Published Aug. 29, 1999|Updated Sept. 29, 2005
Bradenton-based company sells inmates from Florida to California the items usually found in a convenience store.
C.L. Swanson, with its familiar swan and burgundy motif, has been a mainstay of the vending machine industry for 54 years.
But a more low-key sister company is doing much more than locking away candy bars, chips and sandwiches awaiting customers' change. Swanson Services Corp. is providing similar products to inmates locked up all over the nation.
Bradenton-based Swanson Services provides commissary items _ the stuff you can generally buy in a convenience store _ to inmates at 478 jails and prisons from Florida to California.
With a wave of tight budgets in the corrections industry during the early 1990s, sheriffs and state corrections managers started to look for ways to cut costs. As a result, the prison outsourcing industry was born.
First step behind bars
Swanson's family enterprise entered the prison business in 1983 when the sheriff of Dain County, Wis. _ for whom Swanson was providing vending services _ asked the company to take over his commissary work.
"For him, it was becoming a headache to have paid officers handing out candy bars, doing accounting and things like that," said Charles L. Swanson III, Swanson Services' vice president of support services and the family's third generation in the business.
"We said, "Sure, we'll give it a shot,' " Swanson recounted.
The shot was well aimed.
Today, Swanson Services employs 280 workers nationally. It was named as the 60th fastest-growing private company in the state by the University of Florida's business college last year _ its third year in a row on the list.
Sales have grown with the burgeoning populations of jails and prisons. Those sales have been easy to make to a tight-knit correctional industry, where word-of-mouth has been the common sales vehicle.
Swanson Services' sales doubled to $30-million from 1995 to 1997, according to UF. As a private company, it does not disclose profits, but Charles Swanson III said it's safe to say that profits are built from high-volume sales.
"We nickel-and-dime everybody to death," the 33-year-old Swanson said, laughing. "Millions and millions of Snickers bars."
Since its inception, Swanson Services has grown from one Madison, Wis., office to 26 service centers across the United States. The centers typically employ a manager and 12 other employees: a mix of sales representatives, information technology managers and workers filling orders.
When Swanson signs a deal with a jail or prison, it supplies computers and proprietary software. If the jail is large enough in sales terms, computers are part of the package. If it is small, it might have to lease them.
The Duval County Jail in Jacksonville has 14 computers to serve its 3,000 inmates in three separate facilities.
The company's clients range in size from 10 inmates to 4,500, the largest being the Fulton County Jail in Atlanta. In three cases, Swanson Services' center is within the correctional facility _ at state prisons in Idaho and Delaware and at the Kern County (Bakersfield), Calif., jail.
Honey buns' popularity
The methods by which inmates order items vary. Small facilities might have inmates fill out a simple form while others at larger facilities fill out elaborate bubble-in sheets. The information is downloaded from larger facilities. Smaller jails send their orders by overnight mail.
Orders are not sent through the Internet.
"It's not like the information is high-security data," Swanson said. "The thing is, most facilities don't want any outside access. In a lot of situations, we're on other systems, so they dictate the rules."
The jail or prison sets the price for products.
The general layout of a facility often determines the frequency of deliveries. Some get deliveries twice weekly ; others, such as the 2,200-inmate San Francisco County Jail, once a week.
Swanson's Bradenton service center is run by James King. His team stuffs clear plastic bags with goods that inmates have ordered using computer-generated "picking tickets." The bags are put into boxes corresponding with an inmate's location in a jail or prison.
The bags are clear so that guards can inspect them and are heat-sealed so they are difficult to tamper with.
Swanson Services offers inmates about 300 items provided by about 20 vendors.
The most popular item, aside from stamped envelopes, is a 620-calorie treat called "Mrs. Freshley's Jumbo Honey Bun."
"My experience has been that the inmate uses the commissary to fill up," King said. "If he doesn't like the chow, he can buy stuff from us."
"Like seeing Santa Claus'
That's similar to the way Sgt. Gaythel Siplin, a veteran of the Manatee County Jail, describes it. Siplin watched recently as Swanson Services' Evelyn Cunningham distributed commissary items to inmates in an all-female wing. Female workers deliver to female inmates and men to male inmates at the 1,039-bed, 300,000-square-foot jail in northern Manatee County.
Siplin estimates the average inmate spends $25 to $50 each week, but she has seen orders of $400.
The corrections officer said it has been satisfying to see outside workers doing the work she and her fellow employees used to carry out. "It's just not cost-effective to have a $19,000-a-year deputy delivering candy," Siplin said.
Prisoners seem to enjoy the visits of burgundy-clad Swanson workers too.
"When they see the Swanson people, it's like seeing Santa Claus," she said.
Inmate accounts
The systems for accounting for commissary work was very low-tech when Swanson Services started.
"Everything was done by hand," said Swanson, who runs the company's technical support business.
Things have advanced significantly. Now, Swanson Services' software runs the commissary programs and tracks other inmate spending.
"Our software works like a minibank in that every inmate has their own little account," Swanson said. The cash is generally held in a single account by the jail or prison.
Clients have helped change the software over time. Swanson's team of programmers has tried to incorporate the ideas.
For example, the software now handles bail. If an inmate has cash to bail himself out, it deducts that from his account. If family members drop money off for bail or for commissary spending, the program keeps track.
At the end of the day, the program allows jails to transfer bail collections in a single check to the court system, rather than piecemeal, Swanson said.
The program also keeps track of cash for work-release programs. Inmates generally have to pay for the work-release privilege, which allows them to work during the day and return at night or on weekends. If the inmate does not have enough money, then he owes, and the program tracks that, too.
"Any enhancement is free," Swanson said. "If the big jail comes up with an idea that would help them, even the little jail gets it. The funds, the accounts receivable, that was from a big jail. They had two or three people on staff that were doing nothing but keeping track of billing the inmates and how much money there was, and they were doing it all by hand."
Some jail officials have been so impressed with the software, they have asked Swanson Services to provide other services. The Manatee County Jail, a customer for about four years, asked the company to consider writing it a jail management program. "We told them that we'd like to, but at this point we don't have the time," Swanson said.
So far, Swanson Services has not sold the software without the attached commissary services.
A family company
With the relative stability of revenues and profits from the correctional industry, Swanson Services often gets asked whether it plans to issue shares to the public. But the 55-year-old Charles Swanson Jr. said he is resistant to the notion.
"We've contemplated it, but as a family, we prefer to remain private even at the expense of not growing as fast as we could have," he said. "I really like to live by my own decisions."
Family is big for Swanson Services and C.L. Swanson, which is presided over in Wisconsin by Charles Swanson Jr.'s younger brother, Mike. The company is not connected to Swanson food, part of the products family of Vlasic Foods International Inc.
Besides the father-and-son duo at Swanson Services, Charles Swanson Jr.'s wife, Marta, has been integral to the company. She did all the accounting in its infancy and remains secretary and treasurer. She also produces a bimonthly newsletter about company happenings for employees and clients.
The couple's daughter, Kelly, works as the Swanson Services' chief operating officer at an office in Denver, central to most service centers.
Which brings up another negative to selling stock in the opinion of the Swansons. Investors can complicate family-run businesses. Charles Swanson Jr. notes that nationally only about 7 percent of businesses pass on to the third generation.
"Family succession is something we have spent a lot of time on over the years," he said.
What's for sale
Here are the prices of some of Swanson's products sold at the Hillsborough County Jail. The jail determines the price of each item:
Irish Spring soap, 5 oz. $1.30
Arabian Musk, 0.5 oz. $3.00
M&M Plain, 1.69 oz. $0.65
Snickers, 2.07 oz. $0.65
Honey Bun, 4.5 oz. $0.65
Stamped envelope $0.38
Briefs, extra-large $3.25
Sports Bra, extra-large $9.65
Source: Swanson Services Corp.
