Feb. 24, 2002
The conference room at Louisville, Ky.'s Paradise Tomato Kitchens is an elegant wood-trimmed space bearing a ponderous conference table ringed by high-back padded chairs. Enormous food photographs line the walls and a "2000 Supplier of the Year" trophy from Domino's Pizza is proudly displayed at one end of the room.
The handsome space, however, is only a stylish curtain concealing the industrial machinery pumping out tomato sauces several yards away. The aromas of garlic and oregano in the air provide ample reminder that this company is about food, not fancy digs.
Like several guests waiting to take a tour of the plant, Ron Peters, founder and CEO of Paradise, is suiting up in the standard low couture of food manufacturers: hair net, gawky safety glasses and a full-length lab coat. The protective gear makes everyone appear and feel a little silly; indeed, Peters himself looks little like the leader of a thriving multimillion dollar business.
But as he starts to describe the sprawling 9-year-old operation that produces custom-formulated pizza sauce for five of the top 15 U.S. pizza chains, the awkward get-up seemingly disappears, and Peters is immediately convincing as a food industry innovator.
"Technology is what's driving everything," said Peters, 53, referring to the ceaseless upgrades he makes to the plant. "When you're small and nimble like we are, you always have to be thinking of ways to use technology to your advantage: to lower your costs; the customers' costs; and improve product quality."
The factory's production area is chock full of high-tech stainless steel sauce-making equipment. Controlling it all in a nearby glass-enclosed observation area are two men operating a battery of computers that would make an MIT student drool.
The deep red sauce pumping out at the end of the line is packed in flexible plastic pouches, not cans. Paradise is the only facility in the Eastern U.S. that makes its products year round, as its customers need it, from paste shipped from California.
"We're the first sauce manufacturer that we know of to have a B2B Web site for our customers," said Peters. "About 70 percent of our (26) customers use that to place their orders and check shipments and inventory."
Soft Drinks to Savory Sauces
In the 1980s, the factory now housing Paradise was owned by PepsiCo, and produced juice used in its citrus beverage, Slice. Peters came to the soft-drink company in 1986 to design, build and run such plants.
In 1990, however, PepsiCo gave Peters a two-fold charge: cease making juice there and sell the assets, or convert the site to make products for other companies in the PepsiCo family.
Peters immediately set about studying sister companies KFC, Taco Bell and Pizza Hut to see if there were products they might need. Ultimately, he converted the plant to make tomato sauce for Pizza Hut.
But only a year later, PepsiCo again told Peters to make changes: shutter and sell the plant, or convince Pizza Hut to absorb it into its system. When the pizza giant told Peters it wasn't interested, he addressed the other alternative.
"At first I tried to sell the facility, but eventually I wound up becoming the buyer," said Peters, laughing. "I guess it was the right place and the right time, and so I grabbed hold of the brass ring and tried not to let go."
"We look at all aspects of our business and attempt to apply technology to gain a competitive edge."
Founder, CEO of Paradise Tomato Kitchens
In November of 1992, Paradise was born, and ever since it has notched double-digit sales growth every year.
Peters declined to share sales figures, but he said the company has grown from 14 to 60 employees, which, he added, makes Paradise a "small fish in a very big pond" of tomato sauce producers. Still, he believes the company's relatively small size allows him and his staff to remain hands on.
"We're very narrowly focused on serving a niche market," Peters said. "You can reach into the bowels of our organization very quickly. When I call on our customers, I know who I'm selling to and they know me. That's the level of service we like to give."
Jimmy Simonte, purchasing manager for Domino's Pizza, in Ann Arbor, Mich., said Paradise is the right size for meeting the needs of a large company like his.
"They have the ability to manage change and deal with tough issues quickly as they come up," said Simonte, who added that 80 percent of Domino's pizza sauce is made by Paradise.
Kids are the Future
Outside of his business, Peters' passion is mentoring young entrepreneurs like those in Junior Achievement and the Future Farmers of America. He views the country's teens as not as crazy mixed-up kids, but as nation's future leaders.
"My whole emphasis is to get a lot of good talent into the food industry by influencing those kids as much as I can," said Peters. "We've gotten used to watching TV and seeing kids picked up for drugs and shootings, so it's refreshing to be around young folks who are so driven. In (FFA and JA) there are good kids who really want to excel and be entrepreneurs."
Jan Ferris, lead regional director at FFA's headquarters in Indianapolis, said Peters' contribution to the organization goes well beyond donations for scholarships.
"When an executive takes time out from his personal schedule to make time for students, that has a big impact on them," said Ferris. "When you have people like Ron who sincerely care about helping these kids develop career skills and leadership, how can you not admire a guy like that?"
When 47,000 FFA members come to Louisville for its annual national convention, a select dozen "Star Farmers" spend an afternoon touring Paradise's plant and in an extended Q&A session with Peters. Having access to the owner of a successful corporation is a rare treat for the teens, said Ferris. Peters said the depth of their interest in how he runs his business shows the students' remarkable maturity and drive.
Company: Paradise Tomato Kitchens
Position: founder, CEO
HQ: Louisville, Ky.
Hometown: Arkadelphia, Ark.
Children: 2, Josh (23) and Chelsea (15)
Hobby: scuba diving, boating
College: University of Arkansas, Fayetteville, Ark.
Degree: Mechanical engineering, BS
Activities: founding member of the Food Manufacturers of Louisville, board member for Kentucky Technology Services, board member of MindFlow Technologies, active in Future Farmers of America and Junior Achievement.
Quote: "My goal is for my company to become the IBM of the pizza sauce industry. When people think of pizza sauce, I want them to think of Paradise."
"They're very entrepreneurial themselves, sometimes having their own businesses and often wondering how to take a family business to the next level," said Peters. "These kids, I guarantee you, have a hell of a work ethic, and that's what I really respect about them."
Peters remembers well the journey to owning his own business, and wondering along the way when he'd control his own destiny.
After earning a B.S. in mechanical engineering in 1971 from the University of Arkansas, Peters moved to Texas to work for Reynolds Aluminum as a construction engineer. Shortly after he was hired by Elk Roofing to design and build factories for roofing materials.
In 1985, PepsiCo hired him to design and construct facilities that produced soft-drink flavorings. The following year he moved to Louisville to manage the Slice juice plant, and eventually became a supervisor over several similar plants across the U.S.
Peters enjoyed his term with PepsiCo, but it was during that time that the entrepreneurial urge took root. He talked to other businessmen and asked how they came to lead their own companies. To his surprise, nearly all their stories bore one common element: timing.
"Almost all of them said it was a matter of being in the right place at the right time," Peters said. " 'Was it just luck?' I asked them. And a lot of them said that it sort of was, that sometimes odd events and happenstance helped them get where they were."
When the opportunity came to buy the Slice plant for himself, he discussed the idea with Chris Rufer, founder of tomato processor Morning Star Farms, based in Yuba, Calif. Rufer liked Peters' idea so much he became an investor partner and Peters' sole paste supplier.
Peters credits constant improvement to Paradise's machinery, systems and products with the company's steady and profitable growth.
"We spend a significant amount of money on research and capital improvements in automation every year," he said. "We look at all aspects of our business and attempt to apply technology to gain a competitive edge.
"Key members on my staff and I constantly deal with other consultants, who help gather new information for us and funnel it back. We use that information to look two to three years out to see how we can continue to leverage technology to our advantage. It's a never-ending process."
It's that eye on the future, said Domino's Simonte, that helped Paradise win his company's Supplier of the Year award.
"For them to win that is a pretty amazing feat for a company that size," said Simonte, who has worked with Peters for four years. "We have several criteria that our suppliers are judged by, and they consistently score very high. They've also been in our high tier category of suppliers for at least the last five years, if not longer."
The plant tour ends when Peters takes the group to Paradise's product development lab for lunch. On the menu are multiple dishes from widely varying cuisines, all using customized tomato sauces made by his company. Though its core business is in pizza sauce, Paradise has branched out and developed marinaras, barbecue sauces and salsas for new customers.
Those challenges are what Peters says he and his staff relish, because it connects them to new people, flavors new solutions for the industry. Quite simply, he said, it's what makes the job exciting.
"I love what I do because of the fun we have when we work here," Peters said later. "The people who work here are all friends with each other, and we enjoy working with customers. It's just fun."