Success at Its Third Generation
By ANTHONY F. GIOMBETTI
Portions of the Minnesota Business Opportunities Magazine interview with Peter Jude
Note: This was published in April 1994, and some info has changed.
Jude Vending is experiencing its third generation of success as a family-owned business with Peter Jude taking it to a new level.
MBO: I understand that Jude Vending is a family owned business that was founded by your grandfather in the early 1930's. What do you know about the early days?
JUDE: That's true; the business was founded in 1935 by my grandfather, Bernard Jude. He grew up during the Great Depression and owned a general store located in Maple Lake, MN. He certainly saw some tough times.
When he became involved in the Vending business, it was just him and his wife, Cecilia. Initially, they operated out of their garage. My grandfather would drive to Minneapolis to pick up the products and deliver them the next day. At night, Cecilia would do the bookkeeping.
You see, Jude Vending was for my grandfather a one man operation. He was only responsible for himself and his family. That was it. He didn't borrow any money at all because of the attitudes he developed while growing up. His attitude was that if you don't have to borrow any money, all the better. There is no doubt in my mind that he wouldn't have wanted the business to grow to where it is today.
MBO: If that was the case, what happened that changed things?
JUDE: A couple of things. Years later, after graduating from St. Thomas College in 1948, my father, Victor, became involved in the business. World War II had recently come to an end and business was booming. Victor worked with my grandfather until Bernard passed away in the early 1950's.
Soon enough, my father began to add more and more trucks as well as other family members to the business. He took Jude Vending to a new level where the business began to really grow.
MBO: Your grandfather started the business and your father took it to a new level. Tell me how.
JUDE: The growth of Jude Vending was made possible largely through the building of our first warehouse in the late 1950's, the acquisition of other wholesalers in the industry and a combination of internal and external financing which have all led us to become one of the largest wholesalers in the state of Minnesota today.
He took the business from being a company that bought from other wholesalers in the industry to being a direct buyer from the manufacturers. We were no longer dependent on the other wholesalers. We were also no longer a one man operation. During my grandfather's day, the work ethic was solid and relentless. He and his employees would get up at 6:00 am in the morning and work until 10:00 pm at night. They did everything -- the sales, the driving. Each of the routes was a one man operation.
What my father did was expand on this whole operation by opening other locations in Anoka and Litchfield.
MBO: And now, you are taking it to an even newer level, right?
JUDE: Yes. During my father's time, customer service and a handshake was all that was needed to conduct business. Now, the new level that I am trying to achieve is to make every effort toward developing business partnerships with each and every one of our customers. We're not only concerned about our own growth and future but also that of our customers. In this capacity, we have chosen the motto "partnerships in profits." It is our view that we want our customers to be successful so that we can be successful.
In the age of modern technology, it seems that you can use your computer to do whatever you want. There is so much information that you can compile so as to maintain better customer relations and be a better company. We're trying to utilize the new technologies that are available and expand our product lines accordingly. We want to become the one-stop supplier for our customers. That's very important for us. I believe that the fewer suppliers our customers have to deal with the better off they'll be. The idea is that they will be better able to stay on top of their day-to-day business operations and keep up to date with changes and trends in the industry.
MBO: Tell us about yourself before you got involved with Jude Vending.
JUDE: It may come as no surprise that I was born and raised in Maple Lake, MN. I got involved in this business at a very young age. When I was around 5 years old, I couldn't leave my father's side and that's pretty much when it all started.
I began by stamping cigarettes, sweeping the floors, doing general cleaning, stocking shelves and so on. I did whatever was required. I can remember when I would earn a nickel a day and later a dollar a day.
After high school I went to college at St. John's in 1978 and worked at the family business throughout those years.
MBO: At college, did you study anything that was related to what you are doing today?
JUDE: I did. 1 studied business management to hopefully learn the tools necessary to manage people and deal more effectively with the day-to-day operations of the business. I also managed to squeeze in a few courses on accounting arid computer science.
MBO: It sounds as if you were being bred to become the third generation of Jude's to run the business.
JUDE: For the most part, yes. After I graduated from St. John's in 1982, I came home, and my father decided to go on vacation for a month. He told me that I was in charge and to run the business while he was gone. My father had a unique way of doing things as well as running the business. Here was a man who managed the business from memory. He knew exactly what products were coming and going. He could even remember what he had ordered two months ago. This was the system he used. But for myself, I needed to have everything on paper. Even today, I couldn't tell you what I ordered last week.
MBO: What did you do?
JUDE: I had to make sense of everything. I spent many hours on the phone talking to the manufacturers and brokers to find out what he had ordered. Slowly I was able to organize everything and put it down on paper. Only then was I able to make sense and keep track of things.
By having been virtually thrown into the thick of things, it became a learning experience that I never forgot.
MBO: How were you and your father able to maintain such an enjoyable working relationship without letting personal or family problems arise?
JUDE: I have heard plenty of horror stories about family businesses. But there is something here we have developed that I think makes a big difference -- my father trusts my judgment. Granted, I don't make the right decisions all of the time, but he allows me to learn from my mistakes.
Going back to my first day on the job, for him to give me that trust really meant a lot to me. You see, I love the industry that I am in. I love the people with whom I work. I have come to know a lot of the manufacturers and brokers and even the competition. I consider them all friends.
MBO: How many products does Jude Vending store in your warehouse?
JUDE: Today, we carry over 5,000 items, but this wasn't always the case. During the late 70's early 80's we used to sell products directly off the truck, much like how the milkman or bread man would. When our drivers were done selling at the end of the day, they would bring back their receipts and invoices and load their trucks up again for the next day.
Then the industry experienced an increase in new product lines that our drivers weren't able to distribute efficiently. During the summer of 1982, we decided to devise a different way of doing business so that we could become more efficient and also increase the volume and range of products we could offer our customers. We decided to convert one of the routes into pre-selling where the salesperson went out and pre-sold all of the stops. Then the following day, the drivers would go out and deliver the products. This way, the salesperson could continue to sell everyday of the week as opposed to before where he was selling and delivering at the same time. As we converted more and more routes, we divided up the workforce so that our salespeople sold and our drivers delivered.
MBO: What other changes did you notice in the market place?
JUDE: Change is always difficult but critical to survival. Fortunately our employees and I realize this and adapt. We began to notice the metropolitan area as a stronger market for its. We had a warehouse located in Anoka and Mound. We thought that by merging the two we would gain a better foothold in the metro area.
After merging the two operations, we experienced an incredible amount of growth. We went from having no grocery operation at all to being the first wholesaler in the state of Minnesota to have one. Within one year, our sales doubled. It was just phenomenal. Unfortunately, we weren't prepared for such growth. We decided to sell that operation to another wholesaler in 1986, regroup and grow our business at a steady pace.
Since 1989, rather than doubling our business over one year, we grew our business in a controlled fashion by over 130 percent to the present day.
MBO: Do you think that too fast of growth can be detrimental for a business if it is not controlled?
JUDE: Certainly and that was the case for us. Being primarily a wholesaler of candy and tobacco, we knew very little about the grocery industry. We started from scratch, created a whole new line of business operations and then began to see our business more than double. Since we didn't really know what we were getting into, we decided to pull back and regroup.
MBO: Do you concentrate mostly in the outstate or in the Twin Cities?
JUDE: One of the major reasons why we decided to establish ourselves in Maple Lake was because of the growth area for our whole industry. The major shift of the population was toward the metro areas. When I say the metro area, and I don't just mean the Twin Cities. I am also talking about the population shift toward the St. Cloud area.
Obviously the bulk of our growth is in the Twin Cities but our strategic location between the Twin Cities and St. Cloud areas allows us to service all areas efficiently.
MBO: Out of all the wholesalers in the state of Minnesota, how does Jude Vending rank?
JUDE: I believe we are in the top 5 in the state of Minnesota.
MBO: How many paper product accounts does Jude Vending service?
JUDE: We started a paper division in September of 1993 where we now service over 1,000 accounts.
MBO: Tell me more about your paper division. What kind of paper products do you supply?
JUDE: Last summer, we decided to expand our market. We became involved with a company who has over 15 years of experience in the industry and so we started a paper products division called Advantage Paper. We began to target virtually any business that used paper towels, paper cups, coffee cups, copy paper and so on.
MBO: Why hasn't Jude Vending ever opened up their own grocery or convenience stores or even outlets to retail their paper products?
JUDE: In looking at our paper division, we're not in business to compete with an Office Max. We feel that our customers are the type of people who don't have the time or transportation resources to go out and purchase their office paper products. As with all our divisions, Advantage Paper is very service oriented.
Our customers can call us up, make an order and then we'll deliver it to their door -- in most cases within 24 hours.
With respect to having a convenience or grocery store, we did own and operate one for about 10 years. We eventually sold it, however, because we realized that it wasn't a good fit for us.
MBO: In what way?
JUDE: We decided to concentrate on what we did best: service convenience stores, not operate them. What the convenience store allowed us to do, however, was to gain a better understanding of the business we were in. It also helped us become more effective in addressing our customer needs.
MBO: Also, don't you think that it is somewhat taboo for the wholesaler to get involved in the retail business that they are supplying?
JUDE: I agree and it did happen to us with our convenience store. In the town where the store was located, for example, other retailers didn't like the fact that we were supplying them with products and at the same time be in competition with them.
MBO: On an annual basis, what sort of revenues do all Jude Vending divisions generate?
JUDE: Everything considered, we bring in about $30 million a year.
MBO: You mentioned that for your industry, Jude Vending is ranked in the top 5 wholesalers in the state. Tell me about how you are able to stay competitive.
JUDE: We are able to stay competitive by staying on top of current trends and changes in the industry. One of the key things we do to remain competitive is to utilize the high tech tools that we have, namely computers. We get information to our customers so that they can make a more informed decision.
One big trend which is just starting is called Point of Sale (POS) 2000. In working with our software company, we are looking forward to linking up with our retailers for direct ordering. We want to have a direct link to our retailers so that they can maintain better pricing and inventory control. It will also better assist us with our own inventory.
To me, that is the wave of the future.
MBO: Don't you think that some of your customers will view this change with some apprehension? After all, getting "locked in" with anyone or anything is always a big commitment.
JUDE: They might but only to a certain extent. They will always be able to change vendors. But then again, if you treat your customers as you would want to be treated and provide competitive pricing, why would they change?
MBO: Besides technology, what are some other ways that Jude Vending remains competitive?
JUDE: Our employees. They are the biggest asset we have. Instead of dealing with a corporate style operation, our customer deals with a family-style operation.
Here in Maple Lake we have a good community and a good group of people to work with. They have a strong work ethic around here. My grandfather, my father and I have always considered our employees our second family. I feel proud when I see this same attitude being practiced by our employees when dealing with our customers. In my opinion, our employees can't be matched. They seem to take the company to the point where they feel it is their own.
That's the level of service and commitment our customers can expect from us. Our employees are not just out there to get their job done and go home, they want to do the very best job they can.
MBO: Considering that you are the president of a $30 million company, I have noticed that you make yourself accessible. This seems to contradict the traditional norm of having to go through many levels when dealing with top executives in most businesses of your size. how do you explain this?
JUDE: That's true. I am proud to say that any of our customers can call in and talk to me directly, that also goes for our employees. I encourage our salespeople to let our customers know that they can talk directly to me if they have any questions or concerns to address. I'll even make sales calls or deliveries on occasion just to stay in touch.
I think that our customers take comfort in knowing that I am personally concerned about the success and welfare of their business.
MBO: You mentioned earlier that your employees have a solid work ethic. Has theft ever been a problem?
JUDE: We deal with a lot of high ticket items and theft is always a concern but never a problem. There are three characteristics that we look for in an employee: dependability, trustworthiness and self-motivation.
For the most part, we check out their references before hiring them. Also, we live in a small community and that helps too. When we do suspect something, however, we always get to the bottom of it.
MBO: What has been your greatest learning experience?
JUDE: Dealing with all kinds of personalities. In the beginning, when I got involved in the business, our Maple Lake operation was small and had only eight employees. We now have 40.
MBO: Did you come from a large family?
JUDE: Yes, I came from a large, Catholic, Irish family of 11 children; six sisters and four brothers.
Throughout the years, all of my brothers and sisters have in some way or another been involved in the business.
MBO: I assume that you're married and have children?
JUDE: Yes, about 10 years ago, I was fortunate enough to meet my beautiful wife, Anna Maria, who is originally from Peoria, IL.
I tend to view life and business like this: whatever I accomplish or envision today is for tomorrow. My hard work is for my wife and family. It is also for my parents and brothers and sisters too. I believe that everything I do has either a direct or indirect effect on our family name.
It's a family business and I want to see it continue to grow and survive for many more generations. I am the third generation of Jude's. My oldest son, Mark, is already saying that he's the fourth generation Jude for this business.
MBO: What are the names of your other children?
JUDE: Besides Mark, I have three daughters: Justine, Jacinta and Gabriella.
MBO: It sounds as if being with your family is very important to you. Is that where you try to spend most of your- free title?
JUDE: Yes, we make every effort to do activities as a family. Everyone seems to enjoy camping. Nothing beats getting away from it all and relaxing with your family. The kids love it and so does my wife, although at first she needed some encouragement.
MBO: Based on your experience, do you have any advice that you could offer today's business owner?
JUDE: Yes, stay in touch with your industry, customers and employees. It is critical that you never lose your feel for it. Also, be innovative and open to change. o
Anthony F. Giombetti is Editor in Chief of Minnesota Business Opportunities