Industry Watch

A choice cut

Providing old-fashioned service in suburban locations has paid off for Von Hanson’s Meats

By Erica Rivera
Tuesday, June 24, 2014

Pete Von Bank, co-founder and majority owner of Von Hanson’s Meats, believes in old-fashioned customer service above all else.
“That’s your main ingredient,” he says, “Along with a quality product and a fair price.”
Von Bank started out as an apprentice at Country Club Markets, a 50-store grocery chain in Minneapolis. Within three years, he worked his way into management, then moved to the store’s meat market for the next five years.
In 1984, the then 30-year-old Von Bank decided he wanted to be self-employed. He joined forces with a fellow Country Club meat cutter, Dick Hanson, to open Von Hanson’s in December of that year. His goal was modest: to be a small-time operator and have a meat market in Apple Valley. 
“I didn’t have any more vision that that,” he says.
Von Hanson’s primary focus was on customer service, custom orders (no pre-packaging), and fair prices. In addition to beef, chicken, pork, sausage, and jerky, the company steadily expanded its product selection to include bakery items, frozen foods, BBQ products, pizzas, and fresh produce.
“The customers were asking for it,” Von Bank says. “We kept adding different things and bigger lines to avoid the consumer from having to make another stop on their way home from work.” 
The bulk of Von Hanson’s products are sourced from Anderson Produce in Roseville and J&B Wholesale in St. Michael. Von Hanson’s also has its own sausage plant in Circle Pines, where its smoked sausages are made. “That’s a big part of our operation,” he says. 
Gary Pahl, president of Pahl’s Market in Apple Valley, initially met Von Bank and Hanson while making deliveries to Country Club Markets. His home happened to be close to Von Hanson’s first location, and he made frequent visits. Having watched the business blossom, he says it’s more accommodating and friendly than traditional butcher shops. “What sets them apart is their customer service,” he says. “They go out of their way to satisfy their customers’ needs. If you’re having a special event, they bend over backwards.”
Word of mouth helped the Apple Valley location grow, and Von Hanson’s opened a second store in Savage in 1989. The company’s expansion strategy was to target suburbs, and it proved to be a successful one. Today the company has 21 stores in Minnesota and one in Arizona, and it employs between about 225 people.
“A lot of our employees are our customers’ children,” Von Bank says. “Kids that shopped with us when they were five or six years old with their folks are now working behind the counter.”
In 1997, Von Bank decided to open up the company’s expansion to employees. Five years of full-time employment at Von Hanson’s qualifies employees for a license-to-operate (which involves less legal hassle than franchising), as long as they partner up with a co-worker. Today, nine Von Hanson’s stores are employee-owned.
“It’s employees that make the stores a success,” Von Bank says. “It’s not an individual or a handful of people. It’s everybody that’s involved in the company.” 
“They’ve partnered up with good meat cutters,” Pahl says of Von Hanson’s success with maintaining the accessible atmosphere and personal service during the expansion. “They not only know their Ps and Qs about the meat business, they’re personable people.”
The company also has five “sister stores” that are majority-owned not by Von Bank, but by his children, Tony Von Bank and Tami Lamusga. “When it’s all said and done, we hope the kids are going to continue on with the business,” Von Bank says.
Von Hanson’s gets young people involved in raising money for nonprofits, too, by hosting brat stands at its stores and providing gift certificates for groups to sell. “We think it’s real healthy for them to experience what it’s like to go out and sell rather than just hand out $100 bills,” Von Bank says.
The good karma seems to have worked; Von Bank says the  company hasn’t faced any unusual obstacles during the life of the business. 
“Competition is always going to be a challenge, but competition is good for everybody because it keeps us on our toes and keeps us aggressive on advertising,” he says. 
Most perishable food retailers’ biggest fear is a recall, but Von Bank says he’s fortunate to never have had a “major mishap.” 
As for what wisdom Von Bank would like to pass on to the next generation of entrepreneurs? “Plan on six months without taking a paycheck,” he says. “If you start dipping in the till, thinking you’re going to pay yourself right off the bat, it will be difficult to survive.”
Von Bank and Hanson originally put all the money they made back into the business to keep it in the black. At the six-month mark, they began paying themselves a base salary.