Scale & Scope As it has built its sales over the past four-plus decades, Bargreen-Ellingson. has paired organic growth with an aggressive strategy of geographic expansion.
Now employing a total staff of 250 and stocking some 7,000 SKUs (as well as 500 additional proprietary items for long-term customers), Bargreen-Ellingson is on pace to record sales of approximately $77 million in 2004. "Overall, the E&S market in the Northwest is flat, with most multi-unit operators slowing the growth of their concepts, though we do have one Oregon-based chain that's expanding rapidly and with which we do about $4 million a year," company V.P. Rick Ellingson commented.
To provide the maximum penetration of its multiple geographic markets, Bargreen-Ellingson has fully 115 staff dedicated to outside and contract sales, as well as sales support. "We serve 9,000 active customers, ranging from a guy who buys a corkscrew from us once a month to our much more active contract accounts," Ellingson noted. "To cover so much business, we've made a huge investment in our street-sales staff. We have 55 outside salespeople who make 15 to 20 calls apiece every Monday through Thursday or about 3,300 a week. We've equipped all of these employees with laptops and we're working now to get their data into our systems in real time."
This dealer also tries to support its high-volume operations with maximum efficiencies in its central distribution center. Here, Ellingson related, two separate crews work in tandem, with one dedicated to receiving and restocking and the other responsible for picking and packing outgoing orders. This arrangement now allows Bargreen-Ellingson to create and ship approximately 600 orders every day.
High efficiency, however, does not require a highly centralized business structure, according to Ellingson. "Our branch G.M.s function as independent sales managers who pride themselves on running lean organizations. We support them from headquarters with a few key functions, including delivery, purchasing and order-checking, but we want them to stay focused on taking care of their customers, because that's why this business is here in the first place."
Helping company President Paul Ellingson and Rick Ellingson lead the firm's ongoing growth is Tim Irey, director of Sales. Irey came to this dealer eight years ago after beginning his career in retail chain management, and started out manning the front desk in the Tacoma showroom. This was followed by four years in street sales out of the firm's Seattle office before Irey was first promoted to sales manager and then to the Portland, Ore., branch manager. In his current position, Irey travels to all company locations to work with local sales staffs and customers, and meets with the Ellingsons on a weekly basis. "Our top objective for '05," Irey stated, "is to find, train and retain more qualified staff to help us continue our growth."
Histories & Founders
The origins of Bargreen-Ellingson were formed in the aspirations and work ethic of one-time DSR Byron Ellingson who joined an equipment distribution firm run by Howard Bargreen in 1959 and became co-founder of their joint firm in 1960. In its earliest days, Bargreen-Ellingson was a regional broadliner that sold foods and supplies, as well as E&S, to grocery stores and beer and wine outlets. The company was then based in Everett (suburban Seattle), Wash., and had a small branch in Tacoma, which Byron Ellingson was able to run almost single-handedly. This was because "he was willing to work incredibly hard, every day, for 15 hours a day," remarked Rick Ellingson, the dealer's V.P. and secretary/treasurer and one of two second-generation Ellingson sons to hold current positions in the dealership.
"Dad used to start work at 5 a.m. and call on accounts as an outside salesperson," Rick Ellingson recalled. "At lunch, he'd spell the inside staff so they could take a break, then he'd go out and make more calls and finish up with paperwork till about 8 p.m."
Adhering to a credo that called for him to make one customer happy at a time and never to be outworked, Byron Ellingson, his partner and associates had built Bargreen-Ellingson to $1.2 million in annual E&S sales by 1976. It was then that Rick Ellingson came to work at the firm, joining older brother Paul (now company president) who had started in outside sales in 1972. (A third brother, Bruce, also worked for a time as a salesperson, but subsequently left the dealership.) Rick Ellingson's early career exemplified the sorts of dues all three brothers were expected to pay, as he started in the Tacoma warehouse where he put in the company's first inventory-controlling IT system, worked the front counter in the branch's showroom and served a stint in contract sales before moving on to management duties.
As the skills of its dozen-or-so mid-1970s employees grew, Bargreen-Ellingson was able to expand, opening its first new location in Yakima, Wash., in 1979. "Because my dad, Paul and I all led from a position of strength in sales, we had to learn how to operate a branch and that you can't buy market share," Rick Ellingson noted. "Given how we've grown, to a current total of 10 U.S. branches and one in Canada spread over four time zones, mastering the fundamentals of how to manage the economics of a remote location was essential to our success."
The learning process continued for Bargreen-Ellingson's leaders in 1984, when the dealer opened its Spokane, Wash., branch. "By then, we were doing almost $4 million in annual sales and had about 30 employees, so we had resources like computers and training tools to help staff at this branch provide the best possible customer service," Ellingson advised.
Though Paul and Rick Ellingson had been involved in management decisions almost since they joined the company, the torch was officially passed when Byron Ellingson effectively left the firm in 1987. The next hallmark for this dealer occurred in 1997, when the Ellingsons took complete control of the company, including the former flagship Seattle location. "We immediately doubled our volume and payroll, but the Seattle store was bleeding cash at an incredible rate and we had to get control of that situation right away," Ellingson commented. He added that steps such as installing new internal systems that improved efficiency, tightening the internal organization and making appropriate new hires for the Seattle location "all helped us to raise our performance to a higher level and serve customers better."
Quickly improving corporate performance helped Bargreen-Ellingson overcome its next historic challenge — a triple threat to its market and customers that only culminated on 9–11. In 2000, Boeing relocated its headquarters from Seattle to Chicago, sucking much energy out of the regional economy, while the dot.com collapse of that year wiped out more high-tech jobs in the Pacific Northwest than in Silicon Valley. Bargreen-Ellingson rebounded, however, earning some $70 million in 2003, up nearly 33% vs. 2001.
A long-time participant in the industry, Bargreen-Ellingson has been a member of the ABC and IFED buying groups since 1985. Paul Ellingson served as FEDA president from 1992 to 1994, while Rick will conclude his term as president of the dealer association in March 2005.
Problems & Solutions
Bargreen-Ellingson is now servicing a number of new accounts it has recently taken over from a variety of other E&S distribution companies. At one such customer, a chain of Safeway supermarkets, a problem with a heavily supported prepared food-products rollout gave this dealer the opportunity to provide a money-making solution.
"When we became involved, Safeway was already on its second attempt to launch its rollout," Rick Ellingson, the dealer's V.P. and secretary/treasurer recounted. "The chain had been trying to introduce a high-end, hot soups to-go program and had even gone to a local specialty food house to commission an excellent line of products. However, their stores still needed a piece of equipment lightly trained staff could use to heat and present the soups in the front of the house. We only had four months to provide the chain with enough working examples of the equipment to meet its needs," he continued, "so we got together with one of our factories and the soup maker and came up with a very simple, custom thermalizing unit."
Ellingson further noted that this heating-and-presentation unit is controlled only by a single "on" button and has but two colored displays: "a red light that means 'Don't serve yet' and a green light that says 'Soup's on,'" he explained. "The unit was also designed to turn itself on when it's full, shut itself down at night and to be used safely by either store staff or customers. We felt that these sorts of features made it perfectly suited for use in a supermarket environment."
When the custom equipment was installed in Safeway markets, staff were able to load refrigerated soups into the thermalizer in sealed, 1.5-gallon bags. Supermarket employees do not have to wonder about time-temperature heating relationships, as the equipment was also designed with a built-in sensor that registers how many bags have been loaded and presets a warming cycle that brings the contents to 190 °F. in a safe time period. Safeway servers now only have to cut open the bags to serve hot soup or allow customers to serve themselves.
"We sold 500 of these units to the supermarket chain during the first quarter we were involved in their program," Ellingson noted. "Now, Safeway is selling a huge amount of high-quality soup. I think this has been a classic case of a manufacturer supporting a dealer, allowing us to help our customer so they can go out and make more money."
In keeping with other efforts to put fulfillment and logistics management on the most cost-effective footings for Bargreen-Ellingson and its customers, Ellingson pointed out that items sold to support the use of primary cooking, holding and serving equipment are now being combined into individual kits. These are stocked as single SKUs, and packed and shipped in dedicated boxes.
"Broadliners today can't do multi-piece kits as accurately and consistently as we can," he asserted. "We've just taken over $1 million-worth of kit business for a regional restaurant company and some of its franchisees because, unlike the broadliners, we have the systems to fill all orders correctly throughout this customer's territory. I think we're seeing growing opportunities to resolve further problems for broadliners' former customers by continuing to demonstrate the value added by the dealer-based model of distribution."
