Mike and Mike’s Organics – The Fruits of Labour
How two Vaughan businessmen consolidated the organic food distributor business in Ontario and grew their company into one of the country’s Best Managed
The erratic beeping of passing forklifts doesn’t faze Mike Fronte as he makes his way through the massive warehouse of his organic food distribution company Mike & Mike’s Organics. Over the near-drowning white noise droning from the towering coolers, the company president, clean-cut in a purple gingham dress shirt, outlines the details of a recent expansion of their Vaughan facility. A wall was knocked down to increase what was once 20,000 square feet of space to 43,000 sq. ft. It added room for four new coolers, doubling their storage capacity to meet the demand of customers hungry for a slice of the expanding market, and a wrapping machine for their budding packaged product line. It’s certainly a far cry from the modest roots that Fronte and his partner, vice-president of operations Mike Dattoli, set down a decade ago. “We’ve come a long way,” Fronte says.
To say that the past five years have been a time of growth for Mike & Mike’s is an understatement. As the province’s only exclusively certified-organic distributor of fresh fruits and vegetables, Mike & Mike’s has carved out a niche as the go-to guys for organics in southern Ontario. Launched in 2004, the company delivers more than 300 fruits and vegetables from organic farms around the world to 150 retailers, including large-scale chains such as Loblaws, Longo’s, Metro and Whole Foods, as well as numerous health and natural food stores. In each of the last five years its business has grown by 20 per cent, pushing the business well into the multi-million-dollar level.
“We’re very lucky to be in an industry where people are becoming aware of the food that they’re eating,” Fronte explains from across the dark-chocolate hardwood table of the company’s boardroom. “Organic has gone mainstream.”
The organic food industry has certainly made the transition from a mom-and-pop cottage industry to the big leagues of international business. It wasn’t that long ago when grocers struggled to find a reliable supply of organic fruits and vegetables. The conventional produce market has been so well established for so long that grocers and farmers around the world have become tuned to regional growing seasons, rolling from one country to the next, season by season, to ensure there is always a consistent supply of product. Organic, however, was a different story.
“When I started 15 years ago, no one did organic bananas,” Fronte says of his fledgling days in the industry. He recalls a time when he brought in one skid of bananas on a cold truck from California. The bananas were so green they were almost grey and would never turn yellow. “And people would still buy them, because there was no one — no one — doing organic bananas anywhere near me.”
Today the industry is far more evolved. Matthew Holmes, executive director of the Canada Organic Trade Association, explains that as of 2014 the organic industry now generates over $4 billion in sales in Canada alone, growing at a rate of at least 10 to 11 per cent annually. Natural foods and organics trade shows attract tens of thousands of people, including the over 71,000 that attended Natural Products Expo West in Anaheim, Calif. this past March. “We’ve seen some companies even now listed on the Toronto Stock Exchange or the New York Stock Exchange,” Holmes adds.
“In the southern Ontario area there must be three to four containers of organic bananas being sold per week,” Fronte adds. “In Loblaws, it’s now an item. They have it 52 weeks a year.”
At first glance, Fronte and Dattoli could pass as your prototypical partners from a buddy cop movie. Fronte, stocky with a soft, raspy voice and a slight silver gradient creeping up his well-kept bristly hair, has the guarded awareness and the let’s-get-the-job-done attitude of a no-nonsense businessman. Dattoli, lean with a Bruce Willis-esque shaved head, beams often with an easy smile and possesses that youthful, salt-of-the-earth approachability that can build bridges between even the most distant parties. They’re from two different worlds. But sit down with them and it becomes evident why their partnership has (excuse the pun) borne fruit.
“So Mike sells. We both share the procurement. I do more the day-to-day business operations,” Fronte says. “I’m not allowed to sell,” he adds with a smile.
“No, he can’t sell,” Dattoli chimes in with a laugh.
“Those are the rules.”
Their complementing traits compensate for the shortcomings of the other. Fronte, with his business acumen, is the architect while Dattoli, with his engaging personality, is the engineer. And it’s a combination that has worked extraordinarily well.
This past March, Mike & Mike’s was named as one of Canada’s 50 Best Managed Companies. The annual Canadian award program recognizes exceptional performance and management and is considered one of the most esteemed business awards in the country. “For me, it was something that I always wanted to do,” Fronte explains. “It was on my mind the day I started my business, that one day I would win that Best Managed. Not for the recognition, not for anything. It was just something I personally wanted to achieve.”
Fronte had tried for the award in the past, but always seemed to come up short. Every year hundreds of applicants from across Canada submit their companies to the rigorous vetting process to take their shot at the prestigious designation. Best Managed alumni include many large national and international companies, including GoodLife Fitness, Holt Renfrew and McCain Foods. So when news came down that they’d won, Fronte and Dattoli couldn’t have been more shocked and proud of their team. When asked what the key is to winning the award, they explain that it’s about building a staff with the right people and leading by example.
“I think it’s a testament to the management style, which is surround yourself with really good people and good things happen,” says Fronte. “This is very much a family-run operation and when you come here you become part of the family. We don’t take that very lightly.”
“When we first started off it was just Mike and I. We haven’t stopped since and we continue to work,” Dattoli adds. “We’re in the business day-to-day. We tend to lead the team and show by example.”
It’s a trait many of their customers have also come to respect. Matt Lurie is a fourth-generation grocer and president of Organic Garage. When he opened his first store nine years ago, Lurie initially used suppliers out of the Ontario Food Terminal, as he preferred to see product before he purchased. He began turning to Mike & Mike’s to fill shortfalls in orders and over time their relationship solidified. Lurie appreciates how, despite the growth of their business, Mike & Mike’s hasn’t forgotten about the little guy nor have they taken a backseat. “A lot of the other companies aren’t necessarily owner-operated, whereas Mike & Mike’s has a hands-on approach,” he says. “I know them, I’ve been there, you walk in there and they’re working just like everybody else, and that’s the difference.”
The seeds for Fronte and Dattoli’s relationship were planted back in 2000 when Fronte launched his first organic distribution company, Simply Organic. Fronte had recently parted ways with Pro Organics but didn’t want to leave the industry behind. He enjoyed its small and intimate atmosphere and the principles of what organic produce stood for. He approached family friend Gus Bondi, owner of Bondi Produce, for startup cash and warehouse space to get his own business up and running. Bondi obliged. For the first three months, Fronte took on the load himself, working day and night, buying products, picking orders, selling — the stress was high.
At the time, Dattoli was the warehouse manager of Bondi Produce, and Dattoli and Fronte bumped into each other here and there while on the job. Over conversation they even found they had attended the same elementary school. But there was more they discovered. Fronte recognized Dattoli had skills that he lacked. “Where he had strengths I had weaknesses, so that was an easy fit,” Fronte says. When Fronte asked Dattoli to join Simply Organics, Dattoli saw an opportunity to show that he was capable of more. “I wanted to almost put a name out there for myself, to take a jab at starting something new,” he says.
After three years of building up the business, Simply Organic was bought by SunOpta, a multinational Canadian natural and organic food company. For a year, Fronte worked for SunOpta, but he missed being his own boss. He decided again to go out on his own. But this time he wouldn’t do it alone. Remembering the long days and anxiety that come with running a business solo, Fronte knew he had to find the right people to make it work. And he knew just who to turn to.
“When I did it a second time I knew that I wanted a partner right away and I loved the way Mike and I worked together,” Fronte says.
“In terms of a conversation, there wasn’t one particular conversation that stands out, other than, ‘Failure’s not an option,’” Dattoli adds. “That was our mantra early on.”
When they launched the company in 2004, they were well aware of the holes and deficiencies of the industry. Growers would often deliver their own product straight to the store and grocers had to deal with a number of different regional farmers if they wanted to get their hands on different organic produce. This too posed a problem for Mike & Mike’s. Dattoli remembers having to orchestrate a single truck on a winding route around California to eight different farms just to mitigate the costs of getting product to Ontario. “Point A, point B, point C,” he says, tapping his finger across the table along an imaginary map, “just to fill a truck, just to get it here.”
It also meant a lot of travelling to establish relationships with growers and to gain access to top-quality certified-organic produce. Fronte still remembers those early trips to the most out-there farms. He describes a trip to Loreto, Mexico, down in the sun-soaked, desert area of Baja California, where a farm was growing melons and onions. “Literally their packing shed was out in the middle of the dirt. It was just in the middle of nowhere,” he says with a nostalgic smile. “Typically these operations were not very sophisticated and it’s always amazing to see how they produce so much product with so little technology.” Today, they’ll attend two or three trade shows a year. In between, Fronte will still find time to visit farms to keep relationships strong.
Gillian Flies has always appreciated that personal attention of Mike & Mike’s. Flies is an organic farmer and co-owner of The New Farm in Creemore, Ont. She and her husband started organic farming nine years ago, selling product at local farmer’s markets in and around the area. They even made connections with chefs from Toronto looking for fresh organic produce. As demand for organics grew, larger distributors began to pay attention. Flies describes several poor experiences with a handful of distributors that would try and squeeze her on price. They also refused to incorporate The New Farm’s system of reusable bins. Mike & Mike’s, however, was different.
“Mike and Mike’s has been extremely supportive because they do not push us on price. We agree to what is fair and they sell it for that,” Flies explains. “They also have a Zenlike calm that you wouldn’t expect given the volume of food they are moving.”
As the distribution business has blossomed, Mike & Mike’s has continued to evolve. Last year they completed a $1-million rebranding initiative, adopting the tag line “We are all organic.” Their recently added automated flow-wrapping machine has allowed them to intensify production on their new line of packaged fruits and vegetables. And they recently struck a deal that will see their Mike & Mike’s snack line of dried fruits, nuts and seeds sold at a number of retail stores at the Toronto Pearson International Airport.
Looking back, neither Fronte nor Dattoli could have imagined taking the business to this level. But the duo has no plans on slowing down. “The business is very different from the business we envisioned when we started,” Fronte adds. “But I tell you, it’s a lot of fun, and we’re going to continue doing it because it continues to be fun.”