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PFG's Spinner: 'Going Back to Our Roots'



{mosimage}In support of this, said Steve Spinner, president, the company's previously designated Broadline division has ceased to exist as a distinct unit and its structure has been integrated into PFG's overall distribution business.

"What you see happening at Performance Food Group is that we're getting back to our roots, as a foodservice distribution company. That's how we started," Spinner said during an interview with ID Access soon after his appointment as president and coo late last month. "Now that we've announced that we're spinning off Fresh Express, this gives us the opportunity to get back to what we really know - our core distribution business. That's really exciting for me and for everyone at Performance Food Group."

Spinner explained that the label "broadline" had referred to the 19 PFG operating companies that functioned in that distribution venue.

"Since we're now one company, what was PFG Broadline becomes just Performance Food Group," Spinner said, noting that the Customized Division, based in Nashville, TN, will continue to report to Bob Sledd, PFG chairman and ceo.

Furthermore, Performance Food Group, in an effort to intensify its position among independent foodservice operators, turned to its street accounts for guidance about what it can do to improve itself. Their resounding advice to the distributorship was to be "operationally excellent," Spinner said.

"We believe the customers want us to be operationally excellent."
"Over the past six months or so we conducted a fairly significant customer survey that led us to a basic understanding of who the customer wants us to be. We believe the customers want us to be operationally excellent." Spinner explained. "We want them to judge Performance Food Group from the perspective of how well we get them the product, how well we deliver the product that they're looking for, how well we can help them run their businesses, the condition of the product that we deliver them and the timeliness of delivery."

All of those parameters fall under the headline of "operational excellence," he continued, pointing out that the company is going to devote "time and energy" making sure that its technology and training are driven toward that goal.

When asked how PFG will fulfill this mandate, which simultaneously pertains to excellence in logistics, DSR services and foodservice products, Spinner said the distributorship is building a methodology that allows it to measure its accomplishments and success rates. For example, he continued, if operators seek skilled DSRs, then it is PFG's task to ensure that all of its sales reps are expertly trained to help their customers run their businesses profitably.

"We must have a methodology to measure whether or not the customers really believe that we're doing what we say we're doing."
"We must have a methodology to measure whether or not the customers really believe that we're doing what we say we are. Operational excellence, to a great degree, is having the ability to have some key measurement areas that tell us whether we are, in fact, delivering what the customer wants," he said. "Training is one aspect. However, having the technology in selecting and delivering products tells us that, in fact, we're doing what we say we're going to do. And the customer can see the end result."

With Spinner's promotion, the company also created a new position that will oversee execution of the company's new go-to-market strategy. Called senior vice president of strategy and service, the positioned is filled by Joe Paterak, a veteran PFG executive. Paterak is not only responsible for street sales support, procurement, and warehouse management, he is also entrusted with making sure that the strategic plan is presented properly to PFG's operating companies, and the company has the technology and systems in place to support the strategy.

"He will be responsible for making sure that we can actually execute against this operational excellence strategy," Spinner said.

Spinner noted that the business opportunities that exist among independent operators can be realized by what he referred to as PFG's new centralized organization, which will have more standards, a consistent methodology for procuring its truck fleet, designing its warehouses, buying materials handling equipment, paying sales reps, and instituting category management in all of its operating companies.

Furthermore, he said, the distributorship will be tapping opportunities with brand names and making sure that the company has the brands that add value to it as well as its customers. Clearly focusing on its commitment to the viability of its independent customers, Spinner indicated that the company's goal is to create initiatives that will help them succeed.

"We are in an environment, where chains are growing at a pace that is considerably greater than the pace of independent restaurants. We have said all along that we want to be heavily focused on growing our independent restaurants at a pace that exceeds the growth of our chains. If we can't give them a tool that helps them do that, then it's going to be very difficult for the long haul to be operationally excellent as it relates to that particular segment," he predicted.

Operational excellence, as he described it, is the tool that will help PFG's customers grow their businesses, PFG's President Steve Spinner continued.

"One thing that we learned from our surveys is that the sales rep is very important to our customer."
Reflecting on the task of helping operators, Spinner said having the right brands that add value to their customers is one way of driving customer business. Another way is to institute a "solid" training program for DSRs so that they understand how their customers' businesses operate.

"The sales person has to be flexible to be able to utilize the services that we offer that makes sense for a particular customer," he said. "One thing that we learned from our surveys is that the sales rep is very important to our customer. As a result of that, the sales person is very important to us."

While standardization and consistency is effective on a corporate level, during a dynamic sales call, flexibility will be the rule.

"What we've told our operating companies and what our sales people have come to learn is that we will never try to direct how one of our operating companies goes to market in its geography. That is something that the operating company has to continue to be responsible for," Spinner said.

Turning to practical day-to-day distribution issues such as skyrocketing fuel costs, Spinner said the company essentially has two options: It can pass along the costs to those operators with which it has agreements that allow it to do so, or it can take the high road and educate its customers about the impact of the added costs. By showing operators the benefits of reducing delivery frequencies, PFG would save enough money on the productivity and efficiency sides and not have to pass along fuel cost increases, he indicated. Consequently, PFG customers reap the benefits of having the distributorship be their prime vendor.

"We do rank our customers and we are the prime vendors for quite a few of our customers. Obviously, we feel very strongly about driving our less profitable customers to purchase more from us because that's the least expensive sale that we can make. Quite frankly, we'd rather have a much bigger presence with fewer customers as opposed to smaller presence with many operators," Spinner said.

As for inflation-impacted commodity prices, Spinner said the company's DSRs are providing their accounts with "innovative customer satisfaction, which is part of the mission statement." In addition to menu alternatives and market timing, the sales reps have at their disposal a variety of options that they can use to help their customers survive the high prices.

"We are significantly growing our percentage of sales in the center-of-the-plate area."
Following-up on PFG's intention to enhance its COP presence, as it stated in its ID Top 50 survey, Spinner noted that if a distributor controls center of the plate, then its customers would rely "more heavily" on it. The firm, which is benefiting from an elevated image due to its COP offerings, operates six USDA-inspected customer meat-cutting facilities and a seafood processing plant.

"We are significantly growing our percentage of sales in the center-of-the-plate area. It helps us control the customer; it gets the customer to rely more heavily on us. It also helps us to continue penetrating those customers more. I see that continuing to grow," he said.

Without mentioning specific revenue gains this year, Spinner expressed his confidence that if the distributorship maintains its "culture of incredible integrity," growth will follow. His affirmed goal is to make PFG "a great place to work."

"We've never been focused on being the biggest, yet our sales growth continues at about 2-3 times the industry pace. It's all about sticking by what you know, having a great culture, with a great deal of integrity, hiring great people and giving them the ability to succeed," he elaborated.

Spinner is also confident that the national economy and foodservice prospects will be strong enough to sustain the company's revenue expectations, pointing out that more and more people are eating out and using restaurants for take out.

"If you take a look at Performance Food Group's overall market share of less than 5%, we've got almost limitless opportunities to grow," he said.

Spinner does not expect that his promotion will shield him from interacting with operators. By visiting operating companies and meeting with customers at a variety of forums, Spinner hopes to keep his finger on the pulse of what operators need and expect from the distributorship to be successful.

"We have quite a few events throughout the year at which I get to spend time with customers and they're pretty vocal. They're not shy," he said.

Does he consider the job of running the third largest distributorship daunting?

"Not in the least," Spinner quickly replied.

"For the most part it's been a lot of fun; it's been a great ride. I've been fortunate in my life to meet some terrific people who care a lot about our culture and vision. As a result, they make my job a lot easier then it could otherwise be. I'm proud of Performance Food Group, it's a great organization, and you're going to see great things coming from us in the next couple of years."

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