Foodservice Equipment Reports

FER Exclusive: Oneida/EveryWare Global Works To Re-Establish Position

Oneida, one of the truly iconic brands in American tabletop products and foodservice supply, had a really difficult 2014, by almost any measure. Newly public in an arranged marriage with Anchor Hocking, Oneida’s parent EveryWare Global fell out of compliance with its lender agreements in May last year. Though the issue had to do with a profit ratio, not cash flow, the uncertainty the situation created led to skittishness from both vendors—Oneida no longer manufacturers anything itself—and customers. The company began having trouble sourcing products and fulfilling its obligations to customers.

The issue with its lenders was resolved within 90 days last summer. And since the situation developed, EveryWare Global executives and Oneida sales personnel have been working strenuously to assure customers and suppliers alike that the company is financially sound and remains a critical supply source for a broad range of tabletop and servingware products.

The efforts have paid off. The company’s fortunes began to improve in the last quarter of 2014. In this context, Foodservice Equipment Reports Publisher/Research Editor Robin Ashton asked Rob Finley, senior v.p. of EWG sales, for an update on the company’s progress.

Finley has more than two and half decades of experience in foodservice supply. He spent more than a decade and a half at The Wasserstrom Co., in a number of chain and hospitality sales roles. For seven years he helped manage the Avendra purchasing consortium owned by Marriott, Hyatt and others, fulfilled by Wasserstrom. At the end of 2007, he became v.p. international sales for Fortessa Tableware Solutions. He was hired in March 2012 to head national account sales for the Oneida brand and has taken on more and more responsibility in the nearly three years since. He now manages commercial sales of both brands within an integrated sales structure.

Oneida’s problems last summer added insult to nearly a decade and a half of injury. Oneida has been through firestorms of stress and change since 1999, when competitor Libbey, Inc. made an unsolicited offer for the then independently public Oneida Ltd. Already challenged in both its foodservice and retail businesses by inexpensive imports from Asia, high-end product from Europe and an increasingly casual foodservice market, the blow to hospitality and foodservice brought about by September 11, pushed the company to the edge, as sales dropped dramatically. This led to the sale and/or closing of most of its manufacturing facilities, including that of equally iconic Buffalo China, and factories in Italy, Mexico and China in 2003. In 2005, it closed its original Sherrill flatware manufacturing facility, in operation for more than 100 years and became a design and marketing company only.

In 2006, the company was taken private and declared Chapter 11 bankruptcy, shedding debt to stabilize itself. It was purchased out of bankruptcy by a group of hedge funds led by Monarch Capital. In 2011, they sold the company to Monomoy Capital Partners, which already owned Anchor Hocking. Monomoy began integrating the two companies and in the spring of 2013, took the company public, while retaining an interest.

What follows is based on a wide-ranging interview that took place December 30, 2014.

Ashton: How did you get through last summer, when EveryWare was out of compliance with its lender covenants?

Finley: When there was financial uncertainty about us, customers and suppliers alike were understandably uneasy about doing business with us. We’re public, so the financial issues were well documented, and I must add, our competitors helped with the publicity. The irony is the thing we were out of compliance with in our lender covenants was an EBITDA (earnings before interest, taxes, depreciation and amortization) ratio, not a cash or cash flow issue. But the reality is the uncertainty led to supply interruptions.

We first had to convince our suppliers that we were sound. We reached out and touched our entire vendor community and worked to demonstrate to them that we are clearly financially capable. Interestingly, our customers expressed concern, but never made a run on product or quit ordering regularly.

A big part of getting through this period is that we have very dedicated customer service, purchasing, logistics and warehouse teams. They interacted with and did everything they possibly could to get product to customers. The covenant breach was 90 days, but while we lost some business, we didn’t see a significant degradation of sales. It’s a big testament to our customer service folks in Oneida (N.Y.)

They had been told earlier that we were going to shut down customer service in Oneida and move it all to (Anchor Hocking and EveryWare Global headquarters) Lancaster (Ohio). In spite of that, the teams held together through thick and thin. We discovered through this crisis that integration is important, but customer care is essential. Our folks showed they were world class. So we made a decision and reversed course. We’ve decided to leave customer service in Oneida.

Ashton: So how are you doing with supply chain and fulfillment now? And are customers still supporting you?

Finley: When you have iconic brands and committed staffs you get by, we found, in spite of problems. Our customers are weary and watchful, but they continue to support us. Honestly, we’re still off five to seven points from our traditional fulfillment levels. But I suspect by mid-January we should be back to levels we and the customers expect. I’ve personally spent time with our suppliers in Asia and we have good relationships with them. The problems are resolving themselves.

Ashton: Can I ask a cheeky question? Honestly, I don’t think many folks in the business yet know what EveryWare Global is. What are your plans for the Oneida and Anchor Hocking brands?

Finley: Oh, we agree on the brand issue. EWG doesn’t work in North America. We’ve decided Oneida will be the core brand for foodservice and commercial going forward. We’d be silly not to take advantage of the huge equity the Oneida brand has built over more than a century in foodservice. In foodservice and commercial, we’ll use the Anchor Hocking name as a product portfolio under the Oneida umbrella. We already have AH products in the same distribution center as Oneida-sourced products, so dealers and distributors can access them seamlessly.

On the retail side, we’ll use both the Anchor Hocking and Oneida brands. Both have strong brand equity in those markets.  

Ashton: Even without the covenant breach, you’ve had the challenge of integrating Oneida and Anchor Hocking sales and distribution. Traditionally, Anchor is about 85% retail, where it is a dominant brand, with the remainder foodservice. Most sales and distribution is direct. Oneida has traditionally seen a majority of its sales from foodservice and hospitality, though retail remains an important segment. And you still seem committed to a dealer/distributor model. How are you structuring sales?

Finley: When we merged in the spring of 2013, it was decided Anchor Hocking would handle retail sales and Oneida commercial sales for both brands. After a couple management changes, I took over all commercial and foodservice sales. I report directly to EWG CEO Samie Solomon.

On the commercial/foodservice side, we operate in an east-west regional split with regional sales management and factory district managers. And, a bit new for us, we’ve added independent multiline independent reps in key markets, primarily the Southeast, South and West. Where we have good factory reps in those markets, we are changing their role from factory reps to business development. They will be charged with developing regional and smaller chains and other customers, as well as serving channel and operator segment roles.

Ashton: What’s your distribution strategy? I believe you are still a prominent member of many dealer buying groups and being supplies oriented also a significant supplier to the broadline distributors. And you are big in hospitality, too.

Finley: We don’t want to forsake any of the distribution channels. We don’t pick winners and losers. We need to support all distribution entities and need their support in return. We are a member of virtually all dealer buying groups. We know many people remember when some of our hospitality and gaming customers were somewhat direct, but we made a major turn in strategy six or seven years ago and made sure that whatever the specification relationship, 99% goes through distribution. We’re committed to that.

People’s memory can be long, but I want to emphasize that nearly 100% of our products have gone through distribution and have for years, even in hospitality and gaming. Like nearly anyone in foodservice E&S doing business with the big hotel, gaming and restaurant chains, and the foodservice management companies, we have direct contracts where they insist. All these big customers—Avendra, HSM (Hilton’s supply-chain arm), Compass’s Food Buy, Aramark—want to aggregate purchasing. But they also all go through distribution. We work very closely with the dealers and distributors who are part of these national contracts.

Ashton: Now that you are resolving the financial and supply issues of last year, what do you see as Oneida’s and Anchor Hocking’s continuing weaknesses. And what are your strengths?

Finley: We have traditionally been an industry leader in product development. Our financial woes have undercut that leadership, we acknowledge that. Our whole focus now is to build and re-establish that product development value with our customers, especially multiunit operators, to create new products that fit their requirements and support their trends. We can play in all the segments and channels. We want to create value. But if it’s only in a commodities environment, we’re not interested.

As for our strengths, I still don’t see anyone who has a broader flatware, ceramic dinnerware or servingware product offering than Oneida. Now with Anchor, and our specialty glassware products, we bring the full glassware component to the table, too.

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