Deli Dare

Posted on Jul 1, 2009 :: Cover Story
Margaret LeBrun
Posted by , Insight on Business Staff Writer

Mark Skogen, CEO and President, Skogen's Festival Foods

Mark Skogen was just 19, working on a business degree and playing basketball at Viterbo College in LaCrosse, when on his way home one day he saw a new shopping center under construction not far from a small grocery store his father owned. He jumped on the phone.

“He said, ‘Dad, what’s this Crossing Meadows Shopping Center all about, won’t there be a grocery store there? You’ve got to check on that,’” Dave Skogen recalls.

The kid who grew up sorting pop bottles with his sister in his family’s store knew a thing or two about the grocery business. He knew that the four IGA stores his parents Dave and Barb ran, which were based on the mom-and-pop model started by his grandparents in nearby Onalaska in 1946, were giving way to modern supermarkets. He convinced his dad that they had a great opportunity to locate a new, much larger store in the shopping center.

Thus, in 1990 the first Skogen’s Festival Foods was built. “I’m not sure it would’ve happened if Mark hadn’t had the vision,” Dave says.

Mark, now 39, is chief executive officer and president of the 13-store Skogen’s Festival chain, based at the Festival Support Center at the Green Bay west store, while Dave carries on as chairman at the Skogen’s Festival Support Center in Onalaska.

In the past five years, Skogen’s Festival opened four new stores in Northeast Wisconsin – investing a total of $50 million in them as well as improvements to existing stores. It also hired about 1,000 people and doubled its revenues. Mark was recently named a finalist in the Ernst & Young Entrepreneur of the Year Award for the Upper Midwest Region.

Festival’s fast-paced growth since Mark took the reins in 2006 has been heady – and not always smooth sailing.

He keeps a boomerang in his office, hand-crafted by his dad for each store, as the Festival symbol for delivering a level of quality and service that ensures customers will come back. As it happens, he learned something about boomerangs during the year he played pro basketball in Australia just after college: It’s not so easy to toss a boomerang so that it will come back to you.

Servant Leadership
The CEO was taping a video interview at his Green Bay West Festival Foods store when a customer approached the fruit display, eyeing the oranges. Ever attuned to his “guests” Mark stepped back and invited her to make her selection.

“Mark sets the tone and he lives it,” says Bill Melendy, owner of Johns Refrigeration, a vendor that has installed and serviced refrigeration in all the company’s stores.

“The cleanliness of their stores, the service that they give to their customers is a direct reflection of Mark and the way he was brought up in the business with his dad. It’s a trickle-down affect he has with his associates and his employees.”

Customer service is at the core of the Festival culture. Confidence that Festival could compete was among the many reasons that led Skogen’s to enter – and thrive – in what many believed was an already saturated market.

“We just take care of our customers better,” Mark begins as he explains what gave them the audacity to enter the Northeast Wisconsin market in the mid-1990s.

“We cared about the business enough and we were going to work hard in those things we felt would trump bigger corporations – people who didn’t care as much about the business, or people who were just running it as a way to sell groceries, as opposed to building something that was admired and sustainable. We had a list of 100 items that we thought we do well and our competition doesn’t. Behind each one we wrote, ‘This is why it will work for us.’ And luckily, it did.”

Regular customers would say Festival’s success has little to do with luck. Unique among grocery stores in this neck of the woods is Festival’s Tot Spot, a child-care area and the Hot Bar, a free-standing salad-bar style bar stocked with freshly-made, hot food for carryout. Customers rave most about the special treatment they receive.

Every employee is trained to greet customers who approach them within 10 floor tiles. Mark and Dave meet monthly to share their philosophy of customer service with most new hires – and that’s a lot, given a 40 percent turnover rate (actually a low number in the grocery business, especially given that so many new recruits are high school students).

When an employee – “associate” in Festival lingo – is singled out by a customer in a letter or e-mail, store managers call a department meeting and acknowledge that associate. That person receives a boomerang pin to attach to his or her nametag. Letters are read out loud:

“I want to compliment your staff on the wonderful customer service I received a few days ago. To start, the person who was working the meat counter was very polite and helpful.”
–Maria, Green Bay West

“My wife is from France and I am a veteran of the food industry. … Anyone that I discuss food with hears about how great things are at Festival Foods.”
–Jason, Appleton East

“I love the store, I love the website, I love the deli, I love the meat department, I love the bottled milk, I love the produce, I love the variety. I love it that people actually help you when asked. I love it, love it, love it.”
–Terri, Oshkosh

To achieve such accolades, Mark says, takes a servant leadership approach. This means that, rather than announce edicts as the boss, he inverts the triangle and provides coaching from the bottom.

“Mark is a very intense guy, but he’s very good to his associates,” says Ken Krueger, Eastern Regional Partner for Wipfli and Skogen family confidant who serves on the Green Bay Phoenix Fund Board with Mark. “Their organization takes great care in hiring attitude versus skill set. That’s a shared part of the family history and gets into their values as an organization.”

Watching father and son interact in the same room, Krueger says it’s clear they’re cut of the same cloth.

“They’re competitive in the sense that they both want to strive and excel. They probably have different ways of how that is to come about, but I think Mark’s parents early on placed complete trust in him and they’re there to support him. Dave and Barb have allowed their son to do it his way.”

Krueger points out that Mark was a star player at Viterbo – he finished his basketball career there as the all-time leading scorer with 2,027 points, set five new school records and led his team to three conference championships.

His parents never asked him to make the grocery business his career, Mark says. The subject was first broached when they read his player profile at a college basketball game. “It said, ‘I like what my father is doing, I think I’ll go into the grocery business,’” Dave recalls. “Barb and I looked at each other and were kind of embarrassed because we never talked about it before.”

In turn, Mark enjoys telling the story of how his dad asked him to take on the CEO/president title. “My dad sent an e-mail to his personal assistant and copied me. It said, ‘Please order Mark new business cards, and for the title, change it to president and CEO.’ There’s just some wavelength we communicate through.”

From Pro Basketball to Produce
In 1993, when Mark returned from Australia – where the game was not intense enough for him; they only played games once a week – he rebounded into the grocery business, helping Skogen’s take over an underperforming Rainbow Foods store in Marshfield a year later.

Within two years, that store was turned around and they purchased their first Green Bay Festival store on West Mason Street. Then they built the East Side Green Bay store, followed by the De Pere store, then Oshkosh.

In 2006 they entered the Fox Cities market by building a new store in Buchanan and a year later, Festival bought the former Cub Food store on Northland Avenue in Appleton, followed by a store in Fond du Lac. A new store costs between $8 million and $10 million and calls for about 225 new hires.

It was during that growth spurt, in fiscal year 2006-07, that the business began to veer into scary territory, Mark recalls. The boomerang philosophy was still bringing in the customers, but the numbers did not reflect it.

“We knew that we worked too hard to have a profit like this (unexpectedly low). Sales were fine, but yet, we just screwed up,” Mark explains. “We were sloppy and didn’t pay attention to the finer details. So much goes on in this business – such things such as shrink, knowing your costs, holding people accountable for gross profit goals. We do a better job of budgeting now and holding people to our goals.”

Festival has experienced an annual growth rate of 20 percent in the last four years, says Kirk Stoa, hired as chief financial officer in April 2008.

Plans for three new stores in the region have been put on hold since the downturn in the economy, despite the notion that the grocery industry is “recession proof.” Skogen says sales remain steady, but the metrics clearly indicate customers are trading down, opting for sale-priced items, buying chicken instead of beef, off-brands instead of branded items.

“We have a growth plan, but without focusing on it very much, growth just happens,” says Marlin Greenfield, Senior Vice President and chief operation officer. “It’s not about being the biggest, it’s about being the best we can be. Mark gets that from his dad, who instilled in all of us, ‘We keep up with the competition Monday through Friday and we beat them on the weekend.’ ”

Customers continually seek new trends, such as organic and natural foods, Mark says, and “green” is on their list. When the company opened its Manitowoc store last fall, it included Light Pipes from Orion Energy, a white roof system that reflects heat and LED lighting and motion detectors in refrigeration cases, among many other features.

Living the legacy
One reality that Skogen’s must contend with is that the name Festival is not theirs. Festival Foods is a chain of independently owned supermarkets supplied by SuperValu. Stores with the same name but different ownership exist in the Minneapolis area and two others exist in Wisconsin, including New London. Skogen’s would like to own the brand, but barring that, the company has found ways to distinguish their stores in the market. For example, they get miles out of the boomerang motif.

“The idea for the boomerang came from a grocer in Ireland,” Mark explains. “He had a boomerang on the front of his building with something to the effect of bringing customers back. My dad met him and said, ‘Would you mind if we did the same sort of thing?’ It’s been a defining piece for us.”

Mark only needs to reach into his memory of his grandparents’ store, which was attached to their home and served like an extension of their family kitchen, for the essence of what that is.

“Go back to 1946 and picture our first little 2,000-square-foot store. In those days, a grocery store was a hub for the city. It was a place where people hung out, where they met their neighbor. They counted on the grocer to help them with things in the community. They were a focal point.

“We talk to our people about going back to those times, even though the stores are larger, we want to be a place people count on in the community. They know that my grocer helps this organization, my grocer will do things to help the environment, my grocer cares about me, they will listen to me.”

So it’s with little wonder that the Festival name turns up as a sponsor for so many community events, including the Fourth of July fireworks in Green Bay and Oshkosh, among other communities. Mark serves on the Green Bay Packers Board, the Phoenix Fund and serves as president of the Boys and Girls Club in Green Bay.

“He’s a fantastic leader and he gives back,” says Bill Melendy, who has worked with Mark since Dave asked him to help mentor him at his first store. “At a blood drive, he’s always the first one to sign up, when there’s a marathon he supports it – and he runs it! He ran the Cellcom in Green Bay recently. It was his first full marathon and he placed like 142 out of thousands of runners.”

The point is, stocking shelves and selling groceries in and of itself is not what matters, Mark says.

“You need to make a difference. Because selling groceries is not a legacy. Helping a community be better and stronger is what you’ll be remembered for.”

Margaret LeBrun

About Margaret LeBrun

Co-Publisher, Executive Editor View all posts by Margaret LeBrun →