Growth and Expansion Through the Years

40 Years of Growing Strong

Since the early days, growth and expansion have been a part of the DNA of Dan & Jerry’s Greenhouse. Their expansion strategy during the late 1980’s and 1990’s was what some see as “organic.” The company has grown from a couple of small greenhouses in the then sparse suburb of Eden Prairie, Minnesota to a sprawling organization that supplies beautiful plants to nearly a third of U.S. states. With nine growing ranges across four states. They’ve come a long way from the days they started bedding plants in milk cartons to sell at the Minneapolis Farmers Market.

“Our approach to expansion in our early years was basic: leverage whatever we had. If we had a few extra dollars, we'd put up a little bit more space and really wouldn't worry. There wasn't a whole lot of talk put into it. But those days are gone. It’s a whole different world right now,” Dan, (the"Dan" in "Dan & Jerry’s”) Totushek said. 

Dan & Jerry’s experienced a period of rapid growth in the nineties through the early two thousands. When the now defunct Pamida chain put up a storefront in Buffalo, MN, Totushek and his partner, Jerry Quaal, were determined to service that location. They were successful in putting together a deal which opened the door for them with quite a few more Pamida stores. 

“We had some tough years with the box stores,” said Totushek. “Eventually we started backing down a little bit. That's when we started really exploring another way of marketing. We looked at a number of stores that were good sized and we thought had good potential. One being Fleet Farm, called Mills Fleet Farm at the time. “It was a great collaboration. They understood the potential because it was just a natural fit for a farm and garden store to have a garden center. So we sat down with them and kind of worked out with them what would work, what the strengths of each company was, and what we would do together.”

These discussions led to an innovative sales platform: Vendor Managed Inventory (VMI), something never before seen in this market. 

According to Totushek VMI is basically a turnkey for the customer. “Fleet Farm believed a garden center had great potential for their business, but they were gun shy about making the investment in the facilities. 

So we agreed to invest in the facility, along with Compeer’s help. We put up the garden centers and planned and grew the inventory for them. It's all on a scan base. We don't get paid until it’s sold.”

It was a win-win proposition. The first year they were in nine Fleet Farm stores. The second year, they serviced 15. 

“By the following year,” said Quaal, “Fleet Farm asked ‘can you just do all the stores?’” 

Leveraging their Fleet Farm model, over the years Dan & Jerry’s secured business with many other chain stores, including Runnings, Blades, Shopko and KMart. It’s been quite a journey. Starting out, 40+ years ago, they had a total of just three acres. Today, their production lines are working about two acres of crops per day.

Dan Totushek and Jerry Quaal, founders of Dan and Jerry's Greenhouse

 

What the Future Holds

After four decades of growth, challenges and success, at the urging of Compeer, Dan & Jerry’s leadership team started discussing an exit strategy for Totushek and Quall, essentially developing into a succession plan for the business. 

“Compeer approached us about the future about ten or 15 years ago,” said Totushek. “It really made us think. They said, ‘you know, we're comfortable lending to Dan and Jerry, but what's gonna happen down the road when you guys are ready to retire?’

That led to a lot of soul searching and consideration. Were they going to try and sell the business or keep it as a family business while transitioning out of the management?  Ultimately, the family wanted to keep the business, so they started setting up a transition process. 

“Another important thing that Compeer helped us with is restructuring our business plan. We teamed up with Compeer and the Small Business Development Center in St. Cloud and worked to put together a package would serve Dan & Jerry’s going forward,” said Totushek. 

Part of that meant hiring some new leaders to drive the business forward. About a year ago, Mike Vallafskey was brought on as CEO and Leticia DeChene Fulda is now their CFO. 

“We've got good leaders in place to help take the business to the next level,” said Totushek. “Mike is a great guy. Really smart. Creative. He’s bringing in a whole new set of expertise that will really help the business move forward. 

We’re also very happy about our decision to bring Leticia, our financial officer, on board. Her finance knowledge and passion are second to none. We’re happy to say we’ve got a good core leadership team in place. Plus over the years, we've built a really good group of leaders that know their area of the business, know how to run their areas and have done a really good job. The potential is there. We’ve got a good solid foundation.”

Compeer Relationship Manager, Rick Harbarth, couldn’t agree more. “As a lender, communication is priority number one. With the Dan & Jerry’s team, they keep us in the loop. There are no surprises."

Mike Vallafskey, CEO and Leticia DeChene Fulda, CFO

 

Through the transition both Quaal and Totushek plan on staying active in the business, but more on a consulting level. And Vallafskey couldn’t be happier about it. 

“I can truly say I was blessed with the opportunity to join Dan & Jerry's to lead the business to the next level of growth and opportunity, and to continue the legacy that they've created,” he said.

As Dan said, there's a strong, solid foundation already built here. I wanted stability and something I could build on with the team that existed, and that's Dan & Jerry's. It’s been fun, taking it from what they've developed, continually strengthening that foundation already, adding different process procedures, standard operating procedures and building a culture of safety here at Dan and Jerry's.”

Since Vallafskey joined the company, they’ve developed a strategic plan built on three pillars: growth, operations and talent. 

“This has been different, I would say, than what I'm accustomed to,” said Vallafskey. “Because so many of the pieces were already in place. Now it’s a matter of bringing Dan and Jerry along with us to help guide a journey that'll survive any of us. That's the legacy that's been started. And what we're continually building on.”