Meat And Potatoes

by Bob Garrison
OR-based Reser’s Fine Foods achieves peak performance on a basic business strategy of innovation, creativity, and staying ahead of the consumption trends.
Reser’s Fine Foods’ journey from farmhouse kitchen to industry giant in the prepared foods category is marked by risk-taking ventures, innovative strategies, progressive leadership, and a thwarted takeover.
With annual sales estimated at $375 million, Reser’s is positioned as the nation’s largest processor of refrigerated products including meals and entreés featuring meat, pasta, and burritos. The Beaverton, OR-based company operates 12 plants from Halifax, NC, to Honolulu producing as many as 1,000 different kinds of side dishes from salads to potatoes and specialty foods ranging from meat snacks, salsa, tortillas, dips and desserts. The company generated $300,000 in annual sales its first year of business.
“I’ve never been afraid to step out and look at something different,” says Al Reser, president and chief executive officer of the family business his parents started more than 50 years ago.
Bravado certainly helped in the early ‘80s, when Reser’s unknowingly found itself a target of a Chicago investment firm’s hostile takeover plans. The Securities and Exchange Commission alerted the company to the investment firm’s stock purchase forcing Reser’s to act or lose the company.
“Quite a few of our employees owned stock, so I got first-right-of-refusal agreements,” explains Reser. “I fought for three or four years, and the investment firm eventually realized they were locked out.”
Ultimately, Reser’s reclaimed its shares in a purchase deal allowing the investment firm to reap a profit. “They [investment firm] made a nice profit and we had a big debt, but we also had the company,” Reser says.
From its start in the early ‘60s, the company has consistently averaged annual double-digit sales gains. “I’ve learned to stay in the food business, focus on niches and stick with products that are refrigerated and frozen,” Reser says. “I like to look at consumer trends and — even though we may not be calling on a particular department within a grocery store — I never let that hold us back.”
No wonder the company enters this calendar year with promising initiatives including:
- National launch of the Main Street Bistro meal and side dish line targets supermarket meat department.
-Promotion and expansion project for Baja Café to include a repackaged and line extension of Mexican entreés, salsa, and tortillas.
-Reser’s Salad Ovals, a newly repackaged line of grab-and-go deli salads, debut scheduled.
-Improved line of complete salad kits for service deli operators to be introduced.
-Sales increase measures to penetrate the foodservice market.
“If you would have talked to us three years ago about a product like Main Street Bistro, we might have said, ‘That’s not for us,’” says Peter Sirgy, vice president of sales and marketing. “But we’re right on trend with consumer interest in refrigerated foods. As we look at opportunities to penetrate departments and segments in the grocery store, we have no shortage of good ideas. Today we view ourselves as a diversified refrigerated food company and our challenge is, ‘Where do we draw the line?”’
Reser’s officials are considering the same question as they pursue more acquisitions and strategic partnerships. Having acquired several refrigerated deli salad companies over the past decade — including the business of North Carolina’s Made Rite Foods in 2002 —Reser’s more recent focus is on Mexican food. The quiet Beaverton firm is a major player in the tortilla market, producing between 30 million and 40 million tortillas each month.
In 2002, it acquired Salt Lake City-based Wilson Foods Company, a frozen burrito and tortilla processor, along with a minority share in Puentes Brothers, a tortilla processor in nearby Salem, OR. Future deals promise to help Reser’s strengthen its geographic reach in the Midwest and East while bolstering its holdings in Mexican food and other key product areas.
Reser’s product line and distribution growth gained impetus in 2002 when the company revisited its Mexican food brand strategy. This spring finds Reser’s relaunching its entire 40-item line of entrees, salsas, and tortillas under the Reser’s Baja Café brand with a new graphics profile positioning products against an attractive purple-and-gold color scheme. Reser’s also makes its retail freezer case debut with burritos, flautas, taquitos, and quesadillas.
“As a regional company growing nationally [in the mid-nineties], we first took the approach of having our products all look as though they had come from the same national branded company,” explains Don Graff, director of marketing. “Yet, as we move further outside the Northwest, consumer research tells us it’s smarter to develop an image that’s more category specific. We still have the Reser’s brand name but – using this restaurant-style name – we’re playing up the fact that we use authentic ingredients and recipes.”
The Mexican foods category is very fragmented and retailers familiar with Reser’s welcome the company’s efforts, Graff notes.
“As we expand nationally, the retailers may not know us as well but their service deli or dairy department heads know about our quality and can recommend us,” he says.
Consumers looking for quick meal options also find Reser’s in another fast-growing section of the store: the retail meat department. Last fall the company introduced its Main Street Bistro line of three meals including Swedish Meatballs with Gravy and Mashed Potatoes, Meatloaf (with sauce) and Macaroni & Cheese, White Cheddar Mashed Potatoes, and Alfredo Pasta Shells, each offering more than two pounds of food, retailing at about $6.99, and five, 20-ounce side dishes, at a suggested retail of under $3 each.
“The meat department’s [prepared meal] category is certainly in line with consumer demand,” notes Sirgy, emphasizing that growth continues at about 25 percent a year already representing about $500 million in sales.
“When consumers walk up to the glass deli case and see bulk salads in round bowls, they still believe the product was made in the back room,” says Graff. “On the other hand, consumers told us they associate rectangular trays with product mass produced in a factory in another state.
With that Reser’s adopted what it calls “Salad Ovals” and officials soon pursued new graphics for sleeves that wrap around the centers of pre-packed 12- and 16-oz. containers. Graphics emphasize a bright blue sky with images of the primary, fresh ingredients in raw and chopped form.
“Our goals were, first and foremost, to convey ‘freshness,” Sirgy concludes. “Then we turned to clear containers so consumers can clearly identify the product they are buying. At a time when so many products in the deli are not branded, we also wanted to emphasize the fact that our products are brought to you by a brand you already know and trust.” NP
Bob Garrison is Editor-In-Chief of Refrigerated & Frozen Foods