In 1958, LaVerne and Marlene Johnson moved from Chicago to Detroit. With $10,000 of their own money and a $10,000 loan from Manufacturers Bank, they formed VernDale Products Inc. The name is a portmanteau of “LaVerne” and his then six-year-old son, Dale — an interesting choice of name given that LaVerne didn’t expect VernDale to last more than five years.
Nearly 60 years later, VernDale remains a family-owned company, is now in its third generation, and counts some of the world’s premier chocolatiers among its clients. President and Owner Dale Johnson recently took the time to answer 20 questions about his company, how it’s endured, and why its clients are VernDale’s biggest secret.
- Describe VernDale.
VernDale is a leading manufacturer of roller-dried milk powder, which is used by premium chocolate manufacturers.
- What makes you unique?
We’re the only whole milk powder manufacturer in the United States that uses drum dryers (also sometimes called “roller dryers”).
- Why is drum-dried milk powder superior to spray-dried milk powder?
Think of the standard in American chocolate — the Hershey bar. It’s gritty, sugary, and melts in your mouth. Contrast that with European chocolates where the texture is velvety and the flavor explodes in your mouth.
- And the drum-dried milk powder helps achieve this?
Yes. Chocolate manufacturers also prefer drum-dried milk because of its high free fat content, which requires 2–3 percent less cocoa butter. This saves money while producing a healthier chocolate.
- Why don’t more companies use the drum-dried process?
When we started the company, spray-dried milk powder was more consistent and yielded larger quantities. Through our commitment to quality and technology, we’ve improved the drum-dried milk process and are regularly sought out for our quality.
- Did you ever consider using the spray technology?
We did, but that would’ve been a terrible mistake. At that point, we would’ve been selling a commodity, and our product is not a commodity — it’s value-added.
- What one pivotal moment in your history changed how you do business today?
In 2000, the price of raw materials increased, and our profitability began to suffer. We had to evolve. We changed our business model and invested in technology that resulted in a better product with decreased energy costs. I didn’t know if it would be profitable, but I knew it was the right thing to do. Today, we wonder why we didn’t do it sooner.
- You recently expanded to a second facility in Detroit. Why?
We’re the only manufacturer of our product in the United States. Our customers worried about how they’d be affected if we had some kind of disaster — so much that they even began talking to our competitors about the possibility of putting in a drum dryer. We had to act before we lost our position as sole supplier.
- Was it difficult to select a location?
We found the right facility to rehabilitate early on. The difficult part was realizing that you never have enough money to do what you want to do. We started out with a $10 million project and ended up at around $21 million.
- Plante Moran Cresa worked with you on the project.
They were an integral part of the process. They helped us negotiate the property, served as our advocate throughout the construction process, and held my hand through our weekly construction meetings to make sure our interests were represented. We couldn’t have done it without them.
- How is the new plant different from your original site?
We were able to start from scratch. We used the latest technologies to build a state-of-the-art production facility that effectively runs itself. Our initial site is our work horse; our new site is our show horse.
- What is the biggest challenge of running a family-owned business?
Balancing the needs and goals of family members with the needs and goals of the business. We have four second-generation family members and two third-generation members. But working here is not an entitlement. You have to fulfill a need, and you have to be passionate about it.
- Describe your organizational culture in one word.
- Why that word?
Everything changes, and if you don’t see that change coming, you might not survive.
- What’s VernDale’s best-kept secret?
Our customers. Our customers see us as their secret sauce. They don’t want their competitors to know they use us — even though nearly everyone does.
- What’s your company’s greatest accomplishment?
Surviving 54 years in business, particularly when my father only thought we’d survive five. We used to adhere closely to a five-year plan. After making our recent investments, we’re much more visionary — and we remain dedicated to making the best drum-dried milk powder in the world.
- What’s the biggest challenge facing your organization?
Adapting to change. Food manufacturing is becoming more and more sophisticated, more regulated, and there are more customer demands. It’s becoming increasingly difficult to meet these demands — hence our focus on continuous improvement.
- What do you enjoy most about being a part of your company?
Having the freedom to set my own goals and to control my destiny. We also try to give our managers a large degree of freedom. If you hire people who take initiative, have integrity, and are innovative and you give them freedom, they’re going to flourish.
- What’s the most important characteristic of a leader?
Having one foot solidly in reality and the other one solidly in the future. Also, a leader has to be trustworthy and able to listen to and take input from others.
- Anything else you’d like people to know?
One of our customers’ customers came to them this year and told them they only wanted to use our product in their formulas. That’s huge — you can’t get any better testimonials than that.