Chairman and chief executive officer, Dean Foods Company
Born: August 16, 1957, in Durant, Oklahoma.
Education: Dartmouth College, AB, 1979; Yale University, JD, 1982.
Family: Married Cindy (maiden name unknown; divorced).
Career: United States Court of Appeals, 1982–1983, law clerk; 2M Companies, 1983–1984, analyst; 1985–1988, real estate investor (self-employed principal); Reddy Ice, 1988–1995, chairman and chief executive officer; Engles Capital Corporation, 1988–1992, president; Engles Management Corporation, 1993–1994, president; Suiza Puerto Rico, 1993–1995, chairman; Velda Farms, 1994–1995, chairman; Suiza Foods Corporation, 1994–2001, chairman and chief executive officer; Engles, Urso, Follmer Capital, 1994–, chairman; Dean Foods Company, 2001–2002, vice chairman and chief executive officer; 2002–, chairman and chief executive officer.
Address: Dean Foods Company, 2515 McKinney Avenue, Suite 1200, Dallas, Texas 75201; http://www.deanfoods.com.
■ Gregg Engles presided over a consolidation of the dairy industry, first as head of Suiza Foods Corporation and then as chairman and chief executive officer of Dean Foods Company. Dean Foods Company became the largest processor and distributor of milk in the United States.
Although born in Oklahoma, Gregg Engles grew up in the Denver, Colorado, area. He attended Dartmouth College and studied law at Yale University. After graduation in 1982 Engles worked as a law clerk for Judge Anthony Kennedy, who at the time was serving on the United States Court of Appeals, Ninth Circuit, and later became an associate justice of the United States Supreme Court. In 1983 while a clerk, Engles attempted to form a time-share business for corporate aircraft but was unable to raise funds. Engles was ahead of his time, because jet time-shares later became a huge business.
Engles was admitted to the Colorado state bar in 1982 and to the state bar of Texas in 1984, but he decided not to practice law. While pursuing his unsuccessful aircraft time-share venture, Engles had met "entrepreneurs who impressed him as being fully engaged in their work. In contrast, many of the young lawyers seemed unenthusiastic about their jobs, even though they were buying new cars and homes. Engles decided that his biggest personal risk was getting hooked on a lifestyle that would handcuff him to a job," according to June Eichbaum and Victoria Reese of Chief Legal Officer (2002).
Engles went to work for an investor in Dallas, Texas, who made investments in private companies. Through the business he met a partner, Bob Kaminski, and began investing in real estate in 1985. Again Engles's timing was off. The Texas real estate market was poised for a major downturn. The ventures went so poorly that Engles and his partner were almost bankrupt. In 1988 the Southland Corporation, which later became 7-Eleven, had excessive debt because of a management buyout and needed to raise cash. Engles and Kaminski paid $26 million, almost entirely borrowed, for the Southland subsidiary Reddy Ice Group, a producer of packaged ice.
Using Reddy Ice, Engles and his partners began acquiring other ice companies and consolidating the local ice industry. Gayle Beshears, who had led the ice operations for 7-Eleven, advised Engles. By 1990 Reddy Ice had acquired 15 ice plants. Beshears's brother, Cletes "Tex" Beshears, was a semiretired veteran of the dairy industry. He suggested that the larger dairy industry could be consolidated as Reddy Ice had consolidated the ice business.
In 1993 Engles and his partners acquired Suiza Dairy in San Juan, Puerto Rico, as the first step in their dairy consolidation plan. Engles's strategy was to buy the leading producer in a region, acquire other nearby producers, and then consolidate operations to capitalize on the economies of scale and increase profit. In the dairy industry Engles's timing was right. Engles had an advantage in the consolidation of the dairy industry because his customers in the grocery industry were going through a similar consolidation. The large grocery companies wanted to reduce the number of vendors and preferred dealing with a large dairy that had a national presence. In addition, changes in processing and transportation technologies increased the shelf life of dairy products, and processors became able to ship greater distances.
In 1994 Engles Management Corporation bought Velda Farms, another dairy, and in 1995 Engles merged Reddy Ice into the dairy acquisitions to form Suiza Foods Corporation. In 1996 Suiza Foods Corporation went public, providing additional capital for growth and spurring further acquisitions. Suiza Foods reached sales of $1 billion in 1997. Suiza Foods sold Reddy Ice in 1998 to focus on the dairy operations. Suiza Foods made more than 40 more acquisitions from its initial public offering through 2000, when Suiza Foods became the nation's largest dairy processor and distributor. That year Suiza Foods was named dairy supplier of the year by Wal-Mart because of a large sales increase, a 99.5 percent on-time delivery record, and innovative marketing programs.
At the acquired companies Engles attempted to preserve the entrepreneurial spirit of the local management and made bonuses dependent on performance. Joining Suiza Foods was an attractive option for many local and family-held businesses. The family and employees could continue in the dairy business yet have greater access to capital, new technologies, and branded products.
In December 2001 Suiza Foods Corporation acquired Dean Foods Company, and Suiza Foods Corporation changed its name to Dean Foods Company. After the Dean Foods acquisition, the new company had a 30 percent share of the milk market. Engles became chairman when Howard Dean retired in April 2002.
Dean Foods Company sold dairy products under more than 50 different brands, including Country Fresh, Medal Gold, Alta Dena, and Garelick Farms, and was the only milk company that could serve as a sole supplier to national retailers. The company also encompassed Silk soy milk, Horizon organic dairy products and juices, International Delight coffee creamers, and Marie's dips and dressings. The company licensed the brands Hershey's, Land O Lakes, and Folgers for use on its milks and milkshakes, creamers, and milk and coffee beverages. Dean Foods Company was also one of the nation's largest pickle processors.
Engles's transformation of the dairy industry was "analogous to what Herb Kelleher's Southwest Airlines accomplished in air transportation and what Sam Walton's Wal-Mart did in retailing. The dairy business will never be the same," wrote Shad Rowe of D—Dallas/Ft. Worth . William Heuslein, writing for Forbes , quoted food analyst William Leach describing Engles as a visionary.
After the acquisition of Dean Foods Company, Engles and the company entered a new phase. Much of the plan for consolidation of the dairy industry through acquisitions had been completed. Dean Foods Company's strategy turned toward increasing branded products and producing higher margins.
In addition to his full-time role at Dean Foods Company, Engles remained a partner in Engles, Urso, Follmer Capital, formed in 1995. Engles served as a director of one of the group's portfolio companies, Evercom, which provided pay phones in prisons. In 1998 Engles, Urso, Follmer Capital purchased the vacuum cleaner company Electrolux, and Engles served as a director of that private company.
Engles continued to seize opportunities despite poor timing and missteps in his early endeavors. He told Eichbaum and Reese, "Many lawyers let knowledge of risk paralyze them. They focus exclusively on risk, while entrepreneurs focus primarily on opportunity. The person who can simultaneously perceive the opportunity and the risk has a competitive advantage." Rowe described Engles's career path as follows: "A smart, capable person becomes consumed by a business opportunity so big that both the business and the individual grow to levels unimaginable once even to him." Rowe also noted, "People who meet Engles frequently describe him as 'scary smart'." Engles himself saw his strengths as doing deals and attracting well-qualified people.
Engles served on the boards of directors of a number of charitable and industry organizations, include the Grocery Manufacturers of America, Southern Methodist University, and Students in Free Enterprise. He was a trustee of the Boys and Girls Clubs of America and the Southwestern Medical Foundation. He served on the School of Business Administration Advisory Council for the University of Texas at Arlington.
See also entry on Dean Foods Company in International Directory of Company Histories .
Cook, Lynn J., "Got Growth?" Forbes , May 12, 2003, pp. 102–103.
Eichbaum, June, and Victoria Reese, "The Lawyer-CEO: Role Model for a Strategic Business Partner," Chief Legal Officer , Summer 2002, pp. 37–40.
Forgrieve, Janet, "Cream of the Crop," Rocky Mountain News , April 10, 2004.
Heuslein, William, "Suiza Foods Milkman," Forbes , January 10, 2000, pp. 136–137.
Lee, Steven H., "Head of the Herd: Suiza Foods Becomes One of the Largest Dairy Processors through Steady Stream of Acquisitions," Dallas Morning News , August 15, 1999.
Rowe, Shad, "Milkman to the Nation," D—Dallas/Ft. Worth , September 1, 2001, p. 52.