Ruling the Roost

In February, she hired Jerry Kaminski to be president and COO of Sparboe Companies, luring him away from a 25-year career at General Mills, where he was most recently general manager of the “bakery-channels” business that sells mixes and dough products. He and Schnell met through a networking contact. “We clicked instantly,” Kaminski says. He wanted to be president of a still-entrepreneurial organization; Schnell wanted to bring in an outsider with big-company expertise. “It’s a pretty good combination,” he adds.

Schnell made another big change when she set up a new marketing department for Sparboe Companies distinct from its sales group. Alan Andrews, the new vice president of marketing, came to Sparboe in June from Illinois-based Pactiv, where he was director of marketing for egg packaging. Schnell calls him “one of the best, most well-informed individuals in the egg category in the U.S. today. We want him to work with us on category management, so we can help our customers use eggs to drive business in the dairy case.”

“Category management” means recommending the right types—and mix—of egg products to retailer-customers so they have what their customers want, and making sure the packaging, pricing, advertising, and promotions are right for a particular market.

For example, according to market-data supplier A. C. Nielsen, Denver shows a “very high index for specialty eggs—50 percent over the U.S. average,” Schnell says. “So obviously in that market, we really focus on those specialty eggs with our customers to make sure they have plenty of space on the shelf, and that we’ve got a full array of products available for the consumer so they’re not shopping at the competitor.” In Des Moines, Sparboe would recommend that a retailer’s display include eggs in 18-count cartons, which tend to sell well there. In Milwaukee, shoppers show a preference for jumbo eggs.

Kaminski says, “Space is at such a premium, and the industry is flat. It’s very hard for the retailer to be an expert on all of their categories, and that’s where we come in—as not only a full-line supplier, but really an astute strategic marketer of eggs.”

“It’s just the kind of block-and-tackle marketing that a lot of branded companies have done for years, very well,” Schnell observes. “But the egg category is not highly branded, so our goal is to try to bring those additional values to our customer relationships that will ultimately increase their sales and profits with our eggs.”

Lou Raffel, president and CEO of the American Egg Board, believes Schnell’s strategy is on target: “One of Beth’s great strengths is that she’s marketing oriented—and not many egg producers are. Most of them are production oriented. One of the egg industry’s problems is that it hasn’t had the kind of marketing expertise to recognize the importance of value add, which would have been a help to them.”

Sunny Side Up

At the egg-grading plant, everyone wears a hairnet—even the CEO. The grading machine is worth millions of dollars, and errant hairs are unwelcome. Schnell points out the place where she used to stand to pack eggs.

“Yes, I stood. You had to stand, because you had to keep moving. Today, the guys sit, and the eggs come to them on a conveyor belt. In the early ’70s, this was a very state-of-the-art facility, and the eggs were gathered electronically. But you still had to load the trays into boxes, and the boxes into the cooler, and then into the trucks. I had to pick up the tray, turn, set it down, move the box over, fill the box, move the box over, get a piece of tape, manually tape the box, walk over here, and set it down on a pallet. And I would do it over and over again, all day long, 200 cases a day. But I had the radio blaring—KDWB. And I was really strong when I was 16!”

There’s not a chicken in sight here. They’re busy laying eggs in nearby barns. Few people are allowed to enter those buildings for a variety of bird-health, food-safety, and other reasons, and Schnell asks that their specific locations not be mentioned in this story. Sparboe’s chickens are treated humanely, she says, but she worries about animal-rights activists finding the barns. Another Minnesota egg producer, Minnetonka-based Michael Foods, Inc., lost its Ben & Jerry’s account this summer when the Humane Society of the United States publicized video footage from a Michael Foods barn in Nebraska. Public outcry over the chickens’ living conditions prompted Ben & Jerry’s decision.