November 5, 2013

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California Dreaming

Winder Dairy Adds Three Million People to its Customer Base

By Melanie Johnson

November 5, 2013

Fresh food without borders. That’s a concept Winder Farms has tackled with great success.

The company has specialized in delivering fresh food to doorsteps for more than 120 years, and it expanded beyond Utah in 2008 when it entered the Las Vegas market. The success of this venture laid the groundwork for expansion into additional markets—including the “massive” Southern California market, which it entered earlier this summer.

West Valley-based Winder Farms now delivers farm-fresh food directly to customers’ doorsteps in Orange County, Calif.

 “The food industry is a $1 trillion per year industry in the U.S., and two-thirds of that is food that people buy for their homes,” says Mike Dutton, Winder Farms CEO. While expansion brings challenges, it also presents the potential of enormous, untapped markets.

 And growth offers its own rewards. “There are benefits to getting to scale,” Dutton says. “When we’re just in Utah, we have to spread our fixed cost over a smaller customer base. As we can get into Las Vegas and Southern California, and all throughout the West, our business model becomes better with scale.”

Entering a new market is never easy, and Winder Farms has some key advice for companies looking to find success in new locales.
Research the Market

Deciding to expand was only the first step in a long process. Next, Winder Farms had to find the right market where target demographics would support fresh food home deliveries. Company leaders drew an 11-hour map around the radius of Salt Lake City. The Department of Transportation allows 11 driving hours per day, and the company wanted same-day deliveries of their products.

Through this research, Winder Farms pinpointed Orange County as an ideal entry point into California. Orange County boasts a population of three million people, so the potential for growth was there.

“We were looking for those who value fresh food and are willing to pay a premium for it,” Dutton says. “In Southern California, you have a high propensity of all-natural grocery stores—there’s a density of population.”

Winder Farms sent a sales team into Orange County to scout the area. They talked with prospective customers and gauged their interest in fresh food deliveries. Feedback proved positive. Orange County seemed ripe with customers who craved fresh meat, produce, dairy products and bakery products arriving at their doorsteps each week.

One unexpected wrinkle emerged. The team quickly learned that to thrive in Orange County, the company’s product line needed a greater emphasis on delivering local organic products.
Bring the A-Team

For expansion into Southern California, Winder Farms turned to employees who knew the inner workings of the company well. “For the success of the business, we felt it was very important to take our very best players in the functional areas and deploy them in this market,” says Scott Tanner, president and CFO of Winder Dairy.

Winder Farms called on a graduate of its management training program, who oversaw operations in St. George, to head up operations in Orange County.

Hire the Workforce

Finding capable employees was the next phase in expansion. Winder Farms wanted to find people who could flourish in multiple roles instead of one—using the Olympic decathlete model for inspiration.

“Hire a decathlete as opposed to a sprinter because a sprinter is going to be really fast at running that 100-meter dash, but you never know if you’re going to have to jump the high jump or throw the javelin or do the pole vault,” Tanner says. “Those kinds of athletes are able to help you regardless of the challenge that comes up.”

Winder Farms built a base of experienced employees by acquiring an existing Orange County business. This also gave the company a built-in customer base on which they could grow instead of building completely from scratch.

From there, Winder Farms hired a full-time recruiter to fill other necessary positions in Orange County. This included hiring a sales team to partner with existing salespeople from Utah.

Consider Local Laws

Winder Farms covered all the bases on the legal side of the expansion. The company retained a labor attorney who worked to ensure it complied with California labor laws and regulations.
Find the Right Vendors

Winder Farms made a point to visit each potential vendor site, taste the products, ask questions and observe vendor operations. It relied on a few guidelines to choose whom it would partner with in Orange County:

Quality – What are the vendor’s quality standards, including freshness and cleanliness?

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