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A walk down memory lane with Mahaska Bottling Co. [The Oskaloosa Herald, Iowa :: ](Oskaloosa Herald, The (IA) Via Acquire Media NewsEdge) Aug. 26--OSKALOOSA -- This is the first in a series of articles that I will be writing that will feature people or places that have touched my life in some way. I will begin my walk down memory lane with a story about Mahaska Bottling Co. and the Muhl family because they were a big part of my young life. My household was one of only a few that had a mom who worked outside of the home. My mom worked at Mahaska Bottling Co. (Pepsi Plant as we called it). The brand new plant was very impressive and very clean. Watching all of the automated processes in the plant was incredible to me. One of the perks of working for the Muhl family was that they would let the employees take home one case of "short filled" bottles of soda each Friday. Short-filled bottles were the ones that did not fill to the top when being filled by the machines. Now our mom, being who she was, would ask that we share our soda with others and not keep it all for ourselves. When family or friends would visit, or the neighborhood kids would cove over, we would share the soda that we had. Now it wouldn't always be Pepsi. It might be the new, and very popular, Mountain Dew. It might be the orange or grape flavors that were bottled or my favorite which was the root beer. Because of the attachment I had to the Pepsi plant and to the Muhl family I could never bring myself to drink any kind of Coke product and I still can't to this very day. The following questions and answers will help you get to know the fifth generation of the Muhl family managing the business, Branden Muhl. It will also review the history of what has now become purely "Mahaska." Branden B. Muhl Responses to Questions from the Oskaloosa Herald --Please talk about the History of the company starting from inception to current times. Mahaska History The rich American tradition that is Mahaska begins with James WV. McKinley and U.S. Patent No. 418,469 dated Dec. 31, 1889. McKinley was a forefather of the bottling industry with his hand-pump and barrel attachment representing one of the initial manufacturing innovations that coincided with the invention of the oldest carbonated soft-drink brands. McKinley used his innovation to found Mahaska Bottling Works, producing Strawberry and Root Beer soft drink flavors under the Chief Mahaska Flavors brand. In 1912, McKinley took on a partner in U.G. Deck. In 1916, the passing of U.G. Deck afforded Harry Morgan the opportunity to purchase Mahaska Bottling Works. Harry Morgan was the first in the current line of Mahaska proprietors and was responsible for transforming Mahaska Bottling Works into the fully integrated manufacturing operation that was Mahaska Bottling Company--the first step in our transformation into the modern day Mahaska. Under Morgan as President, Mahaska Bottling Company expanded its operations from Oskaloosa to Washington, Marshalltown, Ottumwa, Centerville and Newton. In 1922, Arnold Muhl joined Morgan in the business after being wed to Morgan's daughter Zayda. In 1928, Morgan & Muhl took an exclusive franchise appointment for a rapidly growing soft-drink brand called Pepsi-Cola invented by pharmacist Caleb Bradham in 1893 (originally named "Brad's Drink"). In 1947, Morgan passed and Arnold took over as President. Thereafter, John Muhl, who served as a United States Army Ranger in B Company in World War II, joins his father Arnold in the operation and further expansion of Mahaska Bottling Company. Between 1949 and 1958, Pepsi-Cola brand sales surged 167 percent nationally, and Arnold & John grew Mahaska Bottling Company significantly beyond mere Pepsi-Cola brand sales. On Sept. 9, 1961, Mahaska Bottling Company opened a state-of-the-art bottling plant in Oskaloosa that was one of the most modern in the Midwest. The fully automated 26,000-square-foot facility supplied over half a million cases per year at a production rate of 650 cases/hour. The facility produced several products that were the subject of Mahaska Bottling Company franchise appointments including Pepsi-Cola, Nesbit Orange, Grapette, Hires Root Beer, Bubble-Up, and Squirt in addition to brands sold under the Mahaska trademark. Led by John Muhl and his son Brad (aptly named after Caleb Bradham's invention), Mahaska Bottling Company acquired additional bottling facilities in Kansas (1975) and Nebraska (1981). These acquisitions were the first step in the transformation of Mahaska Bottling Company into the modern Mahaska. In 1988, Mahaska became a shareholder of the bottling cooperative WIS-PAK (www.wis-pak.com), consolidating the manufacturing process for all locations, streamlining supply chain management, and achieving economies of scale. Today, Independent Bottlers account for almost 20 percent of North American volume where WIS-PAK handles 10 percent of the North American Pepsi Americas Beverages (PAB) volume and over 40 percent of independent volume. In 1993, Brad Muhl purchased Mahaska Bottling Company from John Muhl, consolidating ownership under a sole proprietor for the first time since Harry Morgan. Brad fulfilled several brand company responsibilities which included the position of Chairman of the Pepsi-Cola Company Marketing Committee (MARCOM). One of his goals in that position was to preserve the independent bottling system and the rights of its franchisees all over the world. In addition, Brad grew the business aggressively--achieving an industry leading market share versus competitors as well as embarking on several business development ventures such as full-line vending and coffee that are a core part of the business and its future growth today. In 2013, Branden Muhl, son of Brad Muhl, became President and CEO of the company, continuing the tradition initiated by Harry Morgan and Brad Muhl of consolidated ownership under a single leader. Branden is expounding upon Brad's business development efforts including building an independently owned brand portfolio, engaging in territorial expansion, and branding Mahaska. Today, Mahaska continues to embark on its transition into a fully integrated manufacturing and distribution platform offering a wide array of products and services. We honor our rich American history by continuing the forward motion that will ensure the enhancement of the Mahaska tradition for generations to come. --When the company was first formed, how was the bottling plant setup? Did workers perform tasks manually or was it automated? From inception in 1889 through 1938, the bottling plant was what one would classify as a large house located on North E St. in Oskaloosa. Bottling was performed by simple machinery that was manually operated--barrels with bicycle mixers and hand pumps/levers for filling and crowning. For much of this early history, product was delivered first by horse & buggy and subsequently by early trucks. This form of production would allow up to 30 bottles per minute. At this time, Mahaska was producing Chief Mahaska Flavors in Strawberry & Root Beer and subsequently Pepsi-Cola, ginger ale, white soda, and other drinks -- we've come a long way since then! It was not until 1961 that Mahaska Bottling Company moved into its modern fully automated bottling plant on US 63 in Oskaloosa. This modern technology allowed for production rates of 300-450 bottles/minute and equipment was updated frequently allowing improvements to occur much more rapidly going forward. Today, our production lines achieve rates of 2,000 cans/minute. --What innovations have occurred over the years that have helped the company be more productive and instill positive working conditions? This is a very difficult question because there are more innovations than one can count that were required to make modern soft-drink production possible. However, the innovations are very similar to those that have enabled all industrialized production activities. Specifically, these manufacturing innovations are in areas like organic chemistry, assembly line, process optimization, combustion engines, electrical engineering, information technology--and I have probably missed hundreds of technological innovations in this assessment as there is so much technology involved in everything that we do from formulation to batching to bottling to delivery. --What pressures do you face in trying to uphold the family tradition? How does it feel to be the 5th generation owner of the company? There is obviously an extreme amount of pressure that comes with upholding the Mahaska tradition, and it is something that I had been cognizant of as early as grade school. I think that my saving grace has been that I have channeled the pressure in a positive way where it is served as a strong motivator and a force driving my success in college and on Wall St during the most challenging period facing the financial industry since the Great Depression. I have always placed very high demands on myself and have been very critical of myself when I have not met those lofty goals--I think a lot of that is due to the pressure that I have felt throughout my life to uphold this great Mahaska tradition. Statistically, most closely held enterprises similar to Mahaska will fail in the 3rd generation. I am the 5th generation of my bloodline, which started with Harry Morgan, and the 7th generation overall. There are few companies in any industry that can boast this type of tradition as it pre-dates modern assembly line manufacturing. If we were to have much more of a tradition, we'd be running up against the founding of America itself. The longer the tradition continues, the greater the burden and the pressure becomes. You definitely don't want to be the one that fails where a growing number have succeeded before you. At the same time, as each successive generation grows the enterprise it actually makes it more difficult for the next generation to achieve the same feat, which is the hallmark of what makes the number of generations that this tradition has endured so rare. My performance will be judged at the conclusion of my watch over Mahaska; in the meantime, worrying about the pressure is a distraction that threatens the survival of this great tradition. For the time being, I am laser focused on what we can do tactically in the contemporary environment to ensure the continuation of that tradition, and the last 2 years have left me very optimistic on what we are capable of accomplishing in a short amount of time. Right now, I am very excited to watch our 5 year plan unfold, of which our proprietary product platform and the branding is only the beginning. --How many different communities or locations do you serve in addition to the city of Oskaloosa? Our corporate headquarters is in Oskaloosa including important support functions that service all of our different geographical locations and businesses. We have major facilities in Salina, KS, and Norfolk, NE, as well as several satellite facilities in other locations. We conduct the bulk of our manufacturing activities in Nebraska and Wisconsin through our bottling cooperative Wis-Pak. We serve thousands of communities all over the states of Kansas, Iowa, and Nebraska as well as an increasing number in South Dakota and Illinois with various products/services. Our proprietary brands have recently extended our product reach into Southern California, New York, Texas, and Wisconsin. --How is the branding process progressing? The branding is an initiative that is changing both the look and feel of our organization but also our culture. We have struggled over the last several years to communicate an identity to the market that was ours and ours alone as Mahaska activities have continued to grow in number and size outside of the PepsiCo portfolio, which was the focal point of the business from 1928-2000. In a way, the branding has returned us to what our original identity was--a family owned & operated manufacturing/distribution enterprise with a strong entrepreneurial spirit and its own brands and identity. You could say the branding is getting us back to our roots that we inadvertently de-emphasized due to our extreme growth and success within the PepsiCo system. The branding is all encompassing--it changes everything from the way our employees answer the phone and dress to the look and feel of all of our property, plant, and equipment. It is deliberately meant to be immersive and to brand ourselves as opposed to giving all of the credit for our efforts, accolades, and contributions to the communities that we serve to a third party affiliate or brand partner who is supporting us on a national and sometimes regional level but is not responsible for the day-to-day activities in the market, which we undertake on their behalf. --Have there been any additions or upgrades to the plants recently? There are upgrades and additions to the plants all of the time--particularly the manufacturing facilities. There are a couple that are probably notable: --Recently, we just changed all of our building signage in Oskaloosa as well as converted many of our trucks, consistent with the branding plan. We also plan to add brand flags to the yard. In addition, we just upgraded our lighting to energy efficient LED lights. --We imported an extremely high tech piece of Heat Shrink Sleeve (HSSL) technology packaging equipment from France. This effectively does for product labeling what High Definition (HD) does for your TV as well as giving us a lot of potential avenues for printing text and graphics on both the exterior and interior of product labels. The first of our products to be labeled with this equipment was our proprietary TYR Endurance Sport product. --In Norfolk, NE, we are undertaking a major facility expansion that seeks to add 4,000+ square feet of office space as well as 20,000 square feet of warehouse space. We will also be replacing the entire roof and renovating the existing structure. All of this will feature our new branding package. This capital expenditure project is likely to take us 18 months. --What do you hope to accomplish while being the owner? I hope to accomplish many things, some of which are already underway. I'm also sure that there are a myriad of goals that I will want to accomplish in the medium to long-term as opportunities present that are yet to manifest--everything is very fluid as the business plan adapts to new information and a changing environment--and the building process never really ends. My hope for Mahaska is the following: --Use our identity to continue to stay relevant long-term but also expand our horizons beyond our traditional PepsiCo and Dr Pepper Snapple Group territories where we will offer a widening array of products and services. For this reason, re-kindling Mahaska with its own identity that is independent and is not tied exclusively to any particular partner or brand is very important. Partners and brands have come and gone in the beverage business, but thus far Mahaska has lasted forever. We were here at the dawn of the beverage industry, we hope to be here at its end if that day ever comes, and aspire to extend beyond any end. --Vertically integrate Mahaska back into the brand business to become a fully integrated product developer, marketer, manufacturer, and distributor. Ideally, we are looking for brands that allow us to: 1) build equity in the brand itself; 2) expand the breadth of our brand portfolio and offer us greater depth with our existing customers as well as acquire new customers in existing markets; 3) offer us the opportunity to expand to new markets adjacent to existing markets and acquire new customers. We aspire to offer cutting edge new products and services on the fully integrated Mahaska platform that extends beyond beverages to consumer products and eventually entirely new categories. There is limitless potential when we stop thinking about Mahaska as just a beverage marketer, manufacturer, and distributor and start to think about Mahaska as a marketing, manufacturing, and distribution platform on which many different products and services can sit. --Updating technology to increase our marketing clout as well as improve our operations, especially the employee/customer experiences. This is a core area where we are looking to leapfrog and engage in continuous improvement for some time to come. We looked at adopting new computing and software technologies in the early 2000s and most of them were too expensive or not robust enough to be ready for primetime at that point. Today, the applications are not only very robust in functionality but in many cases low cost or even free. One of the key near term goals in this area is to create an e-commerce presence that makes our Mahaska brand identity and those of our key partners available for mass consumption -- both in and outside our core markets. --What does your role at the company entail? What do you like most about your role? My official title is Chief Executive Officer, but I liken a CEO to a Head Coach. I don't feel that I am a Head Coach and if and when I do play that role it is probably where I am least effective. I play more of a team captain type of role as I am deeply involved in the activities of the business where I have the technical expertise and competitive advantage to offer while I am minimally involved in the areas where I lack the technical know-how and expertise -- I leave those areas to our many star players on the team. My player roles are business development and finance, and I am extremely involved in those activities day-to-day. My daily activities include: --Review all of our relationships with new & existing partners and brands and draft the contracts associated with those partnerships. --In terms of existing partners, I ensure that we are in sync with all of our partners and are in impassioned dialogue that is reflective of our dogmatic commitment to making our partner brands successful. We find this most productive as we are heavily invested with our own capital in our partner brands. We want to see partner brands be every bit as successful as our own; therefore, we are not afraid to share a strong contrarian view when one exists. --In terms of new partnerships, I identify the most interesting new products and segments that we want to be involved in and I target those opportunities. The most simplistic expression of the criteria for looking at new opportunities is: 1) potential for brand ownership/equity; 2) potential to offer new products/services to existing markets/customers; 3) potential to expand our geographic reach. I look for opportunities that are ground floor in nature and allow us to play a master distributor role across the entire Midwest, which often entails very high investment and risk on our part but hopefully commensurate reward long-term. I like to think broadly and be progressive about new opportunities--looking in several industries beyond the beverage industry as well as new and emerging categories of the beverage industry. --Also on the business development front, I lead the internal brand development effort, generate product concepts, and conduct formulation activities using data, methods, and scientists from my work in the pharmaceutical industry financing biotechnology companies and their drug candidates. Biotech and beverage may seem unrelated but in fact the history of the beverage industry is scientific. The branding of Mahaska is returning us to our roots as a creator and marketer of brands with our own identity. Our approach to brand development in the beverage industry is to take beverage development back to its roots as most modern carbonated soft-drinks were developed by pharmacists and sold in pharmacies. --In addition to business development activities, I take the lead in the business on income statement and balance sheet transforming activities, including financial engineering and assessing M&A opportunities. Due to my deep involvement in the financial industry and relationships with investment banks on healthcare finance deals, I also monitor most of the deal flow in food & beverage as well. --In particular, how do you feel about serving the Oskaloosa community? I feel an extremely strong connection to the Oskaloosa community as my father was born and grew up in Oskaloosa. I was born in Kansas City, but I resided in Oskaloosa until age 11. We lived in a house on Lake Keomah, and I attended the Grant School (the same school that my father attended). I was very involved in sports in Oskaloosa, playing Little League Baseball in particular. My formative years from a work perspective were also spent in Oskaloosa where I worked in the plant and on the route trucks until I was old enough to obtain outside employment. --When you are not working, what do you like to do for fun or entertainment? Most of what would be my free time is spent identifying new opportunities and managing my portfolio of biotech, molecular diagnostics, medtech, and other investments. I enjoy following almost all sports. I play basketball, box, and scuba dive. I enjoy video games as a leisure activity. See Thursday's edition of the Oskaloosa Herald for Part 2 of the story. ___ (c)2014 The Oskaloosa Herald (Oskaloosa, Iowa) Visit The Oskaloosa Herald (Oskaloosa, Iowa) at www.oskaloosa.com Distributed by MCT Information Services |