Andreas, G. Allen Jr. 1943–
G. Allen Andreas Jr.
Chairman and chief executive officer, Archer Daniels Midland Company
Education: Valparaiso University, BA, 1964; JD, 1969.
Family: Son of Glenn Allen Andreas Sr. (bank president) and Vera Irene Yates; married Toni Kay Hibma, 1964; children: three.
Career: U.S. Treasury Department, Denver, 1969–1973; Archer Daniels Midland Company, 1973–1986, lawyer; treasurer, 1986–1989; chief financial officer of European operations, 1989–1994; vice president and counsel to the executive committee, 1994–1996; member of the office of the chief executive, 1996–1997; president and chief executive officer, 1997–1999; chairman and chief executive officer, 1999–.
Address: Archer Daniels Midland Company, 4666 Faries Parkway, Decatur, Illinois 62526; http://www.admworld.com.
■ G. (Glenn) Allen Andreas joined Archer Daniels Midland Company (ADM) as a member of the legal team in 1973. ADM is an agribusiness specializing in the processing of oils from seeds and grains. In 1999 three top executives, including Michael Andreas, pled guilty to charges of price fixing. Michael, who had been next in line to run the company, was given a three-year prison sentence. Michael's father, Dwayne Andreas, former director and chief executive officer (CEO), resigned his post and appointed his nephew, the current CEO, G. Allen Andreas as chairman. Some board members were concerned by this move. In a letter to BusinessWeek Online, Timothy E. McKinney, a New Hampshire investor, reported, "I thought it was classic nepotism, but have been pleasantly surprised by the direction he has provided and the job he has done." Analysts did not see much improvement as of 2001. John M. McMillin, an analyst at Prudential Securities, told Julie Forster of BusinessWeek, "Whether it's his fault or not, Andreas hasn't yet moved the needle." But investors and analysts were satisfied with his eventual turnaround of the company. Under Andreas's direction, major decision-making processes were changed, a department of corporate compliance and regulatory affairs was established, and new health and nutritional products were introduced. During fiscal year 2003 ADM invested $1.25 billion on property, plants, and equipment. Profits were increasing slowly but steadily, with a five-year record increase by the third quarter of 2004.
REBUILDING THE COMPANY
For Allen Andreas, who spent most of his early years at ADM dealing with finances and legal matters, the appointment to CEO came at a difficult time. In addition to a class-action lawsuit and fines totaling over $200 million resulting from the price-fixing charges, ADM was hit by a declining agricultural economy in the mid-1990s. As the only family member available to take over at the time, though, he accepted the responsibility. He began the task of rebuilding the company image, incorporating new products, and gaining the acceptance of the board, shareholders, and employees.
Under Dwayne Andreas the board of directors was composed of people with political ties that benefited the company. The top three executives made major company decisions. In a Chief Executive magazine profile, Bill Leach, a food-industry analyst, recalled that Dwayne Andreas gave "one-sentence press releases where ADM wouldn't even reveal pretax earnings" (March 1, 2004). Allen Andreas wanted more open leadership and to change the way major decisions were made. He appointed a new president and reduced the board of directors, handpicking the members who were to step down. Under Allen Andreas's leadership each of the company's operations (ADM Natural Health and Nutrition, ADM Specialty Ingredients, and ADM BioProducts and Feed) were to function as separate divisions with individual leadership, leaving room for individual growth and a better chance to increase product lines and profits. Andreas personally recruited or promoted 80 percent of the people running each business unit, and he committed himself to improving communications with shareholders. In 2001 ADM won the Investor Relations Magazine 's Most Improved Relations Award.
On top of building sales and shareholder support, Andreas also saw the importance of building employee relationships. His strategy was to motivate employees to think like owners. He provided stock options and investment plans for employees to create an entrepreneurial corporate culture.
NEW PRODUCT LINES
In 2000, in line with Andreas's aims to reduce reliance on sales of food and feed products and increase newer high-margin retail sales, ADM adapted a new mission statement. "To unlock the potential of nature to improve the quality of life" (press release, October 27, 2000). The new mission statement emphasized the company's focus on nutraceuticals (overthe-counter medications made from agricultural chemicals) and other dietary supplements. The new products, along with the production of ethanol (a gasoline additive made from corn) and veggie burgers (a product he ate for lunch with a salad almost every day) resulted in a 13 percent earnings increase over the fiscal year 1999. In 2001 a new logo and ad campaign were designed to accompany the new mission statement. That same year, in conjunction with the American Menopause Foundation, ADM's Nova Soy Natural Power Tool was introduced. Andreas actively promoted a nationwide tour that offered bone-density screenings to stress the importance of soy supplements in maintaining bone and heart health during menopause. In 2003 Envoa, a cooking oil designed to help reduce fat and obesity, was added to the U.S. product line. It had been a big seller in Japan since 1999 and was expected to increase U.S. sales by $150 million per year. By the third quarter of 2004, five years after becoming chairman and CEO, Allen Andreas was on the road to accomplishing his goals, with earnings increasing 94 percent in that quarter.
THE LOW-CARBOHYDRATE DIET
When low-carbohydrate diets became popular in the United States, the demand for flour declined. In response, Andreas closed some of the company's mills. The new diet also had a positive effect for ADM, as it increased consumer demand for poultry, pork, and beef products. This in turn increased the need for animal feed, another of ADM's core products.
See also entry on Archer-Daniels-Midland Co. in International Directory of Company Histories.
sources for further information
"ADM Announces New Mission," company press release, October 27, 2000, http://www.biotech-info.net/ADM_mission.html.
Burns, Greg, "Archer Daniels Midland Tells Unhappy Shareholders of Plans to Cut Costs," Knight Ridder/Tribune Business News, October 21, 1999.
Buss, Dale, "Heartland Transformation: ADM CEO Allen Andreas Has Led the Giant Out of Scandal and Put it on the Winning Path," Chief Executive Magazine, March 1, 2004.
"Cultivating His Garden," interview, Institutional Investor, December 2000, p. 28.
Forster, Julie, "A Different Kind of Andreas at ADM," BusinessWeek, July 9, 2001, p. 62.
McKinney, Timothy E., letter to editor, BusinessWeek Online, http://www.businessweek.com/print/magazine/content/01_33/c3745022.htm.
—Valerie J. Webster