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How Tasty Catering Became an Illinois Incubator

On the verge of losing the business, CEO Tom Walter looked to young employees to turn his business around, and then helped them fund their own.

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Tom Walter CEO of Tasty Catering in Chicago

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In the last 6 years, Illinois-based Tasty Catering has undergone a revolution—a revolution that not only saved it from closing its doors, but also turned the company into a local incubator for young entrepreneurs.

It started in 2005, when CEO Tom Walter, who runs the company with his two brothers Larry and Kevin, got an unexpected earful from his college-aged son and Tasty Catering intern, Tim. 

"He just came to me one day and said that he wasn't going to continue working here if things didn't change," says Tom, who started the company in 1989. "He also gave me a tremendous business plan for how we should turn the company around."

That plan had a few components. First, Tim suggested his father close the few fast food restaurants they owned, as he saw them as taking away from the catering business. 

It also laid out a long-overdue cultural makeover. Tim's outline was largely guided by Jim Collins' legendary book Good to Great, which led to the formation of two employee-run councils that always have a say in top-level decisions, on everything from acquisitions to new strategies. (Read more about the company's council system.) Tim's plan also addressed a marketing overhaul.

Tom was easily convinced.

"It was like my 'Aha' moment,"  says Tom.  "I realized the market had changed. The people that I had sold to were retired, and the methodologies I used were no longer valid.  Young people understood the market and knew where it was going. "

Tom eventually brought on half dozen more young people, starting with Tim's childhood friend Jamie Pritscher. The revamped company's values also included bold initiatives on green practices and catering menus to specialty diets and food allergies.

"We instituted the culture change in March 2005, and by 2007, we saw a 27 percent increase in sales," adds Tom. "[My brothers and I] had the contacts and cash, while the younger guys had the creative energy, knowledge of the market, and relevant education. It was a perfect marriage."

But this is where the story takes a turn. As Tasty Catering got back on its feet, the young people had start-up ideas of their own. A problem for the Walter Brothers? Not at all. To date, the company has nurtured and funded six start-ups. Most of them have in some way helped Tasty Catering's business, and all of them run by current employees under the age of 30.

Tim was the first.

"In 2005, a client said that if Tasty Catering can get us low-calorie, low-cholesterol muffins that actually taste great, that we'd have an annual order for nearly 800,000 of them. At the time, we didn't have anything like that to offer," the now 29-year-old says. "I realized there was some unique possibilities in specialty foods, so I presented a start-up plan to my dad and his brothers and they gave me $5,000."

What he presented soon became T.F Processors, a specialty commercial baking company. Of course, it initially supplied goods to Tasty Catering, which previously had bought some baked goods from outside companies.

"They saw the value and savings they could get internally," he says. 

Since its foundation, T.F Processors has grown, and now has "several large local contracts" other than its mothership Tasty Catering. 

Soon after T.F Processors came into its own, Pritscher presented an idea for her own company. It was 2008, and she was the Director of Logistics at Tasty, while also finishing up her graduate degree at Roosevelt University.  One of her class assignments was to create a viable business plan.

"We had a division in Tasty Catering for corporate gifts, but it was one of those things that we only did at Christmas time. I saw room for expansion," she says. "I asked Tim for help on the numbers and got a presentation together. Tim said that his dad and uncles would want to know what I was working on in school anyway."

She went into a meeting, and walked out with a check to fund her idea. She started green gift-giving company That's Caring right before the holiday season of 2008. The company sells gift boxes and baskets that include everything from cookies to gourmet cheese.

"At first we focused on corporate gift giving, because I already knew a lot of vendors and clients that did that sort of thing," Pritscher, 28, says. "But after the recession hit, corporate spending was cut back, and we now market to the every day buyer, for year-round holidays like Mother's Day."

Other start-ups spawned from the young staff include a marketing company called nuphorIQ, which both Pritscher and Tim, who is still also Tasty's CFO, were involved in from its conception and execution.

But ask Tom about his role in the success of Tasty and its spawn, he wouldn't take a dime of credit.

"It's all the young guys. I just trusted their energy and knew that if I gave them a chance, they could do great things for us and for themselves," he says.

 

Last updated: Sep 12, 2011

NICOLE CARTER is Inc.'s San Francisco bureau chief. She was previously an editor at New York Daily News, and her work has also appeared in Consumer Reports magazine.
@nicoleckinc




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