Fresh from the Farm

Dexter’s Farm

Dexter’s Farm has come a long way. Over the past 30 years, the business has grown from a humble roadside vegetable stand to one of the largest produce, egg, and dairy distributors in the state of Georgia.

Today, the employee owned company operates 24/7 to keep up with demand, delivering over 50,000 packages a week. Dexter’s Farm acts as an invaluable middle man, purchasing product from growers all across the nation, storing it in a 15,000 square foot facility in Buford, Georgia, then reselling it to organizations throughout Georgia, Alabama, Tennessee, and the Carolinas. “It is really about logistics,” CEO Denny Cahan explains. “It is about getting the right product to the right customer at the right time.”

Many industries are busy cutting out the middle man and going direct to customers. Not so with the produce industry, Mr. Cahan reports. “Produce is a highly perishable product,” he explains, so timing is everything. And, to really pay off, produce needs to be sold in large quantities. “A farm couldn’t just send one case of onions, one case of tomatoes, and one case of lemons to a store. It wouldn’t be profitable.” Dexter’s Farm can purchase a farmer’s entire stock, then resell it in quantities that the end user wants. “We group together all the things each of the individual stores or schools need,” Mr. Cahan explains.

Dexter’s Farm works primarily with schools, restaurant chains, and the U.S. military. “We have a customized approach,” Mr. Cahan says. “We target chain restaurants and schools because they need a certain style of service that we can match. We put together programs for them that seem to work very well.” The company also has a policy to purchase locally grown produce whenever possible. “We try to give back to the community,” shares Mr. Cahan.

In 2011, Dexter’s Farm became the Defence Department’s supplier of fresh fruits and vegetables for the state of Georgia. The contract includes supporting the fresh fruits and vegetables portion of the USDA commodities entitlement for schools. “We have almost doubled the coverage for this program since 2011 and continue to diligently work on expanding this further,” the company reports.

Dexter’s Farm also services over 80 school systems. Federal regulations requiring fresh produce in schools have tightened in recent years, which has increased the demand for Dexter’s Farm’s products. Both the students and the farmers benefit. “The federal government has mandated that the children in school need to get more fruits and vegetables. That is a good thing – not just from a business perspective, but also from a health perspective.” Dexter’s Farm has been active in implementing the Farm 2 School program, which connects school cafeterias with local agricultural producers. The company also supports many of the USDA’s FFVP (Fresh Fruit and Vegetable Program) Grant recipients, providing them with a wide variety of domestic fruits and vegetables.

Dexter’s Farm enjoys a number of big name contracts, but this success didn’t happen overnight. The company’s original owner worked diligently for many years to slowly grow the business. “He was very personable and went out and worked hard at building the business up,” Mr. Cahan recalls. “He was able to get a couple of good restaurant contracts and started moving into the school business.” Then, in the early 2000s, he hit a wall. The business simply wasn’t growing anymore. In fact, it was starting to lose money. That’s when Mr. Cahan and business partner Lane Westfall stepped in.

“When we bought the company everybody thought we were nuts,” Mr. Cahan shares. “They wondered what we were doing. We were in technology and healthcare. We had no experience buying businesses and turning them around.” But, the entrepreneurs were sure that they had stumbled on something with serious potential. “We thought it was a great business,” Mr. Cahan explains. “So we went after it.” The pair were so confident that they put the deal together in 2007, despite the Global Financial Crisis. “We knew the economy was tanking,” Mr. Cahan says. “But it felt like it was a safe business to go into. What could be more [stable] than selling produce to children in schools?”

The eager new owners quickly implemented new strategies to take the business to the next level. “We optimized what we had,” Mr. Cahan says. “We did a lot of profit analysis and reengineering to smooth things out. We are moving a lot of packages for very low margin so we have to do everything very efficiently. We really cleaned up all the processes and the logistics.” The fact that the pair were industry outsiders actually turned out to be an asset. “We were able to bring a different view point,” Mr. Cahan points out. The existing team also proved crucial to success. “We had some very talented and knowledgeable people there with over 20 years of experience in the industry.” By streamlining processes and increasing efficiency, the team was able to win larger contracts. Winning the Department of Defence contract in 2011 was a huge step forward. “That helped propel us to the next level.”

The team has also, of course, placed a strong emphasis on food safety and quality. In addition to being HACCP certified, the company has consistently received excellent inspection ratings, implemented leading edge handling and manufacturing practices, and remained up to date on new requirements such as the Food Safety Modernization Act (FSMA). Mr. Cahan says that he also sees an increasing emphasis on food safety throughout the industry as a whole. “I think that there is more of a focus on food safety and quality. [The government] is moving toward more regulation around that, and we try to stay in front of that curve because we feel it is important.” Dexter’s Farm is fortunate to be large enough to handle the tighter regulations, he adds. “I suspect that some of the smaller companies are going to have difficulty meeting the standards. But it is a necessary change.”

A positive company culture has also played a key role in Dexter’s Farm’s growth and success. “We have a culture of fairness, openness, and honesty. We try to do the right thing.” This means supporting employees – even when they make mistakes. “Everybody makes mistakes,” Mr. Cahan points out. “Nobody’s perfect. But in some company cultures, people try to hide it. They try to point the finger. And that doesn’t help things; that makes things worse.” Instead of playing the blame game, the team encourages employees to learn from mistakes and steadily improve over time. The result is dedicated and competent employees who are excited to continue contributing to the company’s success.

Dexter’s Farm has the potential to expand even more, but the team is not looking for dramatic growth. Instead, Mr. Cahan says that the company will remain a medium sized produce distributor, a market position he describes as “a niche within a niche.” As a mid-sized company, Dexter’s Farm is large enough to get “terrific pricing” and to afford leading edge automation, but is still small enough to maintain a close relationship with every customer. “We can still [react] to our customer’s needs,” Mr. Cahan points out. “We can still be very responsive. So I think being in that middle ground helps us a lot. If we doubled or tripled from here, I’m not sure we would be able to maintain that [customer relationship].” The larger competitors, Mr. Cahan insists, “lose contact with the customers; they just become numbers. We don’t want that.”

Not all growth is off the table, however. Dexter’s Farm has already doubled in size since Mr. Cahan and Mr. Westfall took over. “We think there is still some great opportunity to grow and maintain our high level of service,” Mr. Cahan explains. In fact, most of the upcoming growth is customer driven. “One of our large restaurant chains is begging us to pick up another 150 stores,” Mr. Cahan reports. His guiding principle is to make sure that any future growth will benefit all of the involved parties. “It needs to be a win for the company, a win for the customer, and a win for the associates – otherwise we won’t do it.”

August 17, 2017, 11:23 AM EDT

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