S. Side firm makes lots of bread by making McDonald's croutons

David N. Moore and George L. Johnson started from scratch andnow are making a lot of dough.

Johnson, 41, and Moore, 33, were on the fast track atMilwaukee-based Miller Brewing Co. in 1986, when opportunity camecalling in the form of David P. McDuffie, home office manager forbusiness development at Oak Brook-based McDonald's Corp. McDuffie waslooking for a minority-owned company or aggressive individualswilling to start a business. The company then would be given theopportunity of suppling McDonald's restaurants with croutons for thefast-food chain's salads. McDuffie said he got Johnson's and Moore'snames and those of several other likely candidates through social andbusiness connections.

"There wasn't a guarantee, but there was an opportunity to dobusiness with McDonald's," he said.

It was the chance Johnson and Moore had been looking for.Since the two had met several years earlier at a Miller employeegathering, they had talked repeatedly about starting a business.They seized the opportunity and have built a successful company intwo important aspects. Their business, Quality Croutons, 825-29 W.37th Pl., not only is booming financially, it also has a reputationas place where employees love their work and encourage others to jointhem.

At the time of McDuffie's call, Johnson was working for Millerin San Francisco as sales manager for Miller's Northern Pacificregion, and Moore was market development manager in Los Angeles.Both had been with Miller nine years.

The weekend following their conversation with McDuffie, Johnsonand Moore flew to McDonald's headquarters. It was the first of threetrips the two would make to Oak Brook in order to talk to thecompany's executives.

They also talked with McDonald's suppliers, and they readarticles about the fast-food chain's operations. When they made thedecision to leave Miller's corporate womb, they also went back toschool.

The two, who didn't have any experience in the baking industry,studied at East Balt Commissionary Inc., a South Side bakery thatsupplies hamburger buns to McDonald's.

McDuffie said Johnson and Moore learned all phases of the bakerybusiness and took home a report card with filled with A's. "They werevery astute. They picked up the baking business even quicker than wehad expected," he said.

Their ability to quickly learn also helped them get the supportof East Balt Commissionary in getting bank financing, McDuffie said.Moore said they received $2 million in financing from AmericanNational Bank & Trust Co.

The investment in Johnson and Moore by McDonald's, East Balt andAmerican National Bank has already paid off and is expected to showmore returns in the future.

A year after Quality Croutons opened its doors in May, 1987, ithad revenue of more than $3 million. This year, the two expect salesto exceed $6 million, and in 10 years they hope to do $35 million inbusiness.

Before Quality Croutons' success began showing up on the balancesheet, it began showing up on the company's shop floor and in itsoffices. It's a place where people will do almost anything to gethired.

For example, when Diane Simmons interviewed for the job ofoffice manager at Quality Croutons, she was so impressed with thecompany's management and employees, Simmons used an unorthodox andunproven method to get hired.

"I told George, I was going to talk him into hiring me bycommunicating with him telepathically," she joked.

Simmons got the job and even took a 12 percent pay cut from herold job in order to work at Quality Croutons.

"I never liked working until I came here," said Simmons. "Theyrespect my opinion and I have input."

A number of Quality Croutons' 39 other employees also saidworking for the company is the best job they've had because of theiraccess to management, the firm's family atmosphere, its innovativebenefits program and the high quality of its products.

"This company is fantastic. We put out a quality product and aslong as we're doing that, the business will keep growing," said JimAlexander, Quality Croutons' production supervisor.

Ironically, Moore, who serves as the company's vice president,said hiring employees was their hardest job.

"It's very difficult to find a good employee. When we opened,we wanted people with baking experience, but we couldn't findanyone," he said.

Moore, a Milwaukee native, said they later dropped that idea andstarted looking for employees who were trainable, intelligent,energetic and willing to work with others as a team.

The two also put together a benefits program that would make thecompany attractive to job hunters.

Besides profit-sharing, major medical and dental coverage and a401(k) plan, Quality Croutons gives each of its employees six paidsick days a year. But, "At the end of the year, the employeesreceive a bonus of 70 percent of their base pay for each sick daythey don't use," Moore said.

The company also operates four days a week, 10 hours a day fromSeptember to February so employees are guaranteed one day off duringthe week to take care of personal matters.

"We made a commitment to hire single mothers, but we realizedthey needed a day off to go to the doctor, dentist or their child'sschool," said Johnson, who serves as the company's president. "If awoman has to run those errands, then taking care of those needsbecomes more important than coming to work. So this type of workschedule has helped to cut down on absenteeism."

When Quality Croutons gets into its busy season and beginsoperating sometimes six days a week, employees can use their threepersonal days to take off from work. Moore said crouton sales, andthus production, increase during the summer because people eat moresalads.

Johnson said he and Moore came up with their approach toemployees in order to create a family atmosphere at Quality Croutons.

It seems to be working.

"I have been in the baking business since 1962," said RexHigdon, Quality Croutons' general manager, "and this is where I wantto be."

Bernadette Hill, a machine operator, said she likes workingthere because Johnson and Moore are available to discuss bothpersonal and professional problems.

Quality Croutons happy/productive atmosphere has helped thecompany increase the number of McDonald's restaurants it supplies.It also has helped the company pick up new customers.

When the company opened its doors, it supplied 50 percent of thecroutons to 6,000 McDonald's restaurants east of the MississippiRiver, and in Texas and Oklahoma. The company has now grown tosupply McDonald's with 85 percent of its croutons.

Quality Croutons also sells its product to supermarket chains,including Lucky Stores, Jewel, Treasure Island and Kroger. The firmsupplies Pizza Hut, United Airlines and Houston's Restaurants.

Bob Lynn, vice president of research and development forHouston's, an Atlanta-based company, says Johnson and Moore representa growing trend in business "where people are willing to work hardand pay more for a product that's high quality."

Johnson said he has made that his goal: "I want to be recognizedby the industry and consumers as a quality manufacturer." Moore saidQuality Croutons are better than its competitors because they aremade from fresh bread, not stale or rejected bread.

As a result of its growing business, Quality Croutons is lookingfor additional space because it's busting out at the seams of 37,000square-foot factory/headquarters.