George Holm tells Amanda Barber that revitalizing a corporation isn’t always an easy task.

Since his appointment as president and CEO of Colorado-based Vistar Corporation in 2002, George Holm has dramatically altered the structure of the business. He separated the management structures and distribution centers of Vistar’s two businesses, Roma Foods, a pizza and Italian foodservice distribution company, and Vistar Specialty Markets, a candy, snacks, and beverage distribution business. Nearly four years later, Vistar Corp. has grown by almost 40% and more than doubled its earnings.

“When I came to the company, one of my goals was to recognize and separate the two sides of the business,” said Holm. “Roma Foods and Vistar Specialty are such different businesses, I realized they couldn’t be managed by the same management team, nor could they be in the same distribution centers. Through acquisitions and finding the right distribution centers, we’ve succeeded in separating the two businesses.”

George Holm, President and CEO

Renewed focus
Vistar Specialty Markets can be broken down into two parts: sales to vendor operators and sales to theaters, gift shops, airlines, and office coffee distributors—essentially businesses that sell single-serve candy, snacks, and beverage products. Roma Foods, founded in 1955 by Louis Piancone, is a pizza and Italian food distributor. Each business now has a president and a dedicated management team.

“Roma Foods is a traditional distribution business. Vistar sells to the vend operator who is the distributor,” said Holm. “I look at our Vistar Specialty Markets business as a retail business as opposed to being a food-service business like Roma.”

Holm realized he needed to put the proper people in place based on their expertise. The president of the Vistar Specialty Markets side of the business, Patrick Hagerty, was the vice president of purchasing for Vistar Corp., overseeing product purchasing for the vending, theater, and pizza business. Holm believed Hagerty’s previous position pulled him in too many directions. Now, one person is the vice president of procurement for the Vistar business; another is the vice president of purchasing on the Roma side. “We had to get our management teams focused,” said Holm. “We’re now more focused on our core pizza and Italian food business and less focused on broader distribution lines.”

The company also resigned most of its chain restaurant business, a $700 million revenue generator. The accounts the company retained are those Holm believes have solid relationships focused on Vistar Corporation’s core business. He said resigning businesses without similar long-term goals was a necessary step in putting a renewed focus on his company’s infrastructure.

“The companies we still work with are aligned with our distribution centers, and where they planned to expand matched our existing infrastructure,” said Holm. “We exited most of our chain restaurant business because it was unprofitable.”

Vistar Corporation’s change in focus also influenced some of Roma Foods’ independent businesses. At the time of the acquisition in 2005, Vistar had a cheese processing facility in Minnesota that did custom blends of cheeses for customers, mostly for pizza, Italian, and Mexican foods. Additionally, Vistar Corporation had a printing operation for custom-printed pizza boxes.

Holm can’t attest to the increased revenues generated by those two businesses in the past two years because he sells to his own operating companies; however, the cheese-processing facility has increased its poundage by 50%, and the pizza-box facility is already at full capacity.

“Although the bulk of the cheese business sells to our own distribution companies, we have increased our sales to outside distributors,” said Holm. “We have also increased our sales in the pizza-box division because customers prefer our value and quality.”

Growing family
In the past several years, Vistar Corporation made several acquisitions in an effort to expand in three main areas. On the Vistar Specialty Markets side, acquisitions of companies such as Vend Products, Vend Source, and Voyager Vend Supply support the company’s core business of vend distributors. Acquisitions such as Auto City in Michigan support the theater distribution side of the business. On the Roma side, Vistar Corporation acquired Original Brands in Atlanta, Lisa Foods in New Haven, Conn., and Khoury Foods in Arizona, and merged with Roma Foods Enterprises to support its pizza and Italian food focus.

“Those acquisitions supported our core pizza Italian business and moved the focus of the company away from the chain restaurant business,” said Holm. “The third reason, and why we acquired Donsons here in Denver, Colo., was to increase our ability operate a facility appropriate for the Vistar and Roma businesses.”

One of the biggest surprises in the 2002 management change of Vistar Corporation came from the smooth transition to a company-wide operating system. From day one, Holm knew a common computer platform was necessary to streamline his operations. The company decided to use the existing system that was developed by the previous owners.

Although the transition was not fully completed until January 2006, Holm said the typical problems companies have in transitioning to a new operating system did not affect his company. “I have been in situations where a change in computer system brought a company to its knees for a period of time,” he said. “We didn’t experience that.”

The bulk of the IT integration took place in 2005, and the company’s earnings were reduced by nearly $15 million from the costs of shutting down distribution centers and computer conversions. However, in planning the conversion in tandem with downsizing the distribution centers, the only change customers noticed was better service.

“We kept the previous distribution centers open to move the rest of the inventory out, which normally took between four and five weeks, but it didn’t put a lot of pressure on the organization as a whole,” said Holm. “We are in a better place than we were when we started in 2002. Although our growth was sometimes painful, our story is one of success.”