Think big, think small, think big, think small.
It might be confusing to many, but not to Jim and Elaine Oberweis of Aurora. It has become a way of life for them.
The Oberweises have, on one hand, turned a small, old-fashioned dairy into a booming business with dozens of new retail stores that sell milk and ice cream opening throughout the Chicago area. And, on another front, they have shrunk their financial services business from one with offices across the country to a more locally managed firm.
Which is not to say that either business may not expand or contract again. They certainly have in the past.
It has not always been an easy road, the Oberweises admit, but now things are on an upswing. The market is bullish. And having milk delivered to your door in old-fashioned glass bottles is not only convenient but also fashionable.
Jim Oberweis, 51, grew up in Aurora. His family is a part of the city’s history. His grandfather Peter Oberweis launched the dairy back in 1927. Jim already had a successful business, Oberweis Securities, an investment firm, but when other family members could no longer run the dairy, Jim purchased it in 1986.
Before Jim bought the dairy, Elaine had been helping him with their securities business. She grew up in nearby Bellwood. When she went to college at University of Illinois at Urbana-Champaign, she met Oberweis, who won her heart. They were married in 1967.
Years later, after each earned an MBA at the University of Chicago (he in 1980, she in ’89) while raising their five children (Jenni, Trisha, Jim, Julie and Joe), the Oberweises found themselves trying to grow both the investment firm and the dairy business at the same time.
By 1989, they were in big trouble.
“It was a very stressful time,” Jim said. “My net worth was a little less than zero, and our attorneys were telling us to declare bankruptcy.”
“I can tell you that I personally saw Jim Oberweis at the lowest time in his life,” said Dick Hawks of Aurora, longtime Oberweis friend and former employee. “But he’s not into trying to get out of something he got himself into, except the right way, the honest way.”
Jim had wanted to expand the dairy and open stores across the Chicago area. To do that, he needed increased capacity, so he bought another Aurora dairy that was going out of business. Then he bought the Chicago-based Bresler ice cream chain with its 300 stores nationwide. The plan seemed perfect, but it wasn’t.
Oberweis discovered, after losing millions of dollars, that the businesses weren’t a good fit, and he was having management problems.
“I had an MBA. I thought I could hire somebody to run the dairy, but running a small business is not that easy,” he said.
To make matters worse, the stock market dive of late 1987 left him reeling. Oberweis Securities had more than 300 employees and 20 offices all over the United States. To maintain volume, he bought a Minnesota securities company.
“That took the cake as far as mistakes I have made,” Jim said, explaining that wide differences in corporate values between the two companies led to failure. They never meshed. But the Oberweises just couldn’t bring themselves to abandon either business. Elaine, 50, says she has the kind of personality that just digs her heels in. Jim thought of the dairy business as a tradition and didn’t want to let the community or his family down.
So they streamlined the dairy by selling the companies they had acquired, and Jim sold his securities business in 1989 to Household International and went to work for them as senior vice president of its Hamilton Investments subsidiary. Then he turned to Elaine for help, asking her to take over management of the dairy.
“I had absolutely unending confidence that if anybody could turn a business around, she could,” he said before hesitating slightly, then adding, “Besides, I didn’t have to pay her.”
Elaine walked into the struggling dairy and took a hard look, trying to figure out what was working and what wasn’t. It seemed to her the sale of milk to schools was losing money, and she wanted to drop that. It made Jim nervous, but he went along. She made the decision to rebuild home delivery, a move most dairy experts would have deemed a dinosaur, and market Oberweis’ quality products.
“I knew how great our product was, but, I wondered, was it just an Aurora thing?” she said. “Do only Aurora people like our ice cream, and (is it) because they get to look through the windows of the ice cream shop and watch milk being bottled?”
She hoped she was right and that everyone would appreciate the expensive-to-manufacture Oberweis taste and that her other belief, that there was a niche market for home delivery, was on target.
In 1994, Household International decided to spin off its investment advisory business and gave Jim a chance to buy it back. He took it.
At about that time, Carole Arliskas walked in his door. She had lived in Aurora and had had a number of occupations, including marketing for Playboy magazine and selling things as varied as furniture and securities. He told her Elaine really needed help.
“What do I know about milk?” she asked him. She would soon learn.
“I was challenged,” she said. She stood in the parking lot outside the old dairy on Lake Street and noticed people with license plates from other states loading their cars with milk in glass bottles and gallons of ice cream.
“I knew it was a good product,” said Arliskas, who had been an Oberweis home delivery customer herself for years. But she knew it needed to be marketed. “We became proactive to get new home-delivery customers,” said Arliskas, who is now vice president of sales and marketing. “We called people on the phone, and they just didn’t say no.”
Jim still wanted his dream of opening Oberweis stores to come true, so when they found a vacant former frozen yogurt store on Roosevelt Road in Glen Ellyn, they snapped it up.
“I was scared to death,” said Elaine, but her question about whether Oberweis ice cream’s popularity was just an Aurora thing was put to rest. “The store did better than we expected.”
At the same time, Jim’s business, now called Oberweis Asset Management, was growing. He was managing his growth more slowly with a smaller staff. He started his own mutual fund.
But the dairy business was outgrowing its old Lake Street facility. Jim and Elaine both were working in Aurora, but not together. Jim had an idea to remedy that. He took Elaine to an empty field at the corner of Randall Road and Interstate Highway 88 in North Aurora.
“We can buy this, what do you think?” he said.
She liked the idea, so in 1997 they opened a new 50,000-square-foot plant with an ice cream shop and offices upstairs for Jim’s securities business. They now jokingly refer to their new building as “the land of milk and money.” Downstairs, teenagers with aprons dish out sundaes in an ice cream parlor that looks into the bottling facility. Upstairs, Wall Street news programs drone softly in the background.
So what has made them so successful? Is it their resiliency? Elaine says Jim is a type-AAA personality; he says she is a closet A.
Bob Pearson, a 25-year food industry veteran whom they hired three years ago as president and chief operating officer, says it’s because they are entrepreneurs. “They are willing to risk their own personal wealth to chase an idea or a vision, but they are also smart enough to know when entrepreneurship needs to give way to organizational structure and profitability management,” he said.
Jim Mont, an account manager for Tetra Pak Inc., a dairy packaging company in Chicago, said the Oberweises’ vision is forged with providing a quality product.
“If you had told me a few years ago that they were going to be able to turn this thing around and in 1998 they would be looking at yet another plant expansion and other markets, I would have told you you were crazy,” Mont said. “But they’ve stuck to their guns. They have a vision, and it’s all wrapped up around high-quality products and image. They’ve stuck to their program, and now it’s starting to pay off.”
What makes Oberweis dairy products so good?
To start with, the ice cream has one of the highest butterfat contents of any made, averaging 18 to 21 percent, compared to other premium ice creams that average 12 to 15 percent, according to Jim, and that provides a creamy, smooth taste. (The company says its prices will not rise because of the current shortage of butterfat. A recent customer newsletter said Oberweis will absorb any extra expense because the company believes the shortage will be short-lived.)
The company uses old-fashioned dairy processes that take longer but make a better product, said Mark Kloster, plant manager.
For instance, to get cream they use a cold process that eliminates reheating it after pasteurization and produces a fresher, sweeter taste. Then they store their ice creams a day before freezing to ensure that the ingredients dissolve and meld. They use pure cane sugar rather than liquid ones because they believe it has a cleaner taste and leaves no aftertaste.
Then there’s the milk itself.
“I’ve been in the business so long,” said Kloster, who has worked in the dairy industry for 21 years, “that I was of the mindset that all milk was the same, but as soon as I sampled (Oberweis) milk, I could tell it was different. It starts right off with the farm. We select only the best farms.”
Farms that sell milk to Oberweis must maintain certain standards, Arliskas said, and one of those is using no BGH (bovine growth hormone) in their feed. “We pay our farmers not to use this growth hormone,” Arliskas said.
And then, of course, there are the glass bottles, which the people at Oberweis swear makes milk taste better. “People from Chicago would visit my home, open my refrigerator and ask where I got the milk in bottles,” Arliskas said. “It was like walking back in the Twilight Zone.”
With the support of employees, who stayed on the job through uncertain times, and a new marketing campaign, the dairy business has prospered. Sales have increased 30 percent a year the last three years, and the company expects to gross $25 million in sales in 1998 (from a low of $4 million in 1990). There are 14 Oberweis stores open now, and the company aims to have 35 by the end of 1999 and eventually 50 in the Chicago area.
“They have a high-quality milk and ice cream, and they are willing to bring it to your door,” said Colleen Ruddy, president of Valley Industrial Association in Aurora. “They thought if they could let enough people know about Oberweis, the products would sell themselves. They were right.”
“Both Elaine and Jim Oberweis are a tremendous asset to our community,” said Steve Hatcher, president of the Greater Aurora Chamber of Commerce. Elaine was awarded a LUCI award this year (Leading Us in Commerce & Industry) from the Business Journal of East Dundee as a woman in leadership in a successful manufacturing business.
Meanwhile, the assets Jim’s company is managing have surged to $300 million. His goal is $1 billion.
Working so close together, however, can’t always be easy.
“When two managers in a business disagree, they fight about it and then go to their separate homes at night,” said the Oberweises’ son Jim, who works with his father. “Our family doesn’t quite work that way.”
Hawks said the reason the Oberweises succeed when they work together is that they don’t take their disagreements personally.
“They have differences of opinion, and both view them as such,” Hawks said. “They’ll walk out (after having a disagreement) holding hands because they’re friends and genuinely have true respect for each other’s abilities.”
