Pizza footnote delivers results
Preferred Marketing is tops in direct-mail advertising
By Alex Davis
alexdavis@courier-journal.com
John Schnatter's obsession with quality control helped turn Papa John's International into the nation's third-largest pizza company, with more than 3,200 locations worldwide. But a separate venture that started as a footnote to the pizza story is now beginning to deliver impressive results of its own.
Preferred Marketing Solutions, a subsidiary of Papa John's with a wildly different business plan, has become the largest provider of direct-mail advertising in Louisville, churning out 100 million pieces of mail annually.
More than 200 people now work at Preferred Marketing, and revenues topped $60 million last year. Company officials declined to provide income figures, and even the revenue total is shredded cheese compared to the $1 billion a year generated by Papa John's overall.
But the printing operation, tucked away next to the parent company's headquarters off Blankenbaker Parkway, has expanded well beyond the confines of the pizza chain, with a commercial client list that now includes General Electric, Six Flags, Maker's Mark bourbon and dozens of other companies.
"We're not moving the dial in terms of our stock price, but we're growing," said Sean Muldoon, general manager of Preferred Marketing and a former vice president on the pizza side of the business.
In 1993, when Papa John's was still a regional chain with about 300 locations, Schnatter bought a small Louisville company called QC Printing. The firm was responsible for making menus, box-top coupons and advertising inserts for Papa John's, but Schnatter figured he could do a better job if he ran the operation himself. Later that year, Papa John's bought another one of its suppliers, Novel Approach Promotions, which printed banner signs and did embroidery on employee uniforms.
The merged businesses chugged along quietly for most of the next decade, growing with the larger pizza business as it expanded into new territory. But as Papa John's started to reach a saturation point in the United States, revenue growth slowed at Preferred Marketing, forcing managers to make a decision: should the printing operation rise and fall with Papa John's, or branch out and try to grow with other customers?
"We looked at ourselves and decided, 'Hey, we're pretty good at this,' " Muldoon said, indicating that the company choose the growth route.
Preferred Marketing started looking for business outside Papa John's in 2002. Some of its early clients were already vendors for the pizza chain, which allowed the business to tap into new industries where it already had a solid relationship.
In addition to the direct-mail operation, Preferred Marketing now prints visitor maps for all the Six Flags amusement parks in North America. It also makes posters and T-shirts for the Kentucky Derby Festival, coffee mugs and apparel for Maker's Mark, and brochures about dishwashers and refrigerators for General Electric.
Other jobs include print advertising material for newspapers such as the St. Louis Post-Dispatch, The Columbus Dispatch in Ohio, and Gannett Co. Inc., which owns The Courier-Journal.
Muldoon is aiming for $80 million in annual revenue by 2011, and he said the company eventually could be a contributor to earnings at Papa John's. He said there hasn't been any serious discussion about a spinoff, partly because the business does so well and hasn't been a distraction for the larger company.
Trent Turner, director of sales at Six Flags Kentucky Kingdom, said the printing outfit offers a quick turnaround on jobs, and has been a "home run" for the amusement park chain.
"They have developed technology that has made my job much easier to maintain and track the progress of my print material jobs," Turner wrote in an e-mail.
Reporter Alex Davis can be reached at (502) 582-4644.
Pictures Above
Papa John's ads are the biggest revenue source for Preferred Marketing, but its client list also includes General Electric and Six Flags.
Preferred Marketing Solutions off Blankenbaker Parkway, a subsidiary of Papa John's International, produces direct-mail and other print advertising products. It is the largest provider of direct-mail advertising in Louisville. Tim Kendall, right, checked a just-printed ad.
Sean Muldoon, general manager of Preferred Marketing Solutions, wants $80 million in annual revenue by 2011.
(By Alex Davis, The Courier-Journal)
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