Lancaster Colony sticks to what it knows best — and gets even better at it

 

When Dave Ciesinski considers his philosophy for business leadership, he thinks back to when he was a child, playing baseball.

He thinks about going into the field — smelling the grass, kicking the dirt — and when he looked right and left, his friends were with him. It was rewarding to work together. If the team was behind, they pulled harder. If they were winning, they had to maintain focus.

“I view business like a big version of that,” says Ciesinski, who is president and CEO of Lancaster Colony Corp. “My guess is 25 years from now, if I’m still around, I don’t know if I’m going to remember exactly what numbers we hit in the third quarter of our fiscal year ’19. But I’d like to think I’m going to remember the looks on people’s faces when that new product was shipped to the marketplace and it worked.”

Ciesinki’s childhood experiences in team sports aren’t his only inspiration for leadership. He learned a lot about people when he served in the Gulf War, too. But today he is a dyed-in-the-wool packaged goods and food operator.

He spent more than a decade at H.J. Heinz. After a brief stop helping a friend start a technology company, he moved his wife and six kids to Chicago for a job at Kraft. Eight months later, when Kraft merged with Heinz, he took a step back.

Then, he had dinner with Jay Gerlach, chairman and CEO of Lancaster Colony, and Bruce Rosa, president of T. Marzetti Co., a wholly owned subsidiary of Lancaster Colony. They hit it off immediately.

Gerlach and his father had already decided to focus on food — divesting the company’s holdings in automotive and housewares — because they felt it had better margins. Rosa had announced his pending retirement. Gerlach was preparing to move into the executive chairman role. The board was looking for a potential successor.

“We had a great dinner, but at that point in time, I had a noncompete agreement with Kraft. So, we just agreed to go our separate ways and stay in touch,” Ciesinski says.

As his noncompete expired, the conversation was resurrected. In April 2016, Ciesinski became president and COO of Lancaster Colony, taking his current title in July 2017.

Lancaster Colony has $1.2 billion in annual sales, a far cry from that of Kraft or Heinz. The smaller company had a fantastic reputation, zero debt and a warm culture.

“But the fun thing, the thing that really appealed to me about this job was that we live in a time today, in the food space, where bigger isn’t necessarily better,” he says. “Better is better. More agile is better. More innovative is better.”

Ciesinski had worked on generational brands like Heinz Tomato Ketchup, Ore-Ida potatoes, Kraft Mac & Cheese, but smaller brands are gaining market share — think Seventh Generation or Tom’s of Maine. Big brands don’t have the cachet they once had.

“There used to be a day where the bigger the brand, the more trusted it was by consumers,” Ciesinski says. “Now, that’s largely shifted, and consumers trust small brands more.”

Channels of innovation

Lancaster Colony knows its strengths — innovation and manufacturing capabilities in dressings, dips and baked items. It also supplies salad dressing, sauces and baked items to 18 of the top 25 food service establishments in the United States.

While the company has separate business units, the overlap between retail and food service is increasing. For example, its Olive Garden salad dressing generates more than $80 million in retail sales under a license agreement with Darden Restaurants; that business didn’t exist five or six years ago.

Innovation remains central to Lancaster Colony’s goals. A group of employees have been carved out and dedicated to longer-term innovation. One person leads both food service and research and development, as the teams integrate to help share ideas more rapidly across those two channels. The company is building an innovation center that should be complete in June.

“It’s basically allowing all of these folks to come together underneath one roof with some expanded R&D facilities, but also create a demonstration kitchen so we can bring our most important customers in and co-develop ideas with them,” Ciesinski says.