Posted 7/30/2007 12:00 am
Updated 11 months ago
(Editor's Note: This is the latest in a series of business history feature stories. Suggestions for future "Fifth Monday" articles are welcome. Please contact Gwen Moritz at (501) 372-1443 or by e-mail at firstname.lastname@example.org.)
Nothing is simple -- not even ice cream.
Make no mistake -- really, we mean make no mistake, but we'll get back to the no-room-for-error part of the story -- ice cream is fun. Just try saying the words "ice cream" without smiling. Even the lactose-intolerant can find a frozen treat to their taste.
So for most of us it's a joy. For the Yarnell family of Searcy it's serious business, a 75-year-long, four-generation compact with themselves, with the community and with their customers.
"This is a fun business and people love ice cream," says Rogers Yarnell, president of Yarnell Ice Cream Co. and grandson of the founder, Ray Yarnell. "But it is a very competitive, hard business because you've got to get up really early in the morning in all aspects of this business and it's very hard work. It's truly hard work."
Yarnell, who graduated from the University of Arkansas, considered a career in the military. "Because I graduated right at the end of the Vietnam era, I had the chance to have a lot of responsibility at a very young age and ended up commanding a unit when I was 22 years old," he says. Yarnell served in Europe in the Army. "I liked the military environment."
The affinity reveals itself in an almost martial deportment, not stiff, but dignified, commanding and shyly courtly. This natural air of command appears to be a family trait that manifests itself in unique ways in his father, Albert Yarnell, 83 and company chairman, and Rogers' daughter, Christina, 28 and company treasurer.
Albert Yarnell, who has been working full time at Yarnell's for 59 years, still comes to work every day and, though perfectly polite, is succinct with little time for meandering questions. Albert Yarnell served in the Army in the CBI theater (China, Burma, India) during World War II, most of that time in China, which goes far to explain the no-nonsense attitude.
Christina Yarnell, who began her full-time commitment to the family firm in 2000, is a petite beauty who confesses to being "peppy" but whom only a fool would underestimate. She's smart, she's driven and she's compassionate, an improbable combination of characteristics, but it works for her and for the company.
Family patriarch Ray Yarnell bought the bankrupt company he worked for in 1932, pretty near the height of the Depression in Arkansas, using somewhere between $5,000 and $25,000 borrowed from his wife's side of the family. At the time, the state had dozens of ice cream manufacturers. Today, one remains: Yarnell's.
The Yarnell Ice Cream Co. is privately held. Asked about the company's size, Rogers Yarnell allows only as to "we are a less than $100 million company."
Why has Yarnell's survived, thrived even, in the face of brutal global competition and consolidation in both the food products industry and the retail sector? The family's short answer: hard work and humility, an answer that's accurate but incomplete.
The reasons for Yarnell's longevity lie in a bit of a paradox: The firm has remained both disciplined and adaptable, with the family plowing profits back into the business and learning to adapt to the changing marketplace by updating both the company's technology and its business model.
The Yarnell family, as individuals and as a unit, has also served their community and their state, providing a model for other family-run companies.
And finally, there's the product. As Albert Yarnell and more than one Yarnell's employee said, ice cream is almost recession-proof. Even during the Depression, people would allow themselves and their families the small comfort of ice cream. It is an inexpensive distraction, sweetness in a world gone sour.
Albert Yarnell is a great-grandson of Thomas J. Rogers, who came to White County in 1848, according to the White County Historical Society. He became a merchant in Searcy in the 1850s but lost everything during the Civil War. After the war, he started buying land and by 1890 owned 20,000 acres in White and Cleburne counties, the Historical Society's Web site says.
The "Searcy Centennial: 1837-1937," written by A.P. Strother Sr., had a "supporting committee" that included Hallie Rogers Yarnell (Ray's wife and Albert's mother) and an index that listed a slew of Yarnells.
The plant that evolved into the Yarnell Ice Cream Co. began as the Grisham Ice Cream Co. in 1923. It sold its product as Angel Food Ice Cream. In 1927, Grisham merged with the Terry Dairy Co., and General Manager Ben Grisham hired Ray Yarnell as assistant manager, luring him away from a local hardware store.
In 1929, Grisham sold out to Southwest Dairy Products, which used the word "Dairyland" to advertise its brand. By 1932, Ray was manager of the company's Hot Springs and Camden units, and by 1932, Southwest Dairy Products had gone bust.
"And how we succeeded, I suppose, was because he [Ray] had the nerve to buy the plant during the Depression with borrowed money, most of which was borrowed from my mother's side of the family," the Rogers side, says Albert. That money came from some real estate they had, Yarnell says.
"But the plant was nothing like the size it is now, although we have built on this way and that way and up on the same location," Albert Yarnell says. "But Mr. Grisham's plant was less than 100 feet from where we are now, all of his plant."
The plant's street address is 205 S. Spring St., but it starts at the corner of Spring and Pleasure Avenue and occupies a good four blocks.
As soon as he was old enough, Albert was helping out at the plant, including making deliveries on his bicycle. That pattern has been followed through the generations. "All of us whose last names are Yarnell have basically worked here since we were children. I began working here when I was 12. I'm 57 now -- a long time," Rogers Yarnell says.
The Depression years of the 1930s and the war years of the 1940s were lean, but the company survived, and in 1948, his military service complete and his degree in hand, Albert Yarnell joined the firm full time.
"One reason for the fact that we've been able to stay 75 years is that my father put all the profit that he made back into expanding the business," Albert says. "During our lifetime we've put all the profits that we've made into the business and put all the energy that we had. Now I don't put all my energy because after about half a day my energy begins to wane." But he's only half joking. It's clear he's still a force to contend with.
Changing With the Times
Yarnell's divides its business into two parts, its direct store delivery (DSD) network and its custom manufacturing.
As part of the DSD network, Yarnell's makes and delivers its own brand, and it partners with Nestle, one of the largest food and beverage companies in the world. Under Nestle are Haagen-Dazs and Edy's ice cream, along with some other partner brands.
In custom manufacturing, Yarnell's makes ice cream and frozen novelties for other companies according to their specifications, though the Searcy firm is contractually prohibited from identifying those other companies. Christina Yarnell, however, says, "We do produce for some of the largest food companies in the world."
Although Christina is treasurer, that describes only a third of her duties. She's also responsible for operations and logistics, and she heads new product development.
Yarnell's has been involved in custom manufacturing for 20 years, but Christina says, "We really have started recognizing it as a larger part of our business 10 years ago, and I'd probably say that in the past three or four years it's really a growing part of our business." Rogers adds that "both parts of our business are growing."
"The ice cream and frozen treat industry is dominated by two multinational companies," Rogers says. "One of those is Nestle, which we have a close strategic relationship with. The other is Unilever. So total market share in the U.S. is concentrated among these two brands. We are in a mature industry that is consolidating. As Unilever and Nestle more and more have captive plants, the opportunities to ramp up the custom manufacturing side of our business appear bright. And that is why the part of the business that Christina is managing is thriving well."
Through its adaptability -- and a strict attention to the bottom line -- Yarnell Ice Cream Co. has bucked the trend of the death of the non-giant companies.
"There are less than a dozen companies like us that still exist, which we would define as a mega-regional company," he says.
Rogers Yarnell, as do his father and daughter, cite hard work, humility, the state of Arkansas and a few other factors for the company's success, but in conversation with the three generations, what becomes clear is an absolute refusal to fail.
Asked the hardest part of the job, Rogers replies, "The hardest and the best are both the same in a privately owned business like this: the consequences of your decisions and the weight that each of us feels in making those decisions.
"There are 280 families and literally hundreds of thousands of consumers that depend on us to make good decisions on food safety, that depend on us to make good decisions concerning what financing arrangements are appropriate, and it is that responsibility that I suppose I take most seriously. And it's not unpleasant but it's very serious.
"Because we work with so many very large publicly held companies, I see projects that they initiate that are sometimes successful but many times fail, and for a multibillion-dollar company, that's a very small consequence to their bottom line. If any of the three of us in our areas of responsibility make a decision that's just really wrong, the impact of that could be devastating to a privately held company."
Christina: "I guess our business is one that requires perfection and precision every day. And when it's the middle of July and it's hot and you've been running at 110 percent on both sides of your business since May keeping everybody fresh and enthused and excited about coming to work even though by this time of the year they're pretty tired and maintain that precision and perfection, you've got to be extra peppy. As the leaders you've got to be extra motivating. ...
"I try to keep everybody happy with what they're doing because mistakes are very costly. And as lean as we are, you really can't make them."
As for the technology, Albert sums it up: "Ice cream-making was much simpler in 1932. We made essentially five or six flavors and filled 5-gallon cans all done essentially in what you would call a manual system. Nowadays the machinery that makes the ice cream is overwhelmed by the machinery that packages the ice cream.
"All of this is controlled somewhere along the line by computers, so it's people being smart enough to operate the computers, not people being smart enough to operate and know how to manufacture the ice cream."
Yet despite the pressures of playing in the big leagues, the Yarnell family is known for its community involvement, in ways small and large.
Watson Bell, a Searcy lawyer who practiced with now-Gov. Mike Beebe for 24 years, has known the Yarnell family his entire life. He and Rogers started kindergarten together and are close friends, and Bell's daughter and Christina are best friends.
"They've always been progressive," Bell says. "For many years they were one of the very few industries in Searcy, in this region, and they were always willing to share. They were always willing to try to attract industry to this region. ... They realized that in order for Searcy to progress they needed to attract new business. ... One reason Searcy is where it is is because they helped attract new business."
"They believed and demonstrated that what was good for Searcy was good for Yarnell's and vice versa, and not only Searcy but Arkansas. And if everybody prospered they prospered."
"Albert is a very active member of the First Baptist Church, and he has tried to utilize his Christian principles in his business relationships," Bell says. "And then Christina and Rogers have followed the pattern that was established by Mr. Ray and Hallie Rogers [and] that was giving back to the community."
"They're very goal-oriented," he adds. "Albert's philosophy has always been work hard, put everything back in the plant and everything else will take care of itself. And as far as Christina, she's been like a breath of fresh air. And I think that's been one of the keys. Every generation, there's been a new family member come in and revitalize things." Christina is a very compassionate person, Bell says. "I think she brings that compassion to her business dealings."
Indeed, as part of the celebration of the Yarnell company's 75th anniversary, it developed three new ice cream flavors, with 5 cents of every carton sold donated to the Susan G. Komen Foundation.
Governor Beebe has known the Yarnell family since moving to Searcy in 1972, has performed legal work for them and "I've had a personal friendship with Albert and Rogers and the entire family while I've lived in Searcy."
Beebe calls Yarnell's "one of the most stable and aggressive industries in the city of Searcy....Yarnell's has provided significant and stable employment for the people there, and the family has shared that success with Searcy."
As for its longevity, the governor says, "They have a quality product and take care of their customers....Good businesses last because they have a product that customers want, and they deliver it in a way that those customers like.... Being a family-owned company has helped Yarnell's keep their focus and high standards intact for 75 years."
Mike Black, purchasing agent at Yarnell's, has been with the company 14 years, working his way up from the "mix room" making ice cream mix.
Ask him what he likes about working there, and the answer seems in no way forced:
"It's a team atmosphere, and we make a product that truly, truly is a joy for customers. Many things in life are needed, useful, but when you tell somebody you produce ice cream, that is something that brings a joy to them, and it's great to be part of a team that is pretty much joy-producers."
As for its being a family-run business: "It makes it much more personal," Black says. "Many companies, you never know the owners, never see them face to face. You certainly would not be able to express concerns to them. Here everyone is in town. If there is something that we're really facing, we can all get together and you can get decisions straight from the top without having to go through a lot of corporate red tape to get there. You know the decision is final. You're never wondering where you stand. And it's a company small enough that if we want to make a change it happens rather quickly instead of being filibustered forever."
Finally, all the employees get free ice cream. That is simple, and a simple joy.
Hits and Misses
There's no accounting for taste, but if you make ice cream, it's your business to account for taste, and Yarnell's has had some stunning successes and a few dismal failures.
First, the successes.
- Homemade Vanilla. It remains the company's best-seller. Great for topping an apple pie or, even better, a blackberry cobbler, it's fine all on its own -- just plain vanilla.
- Woo Pig Chewy. In honor of the Arkansas Razorbacks, this brownie-flavored ice cream with bits of brownies debuted last August and was a huge hit. It will be back on store shelves come football season. Christina Yarnell's then-boyfriend came up with the name. She married him.
- Pumpkin Pie. It appears around Thanksgiving.
- Peppermint. Another seasonal favorite that appears in stores during the holiday season.
Now, the misses.
- Moon Pie. It seemed like a good idea at the time Ð the mid-80s Ð Rogers Yarnell says, but was, instead, "a dismal failure."
- A peanut butter and jelly ice cream sandwich. No explanation necessary.