On the East side of Detroit, in a traditionally German and Polish neighborhood, Bernie Polen oversees the operations of Alexander & Hornung, the sausage company started by his Great-Uncle, Willie Alexander, began over 50 years ago.
Bernie is now the third generation to operate the company. His father, Merle, has retired from active participation but remains on the board. Bernie recently made his plant manager, Tom Eckert, a partner in the company. Tom, who also comes from a meat industry family, will manage the day-to-day operation of the plant, freeing up Bernie to devote more time to the administrative operations of the company. Under Bernie´s auspices, Alexander & Hornung has grown tremendously—not only in acquiring other small specialty food manufacturers, but by creating a website for the company.
"I came into the business from the retail side nearly 30 years ago. I had worked on and off at the Dearborn [retail] store for most of my life, and eventually took it over. I would have questions, and I would ask Dad, and his response was `You´re running the place, you figure it out. I´ll guide you.´"
"I had the great advantage of working for someone who didn´t want to manage for me. He would give input, but he didn´t want to be a part of the decision making."
And in learning to make management decisions, he has learned that he can incorporate new technology without letting go of the traditional methods that set Alexander & Hornung´s products apart from their processed competitors.
"We´re taking great advantage of the science of this industry which, for many, many years, was run as an art. When I came in, my dad´s partner said `if you´re going to work here, you´re going to start back in the kitchen and work from the ground up. You´re going to get your arms dirty, and you´re going to make sausage.´"
"Once I´m back there, I ask the sausage maker `Why do you do this?´ and his response was `I don´t know. This is the way we´ve always done it.´ `Well, how long do you chop the meat?´ `You chop it until it feels right.´"
"Now, technology tells us there´s a reason for all these things, and we´ve added that to the equation. It allows us to continue to replicate the process, which is the most important thing, but the second most important thing, in my mind, is that the consumer today doesn´t take into consideration the uniqueness of a product like ours. They feel that, if they bought the product last week, and they bought the product this week, and they´re going to buy it again next week, it had better be exactly the same. Otherwise, we´re ruined."
"But if you go back 100 years and your grandmother went to the butcher shop every day to get a steak or a roast or ground beef, you knew that you were dealing with an animal, and you were dealing with the butcher personally, and every week the meat was going to be a little different. Today, people don´t want different. We don´t think of different as being a good thing."
But "different" is a crucial value to a company like Alexander & Hornung, where individual sausage links and casings are still shaped by hand, despite the availability of high-tech equipment that can do the job more quickly. "Different," to Bernie, means tempering technology with tradition.
Frequently in family businesses, friction arises when the younger generation wants to implement new technologies. The senior generation often wants to hold back on innovations like a website: After all, the business has always done well without it, so why take a risk with something new and unfamiliar? Bernie knows this scenario well.
"We had a conversation like that years ago with my father´s partner when I first wanted to buy a fax machine. He refused. I ended up buying it with my own money. He´d come in everyday, point to the fax and say `Does this thing work? Why do you have it? We don´t need it.´ Of course, it´s pretty tough to do business without a fax machine today!"
Despite the concerns from the senior generation, Bernie pushed ahead to create a website. He likened his decision to the old adage "It´s better to ask forgiveness than permission." The face of their business was changing, and he felt that an Internet presence would help provide his new clients with instant information on the company, even if it wasn´t a step that seemed logical or necessary to his older counterparts.
"We´ve become much more significant in the food service arena. Instead of supplying delis and restaurants, which we had done for 30 years, we went on to service companies like Sysco and U.S. Foods and now Gordon Foods. I felt that it was advantageous to provide their sales staff and their customer base with a site that would give them some information. It was more of an institutional site than a retail site. I wanted to make it easier for them to sell my product."
"When I make a contact, I can send them to the website so they can get a good overall view. Occasionally we get people, retailers or individuals, who just happen to come to the site. We get a few orders from them, although there´s no profit there because the site isn´t designed for that."
Despite the giant strides technological strides made by Alexander & Hornung, keeping a small meat company in business is still a huge battle. Unfortunately, it´s a battle Bernie fears will, for many companies like his, be lost.
Recently, the meat industry implemented a program called HACCP (Hazard Analysis and Critical Control Points), which was created to take the FDA inspector´s job and put it in the hands of individual plants. Although this decision was heralded by many in the industry, the USDA hasn´t completely relinquishing control over the inspection process, meaning the industry must comply not only with HACCP, but with USDA guidelines as well. It is incredibly expensive for companies to implement measures to fulfill two sets of standards. There´s also the potential to be shut out completely by larger companies and powerful conglomerates—a reality family business owner in every industry knows all too well.
"I see our industry disappearing. We´re on the fence in terms of the size of companies that survive, and we may be on the wrong side of that fence. Some of them aren´t going to make it with the demands put on them by the Department of Agriculture or the consumer."
"We´re seeing more and more consolidation. Even my company is buying other businesses. And the big guys are really doing it. That´s the natural erosion of things. We need to be careful to find distributors who are close to our size so we don´t get shut out."
"We´re not going to be a major factor to the big guys. But we are, and need to remain, important to the small guys. But it is tempting to go after the big ones, because their numbers are so good."
In order to keep the business growing, and to preserve the quality products and long-standing history of other small businesses, Alexander & Hornung have extended themselves to food brokering and the acquisition of other companies. These businesses had long histories (one of them operating for over 70 years), and were often clients of Alexander & Hornung. Among these are Brookside Foods (Cleveland), known for their quality luncheon meats, and Bosell Foods, makers of an extensive line of fresh salads.
The most recent acquisition is a small Lithuanian bakery on the brink of going under: "I bought it for one reason: It was going to go out of business and I didn´t want to see that tradition lost."
This is an industry that thrives on tradition as much as innovation. We asked Bernie if he thought his kids, now only 11 and 13 years old, might see Alexander & Hornung into the 4th generation.
"They think they´re interested in the business, but I hope they´re not. This work is hard. Hopefully, I´ve provided an opportunity for them to be more forward thinking than their dad. But I wouldn´t preclude them from being in the business. My dad tried very hard to keep me from getting in the business-- He would´ve paid for me to go to Harvard. Anything, just don´t come into the meat business."
But with advances like the Internet, some aspects of the business have grown faster, more efficient and cheaper. And those are the advances that can often help perpetuate a business in spite of itself.
"I constantly get messages via the website. Industrial and commercial people are always looking for new products and the companies who can provide them, and because we have a web presence, they find us. We´ll get contacted by a number of people who will say `We´re looking for someone who can make this for us.´ And that starts a dialogue."
"The web site has opened lots of doors for us. When I talk to people on the phone, they´ll often request a catalog, and I can tell them `sure, give me your information, and in the mean time, check out my web site´. And many times, they´ll do it right then while I´m on the phone with them."
But even with the new technology at his fingertips, he always follows up the old fashioned way: with a print catalog.
"I guess that´s a sign of my age, that I still like to do things that way. I feel like a piece of paper on their desk is going to be better remembered than a website."
"If you survey people who know Alexander & Hornung as a name in this city, they´ll say `Oh, that´s such a big company!´ It´s a good name, it´s been around a long time, and we produce a good product, but people have no concept of our size."
"I think that the website has provided us with a modern-day presence, and it makes us look like we´re a player. We´re a very small company, but we appear far bigger."
Business profile courtesy of Family Business Strategies.
Bernie Polen can be reached at http://www.alexander-hornung.com.