1980s: A Decade of Growth and Change
Al was surprised to learn through a Securities and Exchange Commission (SEC) filing in the early 1980s that someone owned 10 percent of Reser's shares and was buying more.
"A Chicago investment firm apparently planned to put together a consortium of small food companies something like Beatrice did in the 1980s," Al remembers. "Eight or 10 small food companies in the $10 million to $50 million range were targeted and four had already been bought. We learned we were also a target. The investment firm had been buying our stock for a couple of years when they had to file with the SEC that they owned 10 percent of our stock. After that, the firm really got active and ended up owning about 44 percent of Reser's stock. They ran full-page newspaper ads trying to buy our stock.
"That's when I got active," Al continues. "Quite a few of our employees owned stock, so I got first-right-of-refusal agreements. I fought for three or four years, and the investment firm eventually realized they were locked out. They had bought our stock for as low as 35 to 40 cents a share up to an average of about $4 a share. We paid them $14 a share. They made a nice profit and we had a big debt, but we also had the company."
Paul Leavy, Reser's Chief Financial Officer and Treasurer, sees the 1986 return to private ownership as something just short of a miracle.
"I don't think you could pull it off today," he observes, "because everything moves faster now. I don't think you could gather the resources or support to take a company from the public sector to the private sector now. I've only seen it happen once. It's a remarkable accomplishment."
Darrell sees the entire episode as a blessing. "In retrospect, the threatened acquisition did us a huge favor!"
Despite the time he spent avoiding the takeover, Al continued to blaze new trails and try new ideas.
Determined that Reser's would set the industry standard for quality, Al hired the company's first Research and Development Director in 1981. Before that time, product samples were sent to an independent laboratory daily. Recently out of college with a head full of ideas and a stint at Stouffer's under her belt, Jana Taylor didn't accept the job immediately. Her interest piqued by the opportunities and possibilities, however, she called Al a month later and the two agreed to grow together.
"Although I was only at Stouffer's a short time, I considered it the Rolls Royce of the industry and it gave me a vision of what could be at Reser's," Jana says. "So I asked Al to clarify his goals for me. Did he want to be a Rolls Royce, a Cadillac, a Chevrolet, or a VW? Each of them is a successful product, but we needed to know what our goal was. I needed to know the quality and image he wanted so I could deliver it for him day in and day out."
Because Al wanted to be the best, that conversation set a years-long process in motion.
"It got very complex," Jana recalls. "Understanding the science behind cooking a potato, for example. You had to know the age of the potato and how much sugar vs. starch was in it and how long it had been stored between the field and production because that changed the absorption ratio of dressings. And I just got to do it. I feel like I had a playground because, if Al trusted you and knew things were being taken care of, he pretty much gave you carte blanche to keep learning and delivering."
"In the old days," Al remembers, "you'd look at potatoes, and if they were rotten, you refused them. Now we check specific gravity, sugars, starch levels. We put a lot of emphasis on both the quality of our raw materials and finished products."
Jana spent the first few weeks figuring out how to improve production standards in order to incorporate good manufacturing and employee practices.
"I remember," she says, "that production employees were wearing street clothes and they weren't wearing hairnets. When I told them they needed to wear lab coats and hairnets, they replied that managers needed to comply with the new rules, too.
"I remember the first time I asked Al and Darrell to wear hairnets and lab coats when they brought guests on a tour. They said okay and were very supportive. From that day forward it wasn't a tough transition."
The next thing Jana tackled was formulas. "Standardizing both formulas and mixing procedures gave us the opportunity to improve quality. Standardization meant no one guessed about a recipe and it ensured consistent quality.
"Al realized that if the company was going to survive, we had to have standards," Jana observes. Safety issues were becoming legal issues, and consumer safety was a growing concern. Al committed to making quality changes and to growing the business."
The commitment has never faltered. Today, Reser's is recognized as the industry leader in all aspects of food safety, according to Steve Loehndorf, Director of Corporate Quality Control.
"We go beyond safety requirements," Steve says. "We've established standards in excess of those required by the government. We're aware of and willing to take advantage of emerging technologies. Bioluminescence is a good example. It provides real time-rather than 48 hours-biological results to tell whether machinery is clean enough. We're willing to explore, and we're a leader at incorporating emerging technologies into our systems. Reser's is open to trying new things."
Reser's products are manufactured according to the meticulous HACCP (Hazard Analysis Critical Control Point) system that focuses on process control rather than on product testing. The four-member technical staff Jana originally worked with now exceeds 40.
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