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.
Kayem’s big hot dog innovation is actually a throwback. Hot dogs have been around since the 15th century, invented in either Vienna or Frankfurt (depending on your allegiance), and for the next 500 years they were made of the same basic stuff: spiced ground meat stuffed into sheep intestines, euphemistically known as "natural casings." But then in 1925, a Chicago businessman named Erwin Freund launched a revolution when he developed an artificial casing, which could be peeled away from cooked franks before they were packaged for sale.
Freund’s "skinless" frank proved uncannily well suited for mass production. The new casings were cheap, never split while being filled, and turned out ramrod-straight franks that could be packaged by machines, which even today are stymied by the curves of natural-casing dogs. Over time, the big companies came to produce skinless franks exclusively. Encouraged by the cost savings, they searched for other efficiencies that could squeeze even more profit from their product, like switching to cheaper cuts of meat and adding fillers that extended the meat they did use. Ray Monkiewicz regards the advent of the artificial casing as a dark day in the history of the hot dog. "The product has never been the same quality since," he says.
Today, 95 percent of the 20 billion franks sold annually in the United States are skinless. That’s a shame for connoisseurs: A natural casing makes for a juicier dog—the skin traps moisture during cooking—and biting into one produces a satisfying sui generis snap. Kayem’s new dog will be the first natural-casing frank sold nationally, and with it the company hopes to reacquaint Americans, or at least non–New Englanders, with a style of food many have all but forgotten.
If the choice of a natural casing was obvious to Kayem, the question of how its new frankfurter should taste was a bit trickier. Despite their hegemony, Ball Park and Oscar Mayer tend not to be the top-selling hot dogs in individual markets. Instead, every geographic pocket of the United States has its own favorite. That’s because a century ago, the reach of regional manufacturers was limited to the distance their unrefrigerated trucks could travel. Recipes were tailored with local customers in mind, and those differences have endured: mild pork-and-beef for New England, heavily smoked for the Midwest, spicy all-beef for the South. "People are loyal to the hot dogs they were raised on," says Janet Riley, spokeswoman for the American Meat Institute. "We get e-mails from people all the time who have retired and moved to Florida and suddenly hot dogs don’t taste right."
Kayem’s first try at a national dog used a mild, all-beef recipe, but a series of tasting panels convinced the company that it wasn’t quite right. Monkiewicz and his team realized they were still stuck in a regional mindset. It’s taken 12 more adjustments to the top-secret formula, but Kayem believes it’s at last hit upon the right balance among regional flavor profiles—a frank with a touch of smoke that is at once mild enough for the Northeast and bold enough for the South. As good as the new Kayem frankfurter may be, however, it won’t be quality alone that determines its success.
A few years ago, Arlington-based Brigham’s Ice Cream attempted an expansion of its own by positioning itself as a premium product. And yet what set Brigham’s apart from other brands was never clear to consumers, and the failed gambit hastened the company’s descent toward bankruptcy, prompting its sale to HP Hood. To avoid such a fate, Kayem will work to persuade consumers that its Old Tyme Natural-Casing Frank harkens a return to an authentic hot dog experience. "If you are going to expand in new markets, it becomes a challenge," says Kayem CEO Ralph Smith. "A ‘challenge’ usually translates into a lot of expense."
The average supermarket carries about 35,000 products, but it chooses what to stock from a pool three times that size. Between advertising to store buyers and paying the fees that supermarkets charge to put a new product on their shelves, a company like Kayem can spend $2 million on a national rollout—all before a shopper even tosses the first package of hot dogs into his cart. Then the real test comes: The merchandise has to move. As many as 80 percent of new grocery products fail within a year.
Matt Monkiewicz is optimistic about his new hot dog’s chances. He’s already secured distribution to BJ’s Wholesale Clubs down the East Coast, and established a beachhead up in Albany, New York, where the Old Tyme franks are currently on sale. At a recent tasting panel Kayem hosted in Pittsburgh, one person said it was the best frank he’d ever had. And while the economy is crippling most businesses these days, it isn’t such a bad time to be in Kayem’s game: Hot dogs are among the few foods that do better in a down economy (another is Spam). Kayem’s sales were up, in fact, 20 percent in the most recent quarter.
The day after our visit to the grocery store in Saugus, Monkiewicz flew to North Carolina to film Kayem’s new television commercials. Set in a backyard, with a grill in the foreground and a lawn sprinkler in the back, the ads are designed to evoke Anywhere, U.S.A. Eschewing Oscar Mayer’s approach, there’s no funny jingle, and the shot of Kayem’s newly redesigned logo shows a horse-drawn wagon, not a Wienermobile.
One thing the ad won’t get into, though, is exactly what makes the natural-casing dog so different. "It’s a tough thing to talk about," Monkiewicz admits. "We’ll show a curved frank on the grill and try to be understated."
Staff writer FRANCIS STORRS ate 15 hot dogs while researching this story.
Source URL: http://www.bostonmagazine.com/2009/05/dispatch-building-a-better-wiener/