Swanson Legacy Offers Lessons in Continuing Success

All good things come to an end, but tomorrow brings a new beginning. That summarizes the feelings of many long-time employees of The Swanson Corp., the Omaha, Neb.-based vending, foodservice and OCS provider that serves customers in seven states and enjoys an outstanding reputation for the quality of its service.

In March, Automatic Merchandiser reported that the company, founded in 1952 by the late husband/wife team of Merle and Joy Swanson, was sold to Treat America, based in Overland Park, Kan.

While many veteran Swanson employees believe that the company's best days ended several years ago, the recent acquisition formally marks the end of one of the vending/foodservice industry's greatest success stories.

The Swanson story embodies many of the elements that are characteristic of vending and foodservice. The company was launched by an entrepreneur in the Post World War II era who dedicated himself to excellent service, spared no expense in continually improving his service, and built a team of equally committed professionals.

A model in vending and foodservice leadership

The Swanson Corp. exemplified leadership in every aspect of refreshment services: operations, marketing, accountability, employee motivation, fresh food, and nutrition. In the process, Swanson Corp. grabbed the lion's share of the top accounts in Omaha, despite competition from all of the nationals, and in several other cities.

And like many leading-edge companies, the leadership began at the top. Merle Swanson was liked and respected by everyone around him, and he was able to motivate. His passing in 1995 marked a turning point from which several veterans claim the company never recovered.

Merle and Joy Swanson's legacy nevertheless still motivates many employees, including the new owner.

John Mitchell Jr., president of Treat America Inc., told Automatic Merchandiser he hopes to bring back the entrepreneurial spirit it had lost with the passing of the founders.

The Swanson Corp.'s sales fell from $48 million in 1998 to $35 million in 2005. Some months ago, management announced that it was in the company's best interest to sell the company. The employees had witnessed layoffs with declining sales, and they voted overwhelmingly to accept Treat America's purchase offer.

While some of the lost sales can be attributed to location downsizing, increased competition and an economic recession, company insiders say the leadership was the main cause of the company's decline.

Interviews with current and former Swanson executives offer some insight into what refreshment service companies need to do to maintain success over an extended time period.

In a nutshell, the management team that succeeded the founders failed to maintain the investment in sales and marketing that had driven the company's growth. Merle Swanson in particular believed in the importance of not only the highest quality service, but aggressive sales and marketing.

Excellence from the start

Gary Sands, a former Swanson executive who retired in 1993, was the company's fifth employee when he came on-board as a route driver in 1960. By that time, the company, which began as a Kwik Kafe franchise, was expanding beyond hot beverages, cold drinks and pastry to ice cream, cigarettes and candy.

One way the company distinguished itself at the outset was that all drivers wore ties. "We never took the tie off," Sands said.

Sands worked his way up through the ranks and eventually became president. In 1968, he opened the Sioux City, Ia., branch, which grew to seven routes, before returning to Omaha in 1970 as general manager. As general manager, he helped oversee construction of an expanded, 12,000-square-foot commissary, the largest in the state.

The new commissary was a pivotal tool to the company's growth, and Merle Swanson spared no expense in developing what some observers considered the most professional vending commissary in the country. He hired a foodservice manager with a college foodservice background and a full-time dietitian to oversee the recipes. "It (having a company dietitian) helped sell business and keep business," said Jeff Dale, a Swanson salesman for 17 years who is now retired.