FOR MANY COMPANIES, THE uncertain state of the world and the economic downturn has spelled disaster. But for King Arthur Flour, while it hasn't exactly been a recipe for success, the tone of the times has added a new flavor to the batter.
“Since the economy started to go sour, we've had a lot of people cocooning,” says Steve Voigt, president and CEO of the Norwich, VT-based cataloger and flour miller. “A lot of people have changed their work/life balance post-9/11. In the last two-three years, we have seen a general strengthening of our market.”
Of course, it all hasn't been as easy as pie. When the country went to war this winter, King Arthur felt the hit just as much as any other cataloger.
“[Nesting] isn't an antidote for very challenging retail times, like when all your customers are sitting around watching CNN,” says Voigt.
The company had 600,000 catalogs in the mail the week the war broke out. “We had response rates certainly way down for the first two weeks of the war,” he says. “We've seen some recovery, a strong tail, but it's not expected to make up for those two weeks.”
Voigt joined the company 10 years ago from the investment banking community. While he did have some baking experience thanks to his wife's gourmet business, he had no prior background in cataloging.
“It was a pretty steep learning curve,” he concedes. “But as you know, the DM business is one that's pretty data driven, and consultants love data. They usually have to go out and create it. The easy thing for me about jumping to direct marketing was there was data everywhere.”
King Arthur's 13-year-old catalog operation currently represents about half of the 213-year-old company's annual sales. About 7.5 million catalogs are circulated annually, and the company maintains a 250,000-name house file, 5% of whom are professional bakers.
While the company currently does not create different versions of the catalog for home and professional bakers, “that's certainly a direction we could grow in, notes Shannon Zappala, head of media relations. “We do sell a lot of the professional-grade tools to the home bakers. But I think with some specific circulation and some special purchasing, we can accommodate professionals even more.”
The busiest time of the year is the fall, with Thanksgiving and Halloween being the biggest baking seasons of the year, followed by Christmas. The company has success using rented names from food and cooking catalogs, as well as broader home-based products and some cooking magazines, says Voigt. While King Arthur is in competition with the Williams-Sonomas of the world, “we also work hand in hand with them,” says Voigt.
“They have a very different focus than we do,” he explains. “It's been our experience that their customer service representatives on the phone and even in the stores are very aware of King Arthur. To help their customer solve a problem they're often referring people to us, and we do the same thing.”
“Being a baking-specific niche, we are often resourcing Williams- Sonoma, Sur La Table and the like for things like knives and stockpots, things we're not going to have,” says Zappala. “And likewise, they're coming back to us for ingredients.”
As traditionalists might expect, 66% of the customer base is female. Not so expectedly, over half — 55% — are single-parent homes, “which is interesting, because a lot of people say that single moms or dads don't have time to bake,” notes Zappala. The income range is wide ($35,000 to $100,000) as is the age range, 35 to 70. On the older end of the spectrum, Zappala says a number of retired men are discovering baking as a hobby. “Maybe it's because bread machines are like power tools,” she jokes.
The company employs both in-house and out-sourced customer service reps, who get specialized training on the catalog's varied product lines from the staff bakers. And a Baker's Hotline is in place to answer questions from puzzled cooks.
“If we can filter questions like ‘I'm in the middle of a recipe and my yeast isn't working’ to the baker's hotline, that helps us keep our benchmarks for the people who are calling in and trying to place an order,” says Zappala. “The bakers are instrumental in teaching the CSRs why you might use this salt over that salt, here's why this yeast might be better for sweetbreads over sourdough breads. That education makes it easier for the customer when they call up and shop. I would certainly question why you'd need 11 different kinds of salt.”
Approximately 30 to 40% of the company's direct sales are now online via KingArthurFlour.com. As with the call center operations, the site is designed to allow customers to access the information as quickly and simply as possible.
“We're real people here,” says Voigt. “We don't do much with ‘Press 4 for service, press 5…’ The goal is to have authenticity come through in everything we do. The relationship we have with our customers is one of trust and we don't need bells and whistles and sizzles. What they want is help with baking and we want to help them every way we can.”
King Arthur is also using e-mail to reach out to customers online. A newsletter, The Roundtable, goes out every few weeks, featuring recipes and links to special ingredients on sale at the Web site for those recipes.
The Web has dramatically increased the amount of contact King Arthur has with its customers. “And it's obviously automated some of that, so people are answering their own questions by poking around our Web site,” says Voigt. “We're always having to buy new servers to keep up with [the level of use]. That clearly demonstrates that we have a lot more people in touch with us.”
Why a CATALOG?
Customer demand drove DM launch
To some, a catalog might not seem the next logical step for a successful flour company. King Arthur Flour took their lead on the idea from “some of the smartest people” company president Steve Voigt says he knows: customers.
Before the catalog was launched in 1990, the company was constantly hearing from customers who had left the New England area and were distraught that they couldn't find the company's flour in their local markets.
“Someone who worked here would run over to the supermarket, load up a cart with 5-pounders, bring them back, wrap them up and ship them out,” he says. “It didn't take long for us to see there's an opportunity to service serious bakers across the country.”
The catalog branched out from flour to all kinds of specialized ingredients and baking tools.
“Bakers are a lot like fly fishermen or any other hobbyist. You only need two or three items to have the hobby, but if you have 20, how much fun can you have?” says Shannon Zappala, head of media relations. “It's like knitters have to have every color of yarn, even though they might just use a few for each pattern. The catalog fulfills that kind of glee to have Heidelberg Sour Rye in your bread, or raspberry chocolate chips, all those things that can take your hobby to the next level.”
But the flour itself is still key to the catalog's success — the average order is $50. “Flour is an inexpensive ingredient in the grand scheme of things, but the whole value is that if you use really crummy flour, it makes your whole experience crummy,” says Voigt.
Today, the flour sales drive people to the catalog, and vice versa, and the company is looking at growing more of its catalog-only products to grocery store distribution to further engender customer loyalty.
“I met a 94-year-old woman the other day. She's been using King Arthur Flour for 77 years,” Voigt notes. “She said she would never use anything else.”
— Beth Negus Viveiros
