BUSH BROTHERS CLOSES IN ON A CENTURY OF FAMILY RUN SUCCESS www.bushbeans.com

Unfolding Battle for Chili Market Pits Company’s Traditional Focus on Quality Against Competitors Focus on Convenience.

By Hugh G. Willett

For almost one hundred years, Bush Brothers &Co. has been bucking the odds and coming out ahead. Very few family-owned businesses remain successful into the second and third generation. The Knoxville, TN-based food products company –founded in 1908-- is now going into its fourth generation of success under the management of the Bush family.

“Only about one percent of all family owned businesses are still in the hands of the same family into the fourth and fifth generation,” said Dave Shapland, senior vice president, chief financial & information officer at the company.

A very active and enlightened eight-member board of directors consists of three family members and five industry experts. Company Chairman and CEO and Bush family member Jim Ethier leads the firm. This consistency in the company’s leadership has allowed a continued focus on four principle values of integrity, trust, caring and responsibility when dealing with customers and employees, he added.

Almost as consistent as the management pedigree, is the company’s product focus. Bush Brothers primarily sells beans. The company sells bean products ranging from country-style baked beans to regional specialties such as Boston –baked beans as well as most of the other varieties familiar to bean lovers.

A company run by the same family and selling similar products for almost a century might seem almost boring if it wasn’t for the realities of the food business. It’s a good business—everybody needs food—but the food industry is not growing any faster than the population and a company that wants to grow has to keep introducing new products, Shapland said.

“The challenge for food companies is to bring excitement to the markets and to spur growth from other markets,” he explained. “If you look inside the boardrooms of every food products company, you’ll see they are focused on the challenge of new product development.”

The challenge of new product development has led the management of Bush Brothers to focus on entering the market for ready to eat chili. It’s not an opportunity that has gone unnoticed by the competition and Bush faces some of the biggest names in the food businesses, some with more than just a foothold in the market.

Hormel, for example, has dominated the ready to eat chili market with its Hormel and Stagg brands of chili. Campbells is trying to muscle-in with its Chunky chili. So, how can a company like Bush hope to compete with these giants?

The answer, according to Shapland, is based on product research and long standing company focus on the highest quality products. “We want to be the leader in premium ready to eat chili,” he adds, with emphasis on the word premium.

Consumer research tells Bush that there are two important factors in the chili -buying decision. Those factors are convenience and taste. Which one is more important? This is where the “great chili battle” starts to get more interesting.

Bush Brothers decided to pass on the cans and go to glass containers for its new chili introduction. The reason for the decision is based on the long-standing company focus on high quality products and the consumer research that indicates taste is one of the two most important factors in purchasing chili.

“The glass jar means higher quality and better taste. In the consumer taste tests, we beat the competition by at least two to one with our chili in a glass jar,” Shapland said.

So what about convenience? What makes this match-up between chili giant Hormel and newcomer Bush Brothers so interesting, is that Hormel, has apparently decided to focus on convenience with its latest introduction of Stagg chili in a box; a cardboard box that cannot be micro-waved.

The contrast between the two approaches couldn’t be more obvious. The box is fast and easy; the glass jar has a higher quality image and, according to consumer research, makes for a better tasting bowl of chili, and takes no longer to prepare.

It is not easy breaking into a new market when 800lb. Gorillas are staking out the same turf. Retailers cannot carry every brand of chili. It’s clear that something has to be done to spur interest in the market. In addition to product innovation there is also product marketing. Large grocery store chains need to be assured that the new products will be backed up with advertising, coupons, national promotions etc.

Bush Brothers new product introduction strategy for ready to eat chili combines the innovation of the glass container with a more traditional family style marketing approach. The company has long traded on the legacy of family ownership as a method of building brand equity.

Family member Jay Bush and his faithful dog Duke—based on a real Bush-family pet golden retriever—have been entertaining consumers and helping to sell baked beans for years as cast members in a series of television commercials and promotions.

For the new ready to eat chili introduction, Bush Brothers & Company decided to stick with the family angle by introducing the public to Drew Everett, a Bush family cousin employed in the company and self-styled master chili maker. In the new series of television commercials, cousin Drew is hard-pressed to keep up with demand but insists on maintaining quality and shipping his family recipe chili in the unique glass jar.

It will be interesting to watch the upcoming battle for the hearts and minds, not to mention the stomachs, of American chili consumers. The market is growing fast, spurred on by everything from changing regional tastes to a growing population of Hispanic consumers and, according to Bush Brothers’ research, a higher value placed on taste and quality by all consumers.