After 126 years in business, Chelsea Milling Co. is in no rush to shake things up at its factory.
In this edition of Conference Room, Chelsea Milling Co. CEO Howdy Holmes says that the company is built on a simple recipe: Offer customers the highest-quality ingredients at the best price possible.
"I think our consumers appreciate what we do, and that's to offer value," says Holmes, the grandson of the company's founder, who created Chelsea Milling's iconic Jiffy Mix.
Holmes says the corn-muffin mix brand today has 91 percent of the market share -- with no thanks at all to advertising. Chelsea Milling Co. spends nothing on ads; Holmes says Jiffy Mix's low price speaks for itself when it comes to attracting new customers. Holmes says the company's been pushed to advertise by new board members, but has resisted in order to keep costs low.
"We would be eroding one of the biggest advantages we have, and that is the difference in price between ourselves and the alternatives," says Holmes.
Thanks to Chelsea Milling Co.'s success, Holmes says he's reluctant to mess with the business model.
"We're always in a hurry to change things," says Holmes, speaking generally.
"If something works, recognize you shouldn't change it. You need to polish the system or the process from time to time, but if it works, leave it alone," he says.
With that in mind, Holmes says the company hasn't strayed from vertical integration.
"Any time you outsource something, there's a profit number that doesn't get calculated. So we make our own boxes; we store our own wheat; we mill our own flour; we do our own packaging; we do our own mixing; we do our own logistics," says Holmes, counting off the steps to producing Jiffy Mix.
Thanks to its in-house manufacturing, Holmes says Chelsea Milling is able to save money and pass on those savings to the customer.
The one area where Holmes isn't afraid to spend, however, is on its employees, who he says deserve to be paid well.
"We expect a lot from our employees ... We compensate them fairly, and we expect them to participate," Holmes says. "Life is not a spectator sport, so you need to get in the game."
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