September 25, 2008
By Michael Carmichael
Ten years ago Corp! wrote about Lou Schmidt Jr. and others at The HoneyBaked Ham Company. We decided it was time to see how things have changed.
“The one thing that hasn’t changed,” says Lou Schmidt Jr., now president of the company, “is the HoneyBaked Ham itself. It’s still our most popular product.”
On a visit to a local company-owned store, however, you can see turkey and other meats, alongside a wide variety of side dishes and deserts. A number of food products from other high-end manufacturers compete with the ham for attention.
More than 50 years have passed since Harry J. Hoenselaar began a tradition when he opened his first The HoneyBaked Ham Company store in Michigan. Originally, all HoneyBaked Ham retail stores were company owned. A few years ago as the company expanded and acquired two of its largest competitors - which had franchised stores already in place. Now HoneyBaked Ham has more than 400 stores across the country with a mix of company and franchise operations. “It took a while to sort things out and realign situations where our corporate retail stores and theirs were perhaps too close for the market,” explains Schmidt. “They’re almost all ‘reflagged’ now as HoneyBaked Ham Co. and Cafes.”
The ‘CafÃÂ©’ identity is growing in importance because HoneyBaked depends heavily on its lunchtime customers. David Babich, manager of the Ferndale, Mich. store, says that lunchtime catering is an important part of his customer mix. “We have a lot of offices downtown that we deliver to, since we’re right here on Woodward. We also have a good business with factory workers ordering when they’re on a rush project and can’t get out.”
Perhaps one reason so much emphasis at the store level is on lunch is because as a rule almost all HoneyBaked stores are open from 10 in the morning until 6 in the evening and never on Sunday. In part that’s because it allows the local managers to be on duty to provide a very personal touch to their stores. In part, Schmidt explains, “it’s because we’ve trained our customers that we’re a family company and they appreciate that.” Babich, in fact, is an example of the HoneyBaked ‘family’, having met his wife when she was a manager at another HoneyBaked store.
The idea of family-friendly extends to the rest of the staff as well. “I have people who work for me who’ve been with the company for more than 20 years. It’s great because we have a lot of repeat customers who come in for lunch on a regular basis. We have a lot of repeat customers as well who come in for holidays,” says Babich.
That commitment to customers extends to the corporate level as well. “Years ago families gathered at grandma’s for Sunday dinner a couple of times a month, sometimes every Sunday. That’s really changed today and we’ve adjusted to that by making smaller sizes such as a quarter-ham or a boneless ham that’s more appropriate for smaller gatherings. We’ve adjusted the sizes of our side dish offerings as well,” says Schmidt. “In short, our customers asked for more choices and we’re providing them.”
Schmidt continues: “We’ve always been there for people celebrating a special occasion or a holiday but now people are learning we can be there for them if all they want is a sandwich for lunch or a complete weeknight family dinner.”
Dinner is increasing as a percentage of sales, even in an economy where downsizing is rampant. “We call it the ‘step-down effect,’” says Schmidt. “People who used to think nothing of eating out a high-end restaurant a couple of times a week can now be found at Applebee’s. The mid-level chains are losing a lot of their regular customers to us.” The reason is that HoneyBaked is now offering complete dinners that require little effort on the part of the often time-constrained mom or dad in charge of feeding the family for the evening. “We’re a one-stop shop,” says Schmidt. “They get a main dish, our famous side dishes and dessert if they want, without having to go anywhere else. It represents a healthy balance between cost and convenience.”
Convenience is the driving factor behind another HoneyBaked innovation, the in-store kiosk.
“We partnered with Kroger to place stand-alone kiosks in some of their stores in the period leading up to Thanksgiving and Christmas that feature a variety of sizes of HoneyBaked Ham, turkey and other entrees. This has been very successful for us,” explains Schmidt. “We’re also experimenting with a more complete tasting experience by having a HoneyBaked representative at the store as well. We provide complete refrigerated storage and preparation equipment and the representatives are able to offer customers tastes of our side dishes as well as our main products. The interaction and the ability to offer cooking and recipe suggestions has been even more successful.”
Another success for the company, is in corporate and catalog sales. “We have a separate company-owned division in Toledo that handles our non-store orders,” says Schmidt. “We typically do 20 to25 percent of our sales in the fourth quarter with corporate customers. We have corporate clients who’ve come to us for years and we don’t expect that to change - except perhaps a small reduction in the size of their order. We’re pretty much a tradition.”
The Internet, of course, is having an impact on sales. “Because we’re perceived as a premium brand, we have partnered with other premium brands on our Web site - certified Angus beef, a variety of pork and other meats and a dessert selection to die for including Godiva chocolates and Mrs. Field’s cookies.,” says Schmidt. “Our customers have responded very well to the variety we offer - in addition, of course, to our HoneyBaked Ham.”
“Corporate holiday orders are kind of a bonding time for local managers,” Ferndale’s Babish explains. “A bunch of us will work at one store and prepare as many as a thousand hams a day for shipment to corporate customers. You really get to know the people you’re working with - it’s that family thing again.”
Lou Schmidt Jr. is asked how HoneyBaked Ham will have changed when Corp! returns for an article in another 10 years. “I think you’ll see HoneyBaked Ham in more places - whether it’s in retail outlets or company or franchise stores. There’ll probably be even more sizes to accommodate the changing demographics in the next decade. We know many of our early customers will be growing older - and hopefully not losing their taste for HoneyBaked - but we intend to introduce ourselves to a lot of new customers as well.”
What other changes do you foresee, he’s asked. “Our web presence will continue to evolve and become more user friendly - whether those users are individual consumers or corporate customers.,” Schmidt continues. “There’s a lot of technology evolving even now that can enhance the ‘user experience’ especially when it comes to ordering food. We’ll be there for our online customers as well as our retail ones.”
“Whatever happens, we’ll continue to be true to our roots - the philosophy and quality that have gotten us where we are today,” he concludes.