Upper Lakes Foods Inc.

The Cloquet-based company works with more than 700 vendors to supply food to restaurants, school districts and other entities around the region.
Upper Lakes Foods Inc.

It’s no fun running a resort when the power is knocked out and you could end up with hungry visitors and spoiled food.

Bruce Kerfoot operated the Gunflint Lodge near Grand Marais from the 1960s until he sold it in June, and he’d frequently been on the receiving end of destructive weather. In 1999, after a massive windstorm known locally as “the blowdown,” Kerfoot remembers getting a call from Larry Sorensen, the longtime owner of Kerfoot’s food supplier, Cloquet-based Upper Lakes Foods Inc. “He said, ‘I’m sending up a refrigerated semitrailer, two-thirds refrigerated and one-third frozen. You keep it as long as you need it,’ ’’ Kerfoot recalls. “We couldn’t pay him a dime for it. They walked the extra mile.”

That neighborly approach to business is what Kerfoot describes when he explains why he was a loyal customer of Upper Lakes Foods (ULF) for nearly 50 years. It’s an approach that Upper Lakes doesn’t want to lose, even as it continues to expand. The company is now run by Larry Sorensen’s children, and they’ve had to face some difficult times of their own.

Sorensen founded the company in 1967 after a career in the grocery business. Yearning to be his own boss, he launched a food distribution business out of a Duluth warehouse. ULF is now the 29th-largest broadline food distributor in the U.S., working with more than 700 vendors and stocking more than 10,000 items.

The primary service area for Upper Lakes Foods is Minnesota, Wisconsin and the Upper Peninsula of Michigan, and it collaborates with brokers and vendors to supply food to restaurants, school districts, health care facilities and an array of other customers. It also has a distribution facility in Northfield, which it currently uses to service Wendy’s restaurants in the Midwest, among others. ULF posted $190 million in sales for its fiscal year that ended in March.

Upper Lakes is now run by Sorensen’s daughter, Susan Ryan, who is president. Ryan and her brothers each own one-third of the company. Scott Sorensen is vice president of sales; his brother Shawn serves as vice president of operations. The three Sorensen siblings learned about the family business early. “We’ve been here all of our lives, from the ages of 12 and 13,” Susan Ryan says. After studying business at the University of Wisconsin-Superior, she joined the company full time, working extensively in sales. Ryan was Upper Lakes Foods’ sales and marketing director when her father died in 2005.

Thus began a rocky period for the company. Larry Sorensen didn’t have a succession plan in place, and it took a few years for things to settle. Steve Sorensen, the eldest of the founder’s four children, was company president from 2005 until 2009, when he left the business. Leadership was briefly held by a non-family member who had experience in the food industry. In October 2010, Susan Ryan became president.

“When my father was alive, he pretty much made all the decisions,” she says. Ryan has chosen a different approach. “One of the first things we needed to achieve was to change our company culture,” she says. “We tried very, very hard to get our employees to understand that they were our No. 1 priority, that they were valued, and to begin giving our managers the empowerment to run their departments.”

Timeline

1967 – Larry Sorensen founds Upper Lakes Foods in Duluth.
1981 – Company headquarters is relocated to Cloquet.
2000 – Upper Lakes retrofits a bus to be used as a full-service kitchen to demonstrate food preparation to restaurants.
2005 – Larry Sorensen dies and eldest child, Steve, becomes president.
2009 – Company opens a distribution facility in Northfield.
2009 – Business cuts 65 jobs during the recession.
2010 – Susan Ryan becomes president of the company.
2013 – Responding to customer demand, Upper Lakes introduces the Natural Marketplace, an online store for purchasing organic, gluten-free and other specialized foods.

 

Like many other Minnesota businesses, Upper Lakes Foods was buffeted by the recession. In 2009, the company cut 65 jobs from a headcount of 380. “I never want to have to do anything like that again,” Ryan says.

With a healthier economy and the company leadership in place, Upper Lakes Foods is focused on providing strong customer service and leveraging technology to increase efficiency. The company also is working hard to retain good employees. Its truck drivers are employees, not contractors. Ryan stresses the importance of having an excellent crew of drivers. “After a driver has been with us five years, every year they get a bump in pay,” Ryan says. “That made a huge impact. Some drivers have been with us for up to 28 years.”

Jim Bradshaw, chief operating officer, has been with Upper Lakes for 40 years. “The reason I stayed is I was constantly given opportunities to do new things,” he says. Bradshaw is one of two non-family members in the company’s six-person leadership team. “It’s not always easy” to make tough decisions collaboratively, he admits. “It may take longer than I wish it would sometimes,” he adds. But he says the leadership team chooses a course of action based on the best available information.

“What we’ve gotten better at is getting all the data around the decision on the table,” Bradshaw says. “What we are finding more and more is . . . that almost presents the decision to us.”

Bradshaw lived through the company’s tough times, and he says that “we’ve come out of it a much better business. We have a different perspective on how we need to pay attention to what we are doing and stay current. We operate the business communicating more regularly, and collaborating in a better way as a result of it.”

These days, restaurants are a huge part of the Upper Lakes business. Wendy’s is the largest customer; ULF supplies food to 130 of its locations. (It also supplies 31 Perkins locations.) Upper Lakes Foods is “a great family-owned business that is totally focused on the customer and always willing to do the right thing,” says Ed Medlock, senior vice president for Ohio-based QSCC Inc., an exclusive supply chain co-op for Wendy’s restaurants across North America.

Technology is playing a bigger role in the business, Ryan says. One initiative is MegaBite, which is a new online ordering system that’s designed to save time for customers.

Convenient ordering and high-quality food are two of the benefits that customer Wendy Knight cites about doing business with Upper Lakes. Knight is coordinator of food and nutrition services for the Rosemount-Apple Valley-Eagan school district, which uses food deliveries from Upper Lakes Foods at 25 sites. Like Medlock, Knight appreciates the willingness of ULF to work cooperatively and to provide innovative approaches. “Upper Lakes has been working with us and other districts to source local farms in the state of Minnesota,” she says, adding that the district is able to get turkey, wild rice, blueberries, green beans and other produce from state farmers.

Upper Lakes is “looking at expanding in the [Twin Cities] metro with a larger facility,” Susan Ryan says. She’s also committed to developing a succession plan for the third generation of the family to avoid the pitfalls of the previous era of transition. As she reflects on her time as president, she says, “The best part for me has been watching our company evolve to where it is now, and to watch our employees grow within their fields.”