- Real Estate
- Food & Drink
Sept. 7, 2020
Keith Kinsey is a self-described restaurant guy.
His resume includes leadership roles at Noodles & Company, McDonald’s and Chipotle Mexican Grille, among others.
He most recently spent four years as CEO of Chicago-based Portillo’s, a restaurant known for its Italian beef and hot dogs, before he retired in 2018 and was succeeded by the then-CEO of P.F. Chang’s.
Retirement didn’t last long. In May 2019, he was named CEO of Sioux Falls-based Orion Land Mark, formerly Orion Food Systems.
Here, he saw opportunity.
“I think back to when I was at Chipotle, and they came up with this category – fast casual,” he said.
At the time, the industry scoffed at the idea, he said. Conventional wisdom said the category would be squeezed at the bottom by quick-service, or fast-food, restaurants and at the top by full-service ones.
Instead, the category became an industry-changing approach.
In Orion, which was named No. 1 by Entrepreneur this year in the miscellaneous quick-service category of the magazine’s Franchise 500 list, he sees an opportunity to pioneer a category of the food service industry.
“I believe we can define it,” he said. “If we can continue to do the things we do – the quality of the food and getting our name out there – we have a real big competitive advantage.”
From his office in Sioux Falls, he watches that play out in real time.
His television connects him to Orion’s location in Milford, Iowa, which still bears the Land Mark name. Orion merged with the business last year – a move that made it the nation’s largest supplier of pizzas to the convenience store industry.
On this day, dozens of employees walk in and out of the picture, manning machines that are producing what eventually will become 7-inch pizzas.
“We call these waterfalls,” he explains, pointing at the two cheeses and pepperoni that are sprinkled down from machines as the pizza is topped.
“They’re all preset, so as the pizza goes through, a specific amount of cheese or pepperoni falls on.”
The finished pizzas hit the conveyor, and they’re boxed. Near the end of the line, a fan will blow the box off if it happens to not have a pizza in it.
“Usually, they won’t miss it,” Kinsey said.
“We average probably 90 a minute.”
If it seems a bit “Big Brother-esque” – his words – “it is.”
“But it really helps from a standpoint of looking at things,” he continued. “I’ll look at the toppings to see consistency. It won’t be perfect. But you look for the coloration and consistency of the pattern.”
On the opposite wall, a monitor minus the cameras tracks efficiency in the Sioux Falls bakery on the same property as Kinsey’s office. He’s known to walk through a shift change or to check on setup.
“It’s amazing what technology has allowed you to do, and the beauty of it is consistency,” he said. “If you think about what people want and expect, it’s consistency.”
Following the Land Mark merger, which brought the company to about 500 employees, Orion serviced 2,000 convenience stores.
The merger, which was backed by New York private equity firm One Rock Capital Partners LLC, combined Orion’s Hot Stuff Pizza brand with Land Mark’s Piccadilly Circus Pizza.
But there still are 153,000 convenience stores Kinsey considers potential customers – and 100,000 of those aren’t major chains, “so there’s a huge opportunity,” he said, adding that controlling the pizza-making process “from the ground up” is an advantage.
“We have the bakery, we do the ingredients, we do the mixing, we do all the elements to have that final product.”
For Orion, pizza is the platform on which the rest of the company is built. Build a relationship with a C-store customer around that product line, and it presents an opportunity to add more Orion concepts.
Those are constantly being honed inside the Sioux Falls innovation center, which essentially serves as a big test kitchen in the style of a typical food court.
There are concepts such as Chix Chicken, offering fried chicken and sides; Chopz, with a menu of salads and sub sandwiches; Gourmet Grub, with burgers and chicken sandwiches; Paavo’s Pizza, a make-your-own thin-crust pizza concept that cooks in three minutes; Papa Primos, which offers frozen pizzeria-style pizzas and bread sides to be baked on site; and Day’n Night Bites, which was part of Land Mark and includes breakfast offerings in the morning and burgers, sandwiches and calzones later in the day.
“We use the pizza as a platform to begin. Then, we can look at sandwiches and salads and burgers and fries and day and night bites, which is easier to execute,” Kinsey said.
“We can say, ‘You’ve figured this out, you’ve got the space, so why don’t you add a Chopz or Gourmet Grub’ and really help them with the offerings we have to broaden their business. The team will use the same equipment, so we can do burgers through it, pizza, chicken, so having the versatility on the equipment is key.”
As convenience stores have broadened offerings away from traditional staples of gasoline, alcohol and cigarettes, “they realized the really good margins are in food,” he added. “The challenge is staffing, but food has a great margin, and if you can get it and have the hold times like we do, you can do pretty well.”
Staffing can be a challenge for Orion itself too. It’s a 24-hour operation and is “tough work,” Kinsey said.
“You get a lot of reward because you see the product of what you do. You see the fruits of what you do.”
The company consistently looks for line workers as well as supervisors and plant engineers.
“Depending on what you are into and your background and what you like, there’s definitely a slot,” he said. “One of the things that makes this place special in both locations is the longevity of a lot of the people. That really helps. The key is mixing in new people.”
Many employees help recruit family to work there, “and I think that’s important because it holds a higher level of accountability when your other relatives are here and the pressure of making sure you perform,” Kinsey said.
He plans to continue to add business lines in the Sioux Falls operation.
While Orion serves clients from Sanford USD Medical Center to military bases globally, the approach to business development centers on C-stores.
While the COVID-19 pandemic brought challenges to the convenience store industry with fewer work commuters and travelers stopping by, Kinsey remains bullish on the long-term growth strategy.
“We have so much white space in this space right now with C-stores, we’re focused in on that,” Kinsey said.
“That’s why we invested the dollars we did, and we will invest more. Our focus on product innovation is very important. And given my experience, we’re considered to be a franchise-like concept, and the way I talk about it is we work to make sure you get quality food and we really make sure the delivery chain is there.”
He especially likes the company’s success and opportunity in smaller towns, he said.
“Because of the variety (of food) offered, it becomes a place people go,” he said. “You’ll see people sitting and having coffee and a breakfast burrito. It’s amazing how versatile the use of this concept is.”
This national restaurant industry veteran turned Sioux Falls CEO sees the chance for his company to define its category in the food industry.