Making Hay Out of Peanuts

Dothan Warehouse Executes on Vision to Become Premier Provider of 3PL Services to Alabama’s $100 Million Peanut Industry

Business Challenge

Stan Jones has accomplished the rare feat of building a successful business model on storing and shipping peanuts. He’s well known in the business for his success and growth throughout the Great Recession despite a location in rural Alabama that originally was a significant obstacle to growth.

In 1977, after graduating from Auburn University, Jones went to work with Coca-Cola. From there he moved into manufacturing. As a Jack-of-all-trades and an inveterate entrepreneur, he’s never been content to rest when it comes to business. In 1980, with $5,000 saved up, he approached his grandfather, a developer, about investing in a corrugated box manufacturing company that was close to bankruptcy, and together, they turned it around and sold it 10 years later. To date, he’s bought into or started five or six companies.

In the same year that he purchased the manufacturing company, Jones’s father bought into Dothan Warehouse in Dothan, Alabama, in partnership with several others. By the mid-80’s, Jones’s father was asked to take over the company, and for the rest of the decade, business boomed.

Changes were on the horizon, however, as NAFTA and other factors drove manufacturing opportunities overseas. As the entire manufacturing industry shrank through the 90s, Dothan Warehouse continued to grow, but Jones’s father was keen to keep an eye on the shifts taking place around him.

In 2004, the operations manager for Dothan Warehouse passed away, leaving a gap. At this point, Jones had grown tired of his current role in manufacturing and happily accepted the position. The way Jones saw it at the time, manufacturing is complicated, but distribution and warehousing? Well, that’s simple. You just store stuff.

Of course, nothing’s ever quite that simple. The challenge in warehousing is primarily related to sales and finding the right markets. He found that Dothan Warehouse’s rural location made this challenge greater. To make matters worse, technology was becoming increasingly integral to the modern business world, and he saw that Dothan Warehouse was behind the times. They weren’t even using computers.

Scholz Solution

Defining a Vision

In 2004, Jones took over as president of Dothan Warehouse and around 2008 joined the SWA to learn from others what they were doing to be successful during the economic downturn. In 2010, he attended a strategic planning session that for SWA members in the mountains of North Carolina, led by Chip Scholz.

At that point, Jones admitted that he had never created a strategic plan and hadn’t invested in long-range planning—but he wanted to learn. During the course of the weekend, Jones and Scholz created Dothan Warehouse’s very first strategic plan, and while Jones says he didn’t really enjoy the experience, he quickly warmed up to the task once he saw how it could help Dothan Warehouse to grow. Shortly thereafter he hired Scholz and Associates to help him build out and execute the new vision that would help Dothan Warehouse thrive in the 21st century.

Jones’s vision began with developing clarity around what markets he wanted to target and what kind of company he saw Dothan Warehousing becoming. Jones was adamant that he wanted to get into food storage. It made sense: Dothan is an agricultural area, and he wanted to tap the existing market.

He also wanted to build out the technology side of the business to ensure the company stayed ahead of the marketplace. He saw that there were opportunities to leverage his warehousing knowledge to help farmers reach markets more effectively through the use of 3PL tactics and technologies.

Together, Scholz and Jones reviewed priorities and identified an ideal target: Peanuts. Alabama is the third largest producer of peanuts in the nation, with nearly 200,000 acres devoted to it. 400 million pounds of peanuts are harvested in the state annually, representing revenues of $100 million per year. At the time, storing and shipping was one of the biggest challenges faced by peanut shellers, making the industry a hot prospect for Dothan Warehouse.

Executing the Vision

There was one primary challenge to Jones’s vision for his company: Dothan Warehouse was not certified to handle food, nor did they have the facilities to do so. Certification and cooler facilities represented multi-million-dollar investments that could be risky for an organization. Certain shellers showed some interest however no company agreed to sign long term contracts.

Even a year earlier, Jones might have hesitated to make the investment. But with solid market information and a clear and compelling vision, he knew it was the right thing to do. In 2012, he converted the first industrial cooler for Dothan Warehouse, and set out to visit as many peanut-shelling operations as he could to spread the word and win customers.

His commitment to his vision led to sales. Shellers began using Dothan Warehouse and within two years, they added three more coolers. He also improved the transfer process by utilizing the rail line that runs behind Dothan Warehouse to send and receive peanuts using a conveyer belt system. Dothan Warehouse now boasts 150,000 square feet of cold storage and one million square feet of total storage space.

Next, Jones wanted to not only store the peanuts, but also connect them with their markets via shipping and logistics. Together Scholz and Jones worked out a plan for purchasing and building the infrastructure to upgrade Dothan Warehousing into a 3PL. Among other priorities, Jones and Scholz identified the importance of bringing in young, tech-savvy employees.

Around the time that Jones began working with Scholz and Associates, Jones’s oldest son, Turner, became interested in joining Dothan Warehouse. While Turner had always been involved with the Warehouse, including tasks such as painting the building when he was younger, Jones wanted Turner to finish school and go off in the world and work for others before deciding on Dothan Warehouse as a career.

Turner, however, was determined to stick with Dothan Warehouse. Scholz helped Jones gain clarity around how Turner’s participation could contribute to the long-term vision for the company. He realized that Turner could bring fresh insight on the technology side, as well as some youthful energy that the industry often lacks, and decided on a compromise: Turner would spend the summer shadowing Jones. From sales calls to warehousing visits, he’d learn every aspect of the business and Jones’s vision for it, and make an educated decision for himself after he finished school.

Turner was hooked. Following his graduation, he came on full-time at Dothan Warehouse, and has been instrumental in executing on Jones’s strategic vision, and helping the company come into the 21st century with technology.

Big Results

Looking forward, Jones is excited about continuing to execute on his strategic plan. The company is evaluating multiple growth opportunities including expansion, partnership, and additional services. Since implementing, Dothan Warehouse has nearly doubled in size and is poised to double again.

“Strategic planning with Scholz and Associates has been the most important thing the company has done in 35 years and one of the most important things I’ve done in the last 10 years,” says Jones.

Instead of working for peanuts, Jones executed on a vision that makes peanuts work for him.

About Scholz and Associates

Scholz and Associates is an executive coaching and leadership development partner serving large and mid-sized privately held organizations across the Southeast United States. Chip Scholz, the company’s principal, is a well-respected speaker, author, and coach. His two books Do Eagles Just Wing It? and Masterminds Unleashed: Selling for Geniuses provide business leaders with provoking insights and tools for achieving more. Chip has dedicated his career to helping leaders achieve clarity and focus on what matters most to them with programs customized to each unique situation. Scholz and Associates offers complete solutions from strategic planning and organizational assessment to help hiring the right people and developing them to their full potential.

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