Gold Medal Environmental has been relatively quiet in recent years, after emerging as a growing waste and recycling provider back in 2018. Now its executives say they have a renewed focus on gaining market share and fresh leadership to help do it.
Today, the Baltimore-based company says it is on track for an estimated $92 million in revenue this year (excluding any possible acquisitions), with 473 employees, over 200,000 hauling customers, more than 200 routes and 12 operating locations, including a MRF and a transfer station. Its operations span the District of Columbia, Maryland, New Jersey, Pennsylvania, Virginia and West Virginia, with a range of waste, recycling and organics services.
The company's current incarnation dates back to early 2018, when private equity firm Kinderhook Industries acquired Gold Medal Services, and the company further expanded by acquiring Apple Valley Waste Services later that year. At the time, mechanical biological treatment facility operator BioHiTech Global (now called Renovare) was a minority investor, and all involved were talking up the strategic potential for vertical integration, but that direct financial relationship has since ended. Gold Medal went on to complete six more acquisitions through 2019.
CEO Darren Gruendel joined as president in early 2020, bringing a background from other sectors, and he has been working to reframe the company's plans. Last fall, Gold Medal sold the Envirowaste transfer station in Philadelphia and select commercial routes to Republic Services. It also intentionally pulled back from more distant service locations in parts of New Jersey as one way to cope with recent labor strains.
John Doyen joined as president in late 2021, bringing more than 30 years of environmental services experience from companies such as Republic Services and Orion Waste Solutions. The two recently spoke with Waste Dive about what's next for their company.
The following interview has been edited for length and clarity.
WASTE DIVE: What's new at Gold Medal Environmental, and how does John fit into your upcoming plans?
DARREN GRUENDEL: This is fantastic for the evolution of Gold Medal and our transformation in terms of relooking at our marketplaces and, more importantly, making sure that our leadership is set up to attract the kind of leaders that we're looking for. John's background, with everything he did at Republic and at Orion, makes him the perfect person. We were looking for somebody to help us compete in that middle-market, Mid-Atlantic region, where we are fundamentally trying to attract people that want to be entrepreneurial decision-makers.
JOHN DOYEN: It's about bringing on the right leadership team that has that entrepreneurial spirit. They want to be empowered, they want to make those day-to-day decisions that are required to be effective within their markets. We're of the size we can be nimble and we move quick.
General managers, for me, I frame them up as market builders. So they manage everything from A to Z, from top-line sales growth (with regards to organic growth, M&A and so on), the whole sales structure for the organization, how they drive that growth within their local facility or site, all the way down to their EBITDA.
They're really engaged with the employees and understand what's important, especially in this day and age. So it's not like it was 30 years ago, when people were coming in and wanted to work 60-70 hours [a week]. They want a good work-home life balance. That's what we have to ensure that we're considering on all fronts, and we become a best place to work.
Everybody's competing for these drivers, so we have to have competitive wages. We have to have competitive benefits — that whole package of 401(k) matching, health, welfare and everything. We have to have great equipment that's reliable to go out and service a route every day. We have to have a great atmosphere, great culture within the location. They want to understand how they fit into the overall company, in the grand scheme of things, and how they impact customer service.
Should I interpret this as some of that was not happening before? Is this part of a bigger change at the company?
DOYEN: This is how I build companies with regards to operations and overall leadership strength in the organization, as well as bench strength. I'm looking to have people on the team that can excel to that next one or two levels in the organization. Because I want to promote career paths for people, both in and outside the industry. So for me, that's just how I operate. Whether that was happening at the company or not prior to me, I'll let Darren speak to that.
GRUENDEL: There's a lot of different ways that organizations grow. Very few of them start as a mom and pop and become a multi-billion-dollar public company. So there's some companies that grow into great cultures just organically. But a lot of organizations, especially now, in the independent space, are conglomerates of small mom and pops, and some things that have been well-integrated and other things that may not have been well integrated.
The chances that you're going to have the same leadership philosophy and cultures among businesses that have been acquired over a period of time is pretty low. So that was my job early on, to take a business that was probably not as well integrated from the very beginning as it could have been, do the basic building blocks for it and then hire somebody that can accelerate the growth.
We cover a 400-mile span, from our location at the end of Cape May [in New Jersey] all the way out to Kaiser, West Virginia. You can imagine if you run operations in urban environments, like Baltimore and Philadelphia, that it might look a little different than what you're running out there in Martinsburg, West Virginia, or Kaiser or north central Pennsylvania.
Gold Medal did a series of acquisitions after it partnered with Kinderhook in 2018, but I haven't seen much publicized in recent years. Is more M&A in the cards going forward?
GRUENDEL: Absolutely. So back to business as usual in terms of attracting talent and growing in our markets. You can only grow so fast organically, so this is going to be pedal to the medal for Gold Medal.
We'll look at anything. However, the discipline associated with maintaining the culture [is important]. You can't grow too fast, and we know, from having learned the hard way, about integrating new cultures. Now John's got experience running operations across the entire country, so if you can get on a plane, you can manage something, but our initial focus is growing in our immediate vicinity.
Beyond the two post-collection assets, you're not vertically integrated at the moment. Would a landfill acquisition be of interest if the right opportunity was out there?
GRUENDEL: We're focusing on building best-in-class hauling operations for the most part, and the culture that will sustain us and allow us to acquire talent and therefore grow in what is a pretty tough labor market right now. So yes, vertical integration makes sense — it makes more sense in certain marketplaces — but we're focused on building the culture and our hauling.
Along those lines, what does it take to be competitive on labor in addition to wages?
GRUENDEL: One of the unique things for me is that the trash business is the first business that makes me feel like I'm looking at and talking to Marines. I spent eight years as an infantry officer in the corps. There may be more decisions made out there by trash guys than there are by Marines on the battlefield.
There's so many dynamics in what makes a trash operation go. What we've seen is people crave the authority to make those decisions, the guidance that allows them to understand how to make those decisions and then the supporting technologies that empower them.
One of the things that we wanted in looking for a John was somebody that understood that creating structure and using tools and using data didn't mean taking the decision-maker out of the game. In fact, it meant empowering the decision-maker. So John's philosophy about what he described at the very beginning is a differentiator by itself, because there are a lot of people out there that feel like they're no longer empowered to make decisions. So if you just treat people like good people, in the way they'd expect to be treated, and empower decisions, I feel like you're ahead of the game already.
In thinking about that balance, are there certain types of technology that you don't have now that you think would help further empower the workforce?
GRUENDEL: So the fascinating thing for a guy that comes from other retail marketplaces is [that] the garbage industry is a little bit behind the times when it comes to technologies, and even best practices and the integration of application suites. There's nothing out there that works for the whole suite very well.
But at the end of the day, [we're looking at] traditional customer-service metrics, and the things that allow you to see how to differentiate and make sure you're tracking what your customer needs are, and what a customer experience actually looks like. And then, to John's point, everything that helps us manage and understand the productivity on our routes and provide assistance and tools. So if you've got somebody that's a fill-in driver, he's got turn-by-turn directions.
It's a little bit of a challenge when your cultures are not used to having that degree of automation and accountability that comes with that, but it's also fairly standard fare. If you haven't used those things, then you run into that, but you don't have to be super innovative to make these kinds of things work.
DOYEN: We are going be technology-driven. That's part of the empowering. So our leadership team all the way through to our employees understand what the numbers are telling us, what their overall productivity results are for the day and how it impacts us, and things of that nature. Like Darren was talking about turn-by-turn [directions] on the routes. Drivers want to have that capability to use that tablet instead of the old paper route sheet, and be able to see the next location, and have a GPS, and have it record the account as being serviced, and all those things so that they can see how their day frames up.
In thinking about strategy, you're in market areas with many large competitors. What has worked for Gold Medal on the municipal contract side, and how do you differentiate yourself?
GRUENDEL: We're excited about the [newly awarded] Deptford contract, which is the second-largest contract that we have in New Jersey. So we're excited about the municipal side, but it's hard. Rear-load residential has got to be the hardest thing right now from an operational perspective because of labor. But when you empower the right leaders, you'll find that you'll suffer less. One of the things that [I learned] from being a Marine infantry guy is that when it's cold rain, it's cold rain on the enemy too. Everybody's suffering from this.
We actually just had less turnover than everybody else did. In fact, we didn't have to leave trash on the street until the very end of [this latest pandemic surge], and it was only one day, and kind of due to weather. Everybody else was sending out service issues. In fact, that's really helped change the impression of Gold Medal. Because when it was as hard as it was, we were picking up the garbage. So if you provide the basic, stable service at a fair price, you're going to have a good brand.
DOYEN: You see it in the news, all the myriad of different haulers that are struggling with service issues due to lack of drivers or technicians. And while we have some of those same struggles with a little bit of turnover, or being short a driver here or there, we get everything picked up. We do it all well within DOT compliance and exceed our customer expectations.
Part of the reason why is the culture we built within Gold Medal and Apple Valley attracts people to our organization. Our employees turn in employee referrals, and we hire their friends that are CDL holders or want to get their CDL, and then we retain our employees.
So were you just better staffed than some others to begin with when the illnesses hit in this latest pandemic surge?
GRUENDEL: We did do some strategic retreating in some of our areas. The operation was probably spread out too much from where we were in New Jersey. So we pulled back from some of our northern locations but didn't lose any of our people, which allowed us to have a smaller group of the high-performing folks to go back and serve the areas where we wanted to serve. The municipal stuff's hard, and a lot of the [big companies] are just vacating and not playing. But because of the pandemic, everybody is really starting to understand at the talent level how much it costs to pick up garbage, and then how bad it is when it's not getting picked up. So I think the perception of the cost goes up and, therefore, you can have fair pricing, and you can make a margin on it, so long as your turnover and everything else is okay.
What should people think about as the growth path for Gold Medal in terms of how it might evolve within the region and the broader industry?
GRUENDEL: When you do what I have done, in terms of walk in and try to change the culture of the business, you've got to start by being as honest and transparent as you can. We're private equity funded, and so our job is to go in and grow marketplaces. The good news is that nobody sells anything that's growing. There's so much opportunity here that we don't really think in terms of exit. We're reinventing the business model of support for these larger independent players, both from an infrastructure and a leadership-development perspective.
So right now, we're just focused on how you identify individual markets, how you differentiate yourself there, how you equip yourself with general managers who know how to grow and build those markets, and then the future will come as the timing makes more sense.
So it sounds like you're not talking about an exit any time soon, more so looking at ways to grow organically and through acquisitions?
GRUENDEL: There's a lot of low-hanging fruit that's left on even your best players in the market. So we're going to be doing some innovative things to change people's perspectives about what can be done in a garbage company.
There's often a focus with M&A on engineering returns, but we find the best practices are engineering value. If you're not building it around labor, you have missed the boat. That's going to be the challenge. It always has been the challenge here, but combine the pandemic and this retraction of people from the marketplace — exactly our kind of folks — and the constraints around not just CDL drivers, but diesel mechanics. You've got to build a culture based on attracting the kind of people that want to learn and grow and stay with your company, and in that there is value.