Success depends on relationships and a commitment to learning

by Sunita Batra

Joy Wallace describes herself as an eternal optimist – optimistic enough to take on the challenges that come with breaking out on your own. Eleven years ago the 56-year-old Dallas native went from being an executive at Pizza Hut to an entrepreneur, when she launched J.O.Y. Foods.

As Senior Director of National Sales for the Pizza Hut Nontraditional Business Group, Wallace developed a product known as the “Pizza Hut Pizza Pack,” for the company to market to schools. In 1993, Pizza Hut was very interested in developing brand loyalty among young consumers and the best place to accomplish this goal was through the schools. The company launched a restaurant based delivery program – individual restaurants would prepare fully cooked pizzas and deliver them to school cafeterias. This presented a challenge for the restaurant, since it required the staff to come in very early in the morning to prepare 50 to 100 pizzas and deliver them on time for each school’s lunch period. This was a “high volume, short window opportunity” said Wallace. “If a delivery driver doesn’t show up on time at a home it isn’t a major problem, but a five minute delay for a school delivery may mean that twenty per cent of the school kids won’t get served their lunch.” In addition the payment cycle was a challenge for the company. Schools typically operate on 30-day payment terms, while the restaurants are a cash business. This required Wallace and her team to spend an inordinate amount of time attempting to collect school receivables.

In order to bypass these challenges and serve schools located beyond the eight minute drive time to a Pizza Hut location, Wallace created the component pizza pack, which contained eight 14” frozen crusts, sauce and cheese and also met the nutritional requirements of the national school lunch program. The schools could assemble, cook and serve these in their own kitchens. “I worked very closely with the Pizza Hut Research and Development department and approved suppliers to create a recipe that, in effect, matched the ingredients in a restaurant, in a format that could lend itself to a frozen pizza product for school, while maintaining the same quality that Pizza Hut required,” said Wallace.

At around the same time that Wallace developed her idea, the PepsiCo restaurant chain, of which Pizza Hut was a part, decided to spin off its restaurant business and focus on its salty snacks and beverages. The resulting company was Tricon Global Restaurants, Inc., which included Pizza Hut, KFC and Taco Bell. “The senior management of Tricon Global Restaurants decided that what I had created was a manufacturing/distribution business within the company, which is outside of their core competency. Their core competency is restaurants,” said Wallace. Management’s initial reaction was to forego this business and move her to the new corporate office in Louisville, Kentucky.

“But, I thought about the two years of my career I spent developing the product, doing the research, putting a team and a network in place to market the business to this segment. I decided I could do it. I asked to license the business and that’s how J.O.Y. foods was started. As the exclusive supplier of the Pizza Hut Pizza Pack to the K-12 segment,” said Wallace. As optimistic as she is, she is also a realist, who understands what it takes to build a business.

RELATIONSHIPS ARE KEY
As a start-up company, J.O.Y. foods had access to the Pizza Hut supply chain and received the same pricing on ingredients as Pizza Hut. This opened up the opportunity for Wallace to create her own trademark brand of pizza products that she could market outside of the K-12 school market. Her licensing agreement with Pizza Hut prohibited her from marketing Pizza Hut products outside that segment. “The food service industry is much larger than K-12 schools. Well I needed a product category to go to the military, to the hospitality segment, to business and industry,” said Wallace.

She worked with the suppliers of the Pizza Hut ingredients to create her own pizza brand, known as Sprazzo. “So again, remember, I had the buying power and I was able to negotiate, even with my own proprietary ingredients, a better deal than I would have just walking in off the street, trying to negotiate with these large ingredient suppliers,” Wallace said. This meant that her small and new company could be competitive within the industry. The relationships that she had built with suppliers during her time as an executive enabled her to move forward in this way. Before she knew it she began supplying to military installations both in the United States and overseas. Even though J.O.Y. Foods has branched out into other segments, schools and the military continue to remain its largest customers.

Three years ago, Wallace formed a new company called Merit Provisions LLC., a joint venture with Pilgrim’s Pride Corporation, which supplies chicken products to about 1200 McDonald’s restaurants in Texas, Louisiana and Arkansas. In all, Wallace now has three companies, including J.O.Y. Products, which is a holding company for J.O.Y. Foods and Merit Provision.

COMMIT TO LIFE LONG LEARNING AND BEING ABLE TO ADAPT
The transition for Wallace from an executive at a major corporation to being her own boss meant that she suddenly did not have access to all the resources that a corporate environment provides. “So there were disciplines and skill sets that I needed to learn” she said. With her degree in Economics from the University of Chicago, she had worked in financial planning and analysis for most of her career, but as an entrepreneur, she learned that the most important financial statement was the balance sheet. She had to change focus realizing that if she could not manage the balance sheet, she would quickly go out of business, regardless of the volume of sales.

One of the greatest challenges came in trying to raise capital and negotiate lines of credit, which is not easy for any business, and it doesn’t matter that the owner had a successful career in the corporate world including business development. Her attempts were successful, but required that she learn a lot about the finance side of business development. “It required that I just have faith, step out and believe I could do it, because until I was a proven business, the banks wanted to wait and see if I could really succeed,” said Wallace.

Wallace often receives calls from people seeking advice on starting a business. Her counsel to them is to conduct an honest self-evaluation and ask themselves if they really have the determination, the passion and the belief in their product or service to navigate through the good, more importantly the very tough, challenging times. “It is also important to recognize one’s own limitations and seek the necessary help by surrounding yourself with capable and knowledgeable people who can help you through and build those relationships, and relationships are everything,” said Wallace.

According to Wallace, “Whether for the company you work for or to start your own, to take a product or service from a mere concept to implementation, it is essential to be able to put it down on paper. Write down your ideas and think through every detail about what it is going to take to make it successful. That’s a critical discipline. And you have to understand that plans are not static, they’re dynamic.” Thinking through the ‘what ifs’ and the best and worst case scenario is also critical in the planning stage. Having a solid plan that explores the details of how a business will be implemented is the all important first step in creating a successful business. Then it is important to learn all you can about every facet of the business.

Even though Wallace had a long career in Corporate America, with strong experience in sales, marketing, product development as well as financial analysis, she grabbed every opportunity to broaden her knowledge of the industry. “I’m a big proponent of industry associations, so I joined the Women’s Foodservice Forum, the Multicultural Foodservice and Hospitality Alliance, the International Food Manufacturer’s Association,” she shared. At these association meetings she had the opportunity to network with industry giants, participate in workshops and visit trade shows. “You must become a sponge. Absorb all the information from the sources that are readily available to you,” Wallace said.

All her hard work has paid rich dividends. In 2006, the company opened its own 24,000 square foot manufacturing plant, and significantly expanded its business. The plant received a gold recognition award from a highly recognized third-party audit company known as Silliker, Inc. J.O.Y. Foods has been featured in Women’s Enterprise Texas and the Dallas Chamber of Commerce has recognized Wallace. Last year, Joy Wallace received the Entrepreneur of the Year Award from the Women’s Foodservice Forum (WFF). “We run a very, very good operation, so you know we believe in quality, we believe in good manufacturing practices, so I’m very proud of what we’ve been able to accomplish,” said Wallace.

INNOVATION
Even in the midst of the current downturn, Wallace was at a trade show in Nevada, where we caught up with her for this interview. “A lot of businesses believe that because we’re going through these tough economic times, they need to cut back on expenses and activities, but when you do that, how are you going to touch your customers, how are they going to see your products? This is the time to innovate. Listen to what customers are asking for and develop it for them” she said. J.O.Y. Foods was at the trade show “en masse and with a major presence,” to quote Wallace, showing their new product, Amazio’s, a healthier, wholegrain pizza, which was developed to meet the public demand for more nutritious products.

Even in the current economic climate, Wallace believes that companies can do well. “If you’ve got the right idea, if you can carve out the right niche and come up with something very innovative that can help someone in these times, you’ve got a real winner. Some companies and some ideas are best launched in challenging times. New businesses, new ideas, new concepts and new approaches to old ideas always happened when we were down. I really believe in the innovative minds of this country,” said Wallace.