Purity Dairy

A Case Study by Lipscomb University

Table of ContentsIntroduction..........................................................................................................................3

Era 1: Pre-Incorporation (1926-1945).................................................................................5

Introduction......................................................................................................................5

Early Beginnings.............................................................................................................5

The Great Depression......................................................................................................7

Growing the Business....................................................................................................10

Solid Ground..................................................................................................................13

Permanency....................................................................................................................16

Conclusion.....................................................................................................................17

Era 2: Company Formation & Consolidation (1945-1960)...............................................18

Introduction....................................................................................................................18

Impact of World War II.................................................................................................18

Affect of External Factors.............................................................................................20

Modernization & Expansion..........................................................................................22

Conclusion.....................................................................................................................24

Era 3: Acquisitions & Creative Marketing (1960-1980)...................................................25

Introduction....................................................................................................................25

Growth & Recognition (1960-1980).............................................................................25

Spirit of Innovation (1960-1980)...................................................................................27

Marketing Quality (1960-1980).....................................................................................29

Conclusion.....................................................................................................................30

Era 4: Becoming #1 (1980-1998)......................................................................................31

Introduction....................................................................................................................31

Product Growth (1980-1990).........................................................................................31

Technological Advances (1980-1998)...........................................................................33

Challenging Competition (1980-1998)..........................................................................35

Strategic Marketing (1980-1998)..................................................................................36

Community & Family (1980-1998)...............................................................................39

Change in Tradition (1980-1998)..................................................................................43

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Conclusion.....................................................................................................................45

Era 5: From Family Business to Corporate Division (1998-Present)................................46

Introduction....................................................................................................................46

Early Days with Dean Foods (1998-Present)................................................................47

The Suiza Era (1998-Present)........................................................................................48

Living Legacy (2001-2007)...........................................................................................49

Conclusion.....................................................................................................................53

Teaching Questions...........................................................................................................54

Bibliography......................................................................................................................56

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Introduction

Integrity is defined as a steadfast adherence to a strict moral or ethical code. While there are many names associated with this term, there are none possibly more connected with this definition than Mr. Miles Ezell, Sr., affectionately known as Pops by his family. Through the hard-work ethic Pops ingrained into his family, the Ezell name has come to be known throughout the Nashville area for its integrity. Anyone who has lived in the southeastern region of the United States at any point in their lives has undoubtedly partaken of at least one product made by Purity Dairy. From everyday products, like milk and bottled water to specialty products, to specialty products, such as yogurt and ice cream, Purity Dairy have made a tremendous impact on the Nashville community, the state of Tennessee, even expanding out into the Southeast Region. Purity’s thought that the price of quality is never too high is shown as they have taken many measures such as temperature control, preventative maintenance, and other state-of-the-art procedures that maintain the highest quality possible for their products.

Picture 1: Mr. Miles “Pops” Ezell, Sr. and family.

Purity Dairy is a very service oriented company primarily focusing on giving the public quality, valued products. However, many may not know the company is also very involved in various charities and other diverse projects to better the community and society. Community involvement is highly important to the Ezell family and Purity Dairy as evidenced by their many works. One example of their community involvement is Purity’s support of Youth Encouragement Services in Nashville. An Ezell family member has been on the board of YES ever since its inception in 1956. Not only contributing to the Nashville area, Purity is very involved with the construction and operation of African Christian Schools. Their selfless donations help finance a student scholarship fund and manage two schools in Nigeria, which specialize in spreading Christianity to that

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particular part of the world. The schools also have the ability to train the students how to preach and personally evangelize. Most importantly, the Ezell family does all of this anonymously. The majority of the time a donation is made to an organization, the family requests either no recognition or if recognition is required, that the recognition be made in the name of Purity Dairy. Selflessness does not get more obvious than this.

The Pre-Incorporation section of the case study will focus primarily on the years 1926-1945 and the difficulties presented to Pops as he began his fledgling company, while also displaying the tough, gritty resolve that would come to shape the company. The second section, Company Formation and Consolidation of Local Dairies, centers on the years 1945-1960. These years brought much growth to the company, consisting of a shift in consumer needs, a unionization stand, and introduction of innovative methods that increased recognition of the Purity name. The third section, labeled Acquisitions and Creative Marketing Shape the Company, spotlights the years 1960-1980. This era was highlighted with more innovation, the marketing of these new advancements, and acquisitions that helped further the company on its way to the top of its market. The era 1980-1998, Becoming #1, chronicles Purity’s success becoming the top local Nashville dairy from a combination of new technologies and innovations, smart investments, decreasing competition and brilliant marketing strategies. The final section, From Family Business to Corporate Division, centers on the years 1998 to present. This section demonstrates the difficulty the Ezell family displayed in making the decision to become a division of a much larger corporation, Dean Foods.

This case study is going to encompass many of the Ezells primary industry and business decisions while also displaying the integrity and care the family has showed throughout the history of the corporation. By documenting the decisions in each era, the case should provide tremendous insight as to why certain decisions were made and the impact each decision had on the company and the family as they went from being a small, family-owned business to a corporate owned division. The case will also discuss key events and issues that arose and show how the family never wavered from their primary focus: serving people.

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Era 1: Pre-Incorporation (1926-1945)

Introduction

The start of Purity Dairy is quite humble. As a young man of 20 with little money, Pops as he was known by his family and close friends, could not afford to purchase his own farm and equipment. To resolve this problem, he entered into several partnerships over several years to rent cows, equipment, and land from those who had the means to own such property. Even after multiple failings with these partnerships, he was not discouraged. With his strong work ethic and faith in God, he simply picked up his family and any equipment he’d purchased over the years and continued on to the next opportunity, which God always provided.

From the years of 1926-1945, Pops experienced the loss of five farms, the gain of used and new equipment, and the addition of multiple side jobs that allowed him to grow his business. While any one of the losses of a farm or decisions not to purchase certain equipment could have damaged this entrepreneurial stage, it was the combination of all factors that really created the boom he needed to go from a small family-run startup to a major family owned corporation.

Because there were so many internal and external factors that affected the way Pops conducted business, the easiest way to look at each one is to examine them in chronological order based on what events occurred on which farms. The movements from farm to farm create a natural division in which to look at each series of happenings: Westmeade Plantation, Reeves Place and Hill Place, Burkitt Road Thomas Farm, Fanning School Farm, and Murfreesboro Road Plant. Not only did Pops grow his business over the various movements and decisions, the factors that influenced his decision grew to be more complex at each stage. Yet with each new complexity, he trusted God to help him make the right decisions. With such early influences as shaping factors, the small dairy would grow to become Purity Dairy.

Early Beginnings

Westmeade Plantation (1925-1927)

Just like any business in the early upstart days, Pops experienced many high and low points. In the times that his small business seemed to be finally gaining a steady grounding, the family would lose the farm. While his first investment in the Westmeade

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Plantation was fairly small, it still provided the groundwork for his entrance into the dairy market. It also created the foundation of a very important business habit that proved invaluable to the continued life of Purity Dairy later in the company’s history.

Pops had just recently been married to Mrs. Estelle Ezell when he moved to the Westmeade Plantation, owned by Dr. C. N. Cowden. His new wife moved to live with him on the doctor’s farm in a tenant house that was shared by Pops’ parents and his six siblings. Dr. Cowden operated a milking business called Westwood Dairy and it was here that Pops first entered the dairy industry. Unlike many of the other dairies in the area during this time, the doctor was running his milk through the pasteurization process. This was revolutionary because there were no regulations in place requiring such precautions.

However, it wasn’t too long after Mr. and Mrs. Pops had moved to Dr. Cowden’s farm that they were faced with their first loss. The doctor had decided that he no longer wanted to run the business of the farm but instead wanted to return to his practice in Lewisburg. He let Pops know that the farm would be up for sale and offered it to him first.

The offer included sixty cows, all the equipment including the pasteurizer, and the farm itself. It was not lack of passion that prevented him from taking up Dr. Cowden’s offer but rather lack of funds. Dr. Cowden then made a second offer that required Pops pay rent on the farm for $450 while the doctor promised to fill two silos worth of feed for the first year. Pops was firmer with his second refusal. He explained that he didn’t have any money with which to fund such a generous offer nor was he able to gain credit to afford it. Dr. Cowden promptly took Pops to the bank where the doctor signed a $600 note. He kept $450 as the first month’s rent and gave the rest to Pops as working capital.

After making such a prompt decision, it became evident that Dr. Cowden couldn’t fulfill the offer to fill the two silos. Pops quickly sought legal help from Mr. Ed Gasser. The doctor also retained legal representation and a third disinterested party joined the dispute as a mediator. Mr. Gasser explained to Pops that it would be best to drop the dispute over the two silos and to start again where he could. Even after following Mr. Gasser’s advice, Pops eventually lost the farm anyway. Dr. Cowden had to sell the property in order to raise money.

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With no place to house his fledging dairy business, Pops had no choice but to move. His only assets were a few cows he had purchased on credit and his 1922 Ford Coupe. It was the first real test of his faith and he could have given up and walked away from the family business. Instead, he put the Ford up as a down payment on a new Chevy truck with a wood milk body. He still needed a base location to run his operation and fortunately, God fulfilled this need in the form of the Reeves Place.

Picture 2: Pops traded his 1922 Ford Coupe as a down payment on a new Chevy wood paneled milk truck.

The Great DepressionReeves Place (1927-1930) & Hill Place (1930-1933)

Even though Mr. Miles Ezell, Jr. and Mr. Bill Ezell were both available to relate the stories from the early years, there was actually very little said about the Reeves Place and Hill Place farms in specific. Reeves Place was a two hundred acre farm on Edmondson Pike in Nashville. Pops built a small milking barn and springhouse on the property. The house on Hill Place was very small and the entire family lived in the living room.

The springhouse on this farm had an aerator and a pasteurizer with a churn and separator. No refrigeration existed at either farm and all the bottles were filled and capped by hand while in the case.

While the descriptions of the farms themselves were not very extensive, quite a few important events occurred during these years that not only helped to keep Purity

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running but also shaped the Ezell family with a strong, dedicated work ethic. The rest of the country may have been experiencing a deep depression, but the Ezells struggled through. As Mr. Miles Ezell, Jr. and Mr. Bill Ezell related, neither were really aware of the dismal times. In fact during the Great Depression, Pops’ dairy business actually flourished and gained good grounding. It was a time when many questioned faith in God providing, yet Pops never let that thought cloud his trust, even when a negative occurrence could have caused serious problems for the dairy.

Pops had fallen behind in taking care of the bill due to the limited cash flow. On a Friday afternoon, an electric worker came to the farm, climbed the pole, and physically cut the wire that connected the farm to the rest of the grid. Understanding that he would have to run his weekend route in order to make enough money to pay the bill on Monday and that he wouldn’t be able to make that route without power, Pops climbed the pole. With little knowledge of electric wires, he was able to strip enough of the bare wire to reconnect the severed line. While he had no intention of stealing electricity, he did need a means to power his dairy operation until the electric company opened again on Monday. After collecting the weekend route, Pops was the first to be at the electric office Monday morning. His work ethic would not be tarnished by the morality problem of taking advantage of free electricity.

Problems like paying the electric bill weren’t the only monetary issues the dairy faced. Farm hands in those days would get paid at the end of the work week one dollar a day for the seven days they worked. However, with several farm hands to pay and having to collect the money from half the route before being able to complete the other half of the route, Pops had a hard time coming up with funds to pay all his workers at once. Because this was a somewhat common occurrence, he would hold the paychecks until the following Monday when he would be able to pay everyone together instead of breaking up the pay day. God had blessed him with loyal workers who had enough faith in Pops as an honest, hardworking businessman that would fulfill his employment duties.

It was not only Pops that did everything he could to make sure the dairy kept going. Mrs. Estelle Ezell helped her husband’s dairy business with just as much dedication. The tenant house where the Ezells lived could be described as cramped, since the hands lived in a side room off the house. Because many of the farm hands lived with the Ezells at this time, Mrs. Estelle Ezell was responsible for feeding the family and the workers. There was also the need for creating the chocolate syrup for the chocolate milk. Mrs. Estelle Ezell would make the syrup and Mr. Miles Ezell, Jr. and Mr. Bill Ezell would carry it down to the springhouse to be mixed with the milk while the syrup was still hot.

She also helped by washing the cotton straining pads for the milk. Later when the family

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moved to the Fanning Farm, Mrs. Estelle Ezell worked in the front office. Without her, the dairy may not have survived as well as it did through the depressed times.

Picture 3: Mrs. Estelle Ezell on her wedding day.

Though Mrs. Estelle Ezell played a large role in keeping the family business operating, Pops was still running the route himself during this time. Mr. Miles Ezell, Jr. and Mr. Bill Ezell related a special story about their father’s route running days. Because money was tight in the early days, Pops had to run the first part of the route while collecting the money from those stops. Only after he had made a few stops would he have enough cash to buy gas to finish the day’s stops on the route.

One very important decision did occur at the Reeves Place farm. During this time, Pops was one of over two hundred licensed Grade A dairy farmers in Davidson County, but one of only a few that pasteurized.1 Due to his experience with the pasteurizer at Westmeade Plantation, Pops purchased a used fifty gallon steam pasteurizer of his own. While this pasteurizer didn’t see use until the move to the Hill Place, it was an important purchase decision that would affect Purity in the future. The pasteurizer itself had a rotating coil to heat the milk to 143° Fahrenheit. This process ensured that the customers would not become sick from drinking the raw milk, a term used to describe unprocessed milk taken directly from the cow. Even Pops admitted that had Dr. Cowden not already owned a pasteurizer, he probably would not have gone into the pasteurizing process at all. This early influence would later prove very influential and critical to Purity Dairy

1 The Brief History of the Ezell family states that there were over 200 licensed dairies in Davidson County at this time, but during an interview with Mr. Miles Ezell, Jr. and Mr. Bill Ezell the figure was quoted as more like 125.

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existence.

Growing the BusinessBurkitt Road/Thomason Farm (1933-1941)

After the loss of the Hill Place farm, Pops moved the family to the Thomason Farm on Burkitt Road. Here, he rented a two hundred twenty-seven acre farm from Mr. Hugh Thomason. Pops’, Mrs. Estelle Ezell, and the children moved into a smaller house on the property while Pops’ mother and father resided in the big house. While the smaller house contained less square footage than their previous home, it had one very important aspect that had not existed at any of Pops’ previous farms. This house was the first one he actually owned. He even built a living room extension onto this home.

It was while on this farm that Pops finally stopped driving the route himself and the boys did everything they could to help. Mr. Miles Ezell, Jr. even learned how to drive first the John Deere tractor and later the Farnall tractor his father purchased after some very successful undertakings. Because they raised all the feed necessary to care for the eighty cow herd except grain, which was always scarce, the fields always needed tending. Using the tractor, Mr. Miles Ezell, Jr. handled the Ezell fields by himself even though he was only eleven. There were occasions when he would choke the tractor and need help getting it started, but for the most part he was very self sufficient with it. In fact after the purchase of a binder, Pops and Mr. Miles Ezell, Jr. would supplement the farm’s income by working on neighbors’ fields. Both the Farnall tractor and binder were the first of that equipment type in the community, so the Ezells could help other farmers who did not have such new machinery.

Picture 4: Pops left behind some letters to the Ezell family. Quoted here is his dedication to a good work ethic.

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With the supplemental income earned from field tending, Pops was able to buy good equipment for the dairy. One such purchase was a De Laval milking machine bought in 1938. Before this time, the cows had to be milked by hand. However with the De Laval milking machine, more work could be completed by fewer farm hands. The milking machine wasn’t the only improvement to the farm. Mr. Thomason helped Pops build two new rooms onto the existing springhouse. He also had his first ever refrigeration unit here. Pops had purchased an old, worn out compressor, replaced the piston rings, and added a five horse power electric motor. The icebox as it was called was insulated with sawdust and cooled with ammonia refrigeration. What made this decision so innovative for him was the fact that ammonia is difficult and complex to work, but Pops figured it out.

Picture 5: 1950s De Laval Milker.

While adding the sophisticated milk-cooler-room was important, the process of refrigeration itself wasn’t nearly as critical as it is today. In the summer, the room was only 60° Fahrenheit. The Ezells had to purchase up to three hundred pounds of ice to cool the water pool that would in turn cool the cans into which the milk would be poured. The fact that the route was run seven days a week was actually a very good thing in terms of keeping the milk cooled in the summer. The daily runs ensured that the milk wasn’t sitting around long enough to spoil.

All of these new innovations and machinery sound like a lot for an upstart dairy, but there actually was only one piece of electric machinery. The steam boiler was used to power the pasteurizer and electric bottle brush. Adding the electric bottle brush also helped cut down the time and effort needed to clean the milk bottles. Previously, the bottles had to be hand washed but with the new electric bottle brush, the process was a little more automated. Bottles were put in a hot, soapy water vat for cleaning. Then the

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bottles were put by the electric bottle brush for scrubbing. Once complete, the bottles were drained and put in the adjoining rinse vat. After rinsing, the bottles were placed upside down and left until they were ready to be filled again.

The bottle filling process was still done one at a time by hand until Pops purchased the manually operated filler. Using a hand crank, the filler could simultaneously fill and cap four bottles at a time. This was also another important business decision that allowed him to produce more milk with less effort. And it would prove invaluable to his volume.

During this time, Pops added three smaller routes to the main route. Even with all the innovative machinery he had at his employ, there was still a problem with producing enough milk to meet with the high volume demand the additional routes brought to the dairy. Buying bootleg milk was an option that he used on several occasions. Bootleg milk was simply milk produced by unlicensed dairies. This helped to alleviate the excess demand, but he ran into a few problems with the bootlegger dairies. One of the unlicensed dairies started swapping the Ezell numbered lids for a competitor’s farm because that dairy produced milk with higher butterfat content. High butterfat milk was desired due to its richer and more flavorful taste. Therefore, it was considered a higher quality product. When Pops caught the bootlegger via the numbered lids, Pops refused to continue service with him.

Though there was much growth of the dairy while on the Thomason farm and while the Ezells prospered on Burkitt Road much longer than they had at any previous farm, the good times were not to last here much longer. The farm always had problems with fresh water because the springs that fed the farm were in a deep ravine. In the summer, the water level was not reliable and in the winter, the pipes would freeze and a garden hose would have to be run up to the farm to keep the water flowing. This was a constant problem with the Health Department, which threatened on several occasions to pull the Dairy’s permit.

While the water problem seemed to be one that would need to be handled quickly, the issue was never to be resolved. Mr. Thomason came to Pops and informed him that the farm was up for sale. Just like with Dr. Cowden, Mr. Thomas offered Pops the first opportunity to purchase the farm. And just as before, Pops could not afford or obtain funding to make the purchase. After almost a decade on a prosperous farm, the news was a devastating blow to the Ezell dairy and family. And while the dairy wasn’t a model operation, he had invested enough time and money to get it to the point that it was an

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actual operation instead of a means of income.

Many people may have questioned God in allowing yet another farm to fold or not providing the resources to purchase the farm when an offer similar to Dr. Cowden’s was given yet again. But Pops just picked up his family and looked for the next place. God had provided in all the other situations that could have brought an end to the dairy and the newest opportunity to move on to better things was just around the corner. Pops had the faith to keep going.

Solid Ground Fanning Farm (1941-1945)

As with every other loss, the Ezells were blessed by God to find a new partner right away in Mr. James Ruby Mackie. Mr. Mackie already was operating from the Fanning School Farm adjacent to Berry Field. That entire area today is Nashville International Airport and part of the 101st Airborne. When they entered into the partnership, Mr. Mackie and Pops both decided to run their operations on the same facilities but keep the two operations separate.

The farm itself was very well equipped. Fanning Farm had two cow herds, one route, two milking barns, two silos, and three tenant houses on the property. Combined with Pops’ four smaller routes, Mr. Mackie’s route brought the total up to five small routes. The partners agreed to consolidate the smaller ones to make one large route. The route served individuals, grocer markets, and cafeterias. And the springhouse which was so vital to production was elevated to the status of milking plant. With the operational requirements of running and producing the farm’s assets, there was never a shortage in work. Several families lived on the farm in the tenant houses and many of them eventually became Purity workers who stayed with the company a long time.

The first automatic pieces of machinery were added to the farm’s assets in the form of the automated bottle filler and soaker-type bottle washers. Again, the production numbers went up while the effort needed to produce such volume went down. The ablity to produce more couldn’t have come at a better time. One product, “salvation” milk, provided to cafeterias was a boon for Pops’ dairy. An important partnership for the growing dairy was the Fanning Orphan School. The amount of milk needed to supply the school doubled the former volumes. Because of these increases, the partnerships to deliver milk were considered the dairy’s salvation and thus the term “salvation” milk was dubbed. God had provided yet again for the ever faithful Pops.

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The dairy seemed to really be taking form as a corporation. It was even during this time that his dairy ran under a company name. At first, the joint partnership was called Ezell-Fanning Dairies. Eventually Mr. Mackie incorporated his name and the operations were called Ezell-Mackie Dairies. It wasn’t until 1944 that the name Purity was finally added to the corporation.

Although operations seemed to be going well, not everything was perfect. Mr. Mackie possessed a solid business sense, but was a very difficult employer. While he ran the sales operations, Pops handled the farm and processing plant. With this good combination of business sense, both men drew $35 a week and it actually was Pops’ first drawn salary. However, many of his best employees left the company during this time due to Mr. Mackie’s hard personality. As discussed earlier, Mrs. Estelle Ezell worked the front office of the dairy after the operation moved to Fanning Farms, but it was not long lived. Because of a degrading attitude and his conventional thought that a woman’s place was at home and not making and spending money, Mr. Mackie finally made it too hard for Mrs. Estelle Ezell to continue working in the office. She eventually just gave in and returned to run the Ezell home. According to Mr. Miles Ezell, Jr. and Mr. Bill Ezell, even Pops who was amiable with everyone he met said he had a difficult time working with Mr. Mackie.

Aside from possible personality conflicts, outside factors were brewing that would affect the fledging corporation that was verging on becoming a major competitor. Though they did not appear to be good situations at first glance, they would turn out to be some of the biggest breaks Pops would experience to launch Purity as a major competitor. They were also some of God’s biggest blessings in disguise.

The first problem came from government regulation regarding pasteurization. A decision Pops had made nearly twenty years earlier was about to pay off in a big way. The federal government passed legislation that required all dairies to be certified as Grade A and participate in the pasteurization process. For the majority of the dairies doing business in Davidson County during this time, such a regulation turned out to be an operation killer. Because the Grade A regulations were much stricter, many dairies had previously decided not to take the extra step to be certified and participate in pasteurization. Additionally, the pasteurization equipment could be very costly for a smaller dairy.

With mandatory regulation on pasteurization, the vast majority of Davidson County dairies went out of business, as illustrated in Chart 1. However, because Pops had taken up the habit of pasteurizing while under the careful eye of Dr. Cowden, the decision to move forward with pasteurization and Grade A certification was easy. He had already been participating in the practice for years.

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Before Pasteurization Laws After Pasteurization Laws0

50

100

150

200

250

Davidson County Dairies

Tota

l in

Ope

ratio

n

Chart 1: Due to new pasteurization regulation, the majority of Davidson County dairies either could not afford or chose not to make the mandatory upgrades. In turn, they stopped operating altogether.

The second outside factor came in the form of the Vultee Aircraft Corporation coming to Nashville. As far as the business aspect of Vultee’s arrival, the aircraft manufacturer ended up being one of Pops’ best customers. The company required a sanitary cover on the milk it purchased. During this time, no requirement for sealed tops was in regulation, so no dairy utilized protective covers on the bottles. In order to win the contract with Vultee, Pops took the extra step to add a small piece of cellophane to his bottles. Purchasing one-inch squares of the sealer, the extra step for sanitation was placed on top of the paper caps. They were secured by hand with small rubber bands. It was a very time consuming process, so it was no surprise when Pops purchased a machine that would heat seal the cellophane with a paper band over the paper caps. However, because he followed the tried and true belief that the customer is always right, he was able to provide the service to Vultee that no other dairy was able or willing to complete.

Picture 6: Mr. Luther Head applies cellophane squares.

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Business was really starting to boom and Purity became the twelfth largest company in the Metro area, though it was still very small. While Vultee turned out to be a valued customer, the effects of the company moving into town eventually created a bigger problem for Pops.

The final outside factor turned out to be the worst of the three major issues facing Purity. With the arrival of Vultee and the manufacturing of war planes, Nashville government decided it was time to expand Berry Field. Fanning Farms was going to be condemned and Pops would be out of a farm yet again. However, the move to expand the airport ended up being the biggest blessing that he and Purity Dairy could ever want. Because several businesses were going to be displaced by the airport expansion, the government offered secured loans to re-establish business elsewhere. Pops and Mr. Mackie applied for and received such a loan in the amount of $60 thousand. Now all they needed was a new place to set up shop.

Permanency360 Murfressboro Pike (1945-Present)

The trials and tribulations over losing the Fanning Farm were just beginning after Mr. Mackie and Pops had received their government-secured loan. Pops started looking for a new location and found what he believed to be a perfect location on 12th Avenue South and Carothers. An old store had once been located here and looked to be capable of suiting the needs of the expanding dairy. However, this area was not zoned for a dairy to move in and the zoning board held a meeting. The force with which the community protested Purity Dairy future endeavors in the area caused Pops to rethink his decision to move to the location and he eventually backed out. This decision actually turned out to be yet another blessing as growth and expansion at the store and within the area would have been very difficult.

Turning his efforts elsewhere, Pops quickly found an old brick house plant on the corner of Murfreesboro and Elm Hill pikes. Using the $60 thousand government-secured loan, Mr. Mackie and Pops purchased the brick house plant along with brand new, state of the art machinery. Construction started in 1943 and was completed by 1945, but the first business use of the new Purity Dairy location wouldn’t occur until 1946 when the plant actually opened. Issues and experiences developed at the new location during this time will be discussed in the next section.

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Conclusion

The upstart of Purity Dairy was troubled by lack of funding, loss of farms, and gains of equipment and opportunities. Each time there was a problem that seemed to be the end of Pops’ business, God provided a new resolution provided by for him to grab with both hands and keep the fledgling dairy in operation. It seemed as if nothing would dampen his entrepreneurial spirit, excellent work ethic, or strong faith that was passed down to the rest of his family.

As with any business in the entrepreneurial phase, the years of 1926-1945 seemed to be the hardest on Pops. Economic problems that were crippling the rest of the nation seemed to open up areas of growth for him. He was able to supplement his income, use the funds to better his dairy, and grow his business with each move to a new farm. None of the issues he was faced with would make him succumb to the direst of situations or challenge his faith in God. In fact, those issues only served to make Purity Dairy better than it was previous.

While some businesses wouldn’t survive the move to one location, much less five, Pops made the best of every situation he encountered at each of his farms. At Westmeade, he gained the valuable experience needed to pasteurize his milk and keep him going many years later when government regulation required pasteurization. Though the years at Reeves Place and Hill Place were growing pain years, many of the economic events occurring during the Great Depression helped shape a strong work ethic and faith in God that refused to be suppressed. The Burkitt Road Thomason Farm really provided the strong ground work for Purity Dairy to thrive when it eventually moved to Fanning School Farm. And without the important move to Fanning School Farm, Pops would never have qualified for the government-secured loan that allowed him to grow Purity Dairy into the corporation it is today on Murfreesboro Road. All of these events were blessings that factored into God’s master plan for Pops and Purity Dairy. While any one of these factoring influences could have destroyed all that Pops had worked for, the combination of all worked to create some of the best opportunities any entrepreneurial businessperson could ever hope to encounter.

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Era 2: Company Formation & Consolidation (1945-1960)

Introduction

Up to this point, Purity had fought to survive in the dairy market. The company’s location had moved several times and it was in threat of going out of business by numerous factors. However, Pops never gave up. Purity also was among the first to pasteurize milk which brought them into the 1940’s ahead of the competition. The years of 1945-1960 consisted of a shift in customer needs, a stand against unionization, and the beginning of expansion and growth that continued into the future. Purity made it through hard times because the family worked together and made innovative and risky decisions that continued to pay off.

Impact of World War II Shifting Markets & Unionization (1945-1950)

World War II had a large impact on Purity even though the farm was just a small dairy. In 1945, the city decided that the Vultee Aircraft airport across the street from Purity needed to expand. Unfortunately, the airport would need to grow onto Purity’s farm, which forced the dairy to relocate. Although at the time the move seemed like a detriment to Purity’s success, it actually had the opposite effect. Pops received $60 thousand from government secured loans, which helped Purity open and settle a new location. Pops oversaw the construction on the new small but modern plant. The plant was located on Murfreesboro Road and is still the company’s location today.

Picture 7: Murfreesboro Road location with Purity’s first and most recognizable sign.

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It was during the World War II and Purity’s relocation era that a gradual shift from home delivery of milk goods to supermarket shopping occurred. The shift created a change in purchase methods of milk. Instead of customers wanting milk delivered to their doors, they preferred to shop in supermarkets. However the milk was still packaged in glass bottles, which caused a dilemma for supermarkets. Once the milk was sold and taken home, the supermarkets needed someone to bring the glass bottles back once the customers had used them.

Pops realized that the supermarkets did not need someone to pick up these glass bottles but instead needed new containers. Supermarkets were very loyal to specific dairy manufacturers and only had so much shelf space for competing brands. Pops had a hard time getting the Purity product into the new consumer market. He knew in order to get Purity into supermarkets and to stay ahead of the competition he must find a new container to not only eliminate the supermarkets’ glass bottle problem, but also gain market share for Purity.

Picture 8: Consumer shopping habits moved from home delivery to supermarkets. Purity broached the supermarket barrier by introducing disposable plastic containers.

Thus in 1950, Purity made a huge decision to do away with glass bottles to instead introduce disposable paper cartons. However, even with the movement to a new

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container, glass bottles were not completely phased out until 1965. With the new disposable paper carton and glass bottle return problems resolved, Purity now had its products in supermarkets. While the movement to use paper cartons instead of glass bottles was a risky decision, it also was one of the most rewarding Purity made over the years. The next step was to find a way to inform customers about Purity’s product and make the public more aware of Purity’s quality and taste. But before Pops could launch a good marketing campaign, he had to handle the threat many businesses faced during the World War II era: unionization.

In the early 1950s in the midst of the market shift toward supermarkets, Middle Tennessee saw a rise in demands for unions. These demands would lead to several pickets and strikes. Although Purity was not a large manufacturer, it was not spared from its fair share of strikes either. In one week’s span, Purity experienced the loss of two or three employees a day to pickets. However, Purity’s deliveries from the Murfreesboro Road plant were never stopped or even slowed because most employees were not involved in the pickets. Even despite an unsuccessful attack on assistant plant manager Mr. Bill Ezell and a non-striking driver Mr. Joe Castleman, Purity continued to run its routes. The company even allowed a preacher to drive a delivery truck just to ensure that all customers were served that day.

Luckily, Purity stood strong against unionization. The company experienced several failed pickets that attempted to stop production and a few employees constantly demanding for union representation of the American Federation of Labor Teamsters Local 327. At this time, Mr. Miles Ezell, Jr. decided to work with the striking employees. He offered to start arrangements for a National Labor Relations Board on pay day, but the employees refused. The AFL had left signs outside Purity, but the Teamsters officials who were contacted were unsure why the pickets were there. A few days later, the pickets ceased and Purity had avoided unionization.

Affect of External FactorsLaws & Acquisitions (1950-1960)

In 1956, another external factor would influence Purity’s priority to put the customer first. After milk and dairy product distribution had shifted to the supermarkets and away from deliveries, Nashville experienced a cent-per-quart price increase in milk due to a new production grant awarded to Nashville area producers. This price increase did not only affect milk but also other dairy products such as whipping cream and half-and-half. Whipping cream increased 4 cents while the increase on half-and-half was 3 cents. Despite having to increase prices, Pops did not raise prices enough to cover the added costs to Purity’s new production. Purity’s decision not to raise prices revealed that

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their number one priority was their customers.

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While Pops made the wise business decision to keep Purity prices low, another external influence was about to affect his business and it had nothing to do with milk. Purity tried to avoid political involvement and stayed focused on what was important, such as charity work. However in 1959, Purity was one of two companies on Murfreesboro Road that decided to stay out of an annexation fight. It was a good business

choice and avoidance of political involvement on a subject that did not directly affect milk production. The decision to stay out of the annexation problem was recognized in the community as just another step in giving Purity the trusted name it earned.

The factors that affected Purity during this era did not necessarily come from strict external forces. In 1959, the Clarksville dairy Sealtest disrupted the pricing system by lowering the cost of a gallon jug of milk to an unreasonably low price. Mr. Miles Ezell, Jr. stated that this lowering of prices caused a complete collapse of the local pricing system. The low cost allowed companies to create a price war and this was unfair to companies who could not keep up.

To resolve the price war problem, a milk control law was passed to help control price dealings and trade practices in order to prevent the collapse of the local pricing system. This law regulated dairies, specifically large ones, from pricing milk at such a low cost that other dairies, specifically smaller ones, could not compete without making quality suffer. Mr. Miles Ezell, Jr. was in agreement with this law and showed Purity’s concerns with quality and sanitation in production. Had the price war continued, Purity might have had to compromise sanitation practices if the price of milk stayed below a justifiable profit for too long.

Purity experienced change from more than just outside sources. The time came to start acquiring competing dairies. The preference was to buy small companies, which had little chance of growth on their own, in order to grow Purity’s business. Dairy companies needed volume to be efficient. These smaller businesses did not have the volume that Purity did.

In 1959, Purity acquired the Richmond Pure Milk Company, a fifty-one year old company. During this time, companies were experiencing an inflationary scare, which was probably the principal reason that Richmond Pure Milk Company decided to sell. The purchase included the acquisition of all equipment, seven trucks, and all accounts to be integrated into Purity’s company. Following the sale, Purity had more than fifty retail deliveries in operation. This sale also gave Purity entry into the supermarkets Kroger and Bi-Rite.

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Modernization & ExpansionAdding new technologies & innovations (1945-1960)

Beginning in the mid 1950s, Purity began to expand their plant and modernize by incorporating new technologies and fulfilling Pops’ ever present innovative spirit. Purity’s decisions to modernize helped to push them ahead of their competition.

One of the first new upgrades came in 1954. Six years before its purchase of Clarksville Grade A milk distribution plant, Purity decided to make a switch from an old, familiar ten gallon milk can to one hundred percent farm-tank bulk truck method of collecting milk, which was just a container that held more milk at one time. This decision would be the start of more plant improvement to come in the next few years.

In 1955, Purity was still ahead of their competition and leading the way in plant equipment innovation. Purity initiated a one hundred percent farm storage tank and truck tank pickup among its sixty Grade A producers which cost them $150 thousand. Purity was the first large milk distributor to complete this switch. The farm storage tank and truck tank pickup saved money and labor time. The innovation eliminated much of the undesirable phase of daily cleaning because the tank was made of stainless steel. The tank also contributed to the more desired features of the milk business by allowing Purity more time to focus on other stages of the milk packaging process. The switch came with a high price tag but brought Purity much more in return.

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Picture 9: An employee performs a routine check on Purity’s new milk storage tank.

By 1956, Purity made one of its best decisions of the decade and bought a vacuum-pasteurizer. This innovation was developed in New Zealand and was the only way to eliminate the bad tastes from milk especially that of onions about which many consumers complained. This was a risky decision made by Purity and was done before any of their competitors. Luckily, this decision had a positive impact on sales and within two years all competitors had them.

Picture 10: Mr. Bill Ezell monitors the new vacuum-pasteurizer.

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Then in 1957, Purity announced completion of a two year expansion and remodeling program at the plant for several thousand dollars. By this time, Purity’s plant at Murfreesboro Road was 12 years old. After all its success and growth over those twelve years it needed expansion and remodeling to stay ahead of its competitors. The two year expansion plan included putting up the largest trademark sign in the area which was the Purity plant sign.

Purity continued to modernize and in 1958, began using refrigerated trucks. These new trucks saved time because employees previously had to shovel ice on top of the milk before every delivery in order to keep the milk cold and fresh.

Picture 11: Left: a delivery driver shovels ice to keep milk cold during the route run. Right: Purity’s new refrigerated milk truck saved the driver time since ice was no longer required.

Conclusion

The era 1945-1960 saw increased growth and success for Purity. Even in the midst of dealing with union pickets, Purity grew and gained recognition all over Middle Tennessee. Purity made innovations ahead of their competitors that gave it an edge with customers and helped gain entrance into the new supermarket world. Now Purity needed to find a way to continue getting its name into the public and drawing in more customers so it could continue to grow.

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Era 3: Acquisitions & Creative Marketing (1960-1980)

Introduction

The 1960s were ushered in with more innovations, the marketing of these new innovations, and a continued growth and acquisition of smaller dairies. Purity saw its success over the past few decades increase and continued to strive for quality while staying ahead of the competition.

Growth & Recognition (1960-1980) New acquisitions, products, & accolades

To add to the growing company’s assets, Purity acquired more dairies during the 1960s than any previous period in the company’s history. The first of these occurred in 1960 when Purity bought the Clarksville Grade A milk distribution plant of Swiss Girl milk from owner Mr. Japhet Nussbaumer. The sale raised Swiss Girl Milk’s price from seventy-four to seventy-eight cents. Even though Purity purchased the smaller dairy, it began a trend that ensured its employees were a top priority. While other companies would acquire smaller dairies for assets alone, Purity made sure that the Swiss Girl Milk plant continued to operate at the same location. Existing employees were incorporated into the Purity family and the dairy still provided milk to Clarksville residents.

The next acquisition came in 1964. Purity acquired J.W. Little Dairy Company in Franklin, Tennessee. The dairy was directed by Mr. Albert “A.J.” Gasser who was the President of Purity Dairy at the time of the acquisition. The assets acquired included a fleet of nine vehicles and all plant equipment, not to mention additions to the ever growing Purity family of workers.

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Picture 12: Mr. A.J. Gasser (right) receiving an award from the Civil Defense Agency.

Purity continued minor attainments of dairies and assets over the next few years. However another major purchase occurred in 1965 when Purity purchased Swiss Farm Firm assets for between $200 thousand and $250 thousand. Purity gained fourteen Swiss Farm routes, fourteen trucks, three station wagons, and additional milk pasteurization equipment. This was the first time that a Purity acquired dairy was closed and the Swiss Farm name was dropped. Even though the plant ceased operations, all employees of the Swiss Farm plant were incorporated into Purity’s plant on Murfreesboro Road because the growth of Purity required more employees.

Many other acquisitions would occur over Purity’s corporate lifespan. However, the last acquisition of the 1960s-1980s Era occurred in 1973. Purity bought White’s Creek Dairy Farm. Owner Mr. Reece Thompson sold the 900 acre White’s Creek Dairy Farm. White’s Creek had operated under several names, including Country Maid, but had finally settled into the Purity tradition.

While Purity grew its assets in the purchasing of new dairies, acquisitions were not the only growth that the company experienced. New products started to appear in the dairy manufacturing line. The first of these new products surprisingly was not dairy related. In 1971, Purity decided began selling bottled Echo Valley water. It came straight from the Echo Valley Spring in Hot Springs National Park, Arkansas and was packaged in 2.5 gallon containers. The deciding factor behind this move was simple: the bottled water industry was booming with sales topping $100 million.

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Picture 13: Introduction of Purity's Sweet Acidophilus Milk.

But perhaps the most recognized addition to the Purity product line came in 1976. Purity introduced a very popular new product called Sweet Acidophilus Milk. The new milk formula was the result of research conducted at North Carolina State University. The product was designed to aid in digestion and allowed people who were lactose intolerant to drink milk. Sweet Acidophilus Milk was first introduced in thirty-seven Tennessee counties and five Southern Kentucky counties.

The final growth added to Purity didn’t come in new products or dairy acquisitions. In fact, it took the form of something much more valuable than any of the company’s new assets combined. Purity’s quality was seen throughout their spotless manufacturing plant. Each upgrade and investment showed how highly the company valued quality. Several hours a day were spent cleaning the plant to keep quality standards high. Purity was also the only full service dairy left in Middle Tennessee by the 1960s. In 1970, the hard work and dedication to quality was finally recognized when Purity was rewarded with Master Dairies Incorporated’s National Dairy Award. Given by the national association of independent dairies, the award gave special recognition for Purity’s cultured products: buttermilk, cottage cheese, sour cream, and yogurt.

Spirit of Innovation (1960-1980) Keeping up with Modern Times

The era of the 1960s-1980s was marked by significant innovations, new products, and plant expansions that helped keep Purity ahead of its competition. It was in 1960 that Purity created a major improvement plan that would add another 10 thousand square feet of floor space and install the latest equipment for a modern milk plant. But before the expansion of the existing milk plant could begin, a new innovation would be created that gave Purity a step ahead of its competition.

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Picture 14: Mr. Miles Ezell, Jr. with the first “no wax” container.

In 1961, the introduction of plastic containers eliminated the waxed paper containers of the 1950s. Because the paper containers had to be waxed in order to hold liquid, wax flakes would often fall into the milk. The plastic container innovation was the first of its kind among Purity’s competitors and was unlike any storage container previously created. The new equipment required to produce the plastic containers cost $200 thousand, but gave Purity an added benefit besides just staying ahead of the competition and allowing for easier storage and opening. The plastic containers also eliminated the wax flakes and thus enhanced the taste the milk. And by 1965, Purity was able to introduce Nashville’s first one gallon milk carton.

Purity had always had high quality in manufacturing and during the 1960s, continued to pursue that high quality. Reinvestment was a big priority at Purity. Much of the company’s profit was reinvested into making the plant the cutting edge of milk production. As the plans to expand the plant were more firmly developed, additional equipment was purchased to better the dairy production. In 1965, an investment for new buttermilk vats was made. It was followed by the 1967 purchase of prototype stainless steel casers. But 1967 saw more than just new equipment investment.

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Picture 15: Purity's expansion included a state of the art laboratory.

While Purity continued to innovate and invest in better quality, the plant expansion plan had finally come to fruition. Work to expand the Murfreesboro Road facility included an increased storage capacity of the plant. Upgrades included three 30 thousand gallon silo type tanks, 2 thousand square feet of general office space, 4 thousand square feet of additional facility processing space, several new processing vats, and a new state-of-the-art laboratory. The plant ran eighteen to twenty-four hours a day and was set to increase once expansion was complete. The growth accommodated for a greater output and care of storage needs projected five years in advance.

Marketing Quality (1960-1980) Educating the Masses on Purity

During the 1960s, Purity began to participate in mass media advertising with Carden and Cherry advertising agency. An unheard of two percent of profit went to advertising and became a crucial part to Purity’s growth. The first commercial ad was “The Cow and the Kangaroo”, which gave Purity brand name recognition and let the public know wax cartons were not being used anymore. Later commercial series included “Sergeant Glory”, “Orange-in-the-Face”, and one of its most famous sets “Ernest and Vern”, which will be discussed in a later era.

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Picture 16: 1960s billboard advertisement.

The ad campaigns also made a departure from one of Purity’s goals in the 1950s. Purity in the past had created paper containers to eliminate the glass bottle issue for supermarkets in order to get product on grocery shelves. However, the advertising now focused on letting the public know that Purity was a different product from Kroger brand dairy. It was time to differentiate from the competition.

Picture 17: A Purity secretary doubles as model.

Conclusion

Purity’s success from the 1960s to the 1980s was mostly due to its innovations and marketing. Each decision made during these decades was a huge step in the right direction and each was vital. Purity’s marketing gained more customer awareness while acquisitions lead to a continual need for expansion and growth. Finally, the often costly innovations proved to always payoff in the end.

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Era 4: Becoming #1 (1980-1998)

Introduction

By 1980, Purity Dairy managed to consistently and effectively grow and increase operations from year to year. This upward trend would only continue through later years. During the era of 1980-1998 and with the help of new technologies, smart investments, decreasing competition, and strong marketing strategies, Purity successfully became the leading dairy in not just milk but in a new ice cream line as well. In its journey to the top, Purity also continued to maintain Pops’ ideals of strong family orientation and influential community support. Through all of this, Purity was faced with the hardest decision in its company history that would ultimately change Purity Dairy forever: the choice to sell to Dean Foods.

Product Growth (1980-1990) Adding new product lines

The 1980s-1990s turned out to be a period of significant growth in the accumulation of new machinery, the development of new product lines, the acquisitions of outside products, and the loss of major competition. As the end of the 20th century approached, Purity and other companies experienced an exponential increase in technology. Along with the need for newer and more efficient technology came the need for increase in product depth. Up to this time period, Purity had consistently been quick to develop and produce more products with their signature red logo. This speed in new product development would continue with the addition of several outside products along with several large internal innovations.

In 1984, Purity was approached by Hershey’s to produce, package, and distribute Hershey’s chocolate milk throughout the Nashville area. Much research went into Purity’s decision on whether or not to accept the offer. There were two main differences at the time between Purity’s chocolate milk and Hershey’s chocolate milk. Purity used whole milk and was a darker color than Hershey’s low-fat chocolate milk. The differences between the two products ensured that Purity would not lose any market share to the new Hershey’s product. Purity also sought the advice of companies in other markets that had already accepted Hershey’s proposal. Overall, it appeared that companies in partnership with Hershey’s were seeing good benefits from the proposal. The consensus in addition to Purity’s fear that another company might be approached by Hershey’s if they refused led Purity to accept the agreement. Purity began producing

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Hershey’s chocolate milk in February of 1984.

Possibly the most important and largest product line addition to the Purity family during the 1980s was the introduction of ice cream. The decision was made by Mr. Bill and Mr. Miles Ezell, Jr. after much research, which indicated that ice cream was the fastest growing dairy product in the country. Additionally, there were no strong competitors in the market. Purity was already the leading producer of milk and needed to expand into other areas of production in order to remain competitive. Although no one at the dairy had any experience in producing ice cream, Purity invested over $5 million on the necessary equipment. The investment included building a brand new top of the line ice cream plant on almost two acres of land. However, the first batch of ice cream was not completely finished until April 1986. It was immediately thrown out for bad quality. In May, Purity was finally able to introduce ice cream in pint and half gallon containers. Among the first flavors on the shelves were the classic vanilla, chocolate, and strawberry, along with five others. In the first year, Purity managed to gain the second highest market share and a 95 percent distribution rate throughout the city of Nashville.

Picture 18: Purity began distribution of Haagen-Dazs ice cream in 1986.

In addition to starting their own line of ice cream, Purity was also given the rights to distribute Haagen-Dazs throughout Middle Tennessee in 1986. There was very little hesitation in making the decision. After much marketing research, Purity did not feel that distributing the other manufacturer’s ice cream would diminish profits from their own product. Extensive research showed that both Haagen-Dazs and Purity appeared to have their own market share and Haagen-Dazs existed as a pricier, upscale line. Even without the agreement for the new distribution plan, Purity was already profiting $40 million in

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ice cream sales and was second largest ice cream distributor in Nashville.

But ice cream growth did not stop with either the Haagen-Dazs or Purity distributions. In response to early popularity of the ice cream line, Purity continued to create several more ice cream products. In May 1987, one year after producing the first successful batch of ice cream, three novelty treats were introduced to the already wide variety of ice cream flavors. The new products were nutty buddies, ice cream sandwiches, and ice cream cups. The treats contained the same ice cream that was being produced but was packaged in a new form. All the novelty products became an instant success and followed in the footsteps of previous Purity ice cream products.

Another success for Purity Dairy was the addition of the frozen yogurt line. In 1989, Purity introduced frozen yogurt and, like its ice cream predecessors, it became an instant success. In only one year, the frozen yogurt line accounted for half of Purity’s ice cream sales and increased Purity’s market share of ice cream by almost 15 percent. Although, the frozen yogurt line was extremely popular, it did not take away from any of Purity’s packaged ice cream sales, which continued to increase. The frozen yogurt line also helped Purity distance itself from Breyers and other competitors. It gained Purity the lead in the Nashville market share of ice cream. Ice cream became Purity’s second most profitable line behind the milk line.

Toward the end of the 1980s, Americans adopted a new fad trend concerning conscientious good health. With the healthy lifestyle trend came several concerns such as calories, fat, and cholesterol. Many people changed purchasing habits to accommodate the new concerns. In response, Purity made several strides to promote healthier living. A major development was the new “lite” lines for their products. The “lite” lines were added to almost every Purity dairy product including milk, ice cream, cottage cheese, sour cream, and even eggnog. In addition to the already popular and healthy frozen yogurt line, the “lite” line kept Purity ahead of the curve in healthier products and caused profits to increase. Frozen yogurt sales alone accounted for over 40 percent of all frozen dessert sales and made it the best selling dessert produced by Purity at the time.

Technological Advances (1980-1998) Keeping the Innovative Spirit Alive

Throughout Purity’s history, a liberal approach was adopted when it came to investing money. On average, the company spent anywhere from $2 million to $4 million dollars annually on improvements alone. Such an amount was very high for a company of Purity’s relatively small size. However, these yearly investments allowed Purity stay a step ahead of competitors by implementing new technologies.

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In the early 1980s, a push to further increase overall plant automation was designed. One of the more efficient implements of new technology appeared on the milk lines. Before automation, milk lines consisted of multiple, individual pieces that had to be taken apart daily to be cleaned by hand. To eliminate the hand cleaning process, stainless steel milk lines were welded together. The new welded lines and the purchase of a self-cleaning system saved countless labor hours that were then implemented into other areas of the company. And just like previous technological innovations were adapted, Purity initiated the new welded line technology before any of its competitors.

Picture 19: An excerpt from Pops' letters to the Ezells.

Beginning in 1985, Purity began a complete renovation of its milk plant to become more technologically efficient. The renovation was in addition to building a new plant solely dedicated to ice cream production. Even with the increased technology, there were very few necessary upgrades. For the most part, the existing equipment had been purchased in the late 1960s. Purity saved quite a sum by implementing the old saying “cleanliness is next to Godliness”. In part, Purity was able to splurge on top dollar new equipment when necessary because the old equipment was well maintained. The careful measures of cleanliness implemented in earlier decades kept the equipment and factory running as if brand new. In fact, some of the original plant equipment remains in use today.

As the early 1990s approached, Purity incorporated more new technologies. Around this time, software programs were installed in the plant. One of the new applications was a preventative maintenance program designed to better maintain and control maintenance intervals and costs. Turning to computer monitoring wasn’t the only new equipment additions. By 1993, the company replaced thirty manual valves with automatic valves.

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Challenging Competition (1980-1998) Adapting to changing forces

Purity always had to compete with many dairies while faced with changes in laws and restrictions. Through all of these challenges, Purity continued to remain one of the top dairies in Middle Tennessee and that trend lasted well into 1990s. Part of the success was contributed to the lack of competition as many dairies closed business. Purity also contended with new and changing laws.

A turning point for Purity’s market share came in the 1980s when two longtime rival dairies ceased operations. Local competition had always existed between Purity, Sealtest Dairies, and Flav-O-Rich Dairies. But by mid-decade, both Sealtest and Flav-O-Rich were no longer viable competitors and were forced to close their doors. The fall of both of these companies led to a significant increase in business for Purity. According to Mr. Bill and Mr. Miles Ezell, Jr., Purity was able to better create and distribute product while employing the best workers. Success was once again attributed to continued hard work in producing high quality goods. And of course the employees were treated like part of the family. With the failure of Purity’s leading rivals, the only remaining competition appeared as private companies with grocery store brand products.

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Picture 20: Advertising for Sealtest wasn’t enough to keep it in business.

But loss of competitors wasn’t the only changing force that affected Purity. As discussed in a previous era, the 1955 Tennessee Milk Fair Trade laws were created. The purpose of the laws was to prevent any dairy from pricing their milk so low that no other company could compete with the low prices. By the mid 1980s, many dairy farmers worked to repeal this law. Many farmers opposed the laws because they believed that the higher cost of milk caused customers to cut back purchases. Many farmers were also upset that they were restricted in setting their own milk prices and that the laws discouraged competition. Mr. Miles Ezell, Jr. was among those who supported the fair trade laws. He, along with many others, believed that the law was important in preventing companies from taking profit losses on milk in order to essentially run other dairies out of business which could not compete with the lowered prices. Mr. Miles Ezell, Jr. was quoted as saying that “law forbidding retailers from selling milk at prices too low is beneficial and discourages price wars”.

The Milk Fair Trade laws were only one set of legislation that affected Purity. In 1991, a new bill was sent before congress with which Mr. Miles Ezell, Jr. did not agree. The new bill required that almost all milk would have a skim milk powder added to it. The only real benefit to the skim powder would be a short increase in shelf life. Opposite of this one benefit were many downfalls to the powder including: an expectation of change in the taste of milk; increase of caloric levels and lactose intolerance; and price

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increase for a gallon of milk ranging between four cents and twenty-seven cents. Overall, the costs of adding the powder seemed to greatly outweigh the benefits.

Strategic Marketing (1980-1998) Differentiating Purity’s Quality

As competing dairies began to fall apart and close business toward the end of the century, it became very important for Purity to gain those companies’ loyal customers. In addition to producing the best product, Purity had to find other ways to catch the attention of new customers. So Purity continued doing what it had done for the entirety of its existence by portraying a strong presence through a successful marketing campaign. Purity’s marketing ideas remained unchanged in that a significant amount of money was budgeted for advertising. After the closing of most of Purity’s local competitors, advertising was used to compete with the growing popularity of grocery store label brands. With the help of a good ad agency, Carden and Cherry, Purity managed to have several very successful advertising campaigns. Overall, Purity’s advertising significantly increased both popularity and profits for the dairy.

Possibly the most popular of all Purity commercials were the ones featuring Mr. Jim Varney. Introduced in these commercials as “Ernest”, Mr. Varney later became the actor behind the easily recognizable character who appeared in several movies such as Ernest Goes to Camp and Ernest Saves Christmas. Purity did not claim full credit for creating such a successful marketing campaign. Although Purity had the final say in whether or not a commercial was aired, most of the development and production of the commercials was placed on the shoulders of their ad agency, Carden and Cherry.

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Picture 21: Pops and Mr. Jim Varney.

Although widely popular late in the campaign, Mr. Miles Ezell, Jr. was not a fan of these commercials. They were not an immediate success. He found them to lack any sort of intelligence and thought they were very annoying. In fact, Purity even received many complaints about the commercials and requests for them to pull the ads from the air.

Mr. Miles Ezell, Jr. was ready to pull the plug on the commercials when he was asked by Mr. Jim Carden of Carden and Cherry to give the commercial a little more time to catch on. Sure enough, the commercials were a hit and went from being a disaster to an enormous success. The commercials became so popular and memorable that they remained on the air for about 10 years. “Ernest & Vern” commercials were not just important in promoting milk, but they also held a key role in promoting the new ice cream lines. Customers were able to relate to Purity’s products because of these commercials.

Another very successful and memorable ad campaign for Purity was the release of a 1996 jingle sung by Mr. Gary Chapman, a popular Christian music artist. Until this time, Purity had never had an official jingle. The 30 second ad began in a music video format with Mr. Chapman singing and relating Purity milk to his childhood. It quickly turns comedic when the camera shifts and Mr. Chapman is suddenly playing for an audience of electronic cows. The Chapman commercial, similar to the “Ernest & Vern” commercials, was successful and conveyed the quality of Purity brand to its audiences

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once again.

One of the ideas behind Purity’s marketing campaign was that it was important to make sure people were familiar with the product. The company spent an estimated 1.5 percent of total sales on advertising whereas most companies averaged only .5 percent. Similar to its stance on obtaining new technology, Purity spent money whenever it was necessary. Purity focused on brand building in advertising. The most critical thing message conveyed was giving the customer prior knowledge of Purity before even arriving at a grocery store. Many ad agencies in the Nashville area even considered Purity’s commercials to be the most memorable in the area due to the consistency and simplicity of the commercials throughout the years. Purity’s ad campaigns were always very successful and managed to constantly build and strengthen the Purity brand.

Picture 22: Billboard ad campaign for Purity.

Although Purity maintained a great relationship with Carden and Cherry for 26 years, significantly longer than the typical advertising relationship, the two companies parted ways in 1997. The decision was made because of a change in ownership at Carden and Cherry. The ad agency was bought by Bohan, but Purity remained with the agency for a little time after the change. Mr. Bill and Mr. Miles Ezell, Jr. claimed that Carden and Cherry was like family to them. Much of Purity’s success was thanks to the great advertising work of the agency. But the new ownership in Bohan no longer felt like

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family, thus leading the Ezells to seek new representation.

Eventually, Purity decided to obtain a new ad agency and found one in Ericson Marketing Communications. It was not long after the change before another ad campaign to hit the airwaves. The new campaign, which included television and radio commercials, billboards, and print advertisements, was based around one simple term: “Moo!”. Purity played off the idea that cows were lovable and sparked the interest of customers. A 1.5 ton bovine was named as Betsy, the new official “spokescow”. Ericson even developed a creative “Moo-Moo Jingle” to accompany every television and radio commercial in addition to a tag line: “Purity: Great Taste, Pure and Simple”. The ads were a huge success and kept the Purity name a popular brand in the Middle Tennessee market.

No matter Purity’s advertising agency, the company was very successful throughout the 1980s and 1990s. Advertizing created a widely known brand name throughout the Nashville area and beyond. The use of humor and appropriateness in promoting products turned out to be a winning combination. Purity also took a large risk in placing so much money into advertising. In fact, it had often been suggested that Purity was spending too much on advertising. But increased revenues during this period showed the positive effect of the advertisements. Purity once again demonstrated through its marketing strategy that it was impossible to make money without spending money. Through strong marketing, Purity continued to build a strong brand name that was more than capable of competing with any other milk producer.

Community & Family (1980-1998) Continuing the commitment

The most important thing for Purity throughout its history was its strong commitment to family and the community. One of Pops’ more important things when he began the company was to always keep the company in the family. Pops also put a great emphasis on the community and giving back the blessings that God had bestowed upon the Ezell family. Purity continued to carry out his fundamental ideas.

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Picture 23: The Moosic City Dairy Dash is marathon held annually to support various charities.

One of the things that Purity Dairy continued to pride was the fact that it had been family owned and operated since it began in 1925. During most of this time period, the company was run primarily by Pops’ sons Mr. Bill and Mr. Miles Ezell, Jr. Both served as president after the death of Mr. Gasser in 1980. Eventually in 1997, they accepted the roles of CEO and Senior Chairman, respectively, for the company. The intense period of growth, development, and marketing, allowed the Ezell family to retain a final say on almost every issue. Although they were both young boys when Ezell’s Dairy began, they strived to carry on the values that were initiated in the company back in the early incorporation days. It was during their tenure as executives for Purity that Pops passed away in 1994. Even to his last day, Pops had a strong say in what happened to the company. It became the job of the surviving family to carry on the legacy that he created within the company.

Even during Pops’ time, Mr. Miles Ezell, Jr.’s sons became very heavily involved with the company. Mr. Miles Ezell, Jr.’s oldest son, Mr. Stan Ezell, invested time with the company and eventually became President in 1997. Mr. Stan Ezell’s role with the company was another example of the great success Purity had managed to have as a primarily family run business. At the time of his promotion, it was reported that only 10 percent of all family run businesses made it to third generation of management. Mr. Stan Ezell’s promotion beat the odds and he further hoped that of one of his sons would follow his footsteps. One of Mr. Bill Ezell’s son-in-laws, Mr. John Robinson, also became very involved in the company. He served as the company’s Vice President and Treasurer. In 1997, he was promoted to the position of Senior Vice President and Treasurer. Mr. Bill Ezell is also followed by one of his daughters, Ms. Kim Owens.

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By remaining a strong family owned company, Purity had an advantage regarding philanthropy that other companies may not have been privileged enough to enact. Something that the Ezell family always recognized was the amount of blessings that had been bestowed upon them. In return, it was always very important to Pops that he return his blessings to others in need. The Ezells and Purity Dairy followed Pops’ example concerning community outreach. Contribution effort was directed to the Ezell Foundation, offering great benefits to help employees; giving back to Lipscomb University; or working with a number of other organizations.

Throughout the end of the century, the Ezell Foundation continued to grow and flourish in the community. Pops performed most work himself in keeping the foundation alive and growing. He, on many occasions, contributed 30 percent of his adjusted gross income to the Foundation annually. When Pops gave more than 30 percent, he would gift the overage to his children for them donate. In the 1980s, he even tried investing several hundred thousand dollars in limited partnerships, although few of them made a profit.

In 1980, Mr. Miles Ezell, Jr. began helping his father by doing some simple bookkeeping and investments. By 1994, the Foundation had total assets of over $2 million. Upon Pops’ passing, the remainder of his estate was gifted to the Foundation and raised its total assets to around $3.5 million. An additional $9 million was given to the Foundation during Purity’s acquisition by Dean Foods, which will be discussed later. Total assets settled around $13 million. The sum was far more than Pops could have ever hoped for his foundation. The Foundation’s goals for utilizing the money remained the same as always: at least 5 percent of the total assets were given to worthy causes. Most of the causes were church programs, but some were community projects outside of the church. All of Pop’s grandchildren were involved with the Foundation, and eventually his great-grandchildren will join their family involvements. The Ezells did a great job of maintaining these goals and continued to strengthen the Foundation.

Picture 24: Several members of the Purity extended family chug milk at Lipscomb University.

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Continued blessings were bestowed to Lipscomb University. Around 60 members of the Ezell family attended either Lipscomb University or David Lipscomb Campus School. For this reason, the Ezells have always been very interested in the university and its mission. Mr. Miles Ezell, Jr. eventually found himself on the university’s Board of Trustees. During his tenure, he served under three different university presidents and witnessed multiple advancements including: the growth from college to university and the building of Beaman Library, Allen Arena and the Allen Tower. When Purity was sold to Dean Foods in 1997, $8 million was given to Lipscomb to build a new bible building. The new construction was later named the Ezell Center against the pleas of the family. Because the Ezells don’t seek credit for their donations, they preferred their donation for the new building to be private. A brief walk across the campus shows the great impact the Ezells had on Lipscomb University.

Picture 25: The Ezell Center located on Lipscomb University's campus.

In addition to working with the Ezell Foundation and Lipscomb University, the Ezells also worked with a number of other foundations. Mr. Miles Ezell, Jr. alone made a significant impact in the community. He served on the board at AGAPE and was one of the three original board members at the Nashville branch in 1967. AGAPE was responsible for finding homes for countless numbers of children throughout the Nashville area. Mr. Miles Ezell, Jr. and his youngest son, Mr. Mark Ezell, were both very involved in the Youth Encouragement Services, also known as Y.E.S. Through Y.E.S., they both influenced Nashville’s inner city. Mr. Miles Ezell, Jr. also served on the board at the Nature Conservancy of Tennessee from 1985-2000. For two of those years he was President. The Conservancy’s main goal was to raise money to purchase land for reservations. Finally during this period, Mr. Miles Ezell, Jr. was asked to serve on the board for Nashville Branch of the American Red Cross beginning in 1996.

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Purity also grew the reputation of being a great place to work. As always, the Ezells knew how to treat employees well. They believed that happier employees produced better quality products. And their theory was proved to be correct by the continued success of the company. Employees continued to receive great benefit packages, some scholarship programs were put in place, and the threat of unionization seemed long past.

The Ezell family served throughout the community and for God. The many good deeds and services of the family have also helped to positively promote Purity Dairy. Although none of the family prefer to take credit for community outreach, it was inevitable that their good deeds were linked to the company. While in no way an attempt to garner market share, the Ezell philanthropic tradition created good publicity. They managed to gain a significant amount of respect for the company, which in turn went a long way in advertising to potential customers.

Change in Tradition (1980-1998) The Dean Foods Acquisition

For over seventy years, Purity Dairy was a private, family owned and operated company in the Middle Tennessee area. Sadly, the day finally came for Purity to consider offers from other corporations to purchase the company. On December 30, 1997, Purity Dairy became part of Dean Foods. Many ideas, thoughts, and negotiations went into the deal. Although, Pops never wanted to see Purity become anything more than an Ezell run company, the family decided that it was best for the company and still would have made Pops proud.

Picture 26: "Partnering with Mother Nature"

Mr. Mark Ezell served as Senior Vice President and Director of Sales and Marketing. He first became aware of some grave changes to the dairy world in 1996.

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Some of the biggest changes he could see occurred in Alabama. Mr. Mark Ezell was good friends with Mr. George Barber of Barber Dairies located in Birmingham, Alabama. It was never unusual for Purity to build a strong relationship with dairies in other regions and to share information, especially since there was little competition between them. Mr. Barber’s dairy had been losing money and was bought out by Dean Foods, a trend that was becoming very prominent in the dairy market. Purity watched as dairy after dairy fell to the corporate giant.

Dean Foods was a publically traded company located out of Illinois with just as much history as Purity Dairy. It was started in 1925 by Mr. Samuel Dean in Northwestern Illinois and quickly expanded. In 1961, Dean Foods made its first public offering of stocks. Going forward, the company continued to expand and take on other dairies primarily in the eastern half of the country.

As Dean Foods began to push closer to the Nashville market, the Ezells worried about how they would survive. By cutting at margins and profitability, the family could foresee a continuous trend that would allow Dean Foods to force Purity out of business. Soon the entire family was interested in the arising situation until Mr. Mark Ezell finally began talking with Mr. Bob Baker of Dean Strategic Operations. Though he was the spokesman for Purity, the decision to talk to Dean Foods was arrived upon by the entire family. The only person who was truly opposed to the idea was Mr. Stan Ezell because he believed it went against everything Pops would have wanted for the company. However, he eventually came to terms with the idea. Dean Foods also helped the decision by offering a much higher price for the company than anyone in the family anticipated.

Throughout the entire decision making process, it was still most important that the family focused on what Pops would have wanted. The family researched all factors carefully and weighed all options. They calculated that it would take the family 50 years of donating 10 percent of Purity’s profits to equal the amount that Purity would be able to give by selling to Dean Foods. In the end, the Ezell family made what they believed to be the best choice. And so Purity Dairy was sold to Dean Foods. Thanks to the sale of the company, the Ezells gave $20 million to different foundations and institutions. Although Pops wished for the company to remain within the family, he never could have realized the amount of good that would come from selling the company.

Now owned by Dean Foods, there were still a great number of terms to negotiate so that Purity would remain almost unchanged. Keeping with the ideals that had always existed within the company, there were a few things that Purity was not willing to change after the sale. One thing that was very important in the decision was what would happen to all of the employees. During the sale, all of Purity’s employees were able to keep their jobs. Even though the company was now owned by Dean Foods, Mr. Stan Ezell and all

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upper management and board members maintained their positions. For the most part, Dean Foods did not change much, but they did gain ultimate control of the company.

Purity took on a few new projects when acquired by Dean Foods as well. About 25 percent of the company’s overall milk production was now listed as other brands such as Wal-Mart’s Great Value brand. Purity, however, refused to use the trademark yellow jug for other labels and also would not make Sweet Acidophilus for another label. Although some changes were made to the company, the Ezells worked very hard to make sure the company remained what it was before the acquisition.

Although the Ezells never dreamed of selling Purity to someone outside of the family, it turned out to be the best decision they could have made. If the family had not sold, it would have been only a matter of time before the company began to lose a significant share of the market to Dean Foods and its competitors. By selling the company, the Ezells were able to do more for the community than Pops could have ever dreamed. In the end, no one in the family regretted selling the company because they sold at the height of a seller’s market.

Conclusion

The 1980s and 1990s proved to be the period of greatest change and growth for Purity. With great product additions such as ice cream, Hershey’s chocolate milk, Haagen-Dazs ice cream, ice cream novelties, and the “lite” lines, Purity greatly increased profits and product depth. Purity also managed to implement many technological advances and purchased new equipment to keep the company ahead of the times.

Very successful marketing campaigns created the familiar Purity brand name in Middle Tennessee. The advertisements were also important for the company by ensuring that Purity could gain the market share lost by all of the company’s rivals which ceased operations during the mid 1980s. The Ezells also did a great job of marketing the company through community contributions. This created a great reputation for Purity Dairy in the Nashville area.

The hardest thing for Purity and the Ezell family during this period was the sale of the company to Dean Foods. Although it proved for some to be a sad time, it truly was the best option. For the most part, operations remained the same for the company.

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Era 5: From Family Business to Corporate Division (1998-Present)

Introduction

After the purchase of Purity Dairy by Dean Foods, it was unclear how the company was immediately affected. Because of the purchase, Purity became a different company. It went from a family owned and operated private company to a division of a publically traded corporation. The Ezells no longer had complete control of the decisions made within the company, but they still remained a part of Purity and maintained management roles within the division.

Another interesting aspect was how the Ezells maintained the unique, family aspect that had always been associated with Purity now that it was only a small portion of a much larger company. Up to this point, Purity’s family values had been well respected and appreciated in the local Middle Tennessee area. But there was no assurance that the family atmosphere would translate into a larger corporation. There was an overall uncertainty as to how much the company would have to change to meet the expectations of Dean Foods.

Many good and bad changes occurred. Several new products were introduced, Purity acquired the rights to distribute several new items, and profits rose dramatically. But there were a few negative changes that included the centralization of management within Dean Foods and the loss of departments within the company. The negative affect was Purity’s welcome into the dog-eat-dog world of large corporations. Although Purity had always sought to do what was best for its employees and for the company, it was forced to make changes that were necessary for Dean Foods.

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Picture 27: Even though Purity was owned by Dean Foods, primary decisions were still made by the Ezells.

Early Days with Dean Foods (1998-Present) Starting over from scratch

In the early days under Dean Foods, there were few significant changes to the company. For the most part, the management remained the same, the product lines were consistent, and operations remained primarily unchanged. Dean Foods had begun purchasing dairies in 1996 in a fight with Suiza over market share in the southeastern area of the country. Dean Foods was not picky when purchasing the dairies and bought both good and bad companies as a new consolidation trend. Even though Purity and other companies were owned by Dean Foods, they were allowed a great deal of autonomy. As long as the company was making money and being productive, Dean Foods gave them freedom to make certain decision within their own divisions. Up to this point, Purity proved to be one of the stronger dairies in the corporation. When Purity was purchased in 1998, the dairy saw revenues increase from $50 million to $105 million. Purity had earned the right to make its own decisions.

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Picture 28: Dean Foods and Suiza consolidated assets and retained the Dean Foods name.

The first and one of the biggest acquisitions for Purity Dairy after being purchased by Dean Foods was the acquisition of Bennett Hill Spring. In 2000, Bennett Hill Spring teamed up with Purity to sell purified water under the Purity name. After much research, confidence in the bottled water product was high, especially since Bennett Hill Spring went beyond the state and federal regulations for bottling water. Purity was more than willing to put its name on a product that lived up to its standards of production.

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The selling of Bennett Hill Spring water proved to be the only major change to Purity during the first years under Dean Foods. This addition of the new product plus the loss of another competitor, Medigoal, helped Purity’s profits rise. But even with the significant increases in profits, there would still be many changes for Purity.

The Suiza Era (1998-Present) Phasing out family style management

When Purity was bought by Dean Foods, Suiza was a major competitor that was growing at a rapid rate. After purchasing over 40 different dairies, Suiza became the largest dairy processor and distributer in the country. In 2001, Dean Foods was purchased by Suiza, but the new parent company retained its name. This latest buyout led to many new changes within Purity.

Picture 29: Another of Pops' quotes from Letters to the Ezell Family seems to foreshadow problems that came with buyout by Dean Foods.

When Dean Foods was purchased by Suiza, Mr. Mark Ezell considered the many divisions and dairies of Dean Foods to be “a bunch of cats that are out of control.” Clearly some type of change within the organization was needed in order to gain control of all of the dairies. Purity, along with every other dairy, had been allowed to carry individual operations as long as profits increased. But Dean Foods, under new management of its own, changed this policy. Dean Foods elected to centralize management within the entire organization. For Purity, it meant the once family owned company was subject to the decisions of Dean Foods’ management staff. Purity’s managers now answered to Dean Foods’ managers for everything.

The Suiza transition seemed to bother one member of the Ezell family much more than anyone else. Mr. Stan Ezell, President of Purity Dairy, was very upset about the centralized management. He was the only member of the family who was against selling the company in the first place. When negotiating over the company’s worth, Mr. Stan Ezell said there was no price high enough to sell the company. But he also stood to lose the most if Dean Foods bought Purity. He had only been President for a few years, his son was just beginning in the business and was being groomed to eventually take over,

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and he did not believe it was the best option for the family. Eventually, Mr. Stan Ezell agreed to the terms of the sale to Dean Foods but could not handle the sale to Suiza.

It was quickly realized that a compromise with upper management was not forthcoming and he decided it was time to step down. Mr. Stan Ezell instead donated his time to Harpeth Hill Church of Christ where he already served as an elder. Continuing with the ongoing family legacy at Purity Dairy, Mr. Mark Ezell became President after his departure. Only two family members, Mr. Mark Ezell and Mr. John Robinson, remained employed with Purity. However, other family members still remained involved in the company. Even though there was a more centralized management within Dean Foods, the next few years would prove to be great years for Purity.

Living Legacy (2001-2007) Changing the Purity Culture

The years of 2001-2007 were great for Purity Dairy under Dean Foods. During this time, Mr. Pete Sahinkle was President of Dean Foods and he approved of the direction in which Purity was going. Although Dean Foods’ management was much more centralized, he allowed autonomy for Purity as long as it continued to make money. Purity saw significant growth in revenues and was successful enough to give double bonuses to their employees six out of the seven years. Much of this was due in part to the growing relationship between Purity and Wal-Mart. The new relationship provided increased revenue around $50 million for Purity.

Picture 30: The Purity ice cream plant couldn't keep up with the high volume goal Dean Foods set for ice cream production and was closed.

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In November 2007, Purity opened a brand new $11 million cooler at the Murfreesboro Road plant. It was the single largest investment in Purity’s history. The cooler was over 28 thousand square feet and was used primarily for storage of several different products including milk products, ice cream, water, and bottled drinks. The cooler was necessary for Purity because of a tremendous increase in sales and distribution requiring more storage for product between shipments. The cooler also served a larger purpose than simply providing storage for Purity. It was hoped that the new cooler would help to motivate and encourage the business community on Murfreesboro Road.

Again in 2007, Purity saw severe changes to the management styles of Dean Foods. Almost all independent dairies had been acquired by large corporations, thus Dean Foods stopped growing and their stocks began to decrease. Upper management realized that in order for stock prices to rise, changes would have to be made. The plan for Dean Foods was to find ways to cut costs. The first step was to permanently centralize the corporation’s management. Mr. Mark Ezell would now serve more as a mediator between the corporate office and Purity employees. He could also no longer sign off on contracts, carry out company investigations, or have any say in most major company decisions. Every issue became the responsibility or Dean Foods’ corporate offices. Up to this point, Dean Foods had spoiled Mr. Mark Ezell by allowing him to continue to run the company as he pleased. But he was getting a better look at how a major corporation was run. Dean Foods had centralized the company’s management once before, so it appeared to be nothing new. However, the latest round in management centralization was the first time the change was enforced, regardless of how well Purity was doing on its own.

Soon after the centralization of management, Purity underwent notable changes. Although it retained the name Purity, the company was slowly becoming Dean Foods. Much of the character that made Purity a presence in the dairy market was beginning to fade as the company moved in a different direction. The larger, more significant changes to the company were made to the ice cream and home delivery divisions.

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Picture 31: A Purity legacy was lost when the home delivery service was sold to Plumgood Food.

In March 2008, Plumgood Foods acquired the home delivery portion of Purity Dairy. Mr. Mark Ezell was allowed to make the decision on selling Purity’s home delivery services. Over the years, home delivery had become less and less popular or profitable. However, he still wanted to offer his long time customers the opportunity for the service. Torn between rewarding loyal customers and abandoning an ever decreasingly demanded service, many factors weighed heavily on the decision to sell it. Of Dean Foods’ 110 dairies, only Purity still offered home delivery. With the high increase in fuel prices in 2008, it was no longer profitable to offer home delivery.

Purity and Mr. Mark Ezell still felt that they owed it to the few long time customers that had received their milk this way for years. Instead of phasing out the service all together, he sold it Plumgood, a popular online grocer that already delivered groceries to customers. It made sense for Purity to look to Plumgood to deliver its milk to over 2,000 homes. Purity also lost 18 employees in the transaction. It was hard for Mr. Mark Ezell to sell the home delivery because it was an original part of the Purity legacy. In turn, Plumgood foods stopped operation in late 2008 and the original Purity home delivery legacy was lost.

Despite the great success and reputation of Purity’s ice cream division, Dean Foods decided to shut down Purity’s ice cream plant. Before it was shut down, Purity’s ice cream plant was one of the best plants that Dean owned. It was rated best in quality and it was the second most profitable and efficient plant. Purity and its employees worked hard to make the best ice cream in the cleanest, most advanced plant. The only reason Dean Foods closed the plant was because of the plant’s size: it was too small. Dean Foods’ standard operational goal for ice cream plants was production of 15 million gallons a year; Purity’s plant could only produce 5 million gallons a year. The popular Purity brand ice cream continued to be distributed in the Nashville area, but it was produced at other Dean plants.

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The hardest thing for Mr. Mark Ezell about the loss of the ice cream plant was that he had to lay off 11 employees. When Purity previously had to lay off an employee, the Ezells would go out of their way to secure another job for the employee even if it was with another company. Because of the state of the economy, the high unemployment rate, and the quick notice on the plant’s closing, Mr. Mark Ezell was not able to secure jobs for these employees. This was a difficult blow for Purity since it had always prided itself on treating employees well and offering great benefits and bonuses. The company now had to put employees out on the street with nowhere to go.

The final major change to Purity occurred in the marketing division. Dean Foods began initial plans to cut marketing expenses by 85 percent to practically eliminate Purity’s long standing marketing strategy. Purity would no longer be specifically marketed as a regional brand. Instead, focus was placed on marketing new national products. Centralized advertising budgets have also been planned, which will be very difficult for Purity since it always spent as much as 2 percent of sales on marketing campaigns. In addition to a smaller marketing budget, Dean Foods is planning on charging premium prices for Purity products. Many within the company fear that higher prices with less advertising will have negative effects on sales because there is little to convince customers to spend more. However, Dean Foods is forced to look at the larger picture under this new management instead of making decisions on a dairy by dairy basis. With the newest changes, it became clear that there is little Mr. Mark Ezell can still change within the company. And he is not the only Purity family member having a hard time adapting to the change.

Picture 32: Purity tractor trailers may be subject to the centralization of marketing budgets.

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One of the more frustrating things for Mr. Mark Ezell was presented as the lack of experience by Dean Foods’ upper management. Out of the 14 corporate executives, only 2 had any prior dairy experience before joining Dean Foods. Mr. Mark Ezell alone has more experience and knowledge of the field than most of the executives, but he has little say in the direction of Purity. The Ezells still believe they made the right choice when they sold Purity, but it has still been a difficult time for the family.

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Conclusion

Since 1998, there have been many significant changes within Purity Dairy. In fact, it is almost an entirely different company. Even with all of the changes, Mr. Mark Ezell still claims that selling was the right choice. The selling price at the time was the highest it was going to be for a long time and the family has been able to do so much for the community with the proceeds. Although the Ezells made the right choice in selling the company, it completely changed the overall look and atmosphere of the company.

As Purity looks toward the future, the biggest worry for the company has to be the severe economic recession. With the consistent decline of the stock market, it is inevitable that Dean Foods will continue to cut costs throughout the corporation. This poses a large threat for Purity, which has already seen major cuts since the acquisition. Purity may also be faced with employee lay-offs before the recession is over. The upcoming years for Purity could see even more changes for the company.

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Teaching Questions1. It is interesting to see how the workflow changed over time with the purchase of

new equipment. How efficient was the process? What specific changes were made that made the process more efficient? Diagram the workflow.

2. How did Pops generate more demand for the milk that he could produce? Was word of mouth alone enough? How much did Pops’ networking ability become the primary means of advertising? How was the Purity product first marketed?

3. What personality traits of the Ezells and the vision shown by the company's leadership encouraged creativity? How did Purity handle negotiations with employees of smaller dairies that were acquired through the years?

4. What was Purity’s organizational culture like before the buyout by Dean Foods? How were employees treated before the buyout compared to treatment after?

5. How did Pops handle conflict over the years?

6. Discuss some of the challenges Purity faced and the impact of competition on small businesses.

7. Identify the target markets and discuss how Purity served these markets.

8. Discuss the interrelationships of the marketing mix variables (4 Ps) and how they work to make the company successful.

9. Discuss how owners and managers used the marketing concept to make decisions.

10. What role does ethics play in corporate decision making?

11. List and discuss the factors that made Purity a successful company.

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12. How have product decisions affected profitability over the years?

13. Overall, was it smart for Purity to invest primarily in dairy products or would it have been smarter for Purity to expand into other areas as well, perhaps as far as grocery chains? Was it better to stay safe with products already known by Purity or should they have taken more risks into other product markets?

14. How did Purity tend to sway from the traditional business models early in the company’s life? In this case, did it prove to be successful for the company? Would a well developed model have gotten the company off to a better start or would it have hindered early aggressive moves?

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Bibliography1. $11 million cooler opening leaves Purity lots of room to chill. (2007, November

16). Nashville Business Journal. Retrieved from Bizjournals.com.

2. A Proven Past, a Fortified Future. February 18, 2009. www.deanfoods.com.

3. Banner Staff Reports. (1991, November 1). Dairies battle bill requiring skim

powder. The Nashville Banner.

4. Battle, B. (1987, December 4). Farmers to meet next week: Milk pricing a big

issue. The Nashville Banner.

5. Benevides, L. (1997, August 15). Cream of Purity family keeps rising to the top:

Company announces promotions. The Tennessean.

6. Cook, J. (2000, August). State of the industry: Juice/water. Dairy Field. Retrieved from BNET Business Network.

7. Ezell, Miles, Jr. (2002) Brief History. Mr. Miles Ezell, Jr.

8. Ezell, Miles, Jr. and Bill. (2008, November). [Interview with Mr. Miles Ezell, Jr. and Mr. Bill Ezell, executives of Purity Dairy and sons of Pops, founder of Purity Dairy.]

9. Floyd, C. (1985, August 4). Purity to build $4 million ice cream plant. The Tennessean.

10. Gaber, D. and Dubose, J.G. (1987, December 7). Local dairy exec backs state law on milk prices. The Nashville Banner.

11. Hance, M. (1984, January 27). Companies team up: New product milks market. The Nashville Banner.

12. Hance, M. (1986, May 15). Ice cream blends into Purity lineup. The Nashville Banner.

13. Hance, M. (1986, October 16). Haagen-Dazs distribution rights acquired by Purity. The Nashville Banner.

14. Hance, M. (1987, May 8). Purity expands ice cream offerings: Novelties, more flavors introduced. The Nashville Banner.

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15. Hance, M. (1990, May 15). Purity scoops market in frozen yogurt sales. The Nashville Banner.

16. Hance, M. (1990, December 20). Purity sheds fat with “lite” lines. The Nashville Banner.

17. Hance, M. (1996, June 5). Milking the market: Purity Dairy keeps churnin’ out laughs with Gary Chapman in new jingle. The Nashville Banner.

18. Hermann, J.T. (1997, May 29). Purity to mooove products: Holstein named Betsy has starring role in campaign. The Tennessean.

19. McCampbell, C. (1997, May 18). Purity Dairy hires new advertising firm. The Tennessean.

20. Plumgood Foods acquires Purity home milk delivery service. (2008, March 25). Nashville Business Journal. Retrieved from Bizjournals.com.

21. Ward, G. (2001, May). Changing of the guard: Ezells’ legacy with Purity carries on as president passes torch to his brother. The Tennessean.

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