Hometown Hero
By Larry Aylward, Managing Editor
A Skyline Chili eater would walk a country mile in the driving rain to secure an order of Skyline's 5-Way-a unique potion of chili, diced onions and red beans blanketed over steaming spaghetti and topped with a heaping dose of shredded cheddar cheese.
Skyline Chili is appropriately located in Fairfield, Ohio, a suburb of Cincinnati-the Queen City and arguably the chili capital of the world. Created in 1949 by Greek immigrant Nicholas Lambrinides, Skyline Chili includes about 90 company-owned and franchised restaurants in Ohio, Indiana, Kentucky and Florida. The company also markets pre-cooked, frozen chili products mainly through supermarkets in Cincinnati and Columbus, Ohio.
Cincinnati is the home of more chili outlets than any other city in the world, note Jenny Kellner and Richard Rosenblatt, authors of "The All-American Chili Cookbook." "Cincinnati chili" is a recipe in itself. It is sweet tasting, made with grated bitter chocolate and ground cinnamon, and draped over spaghetti.
Eaters hanker for Skyline's distinctive taste, which is drawn from a secret blend of spices, which the company keeps classified. But Skyline's distinguished product wouldn't be complete without meat.
"Meat is the most important ingredient in our product because more than 50 percent of our product is made of meat," says Kenneth Davis, Skyline Chili's vice president of commissary operations. "We use about 60,000 pounds of meat a week."
Skyline Chili is doing something right and meat has been a contributing factor. The company reported an 84 percent increase in net income for fiscal year 1995, compared with 1994, earning $980,000 in 1995. Revenues were $25.77 million, a 5 percent increase over 1994. The company has experienced 20 consecutive quarters of growth.
Kevin R. McDonnell, Skyline Chili's president and CEO, pointed to several months of low market beef prices as a catalyst for the company's record increases. Restaurant and retail sales were up as well.
Skyline uses only specific cuts of beef in its chili, notes Davis, who is a food technologist and meat industry veteran. The company purchases beef cuts from inside and outside rounds, and inside and outside chucks and sirloin butts. When the meat arrives at Skyline's only plant, it is placed on an inspection table and thoroughly examined before being ground.
Skyline is particular about integrity. Company officials won't let the product slide. Davis won't use mechanically separated meat in the chili because he's concerned with the origin of such meat.
"When I joined the company, one of the first things I did was go out to our packers and make sure they knew exactly what our specifications are," Davis says.
Davis disqualified two suppliers because they were not meeting Skyline's expectations.
"They would leave shanks in with the 90 percent trimmings, or they would leave flanks, briskets and other cuts that we did not want in our specifications," Davis says. "We would like our suppliers to move to Hazard Analysis and Critical Control Point programs, but in the meantime we insist that they meet our stringent specifications, at a minimum."
Speaking of HACCP, Davis introduced it to Skyline's plant operations about three year ago. Davis and McDonnell participate in a daily critical control point exercise: a late-morning chili taste test. The two score the product on a scale, and it is not shipped until Davis and McDonnell give the go ahead.
One day's batch of chili may be better than another day's because of the meat quality, Davis says. The change of seasons brings particular cattle and different grades of meat. The chili may reflect this. No gums or extenders are mixed in the chili to achieve a specific thickness. A quality analysis lab person tests the viscosity of the thickness and meatiness of the chili to get it right.
The chili is cooked in five 450-gallon kettles, which hold and cook about 3,000 pounds of product. It takes three to 3 1/2 hours to cook a batch. Davis would not reveal annual tonnage figures.
Skyline's plant is designed to avoid cross-contamination of raw materials with cooked materials. A quality analysis laboratory is located in the center of the plant. The quality analysis manager inspects all incoming products.
At the marketing level, Skyline is gearing up for expansion, but the company is not in any hurry. Skyline is searching for franchisees who aspire to open 10 to 15 units in a Midwestern city.
Skyline Chili outlets are free-standing parlors with table-service personnel. Company officials discovered its concept doesn't work well in strip malls or food courts. The company has gained a quality image in Cincinnati, and it seeks to do the same in other cities.
"We try to position our restaurants as better than typical fast-food restaurants," says Thomas Allen, vice president of marketing. "We don't get into the low-price battles that most fast-food operators get into." (A regular 3-Way Chili-featuring spaghetti, chili and cheese-is priced at $3.19. A large costs $4.49.)
Skyline Chili is faring well at the supermarket level. Allen says two of Skyline's products, Original Chili and Chili & Spaghetti, are the No. 1 and No. 2 sellers in the frozen-entree category throughout Cincinnati supermarkets. "The growth in the grocery area has been a significant contributor to the profit structure," Allen adds.
Skyline's reputation in Cincinnati is comparable to that of a hometown hero. It has been ever since Lambrinides started the business and passed it on to his sons-Lambert, Bill and Christie-who sit on Skyline's board of directors.
"We are fortunate that we can continue to build on that from a marketing standpoint," Allen says. "But when we are working outside of Cincinnati, it's more about educating people and helping them understand what Cincinnati-style chili is all about."
Company officials don't want consumers to think Skyline Chili is health food. Although a 13-ounce Chili & Spaghetti sold through supermarkets contains 490 calories and only 15 grams of fat, Skyline isn't interested in heavily promoting that facet of the product.
"We got stung promoting it as low fat," Davis admits, adding that Skyline's core customers-males aged between 35 and 40-thought the company changed the product's formulation.
All Skyline Chili needs to do, at least in Cincinnati, is serve up what's expected: chili that's worth walking through a downpour to obtain and enjoy.
"We're fortunate to be part of the fabric in Cincinnati," Allen says.