to the “all-in” strategy. The Wimmer’s plant is Land O’Frost’s fourth processing facility; the other three are located in Searcy, Neb.; Madisonville, Ky.; and Lansing, Ill. Reminders of the next sales milestone are plastered all over posters and banners at the company’s headquarters, with a goal of reaching it by 2014.
Making a match
Van Eekeren says finding the right acquisition target was top-of-mind and sausage companies were largely not even considered. He started with a list of about 100 potential targets and for three years, narrowed the field. Of those, he had discussions with the owners of about 30 companies.
This past year, David learned from one of his salesmen that Wimmer’s was entertaining buyout offers. “We didn’t know anything about them.” After all, the company’s acquisition strategy did not include targeting companies manufacturing commoditized products. “Initially we said ‘we don’t want to do much with bacon or hot dogs.’ But as we started diving into it, we saw that there are really some specialty hot dogs and specialty bacon that add a heck of a lot value to the category and could really increase our portfolio and add a lot of depth without being commodity.”
Once David realized the company was actually an artisan processor serving a niche market, his interest piqued. Conversations with Wimmer’s began in early August. “We realized very quickly this was the right move for Land O’Frost,” he says. Van Eekeren remains committed to those Old-World traditions too. “These are hand-mixed spice blends that are made on a batch-by-batch basis,” he says, and the closely held recipes came with the keys to company. Owning and protecting the coveted recipes are not responsibilities Van Eekeren takes lightly. He also plans to maintain the Wimmer’s plant in Nebraska, where 130 workers are employed.
What about Wimmer’s?
Dave Wimmer, the third-generation owner and chairman of the 78-year-old company, is no stranger to making acquisition deals. Through the years, he has been on the other side of the bargaining table as Wimmer’s bought several other companies en route to growing to a $30 million firm. These deals included the 1995 buyout of the Bassett brand, which was based in Minnesota before Wimmer consolidated the production to Nebraska. The next target was Ambassador, another Minnesota brand that still enjoys retail success in the Minneapolis and St. Paul region and spawned an uptick in sales for Wimmer’s. As recently as 2004, his company went on to acquire Fairbury Brand Meats, based in Fairbury, Neb.
“All three brands we’ve purchased were family companies that believed in quality and reputation,” said Wimmer, several years later. “It’s been a good match,” he added. Wimmer’s is the No. 1 brand of Little Smokies and natural-casing hot dogs in the markets it serves, including Omaha, Des Moines and Minneapolis. Its other brands (Bassett, Fairbury and Ambassador) are also mainstays in their respective markets. After realizing there was no fourth generation family member waiting for the passing of the torch, Wimmer, who will turn 65 this year, began discussing selling the company. As a seller, Wimmer sought a buyer for his company that was right for the employees, the community and the company’s shareholders.
Wimmer’s was founded by his grandparents after they immigrated to the US from Austria. It is those original recipes and use of natural casings and wood smoke that pushed the company to become a respected supplier to retailers and foodservice outlets in the upper Midwest and mail order customers nationally. The company also produces products for export markets and for private label customers.
Sealing the deal
After a bid was issued by Land O’Frost, Dave Wimmer weighed it along with the other offers, giving consideration to not only the numbers on the bids, but the source of the offers and the fit of the prospective owners. Wimmer seemed encouraged by Van Eekeren’s plans for preserving and growing his brands and that his 65,000-sq.-ft. plant would not be immediately closed down and operations consolidated, as one suitor planned.
“We were supposedly not the highest bid on the table,” says Van Eekeren, but Wimmer accepted it, triggering an extensive due diligence process that spanned nearly four months and involved 24 Land O’Frost representatives, from sales staff to QA experts. For the first 60 days, “we had our people on the ground in West Point every week looking at how they operate,” and more importantly, how the aging plant measured up in terms of food-safety standards. “We were very relieved to see that they have kept up with the times and, in many cases, are ahead of the times in terms of food safety,” says Van Eekeren, who traveled to Nebraska about six times during the process.
‘Like looking in a mirror’
Throughout the negotiations, Donna Van Eekeren says she was overwhelmed by how similar, in almost every way, Wimmer’s was to Land O’Frost. “It was literally like looking in a mirror,” she says. From the family ownership’s business philosophy to growth strategies and including how the processing operations were run, David agrees that Wimmer’s was startlingly similar to his company. He recalls the first meeting with the Wimmer’s management team and how the conversation between them was as natural as a visit with a family member. Each side brought their bankers to the meeting, but Van Eekeren told them, “We know you helped us find each other and that you will help us with the due diligence, but we [the Wimmers and the Van Eekerens] need to get to know each other. And we did.”
Almost immediately, Dave and David realized they shared much more than first names. “Our cultures were so similar. It was like talking to your cousin.”
In assessing the two businesses, the Land O’Frost team learned that the process to make lunch meat isn’t unlike processing hot dogs and sausage. “Blending meats, whether it’s in a 5,000-lb. or 20,000-lb. blender, is very similar,” he says. However, certain aspects of Wimmer’s artisanship could be applied to the Land O’Frost process. Likewise, Van Eekeren says there are opportunities to utilize some of the efficiencies, best practices and capital backing that can benefit Wimmer’s.
Bill Marion was a key member of the Land O’Frost due diligence team. Right away, Marion, vice president of manufacturing, was struck by the pride of the employees, not only to the company but to the products and the quality of their work. “We could immediately tell we had a solid core to build on and integrate,” he says. He was also encouraged to learn that many of the managers and supervisors at Wimmer’s had spent their careers there, not unlike Marion, who just marked his 29th year with Land O’Frost.
Van Eekeren agrees that the team of 130 workers at Wimmer’s is highly regarded. “They have a great workforce out there with long-tenured employees who are very loyal to the family and the brand.”
Another similarity between the two companies is in their distribution. From its distribution center in Searcy, Ark., Land O’Frost drop-ships 70 percent of its products using a fleet of about 55 company-owned tractor-trailers designated for less-than-truckload (LTL) orders. It outsources full-load shipments. “It’s expensive,” Van Eekeren says – especially in the last couple of years – “but we know we can service our customers better than any LTL operator.” Wimmer’s has a similar arrangement to distribute its products, albeit with a smaller fleet of four trucks.
As for marketing the newly added sausage and hot dog products to the mix, the strategy is to not rock the boat. The Wimmer’s core brand is known by consumers, Van Eekeren says. Eventually, however, the Land O’Frost brand name will gradually assume a larger position on the Wimmer’s brand labels, just as they have on all of its products, including its Bistro sub-brand.
Land O’Frost has earned a reputation for producing thin-sliced, packaged lunch meats for over 50 years. That reputation could benefit from an infusion of artisanship, a tenet of Wimmer’s. But there are no plans to compete in the deli segment with the likes of high-end processors, including Boar’s Head and Dietz & Watson. “We are looking to staying in the lunch meat category and elevate those consumers to a different experience.”
All in the family
After growing up around the meat business his grandfather founded in 1958, and his parents, Paul and Donna, ran throughout his life, David Van Eekeren went to college at the Univ. of Kansas, where he earned a bachelor’s degree in economics. After graduating in 1991, he went to work at the Land O’Frost plant in Arkansas. There, he spent a full year learning every position at the plant, where at that time, turkey deboning was part of the deli-meat-processing operations. He then worked his way up through the ranks, including working as a salesman while attending Loyola Univ. Chicago to earn an MBA. This ground-up approach to learning the family business combined with a business-based education would ultimately pay dividends when the company was jolted by the death of Paul in 2001. Donna then assumed the role of CEO, a position David would eventually assume after his appointment to president in 2008.
David realizes his business approach is different from his father’s. Paul was more risk-tolerant, he says, for starting new businesses, as was evident from the company’s ownership of a processing plant in South America; while another venture saw the company operate a chicken processing plant in Ohio as well as a stint experimenting with shelf-stable meals. “He did a lot of new business development, while I’m a firm believer in taking what other people are good at and helping them get better at it,” through acquisition, David says. “I think we can grow by buying really good companies and growing our business that way.” With a satisfied smile, David says that the Wimmer’s acquisition is something that would have made his father beam. “I really think he’d be proud and excited about this. Given the direction we’ve taken the last several years, we all feel this was right in our wheelhouse.”
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