Change is a constant, and AdvancePierre Foods Inc. is an organization that is constantly changing, in its approach to the food business, to production and to product development.
Created in 2010 by the merger of three entities, AdvancePierre's roots were planted either 67 or 40 years ago, depending on whose family tree is being traced. A more meaningful milestone would be the year 2008, when the venerable Pierre Foods emerged from bankruptcy reorganization with a new management team headed by William Toler. That set in motion a transformation marked by mergers, acquisitions and the creation of a food giant that thrives on new products distributed through multiple channels.
Retail sales are a growing part of AdvancePierre's $1.6 billion portfolio, but foodservice in multiple channels is the Cincinnati-based organization's bedrock. School cafeterias, convenience stores and vending machines are some of the places you will find the company's many branded and private label creations. The company counts more than 3,000 SKUs in a lineup to which products are constantly added and subtracted.
More than 160 new products rolled out of its test kitchens last year, and 2012 wasn't an anomaly, assures Bernie Panchot, vice president of R&D. Her customers and her customers' customers are not interested in the same-old same old, and it's the job of the 40-person R&D staff to respond with new and interesting alternatives.
Panchot joined Pierre Foods in December 2008 when Toler was building his senior management team. She reported directly to the CEO and served on the executive committee until 2010, when the company merged with Advance Food Co., Enid, Okla. The deal also included Advance Brands LLC, a joint venture between Advance and Cargill Inc. At that point, R&D was folded into the marketing organization, signaling a shift from a conventional foodservice go-to-market approach to a hybrid strategy that is tuned to changing market demands.
The New Year ushered in another realignment that assigns R&D professionals to three business units: branded products, foodservice and strategic activities. Members of the R&D team can be found on the premises of all of the company's 10 manufacturing sites, including five in Enid, two in Ohio, and one each in North Carolina, South Carolina and Portland, Maine, the home of Barber Foods, which was acquired two years ago.
The Barber brand probably enjoys a higher retail profile than AdvancePierre's other labels, and the new owners clearly want to nurture the name. Although AdvancePierre shifted production of Barber's fully cooked foods to an Enid plant and shut down Portland's oven, laying of 232 workers in the process, it also signaled it would invest $10 million over two years in plant renovations and equipment upgrades. The facility now accounts for more than 300 of the company's 4,000 head count.
While AdvancePierre's sales volume puts it in the neighborhood of brands such as McCormick spices and Dannon yogurt, its foodservice skew keeps it below the public radar and, to some extent, the industry's radar. Nonetheless, it is a major player in the channels it plays in and the handheld protein foods it creates. The organization ranks among the Top 10 processors of lamb & veal, beef, turkey and chicken; it also holds down the No. 10 spot in refrigerated & frozen foods, according to Gale Research.
As the Cargill joint venture suggests, the organization collaborates with its suppliers; in fact, "one of the requirements in key supplier contracts is that they help us stay ahead of key trends," Panchot explains. But the bedrock of collaboration is spelled C-U-S-T-O-M-E-R-S. Those are the relationships that drive product innovation.
Belly up to the bar
A recent example is the Fast Fixin' Sandwich Bar, a concept developed to help AdvancePierre's convenience-store clients. People in search of a hot meal increasingly were gravitating to the C-stores' hot dog roller grills, negatively affecting the handheld foods that AdvancePierre supplies.
At the prodding of a field-sales colleague, the R&D team started work on a self-contained system that approximates the footprint of a roller grill and allows people to build their own sandwich, choosing from three protein options and topping off the sandwich with fresh ingredients of the store owner's choosing. Local and regional favorites help customize the sandwich after the proteins are heated in a microwaveable bun R&D had formulated for other channels.
"That was a case where we found a (retail) partner who was willing to collaborate with us on the development of the bar and an equipment manufacturer who developed a warming tray for the buns and then made multiple adjustments as we went through tests," Panchot says. "By the time we launched the system commercially, we had a proven model. It changes the paradigm of the hot C-store sandwich."
Market research also drives innovation. Custom field research buttressed AdvancePierre's march to the top of the C-store sandwich pyramid and helps shape line extensions to Big AZ, a brand created for the caloric-unconscious and sold in C-stores and vending machines. While the name suggests a Southwestern flair, it's actually "a heartier serving in one of our leading categories," she explains.
In April, the company rolled out the Big AZ BaconAddict Cheeseburger, an oversized, flame-broiled patty sandwiched between two layers of bacon-infused American cheese and topped with -- what else? -- more bacon. "It was a way to create some excitement and enable our C-store customers to better compete with fast food," says Panchot. Not incidentally, it helps AdvancePierre maintain its big-dog status in the $4 billion-plus C-store sandwich category.