How Leasing Helped a Salad Dressing Maker Go National
Ken's Foods headquarters in Marlborough, Mass.
When Ken and Florence Hannah opened Ken’s Steak House in Framingham, Mass., in 1941, they couldn’t have imagined that it would be their salad dressing that would become a staple on dinner tables throughout the Northeast.
It wasn’t until the ’90s, however, that Ken’s Foods, the makers of Ken’s Salad Dressings, decided to go national when it built a plant in Georgia and then another in Nevada. What was a regional brand with six salespeople operating out of Massachusetts grew into sales offices across the country. And that’s when Jim Sutherby, chief financial officer, realized he needed to rethink his fleet strategy.
“It just became too difficult to run our own fleet, and that’s when I brought Motorlease into the picture,” Sutherby says.
Today, Ken’s Foods operates 44 fleet vehicles in some 20 states along the east and west coasts, Texas, and in the Midwest. Connecticut-based Motorlease Corp. has performed fleet leasing and management duties for Ken’s Foods since 1999.
Motorlease handles the licensing and registration for Ken’s fleet vehicles in every state. The vehicles are acquired through closed-end leases that come with a full maintenance program. They’re swapped out at a driver-requested location every four years or 60,000 miles.
“It couldn’t be more turnkey,” Sutherby says.
For Sutherby, the value of the closed-end lease is the predetermined lease payment and ease of transaction. “I’m sure Motorlease is worried about residual values, but I’m not,” he says. “We just turn the car in.”
Sutherby avoids charges for excessive mileage or wear and tear through good communication between Motorlease, his drivers, and himself. “Motorlease tracks the mileage, so they’re ahead of it before I am in terms of alerting the driver to order a new car,” he says.
And the drivers understand their duty of care. “I’ve told Motorlease that if someone isn’t getting their service done within a couple of weeks to let me know,” Sutherby says. “I’ll make sure that they get the proper service, but that rarely happens.”
Each time a vehicle is ordered, Motorlease runs an MVR (motor vehicle records) check on the driver. “We’ve turned up a DUI and another with four speeding tickets — those didn’t end well,” he says.
For lesser violations, remediation is part of the toolkit. Sutherby has worked with Motorlease to put a sales rep through a rigorous safe driving program. “The driver actually came back appreciative that he became a much safer driver,” he says.
Sutherby meets each fall with Motorlease to determine the models that will fit within the company’s fleet budget. The selector list includes a variety of sedans and crossovers from Toyota, Ford, and Nissan to Subaru, Hyundai, and GM.
Sutherby works with Motorlease to offer a “driver participation program,” in which sales reps can pay more out of pocket for an upgraded trim level. Sutherby says Toyota Highlander is the most popular model right now.
Ken’s hires many reps from larger consumer products companies, and they’re well familiar with company-provided vehicle schemes. “They say they’ve never seen this type of selection,” Sutherby says. “Their choices were limited to one or two sedans.”
Going beyond budget, Sutherby says Motorlease puts vehicles on the selector that suit the drivers in varying climates but also fit the client culture. “Motorlease understands that we don’t want our salespeople to pull up to certain food distributors in a Mercedes,” he says. “It doesn’t represent well.”
Wide vehicle selection and a smooth process go a long way in terms of productivity, especially in the competitive business of food service and retail grocery. Ken’s Foods sells to large accounts such as Safeway and Olive Garden on down to 10-store sub shops, and building relationships through face-to-face interaction is essential.
“Our sales reps are constantly out negotiating promotions and better shelf space with grocery stores,” Sutherby says, “and even bringing our culinary team to restaurants for menu ideation to help grow those businesses.”
After an almost 19-year relationship, Sutherby says the ordering process is so smooth that the yearly meeting with Motorlease takes fewer than 45 minutes. “They come out from Connecticut, but I feel bad, because we could do this over the phone,” he says. “But they insist on coming out.”