HPC Foodservice shows growth despite hard times

Despite a soft economy and unfavorable weather conditions that have hampered most of the foodservice business in the Northeast this year, Bristol, CT-based HPC Foodservice, is projecting growth of about 6% versus 2002. The management team at HPC, the latest entry into the ID Top 50 list of foodservice broadliners, credits the focus of its business and its value-added services as the primary drivers of this growth.
"We've looked to grow our business through offerings not currently made through the nationals and large independents," says Ken Annino, vice president of marketing.
HPC Foodservice (formerly The Hartford Provision Co.) is a family-owned business that was founded in 1908 primarily as a meat supplier, but since has evolved into a significant regional distributor, serving as the primary vendor for most of its operator customers. The company projects 2003 sales at $62 million, an increase over 2002 sales of $59.5 million.
One reason for the growth despite tough regional obstacles is the focus of its business, with about 60% of its operator customers being in the healthcare industry. Although these clients have a constant need for special food products, they also have had to deal with budgetary constraints in recent years. This is where the distributor's value-added services come into play. HPC has a myriad of programs that focus on customer support and education and the company has worked with its healthcare clients to develop programs designed to supply quality products while reducing costs.
One key program is its Menu Fusion workshop in which HPC's regional healthcare customers go through a two-day program to develop spring/summer and fall/winter cycle menus. The dieticians and directors of each healthcare facility participate in activities designed to alleviate the boredom of the ordering process.
"With Menu Fusion, we make this a fun event for two days," he says. "They are bonded together and feeling good about what they just did."
They try dozens of products, which they rate electronically based on cost, sanitation, ease of use and taste. Manufacturers present their products directly to the customers with the main benefit for them being that purchasing decisions are made at that time instead of the normal back and forth of more traditional sales presentations.
"Manufacturers actually love this program," Annino says. "This is the purest way for them to sell product. It kind of makes us their favorite son."
The main thrust of HPC's marketing strategy is to offer value-added programs such as Menu Fusion that meet customers needs beyond providing food products at affordable prices.
"We need to get them the right price, but also provide other services," he says.
In addition, they hold a healthcare seminar, which is attended by about 200 to 250 people every year, that deals with all aspects of the healthcare industry, including the latest federal or state regulations on healthcare providers. They also hold customer focus groups to listen to the customers' needs and concerns rather than try to sell them products.
"We get a lot of great ideas from our customers about their needs," says Richard Lotstein, vice president and director of sales. "We try to give them what they need, not what we think they need."
The management team prides itself on its ability to maintain customer loyalty. "We have customers who have been with us for 35 to 40 years," Annino says. "The only way we lose business is if an account has become part of a national company that already has a vendor. We've been very successful on our retention of the business we secure."
They also credit the loyalty and hard work of their employees for much of the company's success. HPC has an extensive network of in-house specialists and instructors who work directly with the customers to fulfill their needs. The company's system is unique because the management team has brought in products specialists in areas such as produce, beverage and chemicals.
"Most companies, even some of the nationals, do not have that," says President Barry Pearson. "It's an HPC employee that's actually serving the customer."
The company has eight DSRs, who serve as consultants on issues such as sanitation, food costs and menu development rather than as order takers. HPC has an extensive customer support department and the DSRs guide the customers to the appropriate support staff member.
"(DSRs) kind of orchestrate working with the customer," Lotstein says. "They're not in there taking orders. They're out there soliciting new business."
HPC serves as the primary vendor for most of its customers, which allows DSRs to focus on creating new ideas to help their operator customers improve their business rather than competing with other vendors on the same accounts.
'We don't want our sales people in there every week fighting over a potential account," Annino says. "We want them buying new product. A lot of what our sales force is doing is supporting the business and showing the customers better ways to build business."
The company also has certified ServSafe instructors that actually go to their operator customers' businesses to teach their employees the latest food safety procedures.
"Our number one goal is to educate as many people in our system as we can on food safety issues," Annino says. "The number one concern of our customers is to make sure that their people on the front line get the opportunity to absorb it."
Another reason for HPC's growth in recent years is the use of technology to increase efficiency. The company now has an online ordering system, which is more convenient and more accurate for its customers. About 75% of HPC operator customers do their ordering online.
HPC also electronically sends its own orders to its suppliers and the company recently instituted a new warehouse managing system in which all products are scanned as they come through the door, which allows them to accurately control inventory and reduce internal costs.
The company has no current plans for any expansions or acquisitions, but is always open to the possibility although the executives say that due to the size of its operation, growing via acquisition might be too expensive for them. Their main focus is to continue to grow by "controlling our costs and trying to be more efficient," Pearson says.

Time for a change

When a larger distribution chain bought out Apple Healthcare's primary vendor last September, the company decided it was time for a change.
"We had not looked at another vendor in 13 years," said
Karen Morton, vice president of dining services for Avon, CT-based Apple Healthcare, which has 21 long-term healthcare facilities in Connecticut, Rhode Island and Massachusetts. "We decided that was a good time to step back and reevaluate where we are and where are priorities are."
Apple Healthcare decided that HPC Foodservice in Hartford best served its need for a flexible distributor because it is a local, independent company that provides a lot of individual attention.
"We wanted to enter a partnership where we're both supportive of each other," she said.
HPC provides the same level of attention to each Apple Healthcare facility regardless of size and offers flexible delivery times. HPC also held a menu workshop and has worked with Apple Healthcare to buy products it had not offered before. Apple Healthcare made about $660,000 in food purchases during the last quarter from HPC, its only food distributor.
Another major advantage is the constant communication between Morton and the sales, ordering and IT departments at HPC.
"There are always going to be bumps, but communication has been the key," she said.

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