Purely strategic

Dairy Foods,  June, 1998  by Sue Markgraf

Tags: acquisition, Dean Foods Co.

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Purity Dairies is the latest to become the Dean of the Southeast.

The mid-May acquisition of Purity by Dean Foods Co., Franklin Park, Ill., means the dairy, with its tradition of innovative products and dynamic marketing campaigns, has behind it the financial strength and marketing muscle of an industry powerhouse. It also means Purity becomes part of the family of onetime rival, Dean-owned Mayfield Dairy Farms, Athens, Tenn.

"People who know the Ezells were stunned because Purity was a 'never-sell.' It was to be a family business forever," says Mark Ezell, 38, Purity senior v.p./dir.-sales/marketing, and grandson of the dairy's founder.

With more than 70 years and three generations of Ezells in the business, Purity has maintained steady growth and a reputation as an industry leader.

Innovations include Purity's product-protective yellow fluid milk jug, its sweet acidophilus and 1/2 Plus low-fat milks, and its award-winning cottage cheese and buttermilk. Staying independent was exactly what the Ezells had in mind halfway into 1997.

"We really had done all the things you need to do as a family business to put the next steps in place. Our plan was 'on plan,' it just did not accurately predict what was going to be happening around the world," Ezell says. "In 1997, we did about $101-102 million. We went way past our goal, but the industry was doing so much more than that. As a $100 million company we were much smaller as it relates to the industry in 1997 than we were in 1992 as a $50 million company."

Almost overnight, the family decided to sell.

"Once we made the decision, then we wanted to find the company that would allow our family to operate as a family unit, would be decentralized in nature and yet would bring resources to the table and help us strategically. Clearly, Dean Foods was head and shoulders above the rest," Ezell says.

"We started looking at the rapid consolidation taking place in the industry. The Southeast started to become a more challenging place to do business as an independent," he continues. "It was still sunny, but the thought of hail and thunderstorms coming around the corner and what it could do to our long-term success was of great concern. We wanted to secure a better long-term future."

In the spring of '97, with a new advertising campaign about to be launched, the company broke off its 26-year relationship with Carden & Cherry. The advertising company had polished Purity's reputation as one of dairy's most creative marketers and helped launch actor Jim "Ernest" Varney's career through Purity's TV and radio commercials. Ericson Marketing Communications got the $1 million-plus account, and the charge to give Purity a fresh look.

"We've always been huge believers in advertising," Ezell says. "We spend a considerable amount of money - 2% of sales - and have done so for the last 30 years. We think it's essential for good brand marketing."

Promotions for Purity's key executives were named in September, and near Halloween, the dairy was a step behind Dean Foods with the debut of a wrap-around sleeve on its yellow plastic gallon milk jug. Just this spring, Purity is debuting its take on the Dean Milk Chug, an on-the-go yellow pint bottle for fluid milk, and said more innovations on the line would follow.

"We'll go out and roll with our new package, then we'll re-evaluate it at some point," Ezell says. "Our new bottle has already generated a 20% increase and we're just getting the advertising started."

* Headquarters: Nashville, Tenn.

* Products: Milk, ice cream, novelties, frozen yogurt, cottage cheese, fruit juice

* Distribution: Tennessee, Alabama, Kentucky

* Key executives: Miles Ezell Jr., senior chairman; Bill Ezell, chairman/CEO; Stan Ezell, pres./COO; Mark Ezell, senior v.p./dir.-sales/marketing; John Robinson, senior v.p./treasurer; John Ezell, special projects officer; Kim Ezell Owens, accounts payable supervisor

COPYRIGHT 1998 BNP Media
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