Piloting sensory into success
Centennial research underscores customer-centric beginnings that continue to pervade corporate culture.
An extraordinary thing happened on the way to organizing Bell Flavors & Fragrances’ (BF&F) centennial celebration. During the one-and-a-half years devoted to researching, filming and planning an anniversary program book, a short historical video and a full-blown, no-holds barred dinner banquet, Jim Heinz, co-president and ceo of the Northbrook, Ill.-based company, discovered founder William Bell’s extraordinary Pilot.
Upon hearing of the search for all things related to BF&F’s history, Laura Christian, one of the company’s national accounts managers, presented Heinz with a copy of The Pilot, Candy, Ice Cream and Soda Fountain Formulations, authored by Bell himself.
Published in 1920, the handy — and at times whimsical — guide provided customers with a broad range of recipes using, of course, the company’s extensive line of flavors. Call it the ultimate customer friendly app before apps existed.
As Heinz explains, “Bell, because of his experience at Kraft Foods, knew how to make finished products. He used that knowledge to help his customers by providing them with a compilation of helpful formulations using Bell’s flavors.”
Since then, the company has undergone several changes, beginning with Edward Heinz’ acquisition in November 1968 and its subsequent growth to a multimillion player in the flavors and fragrances segment.
One thing hasn’t changed, however — the company’s dedication to customer service.
“Celebrating our centennial was a way to let our customers know that if it weren’t for them, we wouldn’t have been able to reach that 100-year mark,” Heinz says.
To effectively compete against the likes of international flavor and fragrance companies whose sales range between $800 million and $5 billion, BF&F focuses on its customers, he adds.
“We do that through innovative products and an entrepreneurial spirit,” Heinz continues. “When companies become large, it’s very difficult for them to get away from their standard operating procedures in order to service their customers in an expedited manner. I emphasize an entrepreneurial culture so that our managers can react to and perform for our customers. Our managers are empowered so that customers don’t have to go through five different levels of organization to get something they need quickly.”
That kind of responsiveness dovetails with a corresponding long-term philosophy, one that embraces experience, perseverance and investment.
For example, the average tenure amongst BF&F’s employees is 16 years. Heinz, together with his brother and co-president Raymond, have more than 80 years’ experience amongst themselves alone.
“Having been in the industry that long, I’ve had the good fortune to meet really experienced and knowledgeable people,” he explains. Naturally, those are the kinds of relationships that have helped Heinz corral some of the best and brightest to work at BF&F.
Simultaneously, the company has consistently invested in research and development, allocating between 15-20% of its revenues to ensure the company maintains “a leading edge.”
“You have to be developing new technologies to be competitive; you have to be in that realm,” Heinz asserts.
Much of that research is driven by what consumer packaged goods companies are looking for, he adds.
“We go to our customers to find out what they’re interested in developing,” Heinz says. “Sometimes those new product concepts are for items eight to 10 years out, which gives our R&D team time to work on them.”
BF&F’s commitment to its customers and leading edge research can be seen in the company’s recent investments. For example, last year, it acquired an 85,000-sq.-ft. warehouse building that adjoins its existing Northbrook headquarters. The addition doubled the company’s physical size in Northbrook.
This year, the company began construction of laboratories in the new space, a sure sign of confidence in future growth. In addition, BF&F will expand its R&D operation in Mexico, building new laboratories there. Total investment in the two projects: $6.5 million.
The company just recently set up operations in India and is looking at a potential acquisition in Brazil “by the end of the year to enhance our position there,” says Heinz.
It’s clear that Heinz remains bullish about the company’s future. He points out that thanks to diversification — the company serves six distinct segments: confectionery, bakery, savory, dairy, beverage and tobacco — BF&F isn’t weighed down by cyclic up and downs of any one category.
“Each division accounts for more than 10% of sales and all are expected to grow during the next several years,” Heinz says. He, however, singles out the confectionery, savory and beverage segments as being “the most promising.”
“We see the confectionery industry as being a shining star in the future growth of our business,” Heinz says. Noting its relative resistance to economic downturns thanks to affordability and continued appeal, the ceo believes the sweets sector can be a catalyst for future double-digit growth.
Nonetheless, Heinz’s positive perspective remains tempered by global economic realities. He recognizes that growth depends on maintaining a recovery, one that’s lagging in the United States, even more so in Europe.
Having experienced the good times and bad times — he recalls the impact the Iranian revolution in the late 1970s had on the United States, which generated long lines at gasoline stations and produced limitations on petrochemcials, a critical component in manufacturing flavors — Heinz understands and values the importance of seasoned stewardship, one that’s customer-centric.
“We had to carry petrochemical inventories up to six months in order to ensure adequate supply for our customers,” he explains. Back then, when interest rates were high and petrochemical costs even higher, it was tough sledding.
“But you learn from such experiences,” Heinz says. Such experiences also establish a reputation for reliability and constancy, a trait the ceo believes will serve BF&F well into the next centennial.
Although Heinz doesn’t foresee himself at the next centennial bash, he’s comfortable predicting another decade of working with customers in developing new products and flavor sensations.
As with Bell’s treatise, The Pilot, he’ll do his best to ensure a smooth flight.