Ask CEO Dan Flanagan how his company reached the status of Canada’s largest independent foodservice distributor, he would say it’s rooted in two things: its history and its people. “In our industry, that’s something others don’t always think about.”
Flanagan Foodservice has grown exponentially in the past 40-plus years. Over that time, this “proudly-Canadian” company has evolved into a strong competitive force in Ontario, servicing more than 6,000 restaurateurs and foodservice operators with more than 14,000 products.
Flanagan currently employs 600 people at its Kitchener, Sudbury and Whitby offices. Acquisitions along the way include s.t.o.p. Restaurant Supply in Kitchener and Roseland Produce in Burlington, adding a further 80 employees to the head count. In 2015, Flanagan entered a distribution partnership with Capital Foodservice in Moncton, N.B.
It all started when Joe and Dee Flanagan opened Bob’s Surplus Food Outlet in Waterloo, Ont. in 1977. The discount retail store operated out of a 5,200-sq.-ft. space with three employees and 500 products.
Within a year, Joe realized he was making a lot of deliveries in the family station wagon to local farms. “At the same time, his retail business started shrinking,” Dan Flanagan explains.
The requests were also getting larger than his station wagon could handle, so his life as a wholesaler took hold and he changed the name of the company to J. and D. Flanagan Sales and Distribution Ltd. “Initially, it was delivering mainly dry goods and dairy products to doughnut shops and bakeries. Then he moved into foodservice and restaurants,” Flanagan explains.
That balance has since shifted, he adds. “Now it’s mostly restaurants, with a significant portion in chain restaurants — and a large portion of that is QSR, including Subway, Wendy’s and A&W.”
A point of pride for Flanagan is that sales have increased every year throughout the company’s 42 years of operation. This year, combined sales have reached $600 million (excluding Capital Foodservice, which will account for another $70 million).
Joe’s sons Dan, Rick, Jeff and Murray joined the company in the early 1980s and the name was changed to Flanagan Foodservice. The brothers took the reins with their father’s passing in 2000.
“One thing we were able to do after he passed was significantly grow the business. We were under $100 million at the time, but took the opportunity to leverage our strengths as a company and take on some significant new business,” Flanagan says.
Dan’s brothers retired in 2013, which meant formulating a new leadership team. “Changing times mean learning a new way of leading. Even with that, the fundamentals remain the same. Number-1 is treating everyone with respect and recognizing the contribution of every employee.”
The human element is something the business has always held dear, he adds. “My dad was such a likable person and so good about treating everybody equally. For him, everybody that worked here had an important role. It didn’t matter what their title was, he treated them the same way. We grew up with those values.”
An interesting turning point that speaks to the importance of its employee relationships happened in 1984, when the company needed to apply for financing to build a freezer, Flanagan says. “We couldn’t get traditional bank financing for the freezer, so we set up a share program for employees to help us build it. We still have that program today with over 125 employee shareholders.”
Shortly after that, the company established a profit-sharing program unique to the industry. The profits are shared back with every employee at the same rate, irrespective of their salary, hourly wage, seniority or department. Simply put, the CEO receives the same payout as a warehouse worker or driver.
When asked what makes the company stand out in an increasingly competitive industry, Flanagan says the fact the company is 100-per-cent Canadian and family owned is an important distinction for clients. “We also focus mainly on selling national brand manufacturers’ products that customers know and prefer. That means something to both our customers and our employees.”
Another is the level of service throughout the organization — from sales and warehouse operations to deliveries and customer service. “Customers have told us our people care more about doing their job than some other companies. We hear lots of positive comments about how people go over and above the norm to solve their problems. They try harder and they care.”
The culture of the company is what led Dan Lafrance to take on the role of president in January 2019 after having spent close to three decades with Kraft on the production and retail sides of the industry. “Having worked for a large global organization, I longed to work for a private company that was less focused on achieving quarterly numbers and more focused on long-term strategic plans,” says Lafrance.
Even with the management change, the vision, mission and values have remained the same, Lafrance stresses. “The work done by Dan and his brothers is still very much relevant. What we’re doing moving forward is bringing more focus to near-end goals and the strategic priorities that will get us there. It’s not necessarily to be a market-share leader, but to be recognized as the premium distributor to Ontario foodservice operators.”
While large corporations can tend to lose sight of customer service, that’s not the case at Flanagan, Lafrance says. “I’ve met with customers big and small that value the relationships and personalized services Flanagan offers. Today’s customers look for loyalty, trust and integrity, along with a strong track record. That’s an important point of differentiation for us.”
Flanagan’s history and success resonates with everyone at the company, including new hires. “Our people are attracted by that culture, which is probably why many have such a long tenure here,” Lafrance says.
As long-standing members of the business community in the Waterloo, Ont. region, Flanagan Foodservice is a high-profile presence in supporting business development and foodservice-related associations. Flanagan himself was a former president of the Centre for Family Business in the Waterloo Region, as well as chair of the National Foodservice Distributors Association (NFDA) Canada.
Most of its community efforts are geared towards Friends of We Care, a foodservice-industry charity dedicated to bringing joy to kids with disabilities. To date, Flanagan Foodservice has raised more than $1.2 million through the company’s annual golf tournament. “We also support Habitat for Humanity, local food banks and hospitals,” Flanagan says.
Flanagan Foodservice has also received a number of employer awards. It’s been named one of Canada’s Best Managed Companies for six years in a row, as well as gained recognition from CAFE (Canadian Association of Family Enterprise, now known as FEX or Family Enterprise Exchange) as the Family Enterprise of the Year for Southwestern Ontario.
“It’s fantastic to see Flanagan’s level of success in an industry that’s dominated by large organizations,” Lafrance says. “For a family business to be able to survive and thrive — that’s a true testament to the family, the company values and to the employees. We have a true Canadian success story here and the company continues to grow. You can’t help but be inspired by their story.”
Written by Denise Deveau