Kunzler & Co. has been in operation for more than 100 years and isn’t afraid to offer up cutting-edge flavors along with traditional favorites.
Like so many people before him, Chris Kunzler III was indoctrinated into the family business at an early age. He didn’t get a cushy office job, though. At the age of 17, his father gave him a summer job working in the sausage kitchen of Kunzler & Co. Inc., where his job was to string up bolognas on a smoke stick and place it into the smokehouse.
One day, the sales manager held a contest to see if the sales team could sell more lebanon and sweet bologna in a week than Kunzler could hang in a day. He won, in an exhausting day’s work.
“I remember coming home at the end of the day, and my father said to me, ‘You know son, today you’re no longer a boy. You did the work of a man,’” Kunzler recalls.
Both Chris and his brother John got an extensive education in the inner workings of the Lancaster, Pa.-based processor. For several years, they worked in almost every department of the plant, so that they could learn the operation from the inside out, and so that they would always remember that the company’s foundation is its people.
Now that Chris is the president and CEO of Kunzler & Co. and John is the executive vice president of operations, they still remember the values that their father instilled in them. Currently, the company’s turnover ratio is less than five percent, and almost half of the company’s 500 employees have been with the company for 15 years or longer.
“Having my brother and I work in the plant, we got to hear the people, and we really do listen and respond to their needs,” Kunzler notes. “You can keep people happy with their jobs, and they don’t get that seven-year itch.” He adds that the company has been proud to offer a benefits package that he says is almost unheard of in the industry. Until this May, the company gave free health-care coverage to its employees, as well as their- families. Now, there is a nominal charge, due to cost and competitiveness.
100 years and counting
Kunzler & Co. was founded in 1901 by Christian Kunzler, a German immigrant. When the company first began, its best-selling products were natural-casing frankfurters, bone-in hams and dried sausages. Kunzler & Co. now offers more than 400 different products and more than 800 SKUs (stock-keeping units), from scrapple to filet mignon. It ships its products to 22 states east of the Mississippi River, though its core market is a 700-mile radius around Lancaster.
Some of those core products remain the same, but the frankfurters are now skinless, and the majority of the hams sold are boneless. It’s no longer manufacturing dried sausage, but fresh sausage, lunchmeat and bacon are all available in a variety of flavors, packages and health options. “We’ve evolved into a consumer-friendly company,” Kunzler explains.
While the majority of the products have been released under the Kunzler brand name, the company’s newest venture is to introduce a line of sausages and bacon called Authentic Selects. Kunzler says that the idea came from looking at consumer trends and sales data. “We saw a changing marketplace, where the consumer is trying to diversify from a skinless frankfurter to a spiced sausage,” he says.
Among the types of taste buds-enticing sausage included in the line are a Roasted Garlic, a Jalapeno and Cheddar, and a Rajin’ Cajun sausage. As a further convenience to the consumers, the sausages are offered in resealable packages. The company invested in new packaging machinery specifically to make an appealing package for consumers, particularly new customers who have a choice between Kunzler & Co.’s sausages and a company they already know.
“We think resealable packaging will attract customers to try Kunzler, and then with all the effort we’ve put into R&D and taste profiles, they will want to remain a customer with us,” Kunzler says. “Resealable packaging, we believe, is the wave of the future, and Kunzler wants to be right there at the forefront.” That packaging also will be incorporated into all the company’s hot dog and sausage products.
Along with the sausages, the Authentic Selects line also features several types of bacon, made of center-cut, thick-cut slices. There is a coarse-ground black pepper bacon and a maple and brown sugar bacon, along with a few other varieties to come out later in the fall.
The new brand was launched in July. Kunzler likens the release of a new product under a new brand to the start of a new baseball or football season, when aspirations are at their highest. “We have the right tools, the right flavor profile, the spices are perfect, the packaging has improved greatly,” he says. “One of the things that I teach my sales people is that there are two types of people. There are those who make dust, and those who eat it. We need to make dust.”
Kunzler & Co. relies more on its own internal sales force than it does with outside brokers, and those sales people are all instructed about Kunzler & Co.’s products, and how to differentiate them from competing companies and products. The direct sales force also ensures the company interacts directly with its customers on a regular basis and keeps the lines of communication open.
“We still feel like we are small enough that we can manage our own force, but large enough that we can canvass the entire market with our own people,” Kunzler notes.
Test and hold
Kunzler & Co. has three processing plants located in the west-central part of Pennsylvania, in Tyrone. One plant processes hundreds of different items, including lebanon bologna, luncheon loaves, sausages, salamis and more. One plant is dedicated to pre-sliced lunchmeat, and one to bacon. The company’s Lancaster facility is dedicated to producing hams and hot dogs.
The bacon and sliced lunchmeat plants benefit from the company’s growing foodservice and private-labeling businesses. Kunzler says that the sliced lunchmeat market, in particular, has exploded recently. Kunzler & Co. can produce a variety of setups, which contain a customized combination of lunchmeats. An employee at a sandwich chain, for example, can take a sheet of parchment, flip it over onto a slice of bread, and have all the makings for an Italian sub sandwich or a 6-inch round sandwich.
The rise in private labeling and the need to make Kunzler & Co. stand out as a company led to the development of a test-and-hold policy for its food products. Its quality assurance department tests product at the start of every shift, and then every two hours or at every label change, whichever comes first. Product is held at two large refrigerated distribution centers until the test results show that the product is safe.
The two distribution centers were originally built to hold hot dogs that were going to be shipped to Russia. Ten years ago, when the Russian market opened up to American products, hot dogs were one of the key proteins shipped there. “We were outsourcing the frankfurters to be frozen, awaiting shipping overseas, when the Russian market was booming,” Kunzler says. The company then had the idea to make, refrigerate and store the frankfurters on-site. “The Russian marketplace dried up for almost everyone, and we were left standing there with two big, beautiful distribution centers. We had to do something with them.”
As the warehouses became empty, the company’s private-labeling business was growing, and starting to include several very large companies. As a way to help differentiate Kunzler & Co. from these companies, it started to tout the idea of test and hold. “We thought to take the burden or risk away from these potential customers,” Kunzler says. “We can inventory whatever quantity they’re ordering from us at these distribution centers, and after three days, we know the results. They can feel a lot more comfortable about doing business with Kunzler than someone else.”
As a result, he notes, the company’s private-label account list has continued to grow, and includes some very prestigious companies.
The family business
While Kunzler & Co. keeps evolving and developing new products, it has also held firm to several important time-honored traditions. Its sausages may now include jalapenos and peppers, but the decision-making process of product development still is unchanged from years past and focuses on quality above all things.
When the company’s marketing department comes up with an idea for a new sausage or other type of meat product, the research and development is done first, and then the production, and then the taste profiles and focus groups. When everyone is satisfied with the taste of the item, a cost analysis is then performed.
“Our thinking is, if we start to create an item based on least-cost formulation, our thought process will never be directed on how we can make it the best. It would be built on how we can make it the cheapest,” Kunzler says. That process is something that he learned from his father, and he says the company will continue to adhere to it. “That way, we feel in our hearts and in our conscience that we’re putting out the very best of anything we make.”
In another nod toward tradition, Kunzler & Co. still smokes all of its products using wood instead of liquid smoke, with the exception of frankfurters. Because of that decision, the company has had to spend millions to add abatement equipment to the smokehouse exhaust systems, not to mention updating it continuously to meet Environmental Protection Agency standards. But Kunzler says that it does give a better flavor and color, and is one more company feature that the sales team can mention when talking to customers.
Given the history and popularity that Kunzler & Co. enjoys in the mid-Atlantic region, it is a delicate balance to maintain the company’s tradition while still growing and expanding as the market and consumer tastes change. Being the president of a company that bears his family name, Kunzler says he gets exposed to a wide variety of feedback from both customers and consumers alike. “That’s a good thing, because it puts you in touch with the people,” he says. “It gives you a lot more exposure, because your name is the same as the business, but I’m pleased that they feel comfortable to call or write me.” NP
KUNZLER & CO. INC.
Founded in 1901 Headquarters: Lancaster, Pa. 2005 sales: $125 million Employees: 500 Plants: 3 processing facilities in Tyrone, Pa., and one in Lancaster Brands: Kunzler, Authentic Selects Web: www.kunzler.com