Schoep’s Ice Cream Company, Inc.
Product: Ice cream, frozen custard, frozen yogurt and novelty treats
Headquarters: Madison
Year founded: 1928
Founding family:
- E.J. Schoephoester (founder),
- Peter B. Thomsen (1st generation of current ownership)
Current company leader: Al Thomsen, president/CEO
Website: schoepsicecream.com
Schoep’s Ice Cream Company has certainly mastered brand recognition: who hasn’t been known to enjoy a bowl, or even a pint? And while Schoep’s product can sell itself after just one spoonful, this third-generation family business has had to successfully navigate the challenges unique to family-owned companies to stay viable and on top of its industry.
Founded by E.J. Schoephoester in 1928, Schoep’s has been under ownership of the Thomsen family since Peter B. Thomsen purchased the popular, Madison-based ice cream maker in its relative infancy in 1940. Keeping the same basic formula of fresh cream, eggs and fruit, P.B. Thomsen expanded the market and product options for Schoep’s. Through the years, the company has added Gilles frozen custard and sherbet, as well as other frozen treats. Today, Schoep’s produces 10 million gallons of ice cream yearly and tops $60 million in sales, shipping its product to all 50 states and Puerto Rico.
Planning and preparation
Succession planning is key to the long-term survival of a family business. That plan includes management succession, ownership succession and future leadership development. The Thomsen family has spent significant time and preparation on all three. Third-generation management includes Alan Thomsen, CEO; Eric Thomsen, VP of innovation and technology; Richard Thomsen, operations manager; and John Thomsen, food service sales and special events.
“At the end of the day, the reason family businesses either make it or they don’t has to do with politics,” said Alan Thomsen. “Each generation has to be willing to step back and let their personal differences stay outside of the business. I think that is the most critical piece. You can succeed a heck of a lot better working together than if you try to do it all by yourself.”
When second-generation leaders Les, Walter and Paul Thomsen were in their 60s, discussion turned to the company’s plans for succession.
“We started having some discussions about company bylaws and what is going to happen. We began talking about it four or five years before we ever started engaging in a meaningful way,” said Alan Thomsen.
“It took a long time for us to be able to sit down and get together and validate, first of all, that the third generation was prepared; and then, that they wanted to commit to taking the company forward. So we started down a path of open dialog. We used some of the legal firms that helped us adopt our original company bylaws, and started setting up a path for transition.”
Included on that path were plans in case of death or disease, as well as processes to handle new business opportunities.
“We have a board of directors,” said Thomsen. “And if anybody ever comes to us with business propositions or mergers and acquisitions, those things are vetted out and discussed at a board and/or stockholder level.”
Some family businesses require the next generation to buy the company as opposed to inheriting it. That is currently not the case at Schoep’s. The reality that the next generation may not be in the financial position to buy out the current generation played a part in the family’s decision.
“The current decision is to pass the company along, assuming there are owners in the business that are family members,” said Thomsen. “Otherwise, I’m sure we would look at another direction.”
Smooth transitions
Alan Thomsen always expected to work in the family business.
“We were a pretty tight-knit group growing up,” he recalled, noting the management roles each of the second-generation leadership played. “Paul managed the office and sales activities. My dad (Walter) took care of first shift production, and Les would take second shift production and all the duties associated with that. So we were always as a family interacting between ourselves, cousins and long-standing employees. I think being part of something for so long and the family heritage just continued to draw me in.”
Alan’s uncle, Paul Thomsen, served as company president from 1974 to 2008. Alan assumed that role in 2012, adding CEO to his title in 2015. In between, non-family member Tim Timm served as CEO. Timm is still involved in Schoep’s as a company advisor and board member.
“That was part of our transition, to bring someone in from outside of the family who was knowledgeable in our businesses and was also tough enough to be able to walk down the ‘political path,’ if you will,” Alan said.
Alan holds the mentoring he received from Timm and others in the company in high regard.
“I think that is unique to a family business,” he said. “We tend to have a lot of mentors. We just don’t necessarily recognize them as such until we are old enough to realize the impact they have had on us.”
Coming up through the ranks of the family business, Alan was impacted by a number of people.
“We work with a lot of different folks who have different focus areas,” he said. “Not any one mentor can bring forth everything. You kind of have a shopping cart approach and hopefully you are in a position where you know what your needs are at your current business status.”
Developing the next leaders
Alan and the other third-generation family members worked closely together at Schoep’s throughout their youth
and adulthood.
“We as the third-generation have agreed that any future generation needs to work somewhere else before they engage in the company. We want them to get out and have life experiences,” Alan said. “I think when we were growing up it was necessity. We all had to work hard to keep the family business going. We all played a part, and it was important to all of us.”
Schoep’s currently employs a total of 122 people at its state-of-the-art production facility on Division Street on Madison’s east side and at its distribution center near the Dane County Airport. Alan said he views outside experience as critical to company growth, whether from within the family or elsewhere.
“Whether the next great person has the name Thomsen or not, you really aren’t concerned about that, because the most critical thing we have is a responsibility for 122 people and their families,” he said. “So if you put yourself ahead of those folks, you have made the first and last mistake in business.”
While Schoep’s hiring strategy focuses on bringing key people to its management team, the company also allows its employees to grow and advance within the company ranks through training and education.
“You always need to be looking ahead, training folks and allowing them to grow personally. If you allow them to grow, they are likely to stay with you longer. It’s a mutual commitment rather than a one-sided deal,” Thomsen said.
To assist in employee development, Schoep’s offers a program where it pays the cost of employees’ education in approved areas of study.
Meeting future demand
Innovation and technology play a critical role as this family business grows and adds to its product mix.
“We are spending a quite a bit of money and effort on developing protein-enriched products, either for ourselves or for other customers we co-pack for,” Thomsen said. “We are also spending time on new and innovative flavors and techniques to deliver the best possible product.”
Understanding and meeting consumer demand is one secret to Schoep’s success.
“I think we are in a really unique time now, where the Millennial population continues to grow, and we recognize that folks aren’t looking for a five-quart pail that they will put in a chest freezer at home,” Thomsen said. “They have limited space, and they are looking for an experience. And that experience usually isn’t greater than a pint. My time, our time – maybe a couple sitting on the couch sharing a pint – that is becoming more and more the norm.”
