Earlier this year SEFA, a foodservice equipment and supplies buying group, celebrated its 25th anniversary. And since its inception, SEFA has evolved considerably with its members. FE&S caught up with Tedde and Jim Reid, founders of the group, to get their perspective on the foodservice industry, dealer-based distribution, training and more.
FE&S: What made you think there was opportunity for a new buying group in the industry?
TR: Back in 1986, broadline distributors were rapidly approaching equipment and supplies. I felt that we could do something to help them. The initial goal was to assist broadline distributors to get into the market profitably, if that was their goal.
JR: That's what attracted Restaurant Depot, Maines Paper and a bunch of other broadline distributors to the group. But within the first year, there were two traditional E&S dealers as a part of the group: Curtis and Tassone. They really took us under their wing to help teach us this market.TR: From then on, we changed our strategy to focus on traditional dealers.
JR: In the late 1980s and early 1990s, there were a bunch of dealers where the next generation was taking over and even a few new ones entering the market. So these companies had young management teams that were really growth oriented. They wanted to come together to form a group and had some different ideas and values than the leadership at many of the established dealers. And even today our number one criteria when looking at adding a new dealer is their emphasis on growth. You would think that would be everyone's priority but it's not the case today.
FE&S: Over the years, SEFA has developed a reputation for having the industry's best and most intensive dealer sales training programs. Why is this so important?
TR: We felt there was a real lack of commitment to training in our industry. We started with regional training meetings back in 1989. We brought in suppliers and would give them enough time to demonstrate their products and train our DSRs to sell them. We brought in people from the factories to help establish credibility for our program. Our offerings evolved from regional meetings to national ones. And we've since added several other forms of education including SEFA Academy, ServSafe Training and our exclusive Dock to Dining program, which focuses on food safety.
JR: We've had a strategy around organic growth. You can add members and suppliers to drive growth, but we measure ourselves on organic growth, meaning what did our same set of dealers and suppliers do on a year over year basis. One of the key factors in driving organic growth is creating loyalty, and one way to do that is by adding value. So all of our training programs are structured to create loyalty, particularly between the DSRs and the factory partners. We feel the DSRs play a big role in what products ultimately get sold. Sure, they will sell other products if the customer insists but we are all creatures of comfort, and the more a DSR knows about a product line, the more comfortable he/she is with selling it. There are a lot of factories that offer great products, so that's where relationships become so critical.
FE&S: OK, but some people would argue that they can handle training in house and the DSRs' time is better spent in front of customers. How do you respond to those comments?
JR: It is always a trade off when you take people out of the field. But the question is, does training actually create higher sales? And among the people who track those results, the answer is always yes. We have a lot of people new to the industry going through our training and we have a lot of people who have been in the industry 25 to 30 years. DSRs have a broad line of products to sell. So how do you ask them to stay up to date on all of them? How do they keep track of what's new? And how do you sell the new features to help benefit your operator customers? It does not matter how long you have been in the industry, you have to educate your people on how to sell them.
TR: Bottom line, principals at the dealerships see a return in the results from their DSRs. Some dealers have to be convinced every meeting. But the return is in their DSR's knowledge base and confidence level. That really tells the tale.
FE&S: What does the future hold for dealer-based distribution?
TR: We think dealer-based distribution is as strong as the dealer wants it to be. If you have a good management team, trained sales people and the like, you can have a long lifespan.
JR: The manufacturers have said they see value in dealer-based distribution. Certainly, it is not a perfect distribution channel and people jump over dealers from time to time, but there is a future in it. The people who bring a high degree of professionalism to the table are the ones that will be successful. There used to be enough business where you could run your company through your connections. But today, all the geographic boundaries are down. So it now comes down to the value the dealer brings in the services they offer the operator, whether that is delivery, design or something else. All types of dealers — from traditional dealers to cash and carry to internet dealers — can be successful moving forward, but they will each need to bring their "A" game — all the time.
FE&S: Outside of SEFA and the foodservice industry, you both are known for your many charitable endeavors that range from helping people in Africa to children in Chicago's inner city. Why be as active as you are?
TR: There is a village of 21,000 people in Zambia that we have been involved with for 11 years now. We started feeding programs to help combat malnutrition that provided one hot meal a day for pre-school aged children in African villages. And our efforts and the education grew from there. You have to start with someone that is under five years old to affect lifetime health. Eventually, we were able to provide seeds, livestock, etc. and now the village has reached a point of sustainability where they can feed themselves. Now we are working on similar projects in Central America. People really want to take care of their own.
JR: And that's really what we want to work toward: creating sustainability. People around the world don't want handouts. They want a hand in helping to create some sustainability for themselves.
TR: There is something about the magic of the people of Africa where your heart goes to them. They have such a love of life that once you are there you can't stay away.
FE&S: How has your involvement evolved over time?
JR: Part of what we have been able to do is leverage our experiences while we are there. We have been able to take more than 100 people to Africa during the past 11 years. Some have gotten involved in projects we have worked on and others have found their own projects. This creates a huge leverage factor. For example, we helped build a hospital there six years ago. In doing so, we worked with a group of high school students in Chicago to raise $300,000 toward this effort. Many SEFA dealers and suppliers supported this project, some financially and others by going with us to Africa.FE&S: And what about your efforts closer to home?
JR: We're also involved in a number of programs in Chicago's East Garfield Park neighborhood. This program includes both women's and men's homeless shelters and lots of kids' programs. One effort is a running program that allows kids from East Garfield Park to earn a trip to Africa where they will run with children from there. These kids are from the inner city but if they wanted to go on the trip they had to tell their story, raise their own funds, and get people to sponsor children in Africa. So now you have children from the inner city of Chicago helping sponsor children in sponsor camps in Africa.
TR: We've been truly blessed by those we've worked with around the world. And, we've been honored by the amazing support we enjoy with SEFA Members and Suppliers.