Evan Vitale Consulting: From cows to quartz, Davis family cuts a wide business swath

Saturday, December 6, 2014

From cows to quartz, Davis family cuts a wide business swath – Minneapolis Star Tribune

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On a wall at Jake’s Pizza in downtown St. Peter is a photo of the town’s 1981 Class A high school football champions. Wearing No. 10 for the St. Peter Saints is defensive back Marty Davis. Wearing No. 22 is his older brother Mitch, the team’s fullback.

Fast forward 33 years and the two brothers are still teammates, only the stakes are considerably higher as they lead the third generation of one of Minnesota’s most successful business families.

From Cambria quartz countertops to Davis Family Dairies to Sun Country Airlines, the Davis family owns and manages some of the state’s landmark homegrown businesses. They employ 2,600 workers and take in about $710 million a year in revenue, a figure that would rank the privately held business 38th among Minnesota’s 100 largest publicly traded companies.

For years, the Davis operation was little known beyond its southern Minnesota base. That started to change in 2011 when the family engineered the purchase of Sun Country for $34 million. This fall, for the first time, the Davis clan landed on Forbes magazine’s list of richest American families, with an estimated net worth of $1.7 billion.

“My neighbors must think I have money hidden under the bed,” joked Mark Davis, the second-generation patriarch of the Davis business operation.

The family is only the fourth from Minnesota to make the Forbes richest-family list, putting them in the company of the Cargill-McMillans, the Carlsons and the Pohlads.

But the family knows that prosperity can be fleeting. It only takes one housing crisis to send the home countertop business reeling, high feed prices to cut into dairy yields or low competing airfares to knife airline profit margins.

For Mark Davis, 73, who now serves as CEO of Davis Holdings, success came from working hard and occasionally taking risks. And he’s passed those habits along to his sons.

“Both started at the bottom and worked their way up. That’s what I experienced with my dad,” Mark Davis said. “If they gained anything from me, it was by watching.”

Early entrepreneurship

The Davis family business dates to the 1930s when Stan Davis, now 96, learned the dairy business as an apprentice at a creamery in tiny Norseland, Minn., just west of St. Peter.

After acquiring the St. Peter Creamery in 1943, Stan Davis sold butter to the U.S. government during World War II. Eventually, son Mark joined the business, and the Davises expanded into cheesemaking and purchased creameries and cheese plants in Minnesota, South Dakota and Idaho.

The milk and cheese business became known as Davisco Foods International, and grew into one of the largest producers in the country.

Brothers Mitch, 51, and Marty, 50, spent their early years working at the St. Peter Creamery. During summers and on weekends, they drove trucks along Nicollet County’s paved and gravel back roads to pick up milk from dairy farmers.

Now they run the show.

Mitch is a numbers guy with a degree in food sciences and nutrition from the University of Minnesota. He oversees the production of 500,000 pounds of milk a day in a $45 million-a-year dairy business in Nicollet County.

He calls the operation a “circle of sustainability” that employs 135 on a $3 million payroll.

“What we spend turns over eight times locally,” Mitch Davis said, noting that the Davis dairies purchase $20 million of feed a year mostly from neighboring farmers. “They grow it, we buy it.”

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