Pleasant Prairie-based Fair Oaks Farms was running at far less than full capacity and entirely reliant on one customer, McDonald’s, when Michael Thompson bought the business in 2003. The company has since tripled its workforce to around 260 today and revenue grew to $342 million last year.
Fair Oaks Farms produces protein foods, including breakfast sausage, bacon, meatballs, chicken and turkey. Thompson leveraged his knowledge of the food industry, which he gained from nearly two decades at McDonald’s and his early career at Aldi Foods, to grow the company.
As part of its annual Ovation Awards, the Kenosha Area Business Alliance named Thompson its 2019 Entrepreneur of the Year, a recognition that followed Black Enterprise magazine naming Fair Oaks Farms as its Company of the Year. Thompson, president and chief executive officer of the company, credited the team at Fair Oaks Farms with helping deliver the company’s growth.
“It’s my success, but it’s my success and their hard work,” he said. “I’ve been blessed. I mean, I’ve been blessed by God’s good grace.”
Thompson sat down with BizTimes to discuss his career, growing the business, working with his son, Michael J. Thompson, a vice president at Fair Oaks Farms, and his approach to management and leadership.
BizTimes: How did you get your start in business?
“I was a graduate of Cornell University out of Ithaca, New York. I started with Aldi Foods as a supervisor trainee. So, I got into the food business right out of college and opened up about 17 Aldi stores in the Midwest and just started working on my career from there … I worked my way from operations into supply chain and then McDonald’s hired me away in 1985 to be the beef buyer for the U.S. …
“I had many, many roles in McDonald’s, but probably the two major ones was I headed up North America supply chain for McDonald’s as a vice president and then I ran their West Coast operations out of San Francisco. I had made a switch from a supply chain career into an operations career and wound up running several hundred stores in the California base, operator- and company-owned stores. It’s kind of a unique background to have supply chain and both operations in a large corporation, but that was a good career path for me.”
What are some of those differences, then, between the supply chain side and the operation side that kind of play off each other?
“Well, on the operation side, you’re responsible for day-to-day business, so you have just a different level of responsibility. First of all, you’re working with a group of owner-operators that are entrepreneurs in their own sense under the brand, but still in their own sense they’re entrepreneurs. And you have company goals and objectives and you’re trying to work with operators. They have personal goals and objectives, but you’re all trying to reach one level. The nice thing is that you learn to work with other businesspeople on common goals and you have a daily, weekly, monthly P&L that you have to be responsible for, so those things are very helpful in a business sense. For me, anyway, that is a little different than on the supply chain side where you have more long-term goals and objectives. You’re supplying food every day, but your goals are a little bit more long-term, a little bit strategic.”
You played basketball at Cornell. What are some of the basketball lessons that you apply in business?
“I tell you what, it’s teamwork. It’s working hard. It’s knowing how to win but also knowing how to lose and, even though you’ve lost, persistence, which I think is one of my hallmarks. You just learn how to be persistent and to go after your goals again, even though you got knocked down. That’s the biggest lesson I think a person derives out of sports, besides just the discipline nature of it itself. You work so hard, you go to practice every day, you’re at games on weekends, you’re traveling and you’re expected to keep up a high level of work for school so that you can obviously be successful and graduate … I don’t know everyone really appreciates how hard that all is. And you try to have some fun in between.”
Are there any lessons from your time at McDonald’s that you fall back on?
“McDonald’s is a great company and I learned a lot … primarily this environment of working with people, with the owner-operators. They don’t report to you, you know, so you have to really learn how to accomplish what you need to accomplish through communication, through getting people to align with your thinking, your thought process, and get them on board. And then you learn that your thinking isn’t correct all the time either, and then you learn from them.”
You bought Fair Oaks Farms in 2003.
Why this company? And was owning a company always a goal for you?
“You know, as a young inner-city kid, I’ve always had visions of either running a company or owning a company. And kids have many, many dreams, right, and they come and go but that was one that kind of always stuck with me … When the opportunity came, it was a unique one, one that I thought I could be successful at. There’s a lot of opportunities out there, but you have to figure out which ones you can be successful at based on your skillset and based on what you’ve done in the past.”
When you bought the company, it wasn’t really running at full capacity. Did you have a clear plan of how to grow or did you have to get your feet on the ground to develop one?
“It really was the latter. I really had to get my feet on the ground. Everyone thinks they can run a company … that you walk in the door and you know what to do, but frankly, I was excited for the opportunity. I knew I had to grow the company but I wasn’t quite sure how … there wasn’t a detailed plan. I really needed to get my feet on the ground. I really needed to understand the company and all the different departments, so I spent time in every department trying to learn what everyone does … Once I got a sense of what the company needed, which was volume, then it was about putting together a plan to grow the customer base because at that point in time we were 100% just a McDonald’s supplier.”
So, today, who are your customers now and how did you get that business in the door?
“One of the first things that I did with the company was look for more outside business. So, first thing I did was create a retail division. So, in our retail division are companies like Walmart and Aldi Foods. And then we continued to expand to do more food service, so we do companies like … everyone from Papa John’s on meatballs to Panera Bread … we’re in Meijer, so we’re in several companies like that to help us expand. And then, finally, we were working on the distributor side of the business. So, there’s also large distributors out there that we do business with, and I believe there’s more growth opportunity for us to come.”
What’s the challenge of being in the supply chain for those big brands? They have a lot of leverage, right?
“You have to have a great customer base and for us that begins with McDonald’s. I mean, they are the best chapter and verse on how to work with suppliers, how to use their system to get everyone focused on one goal and the goal is to make them successful. So, once you learn that and, remember, I was in that learning for 20 years, so it was second nature for me to be able to create that same type of process and system for my own company as I went out. So the larger companies, because I came from a larger company, I understand how they work, that’s the knowledge and the information I was able to leverage running my own company. It would have been very difficult if I started with a lot of smaller companies and then tried to scale up to a McDonald’s. But when you start out with a McDonald’s, it became, I won’t say easy, but obviously it was a little easier for me to understand how that all works.”
You mentioned the need for volume. Was there an element of not chasing volume just for the sake of it and making sure you found the right partners?
“That’s correct, and that’s very difficult to do and sometimes you get it right, sometimes you don’t. If you don’t, you try to make adjustments, but we got it right – not 100% – but I think we got it right, and, again, because of my knowledge in the industry, I knew who were the right people to talk to and go after.”
Switching gears, how do you describe your own personal leadership or management style?
“I would consider myself more of a humble leader, but a strong leader and I would tell you I’m an optimist by nature. I’m very persistent and very much action oriented. I think those things help me to be successful in this business because there’s just a lot of adversity that comes up in business in general.”
What’s the importance of goal setting to you, especially in setting ambitious targets for your teams?
We do long-term planning and we do short-term planning. Our short-term planning would be our yearly goals and then long-term planning would be more like three to five years out, but I’m involved in all of those conversations and I want to know what my department heads are thinking about for the coming year – areas that we have opportunities that we want to make sure we capture those for goals and objectives for the following year to make improvements on. The longer-term pieces are more strategic in nature, you know. Where do we want to go, what do we want to be, you know, in three to five years, (are a) little harder to put a framework around, so they’re more at the 60,000-square-foot level, but that’s OK. You have to sometimes just put a stake in the ground and then go for it. I give myself the opportunity to be wrong sometimes and adjust if I need to adjust.”
Fair Oaks Farms has invested more than $10 million into its facilities in recent years. What’s your decision-making process for those investments? Does it go beyond ROI?
“I mean, those are difficult decisions and that’s why I have a very good team at Fair Oaks. We vet those and we go through them with a fine-tooth comb and try to make decisions. A lot of times decisions are ROI-based, but a lot of times you have to make investments that have nothing to do with a return on investment. Sometimes it’s a return on people. I believe in investing in our people and our employees so, you know, I don’t look at that as an ROI, I just look at that as the right thing to do.”
This is both a minority- and family-owned business. What is important about those two distinctions to you?
“I just think being an African-American, it’s important that people of color have opportunities to run and build and grow businesses in this great country of ours … I’m very proud to have had that opportunity and I think there should be more, so I try to do anything I can do to support that…
“The legacy piece, my son is in the business. He’s been here with me for 10 years. I love to create a business that I can create a long-term legacy of family ownership. That’s really important to me. I know a lot of companies grow, build and sell. I’m hoping to grow, build and turn it over to my son and hopefully he’ll do the same, but I just think that that’s important. It’s really something special; it’s really something unique and (I’m) hoping that happens.”
How do you approach making sure he’s fully prepared when the opportunity comes for him to take over?
“You know, you can’t really make sure but I just read a great article that said leadership … it can’t be taught, it must be learned. I think that’s important. He’s learning, he’s doing the learning and we’ve got a great group of folks here that work together. And then the good thing about him … he has a great attitude about it and he understands that he has to learn this as well and you cannot teach leadership.”
What’s the roadblock to more people of color getting into management positions?
“I just think we’ve got to do a better job of looking. I think people are out there. You have … hundreds and thousands of graduates coming out of college, great colleges and universities, across the land. I just think there has to be a better outreach to find people. It used to be said that ‘Well, you know, we can’t find people for these positions.’ I really don’t believe that and I don’t buy it. I think the people are out there; you just have to do a better job of reaching out to them and it may be non-traditional ways of reaching out. But I think if the business community, in general, gets a little bit more creative, then you can find all of the people of color for these types of positions that you want.”
Kenosha and Pleasant Prairie have seen a lot of growth since 2003. How has that impacted your business?
“We used to be able to put up a sign outside of the door that we were hiring and we’d have lines all in the parking lot of people to come in and now we can put out as many signs as we want, we will hardly get anybody. There’s been a huge change in employment base overall. But I love Kenosha County. I think it’s a phenomenal place. I think it has a unique opportunity to become a place of destination for industry, for family, for technology. You’ve got the lake. You’ve got a lot of business coming in and I think the more the leaders look at improving the area and the services to the area and the housing and everything else, I just think it’s got a great opportunity to be a destination. We have more trouble hiring now than we’ve ever had before. I don’t think that’s necessarily a bad thing. I think that’s good for the area and hopefully the more people you draw in it’ll get us more professionals in the area.”
How do you work with your customers on product development?
“Almost every customer we have is looking for the next new thing that’s going to bring excitement to their customer base. We look at our responsibility as trying to help them find whatever that next new thing is and if it’s something that we can do in a protein product … do we spend time on that to try to figure out what is it that people are looking for? Is it a new flavor of bacon or a new flavor of sausage or is it something for snacking time or pre-dinner or new at breakfast? … It’s a giant wheelhouse that you try to make some sense out of, depending on the customer base that you have.”
So it’s not just a spec that McDonald’s gives you, you have to hit, and you don’t have to think about the product development at all?
“We have to do both. I mean, once you have a spec, once you develop a spec, my responsibility is to produce that well and to hit that spec … I think we’re unique in the sense that we want to understand what our customers’ goals and objectives are because I look at one of our roles is to help them fulfill their goals and objectives. So if I know they’re trying to create more customer traffic or they want the newest product for breakfast, we’re going to try to help them do that and by helping them, you know, hopefully we would grow as well.”
What’s the importance of personal relationships in a world that is becoming more digital and transactional?
“While we are fully into all of the digital communications, and we do that very well, we go out of our way to take the time to still make sure we have personal relationships with people. I am a firm believer that every human being is unique and I think every human being has unique qualities and personalities. One of the best things we have on the planet is to be able to communicate with each other and understand each other as people … I don’t care how digital we get, you just have to go out of your way to make sure you meet, you shake hands, you talk to people, you look them in the eye … I’m just a big believer of it and I think it’s part of our success in terms of our relationships with our customers.” n