Mike-Sell’s: A Case For Success

Countdown to the 2012 updayton Summit! updayton is committed to lighting the entrepreneurial fire of young talent. Over the next three months leading up to the 2012 Summit, updayton will present stories of emerging entrepreneurs and family legacies in business, and why they call Dayton the best place to do business.

Daniel W. Mikesell started a successful business selling dried beef and sausage but when he decided to expand and answered an ad to purchase a potato-cutting machine, he had no idea it would turn into a multi-million dollar enterprise that would span 100 years and counting. Today, Mike-Sell’s, a locally based, privately owned company, has maintained a strong local presence and national distribution in the snack industry. Despite the efforts of large snack companies to dominate the market through buyouts and price slashing, Mike-Sell’s has remained true to its commitment of producing the highest-quality products, allowing it to continue to be a competitive player in the industry.

In the true spirit of a Dayton original, Mikesell maintained his company’s headquarters in Dayton, Ohio as it grew. His legacy has continued with great grandson, Luke Mapp, grandson of Mikesell’s daughter, Mary Mikesell, and her husband Les Mapp, who ran the company until his death in 2005.

The family’s potato chip legacy is now in the hands of a team of industry professionals including President and CEO, David R. Ray and Mapp, who serves as the company’s Director of Marketing.

In a recent interview with Luke Mapp he shares his take on why the family business has survived the recession, the company’s plans for the future, and what today’s entrepreneurs should do to be successful—particularly those wishing to enter the snack industry.

Mapp has been part of the family business for more than a decade. He knows the entire operation from top to bottom. He is also acutely aware of the tremendous competition Mike-Sell’s is up against as one of the few regional potato chip companies that is independent from larger snack suppliers.

“The locals are very loyal to Mike-Sell’s and have been a big part of our success…”

“For many years, every little city across America had it’s own independently owned potato chip companies. Today, we remain with fewer than probably 50 others.” Mapp continued, “Giants like Frito Lay and Wal-Mart have affected how we do business. Frito Lay can offer lower prices that push margins to almost nothing, and Wal-Mart has changed how grocery chains buy product with its centralized buying method. The local retail manager used to have control over what his or her store carried, but now all of those decisions are made at the corporate level. Our relationships have changed tremendously and we’ve had to change our approach.”

The disconnect between local grocery stores and the supplier has made it difficult for Mike-Sell’s to expand at their desired level. On the flip side, it has moved Mike-Sell’s to alter the way it does business and distribute its products. Currently, the company sells two-dozen different chip and snack products. It has distribution centers in Dayton and Columbus, Ohio and Indianapolis, Indiana. The Dayton location is the company’s only manufacturing plant. Along with some cost-cutting measures, this is how Mike-Sell’s has survived through the current and past recessions.

“We have had to cut expenses like everyone else. Fortunately, we have a family-like atmosphere here. Everyone here is very supportive of decisions that have to be made.” As Mapp led a guided behind-the-scenes tour, he stopped along the way to chat with staff and to sample freshly made chips that had rolled off the line into the collection area to be seasoned and packaged.

At the end of the tour, Mapp talked about the company’s plans for the future. Over the years, the company has maintained its foothold in the industry by introducing new products like Honey Barbecue, its highest selling flavor and Groovy Chips, its highest selling non-flavored chip. They also added Kettle Chips to their line and are always considering new products to test with their loyal fans.

“The locals are very loyal to Mike-Sell’s and have been a big part of our success. Going forward the company will look to expand its distribution base nationally and increase its marketing efforts,” Mapp said, speaking optimistically about the future despite the sluggish economy. For example, Mike-Sell’s has begun implementing a new web-based strategy with a Super Bowl promotion offering 15% off online orders.

As the conversation came to an end, Mapp offered advice for entrepreneurs entering the snack foods market. “Do your homework. Know your audience. And think niche. Penetrating the snack market on a large scale will be nearly impossible. Instead, build a strong local following and let the retailers come to you. Be prepared to work hard. It takes dedication and perseverance to run any business. It’s not for the faint of heart.”

In a follow-up correspondence, this is what Mapp had to say about Dayton:  “Like, Mike-sell’s, Dayton has a rich history that has made it a successful and nurturing environment for businesses to grow. Dayton is full of reliable and talented people who aren’t afraid to get their hands dirty and work hard—that’s important to any business. In addition, the Dayton area chamber of commerce and various other business friendly organizations work very hard to attract and retain local businesses and talented people to live, work and stay in Dayton, OH.”

Interesting facts about Mike-Sell’s:

A potato by another name is still a potato, sorta. It takes a lot of potatoes to make those tasty chips—but not just any potato. Mike-Sell’s uses chipping potatoes. These organically grown potatoes are purchased from Florida to Michigan. (Yes, Michigan! Not Idaho, which specializes in baking potatoes.) Most potato chip manufacturers use chipping potatoes because of their round shape and density, which withstands the cutting process.

Waste not; want not. “Recycle, reuse and repurpose” has been the standard at Mike-Sell’s for decades. They do everything from giving potato peels to pig farmers for feed to selling the potato starch to paper mills for paper coating. Mike-Sell’s uses every opportunity to be an environmentally friendly company.

Hands off. The potato’s journey from the truck to the bag is, for the most part, a hands-off venture. Modern technology and machinery allow potatoes to be cleaned, peeled, cut, fried, seasoned, bagged and boxed with little human intervention. This method decreases food contamination and safety issues with workers.

The Big Give Back. Mike-Sell’s has given millions of dollars to support women’s causes, education, and community arts. Mike-Sell’s giving program is overseen by Mikesell’s granddaughter,  Martha Mapp.  Some of those organizations include Clothes That Work, a clothing resource for job seekers, and the Linda Vista Project, a transitional housing program for homeless women and their children.