Creating a first-class niche

Robert Lazarz
Chief executive officer of L & L Foods
Age: 67
Family: Wife Nan, four children, 14 grandchildren
Education: Associates degree from Madison Business College
Experience: After spending three years in the Signal Corps of the U.S. Army and three years as manager of Casino Lanes on the East Side, Lazarz joined L & L Foods in 1966 and took over the company as president in 1980.
About L & L Foods: Founded in 1948 by William Lazarz, Robert's father, and Paul Lamm. In 2000 the company moved from Madison's South Side to its current location at 315 Investment Ct. in Verona. With 33 employees, the company has sales of about $10 million per year and distributes within a 100-mile radius of Madison.

Q: What has kept L & L Foods running for nearly 60 years?

A: This business is fourth-generation. I've got a 19-year-old kid working here, my grandson. That's my son Todd's son. And every one of us, including my dad, started delivering or putting up orders. My grandson now works in the warehouse a few days and rides in a truck a few days. I think that's part of our success. We learn the business from the ground up. It's so easy to hire your kid and say you're the president of the company. But they just don't get the proper training.

Q: Why have you kept your distribution so local?

A: We just tried to create a niche. And Bucky Badger (brand) is the niche. We do sell it around and actually sell it in Illinois now because Woodman's is in northern Illinois. It's surprising how well it sells there.

Q: How was the Bucky Badger food brand created?

A: One of those guys, my dad or his partner, decided "We ought to put a Bucky Badger on a piece of cheese." So they got Kaukauna Cheese Co. to pack a 1 ounce stick of sharp cheddar (with a Bucky Badger on it) and that was the beginning. It started very slow at first. It was just cheese items. ... Now we have about 350 items. Little by little we just kept adding. We actually registered Bucky Badger with the state in 1965.

Q: Why do you think it has become such a popular brand?

A: It's created a niche for this company. Here's my philosophy. We don't pack anything that is second-rate. I always tell our salesmen that we pack the Cadillacs. We could get it done a lot cheaper if I would pack something that was (not high quality). But we really try to pack the best.

Q: How is the grocery industry changing and how does that affect your company?

A: It has changed immensely. You've got the big players here now like Wal-Mart and Target. And now you've got Costco coming to Middleton. When we were in our heyday, we were selling to pretty much independent grocers.

Q: Has that consolidation made it harder for your company to get product on the shelves?

A: A little bit. We just got in Target. If we didn't have Bucky Badger, we wouldn't be in there. I'm sure we'll get in Costco. It's a little harder because Wal-Mart is (headquartered) in Arkansas. But I'm sure they realize that they need some little local companies. That's our niche and as long as we have this niche, we're going to be successful. It will be 60 years in business (for L & L) in July and we have yet to have a year where we went backward (in dollar volume). ... What happens to us is we do such a good job selling something that they end up taking it away from us and giving it to the cost-plus houses, the Roundy's of the world. We did it with Pace Picante Sauce. We ended up selling truckloads of that so they decided to sell it to the cost-pluses. That happens constantly with us.

Q: How do you deal with that problem of losing successful brands?

A: There's no solution to it and has never been one. You lose it and hope you find another one along the way. And it happens almost every time.

Q: Why do food manufacturers do business with L & L?

A: They're generally smaller companies that are looking for a way to distribute product instead of distributing it themselves. They want to manufacture the product but it takes a lot of effort to distribute it. We're going to a store with 5,000 items anyway so they come to us and if we believe we can do something with it, we'll try.

Q: Do you think the company is well positioned for the future?

A: I think we're doing all the right things. We're going to recomputerize after the first of the year and that is going to be a big step for us. We've got to be more efficient here because we pretty much run it on my gut feeling now and my son's gut feeling. We've got to know more about what's going on out the back door. ... I usually can go downstairs the day before inventory and guess what that inventory is going to be within $50,000. Which is not much when our inventory runs $800,000. Well this year I had no feel at all because I'm trying to step back little by little and let them make the decisions. My dad actually did that for me. My son knows he is able to come to me and ask me about something and I give him what I really think I would do. It's someone he can sound-board off of and I could do that with my dad too. I missed that when he died.

Q: What are you most concerned about as you ease into retirement?

A: My concerns are getting less because I see what's going on. I was just in Europe for three weeks and I didn't have much facility to call back here. I called back a couple times. And John Suby (founder of Suby, Von Haden & Associates) is a personal friend of mine and when I started thinking of retirement he said, "Here is what I would do Bob. I would go away for a week. And then I would go away for two weeks. And then I would go away for three weeks." I've pretty much been following his advice on that. And this three weeks was kind of the proof. I think within a year or two (Todd Lazarz) will have control of this company. And that's the way I want it, too. It's time.

Q: Is it hard to let go?

A: You know, it's hard to let go of some things. But I don't put out any fires anymore and this is kind of a putting-out-fires business. You've got to deal with your personnel and you've got to deal with customers. They pretty much put out all the fires. I took a lot of that to heart and it always bothered me a little bit. But it's not going to be hard for me to let go. ... I'm trying to not look over (Todd's) shoulder. He might tell you different.

Q: So your primary job now is basically as a consultant?

A: You're right. That's exactly what I would say. I still look at all of the payable invoices because I've got a pretty good eye for mistakes.

Q: Is there anything you're doing differently during this transition than what your father did?

A: I think its pretty much the same. My dad, once I took over, he would never say, "Well, what happened to this customer?" But he might say, "How come the sink isn't clean in the warehouse? Why is that sink so dirty?" I kind of catch myself doing a little bit of that. I'm really just trying to be me and let him run it.

Q: What is the most important advice you've given to your son?

A: He's very customer oriented. He's very good at that. But the best advice I give him is pay your bills on time. It's very important. If you're the type of person who pays the bill on time, and you need a special favor out of the manufacturer they may look and say, "Wow, this company pays well" and then give you that extra favor. I want the manufacturers to make money so they stay in business and we can make money. We deal in pennies here so if we need 50 cents or a dollar off a case of something for a promotion, they tend to say, "Yeah, go ahead and do it." That's kind of my philosophy, treat everyone ethically and they'll do the same for you. It doesn't always happen but it does happen.