Zero Mountain Takes Off
Sage is pleased to have worked with Zero Mountain last year in the sale of a 206,000 SF warehouse space located at 8501 Hwy 45 in Fort Smith.
When Joe Rumsey leased a partially abandoned limestone mine in Johnson to open an underground cold storage facility in 1955, there was just one issue: “there was no frozen food production in this area,” according to his son Mark.
It took about eight years for Zero Mountain Inc. to become profitable.
Mark Rumsey’s son, also named Joe Rumsey, manages Zero Mountain out of Fort Smith. The company has around $40 million in annual revenue, five locations in Arkansas, 36 million cubic feet of refrigerated space, 7.8 cubic feet of dry space and a rapidly growing trucking segment.
After some hard years without many customers, the eldest Rumsey met with Tyson Foods founder John Tyson in 1959.
“John told Dad, ‘You’re a little bit early on this, but if you hang on, one of these days it’s going to really make sense for the poultry industry [to have cold storage],” Mark Rumsey said.
“That was Dad’s carrot to stay in the business when they were losing money year in and year out.” It has panned out. The company now counts Butterball, Tyson Foods, ConAgra, Simmons Foods and OK Foods among its top customers.
Before the invention of polyurethane foam, which now insulates Zero Mountain’s modern walls, the limestone mine in the Boston Mountains was the easiest space to cool, with an ambient temperature of 58 degrees, explained the younger Joe Rumsey, current president and CEO. His father, Mark, remains chairman of the board.
Beginning with the opening of the Ralston Purina Honeysuckle turkey production plant in 1963, Zero Mountain began to accumulate customers. It started storing products like Welch’s grape juice and concentrate, turkeys for Butterball’s Huntsville plant, poultry for Tyson and Washington County apples for Gerber.
As its customer base expanded, so did Zero Mountain, into a Fort Smith location in 1987 to handle OK Foods and Planters Peanuts, a Lowell location in 1992 to take care of Tyson Foods and a Russellville location in 1993 for ConAgra. It tripled its storage space in about six years.
Mark Rumsey first started working at Zero Mountain in 1982 where, given his father’s aversion to nepotism, he said his “first official title was ‘sanitation,’ let’s just say that.” He took control of the company in 1994.
In 2008, the recession created “a perfect storm,” Mark Rumsey said, adding that “it was the first time in human history that global production of protein actually dropped.”
“We didn’t have any product to store, period,” he said. “There was nothing we could do about it. It was either lay people off and live to fight another day or go under.”
Around that time, the youngest Rumsey returned to Arkansas after going to college and working for a pallet repair company in Colorado.
Joe Rumsey, who had started mowing Zero Mountain’s lawn at age 12, had developed “a different eye for management” while away, his father said. With a fresh, unbiased perspective, Joe Rumsey cut more employees and streamlined the company’s internal communications. Joe Rumsey took over as president and CEO from his father in 2011.
“I had expanded and expanded and expanded, and I was just tired,” said Mark Rumsey. “So now he’s doing to me what I did to my father. Whenever we get to a plateau, young blood comes in and starts doing new things. Voila, we’ve got transportation. Voila, we’ve got expansions.”
Though layoffs reduced the company staffing from 300 to 174 employees, the number is back up to 310 now. The company recently purchased its first dry warehouse space and just closed on a deal for a new location for cold storage in Little Rock.
In Colorado, the youngest Rumsey had been exposed to the trucking industry. Once back in Arkansas, he recalled, “I kept going into these meetings with our customers, and they kept saying, ‘Trucking capacity, trucking capacity … do you know of any trucking companies?'” Drawing on his experience in the field, he decided to buy some trucks in 2014.
Zero Mountain had tried and failed to get into trucking twice before, in 1984 and 1996.
“It wasn’t our specialty, and we really didn’t have the resources at that time because we were growing so quickly,” said Mark Rumsey.
Starting with a fleet of six tractors and 10 refrigerated trailers, Zero Mountain Logistics hauled its first six loads on Oct. 20, 2014. Nearing its second anniversary, the segment now has 46 tractors and more than 100 trailers hauling about 46 loads per day. It employs 61 people, including drivers.
“My deal is to offer that total cold chain solution,” Joe Rumsey explained. “That way the customer doesn’t have to worry about it, and we maintain the security of the cold chain solution the whole way through because it’s in our care the whole time.”
Bob Meyers, a member of the Zero Mountain board, has a background in trucking. He was initially cautious about the idea. He spent more than 30 years at Arkansas Best Corp., retiring in 2008 as a vice president.
“I had seen companies, oftentimes they were customers of ABF, who would decide ‘this trucking thing is easy’ and buy some trucks and play around with it,” Meyers said. “And they failed miserably because they didn’t have the wherewithal to do it properly.”
However, he has been won over by the promise of the venture at Zero Mountain.
“I think the chances of success this time are so much better because of the talent that Joe has hired. He has also committed enough resources and bought good equipment.”
Unlike the average emerging trucking company, Zero Mountain had some advantages. “The thing that made it work was that being in this warehousing space, I know the customers and I know the contacts,” Joe Rumsey said. “They were able to trust that we could haul their freight. … That was a big deal. We got very lucky with that.”
While the company prioritizes moving existing customers’ product to and from its locations, it has added business through the new venture. Springdale poultry company George’s Inc., for example, has its own cold storage but uses Zero Mountain trucking.
After almost two years, the segment represents 20 percent of total revenue. For now, Joe Rumsey intends to continue to “add trucks as we get good drivers.”
“I feel like I run two separate companies. It’s a trucking company and a warehousing company; we just try to keep everybody getting along,” Joe Rumsey said with a laugh.