Marty DavisBy Daniel Vance • Nov 2011 • Category: Cover Story
Photo by Jeff Silker
Le Sueur-based businessman primarily responsible for Cambria—just one facet of a multi-pronged family business employing 2,500 people overall.
Through the 1970 song “Stage Fright,” ‘60s-’70s country rockers The Band publicly admitted having a performance phobia. Playing that song, singer/bassist Rick Danko would repeatedly confess, “See the man with the stage fright, just standin’ up there to give it all his might. And he got caught in the spotlight. But when we get to the end, he wants to start all over again.”
Though a diehard fan of The Band—he maintains a close friendship with The Band’s catalyst, Ronnie Hawkins, and often gives away the group’s CDs as gifts—47-year-old President/CEO Marty Davis of Le Sueur-based Cambria in no way shares The Band’s stage fright. That’s because from his birth on, relatives have believed in and encouraged him, and helped build his confidence. In fact, the same could be said for all his siblings, who developed similar schemas from a St. Peter childhood. All are co-owners in Cambria, Cambria Mortgage, Davisco Foods International, Davis Family Dairies, and Sun Country Airlines.
Having caught a collective confidence, the Davises have set the sky as their limit—literally.
For example, this July, the Davis family team purchased Sun Country Airlines for $34 million to add another 850 employees. More down-to-earth and founded in 1943, 800-employee Davisco Foods International annually produces 330 million pounds of cheese and has been a major Kraft Foods supplier and food manufacturer ingredient supplier. Cambria and its 650 employees—Marty’s core responsibilities—are the only U.S. producers of natural quartz surfaces that combine natural quartz, resin, and pigment to create countertop, bathroom, and fireplace applications. It has manufacturing facilities in Le Sueur and Belle Plaine, and in Toronto, Indianapolis, and Cleveland, Ohio. Finally, 100-employee Cambria Mortgage has been making Upper Midwest inroads.
In his hilltop Le Sueur office, Davis feels right at home surrounded by dozens of cheery photos, colorful Leroy Neiman prints, and media clippings marking company milestones. Rather than stage fright, Marty, his family, their management teams, and employees all seem to have acquired a healthy dose of stage might, i.e., the strength of character to make the seemingly impossible possible, and to please difficult-to-please audiences.
My sources say that when you were a little boy, you and your brothers one night locked your two-year-old sister Julie and your babysitter out on a second-story roof. Did that actually happen?
I don’t remember it exactly, but I’ve heard that story. I thought we locked them in the basement. There were five of us kids born within six and a half years of each other. We had adventure and a full childhood. St. Peter was just the best place to grow up. Everybody in town seemed to know what people should and shouldn’t be doing and they were aware of everyone’s kids.
Don Burch owned the shoe store and if Mr. Burch saw us kids doing something we shouldn’t, he would tell us and we’d listen. He was an authority figure—many were. I worked for Bob Swedberg when I was 12 and for Tom Cook at Big John’s Restaurant when I was 13. We walked beans for Jim Kennedy and the Wettergrens. I pumped gas for Butch Frey and Al Mogenson at the Skelly gas station, cleaned the First National Bank and Lager’s for ServiceMaster, where Bernard Langr (correct spelling) was my boss. He was picky and a good boss. I had a key to the bank when I was 14. Franny Connor was the drug store clerk and if she told us to stop running the aisles and leave, we did. (Laughter.) The kids respected adults and everyone knew each other. Kids knew the boundaries.
We felt secure there. We roamed the town a lot. In the summer, I often would leave home in the morning and return at night for dinner. My great-great uncle Walter Moss owned a watch shop and sometimes I was in the way and breaking crystals, making a mess of things, and he would let me learn anyway. It seemed we were related to everyone: the Wettergrens, Pells, Petersons, Hermels, Menks, Seitzers, and others—we were all connected. That gave me a sense of confidence and security. There was always a place to go for a cookie or when you were in trouble, and places to work or to just play around. St. Peter was just a great town, and still is. I met my wife Anne in Mankato. She has been great for me, very supportive and helpful. Her dad, Tom Dunn, hauled milk for my grandpa in the ‘50s.
What about your parents? For example, is there one thing about your father’s personality that you now see in you?
One thing I admire is his candor. He says what he thinks and doesn’t beat around the bush. He finishes what he starts and is a very hard worker. He has integrity and wisdom. If he has an ego, he keeps it to himself. But most of all, having your dad behind you gives you great confidence in taking risks, trying new things, making moves, and exploring opportunities. He does all that himself, so we have been able to observe. My grandpa, Stan Davis, has that same presence.
As for my mother: she got us kids involved in everything. St. Peter had an Easter Egg Hunt contest and my mother got us interested in finding the Easter egg hidden somewhere in town. We were given clues based on history. Mom got out the history books and motivated me. One year, I may have been the one finding the Easter egg, but it was my mother who was instrumental in making me believe I could.
I was a Star Tribune paperboy and they had a contest in which the paperboy selling so many subscriptions won a free Disneyland trip. My mom said I could do it, and I did. She helped me believe I could do anything.
In ‘96 or ‘97, U.S. Speaker of the House Newt Gingrich invited me to Washington D.C. because he and Rep. John Linder (R-Ga) were interested in having me run for U.S. Congress against Rep. Dave Minge. I met with Gingrich a few times—a captivating guy, so intelligent. After the first meeting, I was quite excited and called home to Mom. I hadn’t told her or anyone I was meeting with Gingrich. Then I told her she wouldn’t believe whom I had just met privately. She guessed the President, then a U.S. Senator, and then the Speaker of the House. The meeting itself hadn’t surprised her.
Take me through your career path.
Minnesota State Head Baseball Coach Dean Bowyer recruited me to play center field and I went to school there two quarters. However, I soon realized I needed to get out of the area to get focused, in part because I was hanging around St. Peter too much. I took a year off school to work in a Columbo yogurt factory in Boston. Then I went to the University of Minnesota to major in food science and nutrition. In college, during summers and weekends, I worked at our Davisco Foods cheese factory. (I had started in our cheese barreling room at age 16.) The last two summers of college, I worked for Opus Construction on a road grading crew and later a concrete crew. It was hard work.
I graduated with a B.S. from the University of Minnesota knowing I wanted to be in the creamery business. I never really wanted anything else. My grandmother Gloria Davis often spoke to us kids about the family business—and it was a pretty small one at the time. But she had that vision. She was such a bright lady and really special. Dad never pushed for our joining the family business, but did allow us to work in the factory as kids. He always said having a factory job would be a big benefit to us. He did introduce us to a dairy school professor at the University of Minnesota, but left the decision of enrolling up to us.
I went into the creamery business in St. Peter right out of college. I started out working in the plant, then the manager there left, and by default I was suddenly supervising 25 employees. My dad never really named me manager. I spent 1990-91 also managing the Nicollet operation before becoming involved in our South Dakota plant. By 1993, we had formalized our dairy powder business into a food ingredient division. In 2001, we started Cambria and I went over there.
In the past, when asking interviewees about their candor, I’ve asked if that has gotten them in trouble. I’m sure that has been the case with you, too. But have there been times when your candor opened up doors?
In our company, we call candor “direct communication.” Authenticity is born of it and it helps relationships grow faster. It builds trust. That’s something I believe all my siblings received from our father.
Your authenticity could turn some people off before they get to know you.
I’ve had to learn when to have more moxie and when not. Certainly, my candor has a better governor (i.e., a regulator) today than when I was 30 years old. All of us Davises have a passion for what we’re doing and sometimes we are a bit quick with our emotions. As I have matured, I have learned to better control these emotions and am not as quick to react. Also, I have learned how to better frame arguments.
In August, you were on Dr. Laura Ingraham’s nationally syndicated radio show. In fact, you were on the same hour as Texas Gov. Rick Perry. What did you discuss with Dr. Ingraham?
Laura is a good friend. We talked about job creation and how uncertainty in government isn’t good for business. This government, including our President and Congress, has created a great deal of uncertainty for business. They derailed the recovery just as the recovery was beginning.
We need to cut spending and the size of government. In 1994, I was impressed with President Clinton. If you remember, in his 1995 State of the Union address, he said, “The days of big government are over.” That was a big leap for a guy like Clinton to take that position and adjust to the circumstances of the day. He and Gingrich set the stage for America to grow again. And it did.
Clinton was a believer in free trade and welfare reform. He understood government had to downsize, even though it took the 1994 (Republican-dominated) midterm election for him to realize it. He adjusted. President Obama hasn’t. He has stayed with his government-is-the-catalyst, stimulus program, far-left approach, which I strongly disagree with. No government, Republican or Democratic-controlled, can create jobs. Government does not sell a good or a service in a competitive platform and does not create profit from its efforts. Government is (and should only be) a service provider—a very necessary one—to support private sector commerce. Its jobs are born of the private sector and it can’t create them for the private sector. It just doesn’t work that way.
The growth of big government concerns me. In the ‘80s, I believe Honeywell, Northwest Air, and Dayton-Hudson were Minnesota’s largest employers. Today, the U.S. government, State of Minnesota, and the University of Minnesota are. That should concern the taxpayer. It’s backwards. Individual employees in the public sector are not the issue because government has many talented, good people. We could use their talents in the private sector.
Give examples of uncertainty.
Businesspeople aren’t sure what will happen next on the tax front. No one knows what Obamacare will look like or really what it is.
As for healthcare: Cambria has been offering HRAs (health reimbursement accounts) and our employees have really started reducing their healthcare costs. Let the patient (the employees) manage their own expenses. I get a kick out of people saying Americans can’t manage their own healthcare. Women are often the home finance managers and, in general, they are darn good cost managers. They know grocery prices, school expenses, when prices rise, and they know enough to move to different brands or different stores. They are good buyers. They already manage many other costs in their households, but our government tells them, in a sense, that they just aren’t able to manage their own healthcare. It’s absurd.
Taxes and healthcare are big expense items in any business’s cost structure. Regarding the banking industry, Treasury Secretary Geithner and Congress overreacted. The meltdown and unsavory financial activities were for the most part only in New York and only involving the mega banks and financiers. They have overregulated banks far beyond that hedge fund fiasco and gone out onto Main Street. Mark to market (accounting) is a terrible policy and that goes back to the Bush Administration.
So all of that restricts the availability of capital for small- and medium-size entrepreneurs. For example, the foundry in Le Sueur today (Le Sueur Inc.) began as a small startup in the ‘40s by Mark Mueller’s dad, Butz. Today, Le Sueur Inc. employs 600. All this regulation restricts those small startups. Young risk takers can’t get capital. This overregulation will have short- and long-term negative job creation effects.
What’s the real story behind the Cambria silo on US 169?
The silo was born of spontaneity. I drive by it all the time going to lunch. One day, I called my assistant to find out who owned the silo. I told the owner we would like to paint and clean it, and rent it from him. We now have the right business model that utilizes the storage aspect of the silo in order for us to meet Department of Transportation permitting requirements. DOT has been fair and tried doing the right thing throughout—and after all was said and done, they did. We appreciate that. The silo is staying, so that’s good.
As for today, who makes company decisions?
My dad, brothers, Jim Ward our chief financial officer, and I are an integral part of all we do, even though we have different responsibilities. We talk frequently, often daily.
Who has what areas?
My brother Jon runs Davisco Foods and brother Mitch works with him on the technical side. Mitch also runs our dairy farm enterprise, Northern Plains Dairy and New Sweden Dairy. Brother Matt helps me run Cambria. He is in Business Partner Services and heads up customer service, quality control, and university training—important aspects of interacting with our U.S. and Canada business partners. All four of us are very involved in everything we do and work well together. We are all partners. Our sister Julie is a partner too, although she doesn’t work in the business every day. She certainly is a part of all that we do and is very insightful and supportive. Everyone pulls their weight. Jim Ward is our key non-family person and is involved in everything we do.
Each of you has unique gifts, and one of yours is in being able to talk and establish relationships. I would imagine that has made you the company spokesperson?
We all play that role in different ways. Jon and Mitch are excellent public speakers and relationship oriented. Matt isn’t as public, but handles things just as well. I am probably more visible because I deal with a consumer products company.
So Mitch and Jon would be more in the public eye if you had a Davisco Foods brand cheese, for example.
Sure. They are excellent speakers and do a lot of speaking and networking in that industry. My strength in that area isn’t any greater than theirs. I really feel we are all pretty equal. Everyone asks, How do you brothers get along so well? It’s because none of us are lazy; we all work hard. Our 92-year-old grandfather Stan set the bar. Everyone here works hard, including our managers and all our employees. The Davises may own these businesses, but there is far more to it than the Davises. We have excellent people everywhere. Hard work can overcome a lot of flaws and challenges—and we have our share, so we all work real hard.
What all are the Davises involved in?
We operate Davisco Foods International, which employs 800. Depending on milk and cheese prices, our sales range from $700 million to $1 billion. I was in that business until 2002, when I moved over to Cambria. Davisco Foods is an excellent company and has really good people. Davis Family Dairies are a big part of our enterprises and the most impressive to tour. It’s a very dynamic business and much more complex than one might think. Cambria Mortgage began two years ago. John Schroeder, a long-time friend at TCF Bank came to us. We knew the mortgage business was in a major downturn and felt that was the right time to build that business.
Cambria was really born of Davisco Foods. We have 650 employees and factories in Indianapolis, Cleveland (Ohio), Toronto, Le Sueur, and a soon-to-be fabrication plant in Belle Plaine. Cambria Mortgage, Davisco Foods International, Davis Family Dairies, and Cambria are businesses we manage and operate day-to-day.
Also, we own Sun Country Airlines, but don’t operate it the same way we do our other businesses. When purchasing it, we were confident it had a strong management team. The time I spend with CEO Stan Gadek is more of a general philosophical and strategic nature regarding fundamentals of how the company should move forward. Day-to-day operations are his. I work as our family liaison with Stan and am the managing director reporting back to my siblings and dad.
You feel that comfortable and have that much trust to warrant that?
Yes. My job is to build mutual trust with Stan Gadek, to help him navigate the direction, the strategy, and to support his moves. Stan is candid, straightforward, and well grounded, which was one attraction in buying the airline. During our due diligence, he got quite direct at one point and felt moved to apologize. I said an apology wasn’t necessary. I was impressed and had appreciated his spirit. With him, what you see is what you get and you know where you stand. He doesn’t mince words and is a sharp operator.
Someone who knows you gave me a question. He said to ask, Why did you buy an airline?
We didn’t look at it that way. We bought what we thought was a good business opportunity. It was a well-run company with an excellent brand and was positioned to grow. One thing we believe is most important to business is people and in Sun Country we saw a tremendous culture and excellent people. In our judgment, their business model had good discipline. It looked like a model built for success. This is primarily why we invested. We certainly looked at the fundamentals of the industry as well, and became comfortable with them.
Not long ago, I spoke with John Barry’s son. John Barry owned Sun Country in the ‘90s. His son said the company was special then because of the family-owned feel and unique culture. With Davisco Foods, you have had a unique culture developing since 1943. Your company culture and Sun Country’s must have differences.
That’s a good point. Sun Country’s culture started with a group of laid-off Braniff International Airways pilots and flight attendants in 1982. That DNA is still in that company—it was there when Mr. Barry owned it. We feel it’s still there. We also feel Stan is as good as anyone in being the steward of that culture and enhancing it. He’s down-to-earth and is a person that cares about the details that matter, and he is a competitor.
Sun Country’s 2008 bankruptcy was not the result of a financial condition. The company had to be extricated—this is very important and people need to understand this—in order to protect it from the fallout of the criminal activity owner Tom Petters had been involved in. It was a unique, and I think, appropriate, use of bankruptcy. They protected hundreds of jobs in a business that was having operational success. A key factor in our purchase was realizing their business model hadn’t failed; but rather realizing Petters had failed them. If Sun Country had not gone into bankruptcy, no company, let alone Sun Country, could have withstood Petters’ liabilities arising from his criminal acts. Stan Gadek and the bankruptcy trustee had to choose bankruptcy as a tool to insulate the company from criminal activity it had never participated in.
Your companies do business all over the world. What have you learned from other cultures?
When with our dairy company, I visited Asia often, especially Japan. The Japanese were outstanding to do business with. They have discipline and urgency in regards to issues, and seek accurate and punctual information. They are demanding but fair. I learned much about credibility, character, and quality control. Some people say the Japanese culture isn’t warm, but we found it to be. When I was married, three of our Japanese customers flew in for the wedding. They have warm, deep relationships, but not initially. That takes time. You have to earn their trust.
Could Japan be the next place to expand Cambria?
Asia as a whole will be. This afternoon, we’re interviewing a gentleman from China to open a Cambria office there. Certainly, one motivation for doing this has been our experience there. I was in Asia perhaps 30 to 40 times in the ‘90s and early ‘00s.
I know this is off topic, but one thing I want to mention on the international scene is Mexico. One of our country’s greatest mistakes over the last 30 years has been in not helping, more profoundly, Mexico’s development. If we could help develop their economy into what Japan became, we would have a consumer market that would be a huge economic boom to our country. Their economy could be bigger than Japan’s. A tremendous opportunity exists. It would be hard work but I assure you, if Mexico were next to Japan, Japan would have already helped develop Mexico. We should help Mexico move away from corruption to creating an ownership society, where personal, honest wealth can be built.
When we opened our Mexico City office for Davisco Foods International in the ‘90s, I grew to know our landlord well. His grandfather had built the building we rented. That family property had been corruptly taken away from him three times and he had to pay off people in the courts each time to get his building back. Here in the U.S., we have county recorders and court systems with integrity to establish credible ownership. These simple fundamental changes we consider a given would help Mexico’s middle class blossom. You worry about jobs leaving America? Get an economic environment in Mexico that creates more consumer markets and you won’t have to worry about where our jobs are going.
All over the nation, thousands of businesses are retrenching or shuttering. All yours are expanding. At one point, Cambria was listed in Entrepreneur magazine as the nation’s fourth fastest-growing company. How are you able to expand when most everyone else is cutting?
A down economy often is the right time to build and look at niche growth opportunities. My dad has always said that and it’s true. If your products are innovative, unique, and fresh, you can move forward by penetrating market share. One reason for our success is that Cambria markets direct to consumers. We don’t go through big box stores or brokers. We have a direct sales force. Often in lean years, conventional distributors are more concerned about survival than building long-term relationships with manufacturers like us. If having used distributors to market our products, we wouldn’t have been able to penetrate the market so well. When the market dropped off, we doubled our color development and in 2010 doubled our marketing staff. We placed higher expectations on our sales force. We told them if the company was to succeed they had to be extraordinary. Average sales performance wasn’t going to work and we moved the average performers out. It was hard, but we had to do it.
Our people have great relationships with our customers and knowledge of our markets. This, quality control, and color innovations have helped us have a record year to date. Our other businesses have always expanded during downturns—and this desire often has meant having difficult discussions with our bankers. In fact, we have had to self-fund some of our growth because our bankers would not participate.
What else does Cambria and Davisco Foods International have in common?
The value of having quality people. I have worked in the dairy business, which in terms of sales is more institutional, business-to-business in sales. The last ten years, with Cambria, I have been in the consumer products business. The greatest lessons I learned moving to a new industry was that, first, the world has many excellent companies and industries. If we stay in one industry, sometimes we get kind of lost in just that little world.
The second lesson is that at the end of the day business isn’t about our products; it’s about our people. It’s people that make the business succeed. It’s customers, suppliers, and, most importantly, employees. At every company I have worked, including our family businesses and others, it’s the people that make a business succeed. If you walked through this factory right now, people would greet you with waves and hi’s. They are positive about what they do. That’s the key ingredient with the success of any government, business, athletic team or school. This is why St. Peter High was such a great school; they had great parents, teachers, and coaches—just really good people.
Getting to know you: Martin Edward Davis
Born: June 15, 1964.
Education: St. Peter High School, ‘83; University of Minnesota ‘89, BS in food science and nutrition.
Family: Anne, wife; children, Pete, Jack, Charlie, and Danny.
CONNECT: Through Cambria, you have met people you wouldn’t have met through Davisco Foods International, such as Paul Harvey, Cheryl Tiegs, Ronnie Hawkins, and Bobby Knight, among others. After meeting someone like Cheryl Tiegs or Bobby Knight, does coming back home to Le Sueur and St. Peter sometimes seem a bit dull?
DAVIS: No, because I like Swan Lake and Schmidt’s Meat Market and the river valley culture where I grew up. Cheryl and I became friends through a mutual friend before we hired her. The thing about meeting well-known people is that in doing it you find out how equal everyone really is. Cheryl is down-to-earth and engaging. She grew up in Breckenridge, Minnesota. Through meeting celebrities, I have learned that most started out the same as everyone. They grew up wanting to do something and to be something. They aren’t any different. You get in their cars and some have dirty cars and some have clean ones, some are late and some on time, some are friendly and some not. They are just like everyone else.
- Phone: 507-665-6007
- Address: 31496 Cambria Avenue, Le Sueur, MN 56058
- Web: cambriausa.com