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Where's the Beef?
In Omaha with an Extended Penn Family
If you've wondered "Where's the beef?" and didn't find it at Wendy's or
in presidential politics, Fred Simon, C'59, has the real answer. He'll
tell you to call Omaha Steaks where Simon is the EVP of a family-owned
and -run business that has sold gourmet meat and other food by mail for
80 years.
For the Simons, Penn and Omaha Steaks are both family affairs. Of the
five Simons in senior management positions, four of them are Penn
graduates. Alan Simon, W'56, is the Chair and CEO and his son, Bruce,
W'80, is the President and COO. Fred's son, Todd Simon, W'86, is VP and
GM of Consumer Direct. Stephen Simon, Alan's and Fred's brother, is VP
and GM for FoodService. And there are the Penn Simons who aren't in the
business: Alan's wife, Anne, CW'58, their daughter, Janice, C'82,
Stephen's daughter, Leslie, C'88, and Fred's daughter, Joanna, C'88. The
latest addition to this select group is Fred's nephew and Stephen's son,
Dan, C'94.
The business was born after great grandfather J.J. and grandfather B.A.
(their initials were used because their Yiddish names were difficult to
pronounce) emigrated to this country from Riga, Latvia. Simon family
legend tells the tale of the two traveling west on the train until the
landscape began to resemble Riga and then getting off. The town was
Omaha and the family has been there ever since.
The company was founded in 1917 as the Table Supply Meat Company. Fred
offered the following explanation for the strangely worded name: "The
first store my grandfather bought in downtown Omaha was a carpentry shop
that made tables and chairs. It was called, quite aptly, the Table
Supply Company. When grandfather took over the business, he made minimal
changes: he moved a meat cooler into the building and reworked the sign.
He bumped the word 'Company' to the right on the sign and inserted the
word 'Meat.' Thus the company became the Table Supply Meat Company.
Nobody ever got the name right, and I had great difficulty when I first
came into the business getting people to understand the nature of my
company."
In truth, back then the name made a bit more sense because the company's
business was supplying restaurants and institutions with food, primarily
high quality meat. The direct mail division was born in 1952 in response
to requests from loyal patrons who wanted to send the high quality beef
they had enjoyed to friends around the country. In 1966, the company
adopted the name Omaha Steaks, a move that coincided with the opening of
a new plant in west Omaha.
At first the Simons shipped exclusively by rail with the meat packed in
dry ice-filled, wax-lined boxes. With the development of direct parcel
shipping, Styrofoam, and vacuum packing in the 1960s, the direct mail
division went into high gear. Growth for the company has been steady,
even through the anti-beef backlash in the 1980s, and today the company
describes itself as "the nation's largest direct-response marketer of
steaks and other frozen gourmet foods."
Currently the company sells through two divisions: Consumer Direct,
which handles catalogs, direct mail, Internet, incentives,
business-to-business, gifts, and retail stores; and Food Service, which
handles sales to hotels, restaurants, and institutions. In June of 1997,
Omaha Steaks received the Catalog of the Year Award from Catalog Age,
acknowledging the catalog's excellence and the company's "five-year
pattern of sales growth, exceptional customer service, and active
participation in the catalog community."
As the company celebrates it's 80th year in business, we asked Fred
Simon how his family escaped the squabbles and turmoil that plague so
many family businesses. "My father had the wisdom to put in place a
setup that keeps everything running smoothly. This business is owned
solely by the family members who work here," he adds, "so the five of us
in the business are the owners. As a result, everybody is working toward
the betterment of the business. Of course, we have our disagreements,
lots of them, but we always make our decisions based on what is best for
Omaha Steaks. Naturally," Fred explains with a chuckle, "I always think
my ideas are the best, but sometimes my brothers, my son, or my nephew
disagree with me on that. But we always come around to a consensus on
major decisions."
What is even more extraordinary than a family that always comes to a
consensus is the Simons' attitude about customer service. Their business
meetings begin with a ritual question: "Who's at the top of the
organizational chart?" "The customer" is the answer that always comes
back. Omaha Steaks' customer service employees all receive extensive
training and are empowered by the Simons to do what is best for the
customer. "If a customer calls in and is mad about something--maybe
something didn't arrive on time or didn't live up to its description in
our catalog -- and wants to talk to me," Simon explains, "they talk to
me. Our employees are told 'not to try to protect Mr. Simon from the
customers because he wants to know if something isn't right.' For
example, several years ago I received a call from a man who complained
that his refund check was taking too long. I went down to the customer
service department and asked about the process. What I found were some
steps that seemed silly and redundant, so I talked to our comptroller
and he redesigned the system. Now it only takes 48 hours to issue a
check, the same amount of time it takes us to replace an order."
This attitude, high quality products, and an unconditional guarantee
have produced more than 1.2 million active customers for Omaha Steaks.
When the company started advertising in The New Yorker 30 years
ago, there was no competition. Today, there are over 70 companies that
sell food through the mail. Has this increase hurt Omaha Steaks? "Well,
there's good news and bad news," Simon explains. "The bad news is that
there's increased competition. The good news is that the competition has
heightened awareness and produced more customers who are willing to buy
food through the mail."
In the 1960s, the Simons began expanding their product line so that
today's customer can order an entire dinner from appetizer to dessert
from Omaha Steaks. And, the Simons are always looking for something
really delectable for their customers. Every potential new product goes
through a battery of tests, both in the final cooked stage and in the
frozen or vacuum-packed stage. "Other details we consider," Simon adds,
"are how well will it photograph and how the product lends itself to
descriptive prose. Some products are just hard to enthuse about," he
admits, "and they're not going to sell if we can't romance them a bit in
our literature." This "romancing" is used most artfully in The Steak
Lover's Companion, a cookbook Simon developed with co-author, Mark
Kiffen. Going well beyond steak, the book offers a full range of
wonderful beef recipes from steak soup to carpaccio, and from classics
such as Steak Diane to the contemporary offerings of Mark Miller and
Susanna Foo. Simon adapted many of the classics from recipes developed
by James Beard, who was a consultant for the company for many years. In
addition, each beef recipe has a complement of side dishes to create an
entire meal.
As EVP for Sales and Marketing, Fred is the Simon who puts the romance
into the T-bones and the Mignon into the Filet. His education in the
College prepared him well for this niche, although he never gave it a
thought when he was on campus. "At that point in my life I wasn't
thinking about the practicality of my education, I was thinking about
the love of learning, and I found philosophy fascinating so I majored in
it. I am very sensitive to the meaning of words and the power of music,
and that's why I went with a liberal arts education. I still believe
that a liberal arts education is important and a good background for
anything you do. And, of course," he adds with a chuckle, "I definitely
didn't want to go into the family business, so I didn't need to train
for it."
A decision to get married right after college and the need to support a
wife changed Simon's mind about the family business. But, instead of
rebelling or hating it, Simon found the perfect application for his
writing and creative talents by taking over the advertising and
marketing segment of the business. And the numbers tell the story of how
well he succeeded: in 1959, when he joined the company, Fred Simon was
the 20th employee. Today the employee roster totals 1200. In addition,
Omaha Steaks has 33 retail stores with six more in the works. In 1996,
the first Omaha SteakHouse®, opened in Phoenix, Arizona. The
restaurant, after one year of operation, won the 1997 Beef Backer
Restaurant of the Year award from the Arizona Beef Council and
Cattleman's Association.
What's in store for the future? Fred Simon says that they are working on
several new initiatives but doesn't want to talk about them until
they're a reality. Alan Simon, in the company's promotional literature,
says that "Omaha Steaks intends to 'dominate our market' with its
complete commitment to excellence in both its products and service. Of
course, Omaha Steaks has a website (www.omahasteaks.com) where
potential customers can learn about the company and order products. If
you order by e-mail, the company will send you an e-mail message when
your order is being shipped. Technology notwithstanding, the Simon
family's long-standing unconditional guarantee of quality and service
will continue to guide Omaha Steaks into the future. "Big egos are not
part of this operation," reiterates Simon. "It's cooperation and making
the best decision for our customers and the company that are the driving
forces behind any and all decisions at Omaha Steaks."
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