If you are a dairy farmer, Domino's should matter to you. As one of the top-performing company stocks in the Fortune 100, Domino's is also among the biggest users of cheese . . . as 25 percent of all U.S. cheese goes into pizza pies.From that statement alone, one would believe that Domino's core operations involve pizza.
While that is what the Ann Arbor, Mich., based company is ultimately selling, its sales that have grown from $2 billion to $9 billion over the past five years has as much to do with technology as it does pizza. The story documented in the article "How pizza became a growth stock" by Stephan Moore in the March 14, 2015, The Wall Street Journal, offers some valuable insight for those of us who milk cows. In short, by focusing on the process of customer satisfaction, J. Patrick Doyle shepherded his company into becoming a better pizza maker and improved sales by $7 billion in five years.
Just because the company is baking pizzas doesn't mean they need a food background.
As Moore pointed out, "The atmosphere at company headquarters feels more like Silicon Valley than a fast food company. Most employees here are computer programmers and technicians monitoring in real time what people are ordering, how long it takes to fill the order, and the online complaints and comments that stream in."
Why does that matter?
Domino's has the goal of delivering pizzas in 30 minutes or less. That means every electronic innovation that shaves off 10 or 15 seconds is a major money saver when you're selling a billion pies a year, noted Moore. And electronics matter even more to Domino's because 90 percent of orders arrive by phone or electronically through the internet.
How does this apply to dairy farmers?
Of course, if Domino's succeeds, the company and its 10,000 stores worldwide sell more cheese. That's good for dairy producers whose milk is turned into cheese.
Perhaps more importantly, Domino's approach to improve its business by bringing in outside counsel to fine-tune its internal process can also help improve our dairy farm businesses, as well.
(c) Hoard's Dairyman Intel 2015
May 18, 2015
