Podcast: The Hausbeck Pickles Story with Tim Hausbeck, Third-Generation, President

Description

In this episode, we hear the fascinating journey of Hausbeck Pickles and Peppers, a family business that went from humble beginnings to playing on an international stage. The interview with the president and CEO of Hausbeck Pickles and Peppers, Tim Hausbeck, third generation owner takes us through his early life, education, and the decision to join the family business. He talks about the challenges the company faced, their growth journey, and their transition from supplying local grocery stores to becoming a major supplier of Burger King, Subway, and other fast-food chains.

Today, they ship out around 60 semis a week to Canada and the U.S, and their pickles are a part of over a billion meals a year. Tim also shares his business philosophy, giving insights into his leadership style. Finally, he talks about his proudest moments in the company.

Links from the episode

• Hausbeck Pickles and Peppers Website:  https://hausbeck.com

Transcript

Tim Hausbeck: This is now 1980. Things really changed for us.

it may not seem like a lot, but at the time, they gave us the state of Michigan to supply. Our business transformed.

Cliff Duvernois: Hello everyone, and welcome back to Total Michigan, where we interview ordinary Michiganders doing some pretty extraordinary things. I'm your host Cliff DuVernois.

So today, I'm in the very up-and-coming city of Saginaw doing another one of my interviews. I love talking to family businesses and family business owners. And their stories to me are just so compelling, and there seems to be just this recurring theme lately with a lot of the episodes I've been doing, which we're going to talk about later on today, but what this company did started from very humble beginnings. And is literally now playing in an international stage.

Ladies and gentlemen, I am coming to you from the headquarters of Hausbeck Pickles and Peppers with the President, Tim Hausbeck. Tim, how are you?

Tim Hausbeck: I'm doing well, Cliff. I'm very honored to be part of your show today.

Cliff Duvernois: Excellent. Well, thank you for being here. Why don't you tell us a little bit about where you're from and where you grew up.

Tim Hausbeck: Our plant is here located in 1626 Hess in Saginaw, Michigan. My parents, uh, their first home, uh, I'm number five or seven kids was literally across the street, four homes across the street from here.

Actually, in the hallway, there's a picture of my dad holding me. And in the driveway and in the background is where we're located, but. There wasn't a pickle company back then. There was a company that made wooden rulers. Many of us might have in our toolbox a Lufkin brand ruler tape measure.

Well, they had a plant here in Saginaw. Now it's a pickle plant.

Cliff Duvernois: So I, I think I remember when you talk about one of these, is it one of those ones that like unfolds almost?

You remember those wooden

Tim Hausbeck: wooden rulers back then? Yeah. So there was a large foundry here that made wooden rulers. And that was part of the first industry in Michigan, or in Saginaw, was the lumber industry.

Uh, our, our, we have a tank yard, a fermentation yard on the other side of the river, a mile and a half, two miles as a crow flies.

Before that was a pickle facility, it was a toothpick factory. You know, you got all this lumber, and, you know, what do you do with the pieces that aren't being made to make homes or buildings? Well, they made toothpicks out of the scraps.

Cliff Duvernois: Man, we can spend an hour just talking about that right there. But we gotta talk about pickles.

We gotta talk about you, uh, cause this is something, I mean, I love pickles, I love peppers. I love them all. So, so you grew up here in Saginaw?

Tim Hausbeck: Did you go to college?

Yes. you go?

I first went to Delta Community College. Followed my older brothers and my older siblings. Again, I'm number five of seven kids.

And then after that, I followed the same path. Didn't even apply anywhere else but Michigan state.

Cliff Duvernois: There you go

Go green. What did you, what did you study while you were there? Finance. Why, why finance?

Tim Hausbeck: Well, you know, when you come out of high school, a lot of times, you don't know what you wanna do. And I'm just, like, not untypical than others.

A counselor said, hey, this might be something good. I, you know, that, you know, you just sort of, I tried. Uh, I thought maybe I wanted to be an engineer. Physics and chemistry were a little too much for me to really be. I knew that that wasn't going to be for me.

Uh, I liked economics. So, I just went into business and, at one point in time, I thought I might want to be a stockbroker. Uh, So I followed finance. Uh, I did an internship at Merrill Lynch, uh, between my junior and senior year of college. Did not like that work. So, um, I still stuck with my degree and found that sales was best for me.

Cliff Duvernois: Oh, interesting. Well, so what I want to do is I'm going to put a pin in that right now because as you're growing up, as you're going to college, and you mentioned this before a little bit when you were talking about your dad holding you in the driveway,

Hausbeck Pickles is going in the background. Now, um, what I'd like to do is explore the history of Hausbeck, and then eventually, we'll talk about you coming on board.

Obviously, that's why I'm here. So, talk to us about the beginning. Did your grandparents start it?

Tim Hausbeck: Yes, and actually, we're celebrating our 100th anniversary this year.

Happy birthday! Thank you. It was founded in 1923, uh, on M 13, which is just outside the city limits of Saginaw. Uh, we were there for 80 years. Uh, it's a very small facility.

We were landlocked. Uh, so as we were trying to grow, we couldn't go any, you know, there was no place to expand. So, we found this property where we are sitting on four city blocks that we can control and expand.

But back then, it was founded by my grandfather, Charles, and his wife, rose Hausbeck.

Cliff Duvernois: So the question I got is. Why? Did you ever learn the reason why they decided to go into the pickling business?

Tim Hausbeck: Well, good question there. It was the Great Depression, and you know, they started dabbling. There wasn't a lot of work. So they knew a little bit about making pickles So there were literally just a few people that were fermenting small cucumbers in barrels, 50-gallon wooden barrels, which actually the interesting thing there where they got their barrels from were from distilleries

Yeah. So they would unload these barrels, and the main item we made back then was you would take fresh cucumbers and put them in this 50-gallon barrel with brine, with a lot of, uh, dill weed.

And so they were called genuine dills. And they were a big hit back then. Uh, and they were drop shipped to different, tiny corner grocery stores all over the state of Michigan.

But the interesting thing about these distilled barrels, uh, I hope I don't get in trouble because I didn't do it. But back then, they would take these barrels, and there would still be some whiskey. They'd put them in the sun and let them. You know, uh, dry out.

Maybe they should have just fermented pickles in whiskey barrels, and that would have been something, you know, it would have had maybe a bourbon taste to them, but, but they'd actually get one or two quarts of whiskey out of these barrels and again, it was prohibition.

Cliff Duvernois: going to ask that.

Tim Hausbeck: to liquor.

Cliff Duvernois: Oh, that's wonderful. Yes. Because I'm sure the statute of limitations is since expires. Nobody's going to come and arrest you today.

But I'm not an attorney. So, there you go.

Oh, that is. So, that's it. That’s incredible. So, initially, it was your grandparents who started making pickles, putting them in jars, and then sending them out to grocery stores.

Tim Hausbeck: Yes, my dad, who's no longer with us, lived to be 93. He's been gone six years. He would go with his father uh, on this these old-style straight trucks to the, around the state, they'd spend a weekend dropping cases of pickles off at these little corner, tiny grocery stores that we all used to have.

We don't, and it wasn't like the big stores we have today, whether it be a Kroger or Meijer or what have you, but tiny corner markets.

Cliff Duvernois: And then, through the research, reading about the history on your website, the company gets up and running, things are going, and then, rather unexpectedly, your grandfather passed.

Tim Hausbeck: Yeah. A first big challenge to our a hundred-year company. I mean, it could have folded right then and there. You know, the founder dies, leaving, uh, his, his wife and six kids behind.

Cliff Duvernois: So what did she do? Yeah.

Tim Hausbeck: Well, some of her oldest sons were part of the business. So, and she had someone helping her, so. They were still just small, they kept trudging on, um, trying to do what they did. I, again, fortunately they had, she had two older boys that were probably around 18 years old at the time that were able to at least carry on.

But it could have, it could have ended right then and there.

Cliff Duvernois: It makes me think of, uh, when people talk about having large families on the farm.

Right, because having kids is cheaper than hiring somebody.

But it's almost the same logic applied to Hausbeck Pickles.

Tim Hausbeck: And then, the next challenge that came along was World War II. So now we lose half our workforce going off to either World War II or the Korean War. Moses.

So now your left with again skeleton crew once again.

Cliff Duvernois: Now, how long did your grandmother and the two, the, the, the son, the two sons, I think you said, how long did they run the company?

Tim Hausbeck: Well, after, like, my father and two of my uncles came back from World War II and the Korean War, they, you know, they started helping out with their mother again.

So, again, it was a very tight, close-knit group of people. Uh, And it was somewhere in the mid-70s that she turned over the ownership and control of the company to four of her sons.

Cliff Duvernois: That is incredible. So, she was involved with the business from the very beginning

Tim Hausbeck: Yes, and ran it until the mid-70's. That's 50 years.

Yeah. Yeah.

Even back when I was young, growing up in the business, my grandparents' house was right behind the plant, and phone calls would actually come through to the house. My grandmother was the secretary. If you were there and the person answering calls, she would transfer them to the plant if someone needed to talk to someone else.

Cliff Duvernois: There's a memory for you.

Tim Hausbeck: Yeah, it was interesting.

Cliff Duvernois: Yeah, that is interesting. So. So you said you she transferred the business to your father and three of the other brothers.

Tim Hausbeck: Yes.

Cliff Duvernois: Okay, so there were four of them that are that were basically running the business at that time, right? Now. If we fast forward a little bit, you've now graduated from college. You were thinking about, what you could become, but what made you decide to get into the family business?

Tim Hausbeck: Well, I have to back up a little bit more than that. Working in the family business with my siblings and my cousins, a lot of hard work for minimum wage. And it was my generation that was the first generation actually to get college degrees.

So there were a lot more opportunities for everybody else to go elsewhere. Uh, So it was my brother Joe, who's the other owner, who's 70, uh, received his degree in food science from Michigan State.

He was the first one to come back after getting a degree.

He helped a lot with what he took and what was learned. A lot of research was being done on fermentation and how to improve quality and yield. So he took a lot of these things that were being done in the sixties and seventies. He graduated in 1976 and was able to start implementing these things in our fermentation process, which started improving quality and our yield.

So then, you know, back to me, uh, I wasn't part of the company after I graduated. I was out, you know, working for a couple of different companies for a couple of years and not really thinking about the family business. But as I matured, got a little bit older. I'm like, you know what? I think I can come back and make the company better as well. Just like my brother Joe.

Cliff Duvernois: That's cool. So, when you talk about making the company better, did you have some ideas when you were coming back?

Tim Hausbeck: Not initially. But I had a desire. I didn't have any visions at the moment. But I felt that, you know, I knew how to do things. They were starting to grow. Uh, our, this is now 1992.

Uh, we have been supplying Burger King since 1980. That was the first fast-food facility, or fast-food customer that we've never had. And we are still with Burger King today. But the company was still quite small. We had seven employees, and I knew how to do everything.

Cliff Duvernois: You still had seven employees in 92?

Tim Hausbeck: Yeah, there was only still a handful of employees. 

Cliff Duvernois: Oh, Sweet Moses.

Tim Hausbeck: Yeah. Now, in the summertime, we might have, you know, 10 seasonal employees that would help us through a packed season. But, again, mostly we're 7 people and, uh, 4 of those were the owners.

Cliff Duvernois: Oh, that's absolutely incredible. And, how many employees do you have today?

Tim Hausbeck: a hundred.

Cliff Duvernois: Year round?

Tim Hausbeck: Yes. Now in the summertime, uh, when we're at our grading operation and a little bit here at our production, we will bring on about another hundred employees for two to three months.

Cliff Duvernois: That is absolutely phenomenal. So between 92 with seven employees and 2023 with 100.

Tim Hausbeck: Yes.

Cliff Duvernois: That's a tenfold increase.

Tim Hausbeck: Yes, I'm happy with the numbers. I've never really, I never wanted to grow to where we have a thousand employees. My philosophy has been, and still is today, that through automation, I don't want a thousand people making a minimum wage. I'd rather have a hundred people making a living wage.

So, most of our people are machine operators, or working in quality control of some sort, or in a warehouse.

Cliff Duvernois: And for our audience, we're going to take a quick break.

Cliff Duvernois: Hello, everyone, and welcome back to Total Michigan, where we interview ordinary Michiganders doing some pretty extraordinary things. I'm your host, Cliff DuVernois. Today, we're talking with Tim Hausbeck from Hausbeck Pickles and Peppers out of Saginaw, Michigan.

Now, one of the things that I want, there's a couple of threads from the first segment that I want to make sure that we explore here in this next segment.

And then, one of the things that you mentioned before was landing Burger King as a client. Your little pickle company with seven employees servicing Burger King, Sweet Moses.

The question that I got for you is because it was your, was it your dad that brought in this business? So your dad wins his contract. I guess my question is, what in the world made him think that your pickle place here in Saginaw could support a major franchise?

Tim Hausbeck: Well, that's a really good question.

Uh, My dad was, um, a middle child and he was very charismatic. But he, he was our first salesperson. So this is back in the mid to late seventies that he was actually going and talking to local franchises of both McDonald's and Burger Kings. So we were actually taking a truck to those corner grocery stores I mentioned, he was drop shipping pails of pickles off to small or local McDonald's and Burger King's.

We were doing kind of well with that. But as McDonald's and Burger King's, which were still somewhat in their infancy, they started becoming a little bit more professional, if you will. As they were growing, they realized they couldn’t have all these franchisees buying whatever they wanted. They need to consolidate the purchasing

Cliff Duvernois: Yes, because a Whopper needs to taste the same whether it's in Detroit, Michigan, or Los Angeles, California

Tim Hausbeck: That is correct. So we actually these stores told us week they couldn't buy from us anymore So this is like 1976, or '78. And we were starting to do well with them, and this was a good revenue for a small company.

And I remember that year and it was a lean year. I was in middle school. Losing some of these local stores we were starting to count on was a big challenge for us. It hurt financially.

Thank goodness for a franchisee that was located in Lansing, Michigan. His name is Norm Spaulding. He was a franchisee, who was growing as a larger franchisee for Burger King. His store in Lansing was the number one store in Michigan.

And we owe a lot to Norm Spaulding. It was Norm that said, I don't like the pickles that I'm told to buy. I like these Hausbeck-branded pickles.

So, he was a big enough franchisee with Burger King and they listened to him. And they approved us as a supplier. This is now 1980, and things really changed for us.

Now, it may not seem like a lot, but at the time, they gave us the state of Michigan to supply. Our business transformed. Just supplying the whole state of Michigan was a large hurdle to overcome.

Cliff Duvernois: well, so let's put this in a little bit of perspective here. Because you say the state of Michigan, but there could have been like three Burger Kings.

Tim Hausbeck: Oh, well, no, there were probably 100 stores. Yeah, that is huge. Yeah.

You know, probably using three, or four pails of pickles a week or pails of pickles a week. And you times that by 100 and that's a lot of pails for us to deliver, or to produce.

Cliff Duvernois: Yes. Now, I

Tim Hausbeck: need a lot of of time to do some of the other things like the retail items we were making.

Cliff Duvernois: Yes. And, and so I, I have to ask this question because I love this. Was this one of those situations where like your dad goes out, puts out this bid, says we can do it. Burger King says, yeah, we'll give you the state of Michigan.

He says, awesome. You guys celebrate. And then all of a sudden, like, how are we going to do this? Was it, was it one of those?

Tim Hausbeck: It was, YES! I mean, a lot of that was part of what, you know, coming back they were working five days a week to just to supply one major customer.

Now at the other time, we were supplying Meijer Thrifty acres and other smaller chains of grocery stores with our retail items. Um, and we would package all those up for the most part in the summer and into the fall.

But for the rest of the year, it was just supplying Burger King. And Burger King, like many other quick service restaurants like McDonald's, was growing at 40 percent a year.

Where our grocery store stuff was very flat and, in some ways, shrinking because that section on the shelves was starting to shrink. So I think the biggest thing that I was able to offer when I came back to the company is you see this growth it was pretty obvious that fast-food chains were going to continue to grow. And we only had Burger King. The retail was pretty flat and I was able to convince my dad, my brother Joe, and my dad's youngest brother, Richard, who were the owners. And I was able to convince them that we should really focus more on the fast-food chains.

And perhaps, I even said we should probably leave retail behind.

They didn't, really want to go with that. They didn't want to just, here's this young kid who's 23 years old, offering some advice. My dad said we needed to have some market research done.

So we found a company out of Midland, and they did a bunch of market research, which basically supported what I was already offering. So, they had evidence behind it, and so that's what we started doing.

We started calling on other fast-food chains. And slowly but surely pulled away from retail.

Cliff Duvernois: Well, I think another part of this puzzle, too, is that if you get comfortable with just having a Burger King, Which is probably a large portion of your income if Burger King decides one day, you know what? We don't like pickles anymore. You guys are out the door Then you know 80 of your revenue just evaporated overnight.

So it almost makes sense that like, you know what? We need to find more clients like Burger King and move forward. And get them so we're not, if so, if we lose one, we're okay.

Tim Hausbeck: Yes. Very hard to do. One, because our company was very conservative with regard to debt. And we didn't have any debt. My dad and his brothers all grew up in the Great Depression, so you didn't spend it. I, on the other hand, I was different. I didn't have trouble borrowing money and spending it to increase capacity.

Cliff Duvernois: That's right because you're an eighties kid. Yeah. So let's talk about this here because you brought this up, and you talk about, like, we need to find more Burger Kings, right? We need to, we need, so we're talking subway.

Tim Hausbeck: Well, there's even another challenge.

So, we're doing a good job for Burger King. And they want more and more and more and to give us more states. So now you're also trying to keep up with this capacity, just growing. Still, the problem is getting worse where you're saying, you know, you're sole source, or your one customer now is representing over 90 percent of your revenue, and they want to keep giving you more. So, times are good, but you need to diversify.

Cliff Duvernois: Yes, so let's explore that just a little bit. So Burger King comes back to you and says you guys are doing a bang up job. Michigan's covered. We love you.

Did they say here's Indiana or did they say here's the eastern half of the US? How did that work?

Tim Hausbeck: In between, like here, here's the upper midwest we want to give you.

Cliff Duvernois: Sweet Moses. much lead How much lead time that they give you to be able to do that?

Tim Hausbeck: Um, usually, the contracts are based on one year at a time. So typically, six months notice. Now, there's a lot that has to go around that. I mean, first of all, you've got to have enough fermentation space. These are all fermented pickles.

And then there's the whole fermentation process, in which you need tanks to store them. Uh, and then you've got to go out to your farmers. So when it comes to the food business ramping up, finding more acres, and more farmers to plant more cucumbers for you, gotta have the storage to hold them and ferment them in.

So, those processes, even though they may want to give you business, you have to plan for it. Even though they may give you six months, it still takes a year to two years of planning. We knew that it was happening, so we kept increasing our capacity as much as we could.

So we were always ahead of the game a little bit. We never took on more than what we could handle.

Cliff Duvernois: When you first started out, Hausbeck you commented being landlocked. You really couldn't get more land to build a bigger facility versus where we are today. So, was it about this time?

Tim Hausbeck: no, this would've been around 2000, three to 2005 that, oh, okay. That we, you know, we needed to expand more. Our customers were going now in 2001. That's when we started to supply Subway. So that volume, they were a large QSR and weren't just buying pickles. They were buying, now, jalapeno peppers and banana peppers. They came to us in 1996 to supply them.

But at the time, we didn't know anything about how to make a jalapeno or, yeah, and again, we didn't know where to source them. You know, we were able to play around with it.

But the opportunity came back around in 2001. Because Subway was growing so fast, they needed to expand their supply base.

In addition to Subway, it's Taco Bell, Chic-fil-A, Domino's, and Pizza Hut. I mean, man, the list goes on and on of all of these fast-food chains that have come to you and said, we need pickles. We need jalapenos. We need banana peppers. and NOW you're able now to provide it.

Tim Hausbeck: Yes, uh, to give you a little bit of scale, out of Saginaw, Michigan, right here, we ship out, on average, around 60 semis a week, going out between Canada and the U. S.

Cliff Duvernois: Sweet Moses.

Tim Hausbeck: Yeah.

Cliff Duvernois: conservatively, if you assume that, uh, the pizza places that we supply, if you want a jalapeno or banana pepper on your pizza, at one of those chains I mentioned, there's a good chance it's coming from Hausbeck. And assuming that there's, Uh, a large pizza serves four meals, I would say. Uh, when you add up how many slices they might put on a burger, a chicken sandwich, a, a, Subway, uh, deli style sandwich, we're on over a billion meals a year between Canada and the United States.

Why did you choose to stay in Saginaw versus go out in the middle of like nowhere where you could get land probably a lot cheaper?

Tim Hausbeck: stay in Saginaw? Good question. Um, I was thinking about leaving Saginaw. Uh, we’re in a peninsula state, and all these trucks are coming up out of the main arteries of, uh, thoroughfares.

So, I started looking at properties in southern Michigan, northern Ohio, and northern Indiana. Uh, I found a pretty good site in northern Indiana, around Angola.

But then again, I started thinking, you know, this site came up. And back in the twenties on the eastern edge of this four-city block, Heinz had a small operation. One of the problems of moving into a new area is not everybody wants to rezone land to have a pickle company.

And then I also thought about the synergies of not having any of that and this is where our roots are. And no one would have to move, and you start this plant while we're still running the other plant, and they're only a mile away from each other. So employees, you know, aren't being put out if they're having to work at one plant versus the next.

I think, in hindsight, we might have failed to move to another facility and tried to operate out of two people, out of two different areas.

Cliff Duvernois: One of the things that I would like to cover is that, you know, you join the company, things are expanding.

And like you said before, it's like your dad, and his brothers are running the show. At some point you stepped up to be the president and CEO of Hausbeck Pickles. Talk to us about that journey there. How did you do that?

Tim Hausbeck: It's exactly how that came down I just know that when I was invited to be an owner, um, my brother Joe who's the other owner was running this tank yard He actually left for a short period of time and it was 1996. My brother wanted to buy this tank yard that was owned by Vlasic Pickle that's on the other side on the west side of Saginaw. And my father and my uncle didn't want anything to do with it.

It was a lot of work. They're late in their careers. They didn't want to invest in this thing.

I thought it was an interesting opportunity. So my brother didn't want to pass on it. So he left Hausbeck Pickle to go start this company. It was called Custom Foods. So now I was left behind, and again, we were, we had maybe 20 people at the time.

And, you know, I was just thrust into this leadership position where my brother had been filling that role. Uh, He then ran this fermentation yard. We became one of his customers. So he was running that. Uh, and then our company started growing with Subway, uh, and other organizations.

I was running sales and production and overseeing all the departments. And my dad had just decided that I'd proven to be a good leader. And thought I was, you know, he crowned me the next President and CEO.

Cliff Duvernois: Tim, if somebody's listening to this and wants to learn more about Hausbeck Pickles. Uh, maybe find you guys online, what would be the best way for them to do that?

Tim Hausbeck: Hausbeck.com. gives you everything you need to know. And, we're also on Facebook.

Cliff Duvernois: Tim, thank you so much for taking the time to chat with us today. I really appreciate it, and this is one of those interviews I'd love to sit here and pick your brain all day. Thank you so much for taking the time to chat with us today.

Tim Hausbeck: Cliff, thank you, it's an honor to be here today.