Centralization, Motivation Drive Growth of Tankersley Foodservice

by Sam Eifling  on Monday, May. 24, 2010 12:00 am  

VAN BUREN - Workers in hooded sweatshirts and parkas mill in and around the chilly inner chambers of the 150,000-SF warehouse that serves as Tankersley Foodservice's beating heart. Motion-activated doors whisk open when an employee approaches on foot or forklift, allowing speedy passage between the dry storage, the refrigerated fresh storage and the 0-degree cold freeze.

It's fairly quiet at 3 p.m. on a Monday, when the company's 36 sales reps are taking orders from thousands of clients - independent restaurants, schools, nursing homes and convenience stores - around Oklahoma and Arkansas. But this evening, the docks will be abuzz as workers rush to load refrigerated trucks with foodstuffs. "You come here tonight," says Don Tankersley, the company's CEO. "It'll be a zoo."

This operation - a combination of storage, trucking and food service businesses - has made Tankersley Foodservice LLC one of the fastest-growing businesses in the state. In Arkansas Business' annual survey of the largest private companies in the state, Tankersley Foodservice LLC popped onto the list for the first time - and clocked in at No. 65 with 2009 revenue of $93 million.

"We've been running under the radar for the last 10 years," Tankersley Foodservice President Danny Lloyd says, with a chuckle. The fact is, though, in the 12 years since moving into this former Affiliated Foods warehouse, the food service portion of the company's operations has gone from about $10 million in revenue to seven times that last year, Lloyd says.

To hear Lloyd and Tankersley describe it, the source of that growth has been straightforward. The company has carved out a niche, has avoided overreaching and has dedicated itself to finding and retaining the best people available.

"We hire the best sales reps, and we pay 'em," Tankersley says.

It was Tankersley's father, Walter Tankersley Sr., who in 1928 founded the ice cream maker, White Dairy, that eventually branched into institutional food service in 1944. In 1980, the company started supplying foodstuffs such as chicken, milk products and Little Debbie cakes to military commissaries.

"It's kind of unique for us to be a Fort Smith-Van Buren company doing that," Tankersley says. "We started with three commissaries in Panama in 1980, and it's gone worldwide."

The biggest step came in the late '90s. White Dairy sold its Fort Smith ice cream manufacturing business to Hiland Dairy in 1997, and in 1998, along with the Tankersley family's two other companies, moved to the current digs.

"Until we moved into this facility, we couldn't do it right," Lloyd says. "We were in three or four different spots, and we had to pick from this one, this one or this one. We couldn't keep up with the Syscos. They just did it better than we did. Too centralized."

Here the four businesses work in concert: Tankersley Foodservice is the lion, accounting for $70 million of the companies' $93 million in revenue last year. White Dairy International still supplies military installations, keeping GIs the world over wired on Rockstar energy drinks. JR's Trucking, a carrier that runs 35 to 40 long-haul trucks, started in 1995 to haul foods for the military supply business; its offices are on the second floor of the warehouse, overlooking the bustling floor. That warehouse is also home to Tri-Temp Distribution, which stores for Tankersley and for other clients. The four companies together employ 200 people, with an annual payroll of about $7 million.

"The food service business is the engine that pulls the train," Tankersley says. "It's the biggest company by far. But they all interrelate, and we make them all work with each other. If we need storage, we've got a storage company. If we need freight, we've got our own truck line.

"It fits like a glove. It's a beautiful setup. And it hasn't done anything but go straight up since we moved into this facility. "

Now with offices in Fayetteville, Little Rock, Tulsa and Nashville (Howard County), Tankersley's reach extends from Oklahoma City to east of Little Rock and from Joplin, Mo., to Texarkana. Thirty-six sales reps cover that territory, led by a management team that has been extraordinarily consistent: None of the people in the core group has left the company during the past 10 years. (News flash: Don Tankersley attributes their apparent satisfaction in part to quarterly bonuses.)

Tankersley credits his company's affiliation with UniPro, a food service distribution cooperative of 350 independent food distributors, with helping to keep its costs competitive. Between them, UniPro affiliates represent about $58 billion in sales, equivalent to Sysco Corp. ($38 billion), U.S. Foodservice ($17 billion) and Ben E. Keith Foods ($2 billion) combined.

The overall food service business nationally was down 6 percent in 2009, Tankersley says, but his firm was up 6.5 percent. In 2010 so far, the company is up another 10 percent.

"One thing about the food business, it doesn't have the peaks and valleys of a car dealership or something," Tankersley says. "People are always going to have food. It's pretty steady business even in a recession."

But nearly all other UniPro affiliates were either down or flat last year. Tankersley Foodservice's growth earned it the distinction of being named UniPro's distributor of the year in 2009. The UniPro representative told Don Tankersley his was the only company in the rep's territory who saw growth in the recession year.

The company strives to retain business by making as few mistakes as possible - Tankersley said a recent week saw 10 errors in 50,000 units shipped - and commitment to fix any gaffes immediately. If a restaurant gets shorted a case of greens or a few gallons of mayonnaise, say, a driver has to "hotshot" the order in a partially filled truck. It's a blow to the bottom line, but Tankersley sees it as integral to retaining business.

"We've hotshotted to Oklahoma City before - and that's 200 miles - when we've made an error," Tankersley says. "You have to do it to keep that customer happy."

In one fluorescent-lit, 34-degree chamber of the warehouse, Thomas Moon, who oversees operations at the warehouse, shows off the computer systems in a small forklift meant to reduce errors. He, like others at Tankersley Foodservice, takes pride in running software and warehouse systems equal to those of the industry titans such as Sysco. A new coding and tracking system called Retalix Power Warehouse will soon allow the company to track the tip-to-tail costs of and revenue from every single crate that comes through the warehouse, allowing the company to determine the precise value of every unit it handles.

The company's low error rate - 0.25 percent on the day before Arkansas Business' visit, about a third of the industry average - Moon attributes to a bonus system that can pay workers up to $200 a week for meeting levels of performance and accuracy. "Money talks," he says.




Please read our comments policy before commenting.