HoneyBaked Ham enters peak selling season

Please suggest a candidate to interview by contacting writer@billhendrick.com.


MEET CHUCK BENGOCHEA

Job: CEO of Original HoneyBaked Ham Company of Georgia

Age: 55

Family: Wife and four children

Born: Cuba

Lives: Roswell

Graduated: Cornell University with B.A. in economics

Hobby: Triathlete and Ironman competitor

Favorite book: Bible

The holiday season may last for two months, but it makes Chuck Bengochea sweat all year long.

Bengochea, CEO of Alpharetta-based Original HoneyBaked Ham Company of Georgia, and the 70 employees at headquarters work through the year to make sure fresh hams and turkeys are delivered on time for the peak season. The hogs and birds are reared on farms in the Midwest, and 60 percent of the company’s sales are made in November and December. Another 10 percent of sales — from company-owned and franchise stores and from the Internet and catalogs — are made in the Easter season.

Bengochea, a 55-year-old Cuban native, says he loves tough tasks, which is why he’s completed five Ironman competitions, each consisting of a 2.4 mile swim, a 112 mile bicycle ride and a 26.2 mile marathon. Before taking over at HoneyBaked of Georgia, he held executive positions at General Electric and Coca-Cola.

Q: You are head of HoneyBaked Ham Company of Georgia, but there are other HoneyBaked companies on the Internet. How does it work?

A: It's complicated. The company was founded in Michigan in 1957 by Harry Hoenselaar. He left the business in equal parts to each of his four daughters. A territory was carved out for each. We are the biggest, and the only one that sells franchises. We control all the franchises in the country, even those in territories of the others.

Q: So are you the headquarters?

A: No, we just have a unique corporate structure. The other divisions pay for their own overhead and a piece of the overhead that ultimately runs the system. They have their own corporate-controlled operations. We do, too, but we help all the franchises with marketing, with everything that needs to be done to get hams and turkeys, supply the stores and train the personnel.

Q: How many franchises are there?

A: There are 190 franchise stores, primarily single-store operators, in 40 states. HoneyBaked of Georgia has 115 corporate stores in 24 states. These are run by the Original HoneyBaked Ham Company of Georgia. We have 21 corporate stores and 19 franchise stores in the state of Georgia.

Q: What is your revenue?

A: Total HoneyBaked of Georgia revenue has grown from $200 million in 2005 to $250 million today.

Q: Was revenue hurt by the recession?

A: From '07 to '09, we got hit like everybody else did. We did have store closings. That was a painful time. But we have been growing. People tend not to compromise on these products, which represent a special event in life.

Q: Do you sell in some grocery stores?

A: We have kiosks or what we call pop-up retail. The strategy is to extend our reach to consumers. The people who operate these are our employees. Groceries want us because we drive more traffic. There is a fee we pay to them for the right to be there.

Q: All told, how much ham and turkey does HoneyBaked of Georgia sell?

A: We serve 21 million pounds of ham and turkey to more than 2 million homes during the holidays. Just ham is 18 million pounds.

Christmas does the most volume. Easter ham sales are up to 10 times higher than a typical non-holiday week.

Q: Do you add a lot of employees during the peak seasons?

A: Yes. Our company stores are going to be hiring about 6,500 in all our 24 states.

Q: Is gifting a big part of the business?

A: Yes. We expect 213,000 orders to be placed that are intended as gifts this year. That's just our operation — our stores and the franchises.

Q: How many meals have been served this year in metro Atlanta?

A: We've served close to 2 million meals — 1,813,367 to be exact.

Q: Do you train franchise operators?

A: We have training stores. We send people to a two-week program. A district manager will be there when your franchise store opens. He might live out in the field, but he reports to the Atlanta vice president of franchise operations. Franchisees have access to accounting, marketing and operational help.

Q: How much does a franchise cost?

A: It costs $30,000 to get into one, and you have to have net worth requirements of $300,000 to $350,000, and a good $100,000 of that has to be liquid. There is a 6 percent annual royalty fee and a marketing fee of 2 percent. You get the right to a territory.

Q: How do your stores operate, whether corporate or franchise owned?

A: We have distinct business models. One is retail — the ham and turkey you sell. We have a café business, where we sell sandwiches. We have a gifting business, selling online and via catalog.

We are also a manufacturer. The person in the store needs to know how to run a manufacturing facility in the back. You have to pay attention to detail when making sandwiches. You have to know how to receive the product, slice it, move it into the cooler. All food is delivered fresh.

Q: Where do you get the ham and turkey?

A: We have two manufacturers. They do the curing and the smoking. We have a manufacturer in Canton, Ohio, and one in Nebraska. Hams are sourced from domestic hog farms in the Midwest, such as in Iowa, Nebraska, Indiana, Kansas and Missouri. It is stored at 36 or 38 degrees when it comes to the stores. In non-holiday seasons, we have a couple of folks dedicated to make the sandwiches.