Dispatch: Building a Better Wiener
We may not have Chicago’s famous stockyards or New York’s abundance of hot dog carts, but the Boston appetite for frankfurters is unmatched. The statistics speak for themselves. Each year in those two supposed capitals of wienerdom, the average resident spends $15 and $13, respectively, on tube steaks. By comparison, we spend nearly $60 in the Hub. And when we eat hot dogs around here, we overwhelmingly eat Kayem—whether we know it or not.
The Chelsea-based company’s portfolio encompasses 12 brand names, including Deutschmacher and Essem, through which Kayem produces some 120 varieties of hot dogs. A shopper who buys the plain old store brand is also eating Kayem: The company makes franks sold under the Shaw’s, Stop & Shop, and Market Basket labels (though it is contractually prohibited from confirming this). And now that most legendary of local dogs, the venerable Fenway Frank, is made by Kayem, too, thanks to a deal inked this past January. All told, the company’s plant is currently turning out close to a million hot dogs every day.
Not long ago, I met Matt Monkiewicz, Kayem’s head of marketing, at the hot dog case in a supermarket in Saugus. A great-grandson of the company’s founder, the 40-year-old Monkiewicz has a round, friendly face and is never without a pocketful of coupons, which he presses into the hands of shoppers whenever he visits stores. As soon as he arrived, he began straightening Kayem’s wares. "My wife won’t go with me to the supermarket," he said. "This drives her nuts."
Positioning his family’s hot dogs to stand out is an obsession for Monkiewicz, and this summer that task has taken on a singular importance. After three years of tinkering, the company has begun stocking shelves like these with a brand-new wiener. It’s more than a hot dog, really: It’s the biggest risk the century-old firm has ever taken. Despite its success—annual sales top $150 million—Kayem has always been merely a regional player. Yet Monkiewicz is convinced his company has finally come up with a recipe that can become a national hit. "It’s a better frank," he said. "We think we can introduce them to the entire United States; that’s our mission." Kayem will spend huge sums to pit its creation against the national juggernauts. For the gamble to pay off, all it has to do is change people’s minds about what makes a great hot dog.
Kayem was founded in 1909 by Polish émigré Kazimierz Monkiewicz (he used the phonetic spelling of his initials to name his venture), and for its first five decades it was part of a crowded local industry, competing with more than two dozen other hot dog makers in the state. Then, in the 1960s, with an eye toward grabbing market share, Kayem’s president instructed his best salesman to offer new stores willing to carry its dogs a 50-cent discount on each 10-pound box. Misunderstanding the directive, the salesman instead offered 50 cents off each pound. It was a costly mistake that ended up creating a runaway success. "We lost money that year but it was a great investment," says chairman Ray Monkiewicz, Matt’s father. "It got us in every store from that day on."
Succeeding at the national level, though, has long been a much tougher proposition. The $1.8 billion industry is dominated by Ball Park and Oscar Mayer, both of which have annual sales in excess of $300 million. And since the hot dog business, which doesn’t see much innovation beyond the occasional cheese dog, hasn’t experienced overall revenue growth in years, the only way to get bigger is to steal customers away from competitors. "It’s like the killing fields out there," says Matt Monkiewicz.
Rather than slug it out with the giants, Kayem has traditionally looked beyond hot dogs to expand its operations. For several decades it made a nice sideline of using its trucks and warehouses to distribute other companies’ food to supermarkets. It also dabbled in niche products, seeking untapped revenue streams. One such project unwittingly gave Kayem an insight into how it could succeed with a new hot dog.
In 1999, a family member named Deb O’Donnell began playing with recipes for a chicken sausage. At about $25,000, her R&D budget was paltry (especially compared with the $499 million that Oscar Mayer’s parent company, Kraft, spent on product development last year). She sought out experts willing to work cheap, enlisting a team of poultry pros from the University of Vermont, along with John Levins, former chef of Cambridge’s Green Street Grill. After a year of experimenting, they were convinced they had come up with something better than anything else out there. Kayem persuaded supermarkets to give its sausage, which it called Al Fresco, a try. Today that line is the bestselling chicken sausage in the country.
The surprise triumph did more than merely boost confidence at Kayem. That foray into chicken sausage had forced the company to build sales and distribution networks that spanned the United States. With those new tools in place, Kayem realized it just might be able to use them to sell a national hot dog. But first, it needed one engineered for maximum appeal.