Johnsonville Sausage L.L.C

International Directory of Company Histories, Volume 63 (1992) by A. Woodward

Johnsonville Sausage L.L.C.

950 Woodlake Road Kohler, Wisconsin 53044 U.S.A. Telephone: (920) 459-6800 Toll Free: (888) 556-2728 Fax: (920) 459-7148 Web site: http://www.johnsonville.com

Private Company Incorporated: 1945 Employees: 1,000 Sales: $200 million (2003 est.) NAIC: 311612 Meat Processed from Carcasses; 311611 Animal (Except Poultry) Slaughtering

Johnsonville Sausage L.L.C. is a leading manufacturer of bratwurst, dinner sausage, and breakfast sausage. The company sells its products nationwide through retail outlets and to food processors, institutional customers, and food services. Johnsonville bratwurst (brats) are the official brats of Lambeau Field, home field of Wisconsin's Green Bay Packers, and the brand is also sold seasonally at more than 4,000 McDonald's restaurants. The company has plants in Johnsonville, Sheboygan Falls, and Watertown, Wisconsin, and in Momence, Illinois. The company is owned and run by members of the Stayer family. Johnsonville achieved national prominence in the 1990s for its unique management style. Many traditional management roles at the company have been replaced by worker-run teams, and workers control their compensation, hiring and firing, quality control, and near- and long-term goals for the company. CEO Ralph C. Stayer initiated this system in the 1980s, as the company grew from a small regional player to a national marketer.

Early Years

Johnsonville Sausage was founded in 1945 by Ralph and Alice Stayer. The couple bought a small market and slaughterhouse in Johnsonville, Wisconsin, and named the business after the town. Johnsonville is a small community near Sheboygan, north of Milwaukee near the western edge of Lake Michigan. The Stayers were of German and Austrian descent, and they began making sausages according to an old family recipe traced to 19th-century Austria. Their sausages grew popular, and within a year the Stayers had added on to their business. Apparently their bratwurst was a big hit from the very beginning. Founder Ralph Stayer recalled in company documents an early customer requesting ten pounds of bratwurst and 40 pounds of hamburger. "On his next visit," Stayer went on, "he ordered 40 pounds of bratwurst and 10 pounds of hamburger." Stayer knew the young company must have been doing something right.

Johnsonville Sausage expanded throughout the postwar years. In the 1950s and 1960s, the company began selling in more nearby Wisconsin communities. By the 1970s, the company had bought its own fleet of trucks and was making deliveries throughout Wisconsin. The Stayers' son Ralph C. Stayer graduated from Notre Dame, where he studied business and finance, in 1965. He then went to work for the family business. He had worked on the production floor since high school, and his academic training led him to imagine big things for the company. Annual sales were about $1 million when Ralph C. joined Johnsonville full time. Ralph C. got his parents to agree to let him develop the manufacturing and wholesale business, while they remained in control of the retail operations. In 1978, Ralph C. Stayer became president of Johnsonville Sausage. The company also broke ground for a new production facility that year. Stayer began moving the company's products into markets beyond Wisconsin, pushing first into nearby Michigan, Minnesota, and Indiana. As Johnsonville expanded in the 1970s, sales grew at around 20 percent annually. Johnsonville was changing from a small local producer into a leading regional sausage company.

Management Odyssey in the 1980s

By all conventional markers, Johnsonville Sausage was a successful and growing company by 1980. Sales were strong, the company was profitable, and the Johnsonville brand was making inroads into more midwestern markets. Nevertheless, Ralph C. Stayer was deeply dissatisfied with the way things were going, and he pushed the company into a massive change in structure and attitude. Several factors led Stayer to take the company in a new direction. One was fear of competition. Although Johnsonville was doing well, Stayer felt that its success might be tenuous. The sausage industry was dominated by a few national players like Armour and Oscar Mayer, who were able to spend far more on advertising and promotion than Johnsonville could. On the other end, small sausage producers that sold only in their nearby communities had intense customer loyalty. Stayer felt that Johnsonville was too big to be a small producer but not big enough to fight off the national brands, if it came to a battle over market share. The second major factor that set Stayer on his management odyssey was his perception that Johnsonville's workers did not care about the company or their work. This led to many avoidable mistakes. Workers mislabeled products, spiced the meat wrong, wasted time and materials, and even caused physical damage to the plant unintentionally. The product was good, quality control was okay, but Stayer was sure the company could do better, if only the employees cared more about their results. Stayer began reading management books, looking for a solution. He beefed up the company's quality control department, and he began meeting with groups of workers to find out about problems at the plant. But things failed to change at Johnsonville.