Harry & David Gets Hungrier

“Once we divested ourselves of Jackson & Perkins, we turned our attention to finding businesses that would leverage our infrastructure and expertise.” That’s how Bill Williams, president/CEO of Harry & David, neatly sums up the Medford, Ore.-based food marketer’s array of sale and acquisition activity over the past 18 months. “And that naturally took us to food and gift food businesses.”

Indeed, it’s been a rapid transformation for this marketer and grower of fruit, cakes and other food gifts.

• April 2007: Sold its interest in the horticulture multichannel business, Jackson & Perkins.

• January 2008: Acquired Wolferman’s, a cataloger known for its English muffins and its other breakfast foods.

• August 2008: Acquired Cushman’s, a grower and cataloger of citrus fruit.

Uprooting a Fixture
The decision to divest itself of Jackson & Perkins proved difficult for Harry & David. The brand had been a fixture in the Harry & David family since its acquisition in 1966. Jackson & Perkins played a major role in counterbalancing the seasonality of the Harry & David business, where the Christmas holiday season accounts for about 80 percent of sales. February, March and April, typically slower months for Harry & David, were strong for Jackson & Perkins.

“The only drawback is we aggravated our seasonality a little bit,” Williams says upon evaluating his company’s recent acquisitions.

While Wolferman’s and Cushman’s likely will do little to ease the seasonality of the Harry & David operation, they do expand the customer base to which the company can market — in particular, consumers who’ve shown an inclination to purchase food through catalogs.

“These acquisitions give Harry & David the opportunity to leverage its platform among additional brands and market segments,” says Donn Rappaport, chairman/CEO of American List Counsel, whose firm has handled customer acquisition and data management on behalf of Harry & David for more than 25 years. “It gives the company the opportunity to speak to a larger database, model against a larger database and expand its offerings on a real knowledge-based platform to a wider market.”