Company roundtable

Company roundtable

Renaut, Bob

Dairy Field asks Bob Renaut, president and chief executive officer, and Mark Vance, director of marketing, key questions concerning the business of Oberweis Dairy.

Q What specific products have been most successful over the past year?

Bob Renaut: “This year our marketing efforts have involved the expansion of our 12-ounce single-serve milk line. We introduced two coffee-flavored milks this year – French Vanilla and Mocha Cappuccino. These were added to the chocolate, vanilla and strawberry flavors we introduced under our brand name in January. We now have five different single-serve flavored milks in our market to choose from, as well as iced tea, fruit punch and lemonade. This segment of our business has been very successful for us.

“Likewise, our school-vending business is thriving. We are selling 800 to 900 bottles of fluid milk per week per vending machine. And these are not 5-year-olds or 8-year-olds selecting our milk – these are teenagers. We still have a long way to go to convince teenagers that milk is the best choice, but we are heavily invested in this effort and very positive about the future.”

Mark Vance: “On the ice cream side of the business, we actually let consumers decide what new flavors Oberweis Dairy would introduce this year. We conducted an online survey that asked our customers to vote for their favorite flavors. The survey explained that the top three vote-getters would be flavors the company would create and introduce to the market this year. And vote they did. We later introduced Black Raspberry, Chocolate Chocolate Chip Cookie Dough and Heath Bar Crunch. Profitably speaking, these new flavors have done very well for us.”

Q What are the main selling points emphasized when promoting the company and its products? Furthermore, how does Oberweis Dairy maintain its competitive edge?

Bob Renaut: “Let’s break off into dairy stores for a second. The competitive edge there really hinges upon the quality of our customer service. If the customer does not have a good experience in one of our stores, no matter how good the ice cream tastes, they’re not coming back.

“We have a store design that is very appealing. In fact, the new design introduced this year has been received exceptionally well by our customers. They feel the stores are warmer, more friendly and enticing. As a result, they are more likely to come back. Superb customer service is something that we really stress – it is one of the key ways we maintain our competitive edge.

“On the home-delivery side of the business, even though it’s inherently unique, customer service is very important. It is crucial that we look at what the best practices are for delivering our products. For example, we make sure all of the drivers on our routes deliver milk the same way. So, if the customer moves from one route to another, they know exactly what to expect. We demand the same consistent service across our entire home-delivery network.

“We also believe it is important to attentively be in touch with our customers. We actually want to talk to our customers. When you call our company, for example, you get a live person, not a machine. And I think that is one of the ways we differentiate ourselves from the competition – by staying in touch with what our customers want and need, what we’re doing right and more importantly, what we’re doing wrong. If we have things to work on or improve, we need to know about it.”

Mark Vance: “I would only echo the emphasis on customer service. We place a lot of weight on service in terms of training and continued support of our employees. We work diligently to help them understand the value of superior customer service.

“Likewise, you will find themes in everything we do that communicate the significance of superior product quality. When speaking with consumers, the answer is always the same – the reason they like us, the reason they choose us, is the quality of our product. And ‘quality’ is a kind of term you can’t really define – it’s user-defined, so to speak. But we know what tastes good, our customers know what tastes good to them, and we try to deliver, consistently, every single time.”

Q What is the strategy for expanding the company’s market share?

Bob Renaut: “Our growth strategies include diversifying our product offerings to our existing customers, geographic expansion and increased penetration within our existing markets.”

Mark Vance: “I think the most important growth strategy we have is helping people understand how we do business. We have a different marketing plan for each of our channels. What works for a dairy store, for example, is different from what works for home delivery. Therefore, what we are trying to do in terms of our product assortment, pricing strategy and promotional activities in all of our business channels is help customers understand how Oberweis products fit into the choices they make for themselves and their families.

“One of our other strategies is emphasizing what’s not in our products, like artificial growth hormones or antibiotics. We are really focused on helping consumers understand the inherent qualities of our product.”

Q What challenges does the industry face and how is Oberweis Dairy responding to these challenges?

Bob Renaut: “I think one of the biggest challenges in the dairy industry is competing against the Pepsis and Coca Colas of the world and impressing upon children and teenagers that it’s cool to drink milk. Obviously, those marketing giants have a head start on successfully convincing the public that their drinks are wholesome and fun to drink. As an industry, we still have a long way to go – but the tide is turning.

“The fact that soda giants are introducing milk-based beverages, on some level, legitimizes the single-serve fluid market. Sure it’s competition, sure we are at a disadvantage in terms of marketing dollars, but we have responded to this challenge by concentrating on producing a great-tasting, fresh product. What we do have, from an advantage standpoint, is an understanding of what it takes to make a premium product. Side by side, our products taste better, and that’s how we remain competitive.

“On the ice cream side, one of the challenges we face is managing the growing number of SKUs produced. As customers want more choices and different flavors available all the time, it becomes more and more difficult to meet that demand. Coming up with new flavors that keep the category fresh and excite the customer is an ongoing challenge for every ice cream producer.

“Regarding the recent attack on ice cream and the issues concerning the current obesity crisis in this country: A dessert is a treat; you have a choice. Some people eat an apple for dessert. Some people eat a handful of grapes. Some choose ice cream. The intelligent public knows the difference.”

Mark Vance: “But at the same time, consumers are telling us to give them more choices. We respond to our customers by offering low-fat alternatives to higher-fat ice creams. We even have frozen yogurt. And as producers in the industry, we must offer more options to consumers.”

Q Where do you expect the company to be in five years?

Bob Renaut: “Five years down the road, we expect to continue to be growing 15 to 25 percent annually. We anticipate being well on our way to becoming a national company with stores located throughout more states. We are currently putting in 10 to 12 new stores a year, and we see that number increasing as we grow. We also see ourselves manufacturing more of our own products, diversifying our product mix – bringing yogurt and cottage cheese in-house, for example.

“We are going to be breaking ground here soon on a 6,000-square-foot new freezer that we absolutely need to support our growth from an ice cream standpoint. It will also allow us the space to double our capacity for milk production. We continue to see development and opportunity in this particular market segment, and we are investing heavily for a company our size to support that growth.”

Mark Vance: “From a marketing and sales perspective, I would like us to be a company that has national awareness. I want people everywhere to understand the Oberweis message – quality, consistency, excellent service and freshness of product.

“I want to be able to say that we have reached our potential in the markets in which we are currently operating. We have a lot of density we have yet to tap into. But in five years, I expect us to be poised to flip the national switch.”

Dairy Field asks Bob Renaut, president and chief executive officer, and Mark Vance, director of marketing, key questions concerning the business of Oberweis Dairy.

Copyright Stagnito Publishing Sep 2003

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