Where's the Beef?
In Omaha with an Extended Penn Family

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."