Tuesday, September 30, 2014
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Dietz & Watson takes issue with Boar's Head business tactics

As both try to grow in supermarket delis, one competitor in the premium deli meats business says consumers lose when retailers go along with exclusivity contracts that toss out other brands.

Dietz & Watson takes issue with Boar's Head business tactics

Dietz & Watson Inc. has a beef with Boar’s Head Provision Co., its larger competitor.

A Philadelphia maker of deli meats and cheeses, Dietz & Watson is casting itself as the defender of consumer choice in calling on its Florida rival to end its practice of demanding exclusivity to sell in supermarket delis.

Dietz & Watson and Boar’s Head duke it out in deli sections where store personnel slice to order. Given the “premium” nature of the brands, both charge a buck or two more per pound than a store’s private-label brand meats and cheeses.

But you won’t find Dietz & Watson and Boar’s Head side-by-side in that deli case.

Case in point: About a dozen Harris Teeter supermarkets in the Charlotte, N.C., area dropped Dietz & Watson products this spring in order to carry Boar’s Head. A couple of food-oriented blogs buzzed with customer comments praising or panning the switch.

Dietz & Watson president and CEO Louis Eni said the customer reaction to the Harris Teeter move spurred him to draw attention to Boar’s Head’s practice of insisting that grocers boot out other brands, including some pre-packaged products.

Shoppers lose when any product maker demands that a retailer carry only its line and no other, Eni said. Dietz & Watson has not and will not do that, he said.

But seeking exclusivity is Boar’s Head’s business model, according to Mark Lang, a food marketing lecturer at St. Joseph’s University. He saw it firsthand as a marketing executive at Publix Super Markets Inc. in Florida, where Boar’s Head has managed the 900-story chain’s deli cases for years.

Lang called Boar’s Head’s aggressive distribution network its “secret sauce.”

Most areas of a supermarket are self-service. Not the deli or bakery, where customers must ask interact with employees to get the cold cuts or birthday cakes they want.

A well-run deli should be a profit center, Lang said. But we’ve all encountered delis that aren’t well-run. Boar’s Head’s distributors are the best at whipping a deli into shape, even training the store’s own staff, Lang said.

I called Boar’s Head’s corporate offices in Sarasota, Fla., seeking comment. With the spokeswoman on vacation, I asked to speak with someone in management about its practices. No one called back.

Dietz & Watson calls itself the No. 2 deli brand, which is quite possible but with the biggest players all privately held it’s hard to get independent confirmation. Eni would say only that Dietz & Watson has annual sales of more than $300 million, having grown at a double-digit pace for several years in a row.

Boar’s Head and Dietz & Watson have much in common. Frank Brunckhorst started making Boar’s Head cooked hams in Brooklyn in 1933, while Gottlieb Dietz began making deli meats in 1939. Both have expanded beyond their regional strongholds in recent years.

Boar’s Head is available through the U.S. with Dietz & Watson sold in more than 40 states.

Eni insists Dietz & Watson is making more inroads than it is losing. It recently began distributing products to Meijer, a Grand Rapids, Mich.-based chain of 189 stores in the Midwest. Costco Wholesale warehouse clubs is another new client.

Why doesn’t Dietz & Watson fight back with its own exclusivity arrangements? Eni said he thinks that it's unfair to customers to limit their choices.

When it comes to grocery stores, consumers have a lot of choice. And supermarkets have been known to relent when enough customers demand the return of a product.

Mike Armstrong Inquirer Columnist
About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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