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Three years ago, Milwaukee-based Dohmen underwent a massive shift, prompted by an “a-ha moment” among company leadership.
After re-evaluating its direction and vision, Dohmen leaders determined they no longer wanted to be part of the problem when it comes to the nation’s battle against diabetes, heart disease, obesity and other chronic illness. The company – a conglomerate of health care businesses – sold its life sciences business to a pair of private equity firms, marking its exit from the pharmaceutical industry.
“With the spend in the U.S. on health care approaching $4 trillion a year and 80% of that being spent on chronic disease, we felt we were part of the problem,” said Kathy Koshgarian, president and chief operating officer of the Dohmen Company Foundation. “Being in the pharmaceutical space, and really looking at the fact that almost 80% of what we were supporting was either reversable or preventable, that’s why we exited.”
The company set out to instead be part of the solution, charting a new course for the 160-year-old company. Rather than being prescribed pills to treat their conditions, people need access to nutritious food to reverse them or prevent them altogether, company leaders reasoned.
“Watching the trends, being on the frontline, we truly not only saw what was happening on a macro level, but then on a micro level,” Koshgarian said. “We basically said, ‘we can’t do this. We know there’s a better way to solve this problem.’ We’re problem solvers. That’s part of the DNA of the organization.”
Following its divesture, Dohmen converted its ownership structure in 2019, becoming the first in the country to switch from a family-owned S corporation with more than 40 shareholders to a benefit corporation owned by a private nonprofit foundation, The Dohmen Company Foundation.
The company also announced it would move its headquarters from the Historic Third Ward to the former Fein Brothers building on North Dr. Martin Luther King Jr. Drive in Milwaukee’s Bronzeville district, a location that Koshgarian says will embed it in the community it serves and allow for collaboration with like-minded organizations.
Koshgarian, who last year took over Dohmen’s daily operations with the retirement of former CEO Cynthia LaConte, has steered the organization through these shifts, leaning on her past experiences in disrupted industries.
Koshgarian got her professional start with AT&T – a “true startup” at the time, she said – where she worked with clients in the government, education and medical sectors. She was then recruited by Harley-Davidson, where she and her team were responsible for developing a retail strategy amid the Great Recession.
“My past experience relative to AT&T and working with the health care space and the philanthropic space and then with Harley-Davidson through growth and change, truly has assisted with now the focus on the development of the new service offering (Dohmen is) constructing and changing locations at the same time,” she said. “The 25 years or so I spent with AT&T, Harley-Davidson and Dohmen truly has positioned me within the organization at the exact right time to be able to deliver on our vision.”
Central to Dohmen’s new strategy is the belief that food is a key preventative medical intervention.
“We got to work quickly on research and realized that food is the primary and most efficacious intervention to reverse the trend in today’s health care with regards to individuals dying on a yearly basis. There are over 700,000 people dying from cardiovascular disease and the primary reason for that is what they’re eating,” she said.
This work is personally meaningful to Koshgarian, who has an autoimmune deficiency and was “caught in the health care system” for nearly a decade not able to identify the issue. After making changes in her lifestyle – including intentional food choices – her disease is completely managed.
“I’m an example of the power of food being a primary medical intervention,” she said.
To get healthy food to more people, the company has made a series of acquisitions in recent years to build out a food delivery services platform. Early in the COVID-19 pandemic, the company launched the Food for Health program, which provides free meals to low-income members of the Brookfield-based Common Ground Healthcare Cooperative.
Dohmen is now building off that platform to launch a for-profit “social business” that will allow local employers to provide a food benefit to their employees, similar to employer-sponsored medical or pharmaceutical benefits.
“We’re going to bring to employees healthy nutritious foods, and we’ll be delivering it onsite, in addition to health and wellness programming, which includes coaching, education, biometric screening and goal setting,” Koshgarian said.
Those profits will then be funneled back into the charitable purposes of the business, including Food for Health and the foundation’s grantmaking to other organizations. The goal is to be entirely self-sustaining in the coming years.
The company’s other goal is to grow its impact.
“Ten years out, we envision fully bringing our vision of ‘healthy people powering healthy communities’ to life,” she said. “Ten years from now, I envision Dohmen Company Foundation will have been touching and improving upwards of a quarter million lives.”