Milwaukee Area Leader Meets New Needs with Proven Principles

Profile: D&S Food Services, Inc.

Headquarters Location: Menomonee Falls, WI
Founded: 1958
Owner: The Kwarciany family
Number of Routes: 34 vending, 2 OCS, 16 corporate dining
Number of Employees: 240
Annual Sales: not revealed

In a market wrought with challenges, D&S Food Services, Inc. is an independent based in Menomonee Falls, Wis. that has found success with some of the fundamentals of traditional full-line vending. Fundamentals such as inhouse fresh food preparation and an ongoing commitment to high level customer service are allowing the company to meet the demands of a changing customer.

DIVERSIFICATION IS A MUST

Informally, D&S Food Services is known as D&S/Davians, a combination of two divisions which make up the company (vending, known as D&S Food Services and banquet/off-site catering, known as Davians). Scott Stellman, president, believes both divisions build awareness of the whole package of services to current customers. It’s D&S/Davians’ service that sets it apart. Stellman calls it “Our Five Star Service: vending, corporate dining, OCS, catering and banquet/conference. Diversity was important 50 years ago, and it’s just as important today,” said Stellman.

This extensive selection of services sets D&S/Davians apart from the competition. Customers today want service providers who can offer one-stop shopping. D&S/Davians can offer a potential customer many different types of services, even outside the workplace.

FOODSERVICE DRIVES MUCH OF THE SUCCESS

The foodservice division, which covers corporate dining, catering and the banquet facility, accounts for 35 percent of the company’s sales. A big part of the success of the foodservice division is the commissary, which also provides food to the vending side. D&S/Davians’s commissary can prepare thousands of types of fresh food daily, at a time when many operators are electing to close this capital intensive operation. Stellman admits a commissary doesn’t come cheaply, but feels it gives D&S tremendous control of quality content of its food, labeling, packaging and so forth. “Quality isn’t expensive, it’s priceless,” said Stellman. “We promote fresh food – made daily right here in Menomonee Falls.”

D&S has been part of the Senior Meals program for Milwaukee County for the past 15 years, working closely with program coordinators to balance menu variety and cost. D&S operates five trucks to 25 locations to provide meals for senior including weekends, holidays, lunches to go, etc.

Having a commissary allows D&S/Davians to aggressively target healthy eating. D&S/Davians has been able to react to the needs of customers. The company’s first initiative for healthy eating was called “To Your Health,” but as peoples’ desires changed, the company adapted and the program became “Keep Your Balance.” “Being healthy is finding a balance,” said Stellman, “not just cutting out fat, etc. You have to find a balance of what works for you.”

The “Keep Your Balance” program is a mix of guidelines. All nutritional information for the food is available and often posted, especially in manual operations. D&S/Davians uses a software program, Computrition, to assist with nutritional reporting.

In glassfront snack machines, national products that meet the guidelines are in spirals marked with a blue “Keep Your Balance” tag. There are also clings on the machines to draw customers to the “Keep Your Balance” items in both English and Spanish.

“We try to educate customers and meet a huge mix of expectations. Initially, vendors thought the market for healthy eating was a fad and was going to go away,” Stellman said. While the return on investment in this area is still emerging, the company’s efforts in fresh food set D&S/Davians apart from the competition. Customers are looking for an individual approach to dining, said Stellman.

BANQUETS OFFER LARGER MARGINS

“We continue to grow all divisions,” explained Stellman. However, D&S/Davians is currently focusing on its catering and banquet opportunities. There are greater margins available in these areas, not to mention a broader customer base. Traditionally, catering is a very profitably business. By utilizing the company’s commissary, D&S/Davians has an advantage in offering more diversified services.

Marketing catering is something D&S/Davians has recently separated from the vending initiatives as the clientele is different. The marketing for D&S/Davians foodservice services might include radio and television advertisements. For vending, D&S/Davians continues to favor more traditional methods: direct mail, cold calling, etc.

According to Stellman, customers view D&S/Davians differently because it offers additional services. The highly visible banquet center especially facilitates this idea. It gives D&S/Davians the opportunity to showcase talents and abilities in order to create lasting memories for customers.

The banquet facility was named number 1 in wedding venues in the Metropolitan Milwaukee, Wis., area in an online survey in 2007. The banquet center is lavishly decorated, including the lobby, restrooms, bride/dressing rooms, two banquet rooms, etc. Stellman admits that these types of centers take a lot of abuse, and D&S has already redone the decorum once since it opened to keep it looking nice.

Also, because the facility is open to the public, security is a major concern for D&S/Davians. Every employee wears a badge on the premises, and visitors are required to check in at the corporate office to receive a visitor’s badge. A separate entrance for the banquet center allows guests to enter that area without security clearance.

There are also other security systems in place at D&S/Davians, such as video cameras.

Corporate Dining needs large facilities

The corporate dining division includes self-sufficient cafes where food is cooked and prepared onsite. Some of the D&S/Davians run cafes are even open to street traffic, said Stellman, as well as employees. D&S/Davians considers locations with 600 employees per shift an ideal for cafeterias without the need for a subsidy.

VENDING REMAINS THE MAINSTAY

Vending still accounts for 65 percent of D&S/Davians’ business. The company serves 800 customers with a very strong manufacturing base covering a 50-mile radius around Menomonee Falls, Wis.

Stellman considers the company conservative in its use of technology. D&S/Davians does not yet use DEX or handhelds, although after much research, the decision for these products will be made at the end of this year. D&S/Davians does, however, use satellite tracking systems in its vending trucks. Stellman said D&S installed the GPS units in a quest for better efficiency. “I view it as a minor investment for a very positive return,” said Stellman. Not only can D&S/Davians tell where the trucks are and the routes they take, but a dispatcher can communicate with the drivers via the GPS screens. Drivers cannot use the system to communicate back to the headquarters, however. Each driver/service technician has a cell phone for that purpose.

TRAINING ON THE JOB

D&S/Davians utilizes on-the-job training opportunities. In the vending division, team leaders and trainers ride with new drivers and help them learn the job. In the commissary and manual operations, Stellman explained his foodservice district manager and unit managers assign mentors who give guidance and show new employees the nuances of a location.

Training is ended when the new employee meets D&S/Davians standards of customer service and safety and sanitation, said Stellman. All food managers are trained and certified in ServSafe, the official sanitation training program of the National Restaurant Association.

Stellman also has two company-wide meetings yearly, where he takes the opportunities not just to educate and communicate with employees, but to refresh training. He strives to bring something in reference to customer service, safety or sanitation to the meetings where it keeps the topics in front of even the most seasoned employees.

CUSTOMER SERVICE REIGNS

Throughout all divisions, D&S/Davians values customer service. D&S/Davians has a 24/7 customer call line. The company employs an answering service and night man to respond to calls after normal business hours.

Bambi Lewis, customer service representative, talks to clients everyday. “It’s important for us not to wait to hear from them,” said Lewis. She regularly contacts them for feedback. Lewis has even called to reassure customers when food safety issues are announced in the news, as she gets very few calls into her office on this topic, but still feels it’s important.

Lewis uses software to file communication notes and maintain a client database with contact information. The system flags accounts, notifying her when it’s time to follow up. One very important part of the customer service role is to pass on the feedback she receives, not just what can be improved upon, but also what’s working well. “We like to give kudos where kudos are due,” said Lewis.

Stellman believes in the diversification of D&S/Davians. “A lot of us (vendors) do the same things, provide the same national products and the same equipment. It’s important to have something that sets you apart,” he said. The vending industry over the past number of years has been shrinking, with the independents disappearing and large nationals taking over, Stellman added. It’s due to D&S/Davians’ diversified growth and customer service that has brought it this far. Traditional vending revenues still have a successful place in today’s market.

COMPANY REMAINS FAMILY OWNED
WITH AN OUTSIDE PRESIDENT

In 1958, David Kwarciany got into the vending business with a friend, naming the company D&S Food Services (the initials of their first names, David and Sam). D&S Food Services started with a few candy and cigarette machines.

“Dad found he really enjoyed the business,” said Patricia Huhn, research and development specialist for D&S Food Services and one of the four children of David Kwarciany who share ownership in the company. He ended up buying his partner’s half of the company.

D&S Food Services was family run with a warehouse and commissary in the basement, coin counter in the closet and trucks/equipment in the garage. Kwarciany’s wife, Vivian, picked the recipes and made the fresh food. The kids were heavily involved, helping with inventory and food preparation often. As the business grew, the Kwarcianys focused on their fresh food as an important addition to the service. They added corporate dining to their vending business, soon following it with coffee service and catering. In 1990, D&S Food Services went in a unique direction. The company opened a 46,000-square-foot headquarters/banquet and conference center in Menomonee Falls, Wis. The facility not only houses the commissary, vending service department, warehouse, trucks, employee breakroom, and coin room, but also two banquet/conference rooms open to the public for weddings, corporate events and more – all on site.

D&S held an internal contest among employees to name the new division, and it became known as Davians (a hybrid of the founder’s names, David and Vivian). In the late 1990s, the Kwarcianys made the decision to retire. With four of their six children working at the family business, it wasn’t immediately obvious who should lead the company. The Kwarcianys chose Scott Stellman, a non-family member and their vice president of foodservice, for the president’s position.

“The decision may have been surprising to others,” said Stellman, “but for David and Vivian, it was purely a business decision that made the best use of the considerable talents of our leadership team, which now numbers 25 and of which all four of their children are members. I’m quite proud to have been chosen to lead the team, and to be a part of the ongoing growth and success of this company.”

David Kwarciany Sr. holds a chair position, and he and his wife commute to Arizona each winter. This year, the company is celebrating its 50th anniversary and planning a party for its customers in July.

D&S/Davians continues to be a family business, with the third generation helping out in the office and coin room. “It’s exciting for our kids to be involved in the business,” said Susan Hillstrom, vice president of human resources and a second generation Kwarciany, “like we were with our parents while we were growing up.”

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