Slicing up convenience: local distributor finds its fortune in prepared sandwiches and salads...

A Chicago-area lunchmeat distributor's lucky number has turned out to be 7-Eleven.

Due in large part to a new contract to be a commissary operator for 7-Eleven convenience stores throughout the northern Midwest, H.C. Schau & Son has changed its focus from supplying lunchmeat products

The company was started in 1919 by Chuck Schau's father, Herman, who delivered bulk lunchmeats to butcher shops by operating out of a large garage with a large cooler behind the family home. Schau began to diversify into sandwich manufacturing several years ago when it linked up with Shell Oil to service that company's sit-down restaurants with bulk lunchmeats.

"They asked us if we could make sandwiches for some of their smaller facilities, so we thought we'd try it," he recalls. "It just took off, and we started servicing some 7-Eleven stores, also. As time went on, 7-Eleven asked us to run their commissary in the Chicago area."

The commissary operation's range has been from South Bend, Ind., to Milwaukee for a total of 175 stores, but soon this month the territory will expand south to St. Louis. Schau expects to service about 200 7-Eleven stores this year, and also sees a steady growth as 7-Eleven builds new stores in the territory every year.

Schau is not locked in to servicing only 7-Eleven stores, however. He still maintains his original contacts with Shell, and also provides sandwiches for Mobil, Phillips 66, and Gas City convenience stores under Schau's Red Label brand, plus he makes sandwiches for Walgreen stores under Walgreen's private label.

About 4,000 sandwiches, subs and salads go to 7-Eleven each day for its Deli Central label. The Schau Red Label line for other stores requires 1,500 sandwiches and subs a day, and Walgreen's private label has daily needs of 800 to 1,000 sandwiches and subs.

The company is churning out 28 different kinds of sandwich items. Schau also expects to diversify into meal entrees as 7-Eleven expands its product offerings.

To get to where it is now, H.C. Schau & Son had to find a new facility to handle the 7-Eleven commissary operator contract. The business had been running out of a plant in Crestwood, Ill., but that facility did not meet important sanitation stipulations of the 7-Eleven contract.

"It was a demand of Southland that we have a USDA-inspected facility," says Schau. He and his son, Randy, spent a year-and-a-half getting the new facility built and operational. The plant began operations five months ago.

"We have our own system and our own set of standards that we operate from which are at a more strenuous level than government regulations," says Keith John, national commissary manager for the Southland Corp. "We try to maintain a high standard and try to hold ourselves to a high level of quality."

Employees work in refrigerated rooms and wear masks and surgical gloves while working with the food items. All food items must be kept below 40 F at all points in assembly and transportation, per a mandate of The Southland Corp. Every evening, a clean-up crew comes in and sanitizes the work stations and floor, and once a month the ceilings and walls are scrubbed with a bactericide foam.

"When we come in in the morning, it looks just like an operating room," jokes Schau.

Another benefit of the new facility is that it allows a baker and a transporter to be located in the same building. A Rolling Pin Bakery took space on one side of H.C. Schau & Son, while distributor E.A. Sween Co. set up on the other side. Now, baked goods come in every day from one neighbor, and after assembly the sandwiches go through the wall to the other neighbor, who delivers the sandwiches to the individual stores.

Schau operates seven days-a-week, and maintains a Just-in-time inventory system for the sandwich ingredients to assure freshness. Sandwich ingredients are supplied by Alliant Foods. Orders for the individual 7-Eleven stores are downloaded from a computer line to The Southland Corp.'s Dallas headquarters, and by 5 p.m. the sandwiches are assembled and out the door.

H.C. Schau & Son is the eighth and most recent commissary operator in the country for 7-Eleven. Helping to smooth out the rough waters of any new start-up has been The Southland Corp.'s long program of sharing information and ideas with vendors. Each month, commissary operators meet at one of the eight commissaries to trade solutions to problems and to learn about new programs at Southland.

"We share all our problems at the meetings and try to work things out for each other," says Schau. "If I have a problem, I bring it up at the meetings and they can advise me."

When Schau first began working with The Southland Corp., products in 7-Eleven stores were given a three-day shelf life. The shelf life was then reduced to two days, and beginning this month, the code rolls back to just one day. Products are even stamped with the hour and minute they were assembled.