May 1, 2007
by James Dudlicek
Guida’s Milk & Ice Cream knows the formula for staying afloat in a pond of big fish.
Guida’s Milk & Ice Cream finds itself with an “unusual development,” according to chairman Al Guida III — business is actually coming to them.
“I’m asking myself, ‘Why?’” wonders Guida, a second-generation member of the New Britain, Conn.-based processor’s family ownership and management.
Not that he doesn’t have an answer — and there are several. One, the company’s strategic location — halfway between New York and Boston — makes it easy to serve two of the largest U.S. metropolitan markets. Two, nimble, flexible manufacturing capability looking to fill extra capacity.
And three, private family ownership means customers “aren’t as afraid of doing business with us as they might be with a giant,” Guida says.
Management’s oft-spoken David-and-Goliath comparison isn’t much of an exaggeration. Guida’s faces stiff competition in its lower New England market, the likes of Garelick Farms, owned by giant Dean Foods, and HP Hood, which has expanded exponentially in recent years.
In fact, shortly before press time, Guida’s revealed it would no longer accept any milk from cows treated with artificial growth hormones, a bow to a like move last year by those larger companies. Guida’s already packages two rBST-free brands — The Farmer’s Cow for the Connecticut market and Rhody Fresh for Rhode Island. “It’s easier to go 100 percent,” says sales manager Dan Tegolini.
But it’s projects like these private labels that has allowed the company to build itself into a leader in niche business. To be sure, Guida’s $130 million in annual sales — to a host of customers including retail, institutional and foodservice — pales in comparison to the multi-billions of its national competitors. But don’t think it takes its business any less seriously.
“We have all the values of a family but we operate like a Fortune 500 company in terms of our practices and policies,” says Michael Young, executive vice president and treasurer, and the first executive hired from outside the Guida family. “It gives us the best of both worlds, and a competitive advantage, too.”
Filling a Niche
The organic boom is helping to drive that new business. For nearly three years, Guida’s has been a contract packager for Organic Valley milk. Meanwhile, the Guidas do a brisk business selling bulk milk and ice cream mix to yogurt and frozen dessert manufacturers, as well as milk and cream for the Dunkin’ Donuts chain on the East Coast.
And last year, the company completely updated the packaging and labeling for its product line, including its school milk, done in cooperation with the award-winning “Milk Rocks!” program to boost school milk sales.
“We try to do just a little bit better than our competitors,” says Mike Guida, president and chief executive officer, and Al’s brother. “We offer an alternative to customers. They realize that if it wasn’t for us, Dean — Garelick — would take over the market and prices would be where they’d be. We offer quality and service. If you call us on the telephone, there’s always a Guida here. We just try to do a little bit better, with a personal touch along with excellent quality.”
Organics are experiencing double-digit growth for Guida’s as well as the overall market, helped along by the partnership with Wisconsin-based Organic Valley, says senior vice president Jim Guida, cousin of Al and Mike.
Al Guida sees companies like his as the best kind to take on niche business as the demand for specialized products continues to grow. “Being a family business and being flexible and having extra capacity and state-of-the-art equipment and excellent people and programs make us a prime candidate,” he says. “I see strong growth potential in that. That’s a sign of growth and evolution. As they say, when opportunity knocks, you have to be ready to open the door. Organic milk is one of those deals. Specialty bulk customers — these types of things. Large-buying commissaries. Logistics are more important than any time ever in my history.”
The industry’s customers, he says, are starting to “wake up and find out what’s valuable — what’s local, what’s regional — what means something to consumers. This Farmer’s Cow brand we package — local farmers marketing their own milk, their own identity, with an award-winning carton. They’re not looking for a handout; they’re doing something to help themselves. Connecticut stores have embraced that. People are willing to pay a premium for what they want and especially for organic, because it’s fresh, it’s local, it’s not coming in mega-tankers from the West.”
But being a niche player isn’t restricted to products; it also extends to service. In the case of Guida’s, it’s 24/7 online ordering and its Electronic Data Interchange system, which managers say give them an edge over their larger competitors. “We have some technology they don’t even offer, things like scan-based trading [to help manage store inventory] and electronic data interface,” Young says. “One of the great equalizers of the marketplace is technology, and we have a great IT department.”
That department is headed up by Joel Bartolome, who stresses the importance of technology. “We’re slowly changing, making the end users adapt to the technology, understanding that IT is an integral part of the business,” he says. “The price of the milk is no longer the competitive advantage. It’s the service and how you serve customers by using technology.”
Other changes have been more traditional in nature. “Here at the plant, we’ve computerized the pasteurization. We’ve updated the filling operation,” Mike Guida says. “We run a tight ship and try to be very cost-conscious in production. It’s tough.”
The people make a difference, too. “They feel like they’re part of the family. For years, people have asked me why are we still in business when all the other dairies were going out of business. What do we know that they didn’t know?” Guida says. “We really didn’t know anything more than they knew, except maybe we had better help than they did. Everybody works together as a team and becomes part of a family, and it makes a difference.”
Few, if any, working at Guida’s today have been there less than five years, and some have been working as long as 50 years. As a show of appreciation for their hard work, 25-year employees receive a travel voucher for a well-deserved vacation.
“I think being a family business is a great help to us in trying to promote that customer-centric feeling,” Jim Guida says. “You can still deal with a Jim Guida or a Mike Guida or an Al Guida. There are still a lot of family businesses out there that prefer to do business with family businesses. We feel our level of service, because we’re so close to everything, is really great.”
And Guida’s is particular about the folks it hires. “I’m of the opinion that business is changing so rapidly that it’s important to have the right group of people that can adapt to the business environment rather than to hire a specific person for a specific job,” Young says. “It’s more important to get great thinkers on board who can change with the dynamics of the marketplace.”
To improve things even further, the company is in the midst of strategic planning on how to get the most out of its resources. “It’s taken us in a completely different way of thinking about our business,” Young explains. “We’ve broken our business down into several channels and we’re looking at each one of those channels. Instead of a top-down approach we have a bottom-up approach now, where we have committees of people representing each facet of the organization. In doing that, it’s opened our eyes to a lot of things at the highest levels of the organization and has changed the whole way in which information flows within the dairy. That’s been pretty exciting.”
Among the results of this ongoing planning was a streamlining of delivery routes to help combat the rising cost of fuel. David Drezek, director of distribution and transportation, explains how Guida’s was able to convince customers to take on more product per shipment to reduce the number of weekly deliveries from three to two. “If you do that with three routes, you can take a truck off the road and sell the same product with the same customer satisfaction,” Drezek says. “We maintained our existing business and got some additional business as well, and took 15 to 20 trucks off the road.”
It was also an incentive for drivers, who are paid by the case; the new system allowed them to work the same hours or fewer but sell more cases per route, Drezek notes. Additionally, a fuel surcharge imposed on customers in 2006 was lifted this year due to the resulting savings.
The company is looking to get more out of the trucks in other ways, too. Guida’s is conducting a test program with a national chain retailer selling products like hot dogs, bacon, pudding and other food products from its delivery trucks, much like full-service home delivery used to be.
All in the Family
Members of the third generation of Guidas to work in the business are staking out their careers in dairy, taking steps to ensure the company stays in the family.
“The first thing I got paid to do was sweep out the garage,” says route supervisor Jon Guida, Michael’s son, who first wielded that broom two decades ago at age 12. Moving up through the ranks of receiving and processing, Jon is now in charge of the company’s wholesale drivers and their fleet of trucks.
“At 32, I’ve got 20 years in, so that definitely shows an interest,” he says, noting that his own children are already showing an interest in the business. “It’s definitely a career. I plan on seeing it through the next 100 years.”
Jon’s sister, Ashley, oversees a 14-member customer service department that handles orders for convenience stores and distributors. She wasn’t quite as sure at first about entering the family business.
“If you asked me five years ago, I would have said absolutely not,” she says. “But now, absolutely. I take such pride in it.”
The siblings note that many working at Guida’s today have been there since before they were born. But they have no notions of business royalty. “Our feet are still on the ground,” Jon says. “I’m just as comfortable in a delivery uniform as in a shirt and tie.”
That’s a philosophy reflected by their dad. “I’ve helped load trucks and run machines at the drop of a hat, and still know how — and still do occasionally,” Mike Guida says. “One of my management philosophies is MBWA — managing business by walking around. That’s more important than an MBA.”
What’s in store for Guida’s a few more years down the road?
“Right now, trying to streamline and get over the transportation issues is one of the biggest hurdles,” Jim Guida says.
Continuing to evolve as a diversified niche player will be key, Tegolini says. “We’re not just a milk processor," he says. "We're more service-oriented.”
Helping that along is the ability to jump in feet-first and take on new projects. “We can provide a good option for a lot of people by developing new products and doing things in a different way,” Al Guida says. “We can’t be all things to all people, but we can do certain things much better than others. We’re not the biggest plant east of the Mississippi like our friends in Massachusetts are. We don’t have to sell to everybody and be the biggest. We’re 121 years old and still fresh.”
And there are no signs that the freshness — or independence — is ending anytime soon.
“We care about our customers; they’re not just a number,” Mike Guida says. “We probably don’t play that card as much as we should, but it’s something we’re very, very proud of.”
GUIDA’S — A BRIEF HISTORY
In New England, where few independents remain, resisting the temptation to consolidate while capitalizing on the advantages inherent to a family-owned and operated firm is the cornerstone of this company’s success.
Guida’s Milk & Ice Cream — a regional processor of fluid milk, cream, ice cream and ice cream mixes, fruit juices and drinks, water and a variety of other dairy products, and a distributor of ice cream products — is one of the largest independent dairies in New England. The company has experienced remarkable growth over the years. Expansion by maintaining a conservative and solid approach has been key to its development for more than 120 years.
Guida’s Milk & Ice Cream attributes this business surge to numerous factors, but insists the most important ingredient in the company’s recipe for success can be traced back to its founders, brothers Frank Guida (pronounced GUY-da) and Alexander Guida Jr. The latter, current chairman Al Guida III’s father and one of 13 children, grew up on a working dairy farm and was selling milk in New Britain by 1932 at the height of the Great Depression.
During World War II, HP Hood bought Guida Dairy’s supplier with plans of ultimately eliminating its subdealers. Rather than sell, Alexander and Frank purchased the milk plant and business — Seibert Dairy, founded in 1886 at the company’s present location — from Arthur Seibert in 1947.
Since then, Guida’s Milk & Ice Cream has had the reputation of supplying the finest products and service to its large customer base. With a fleet of more than 200 vehicles, the company delivers products throughout southern New England. The Guida’s service area includes Connecticut, Rhode Island, Massachusetts, northern New Jersey, New York City, Long Island and eastern New York.
The company says its emphasis on quality control cannot be overstated. In fact, with an 18-day code on all of its fluid milk products, Guida’s Milk & Ice Cream says it guarantees the utmost integrity of its product line.
Guida’s lives by its mission statement: “Committed to complete customer satisfaction through service, quality and innovation. We continuously strive to be the leader in our industry while retaining the personal touch.”
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