The Lyons share just keeps on growing
PEARSE LYONS starts his day at 3.50am in Lexington, Kentucky, and one of the first things he does is put in a call to the European headquarters of his company, Alltech, in Dunboyne, Co Meath.
His assistant there, Mary, is ready to brief him on emails that came in overnight. It’s almost 9am in Ireland, which gives Lyons a five-hour head start back in Kentucky.
His first US assistant arrives into Alltech’s global headquarters in Nicholasville (just outside Lexington) at 5am, by which time Lyons (68) is out running. He runs every morning, regardless of where he is, usually making it back to complete one fast mile on the treadmill by 6am.
By 7am he is at his desk, dealing with a non-stop flow of communications and appointments concerning the Alltech machine, which reaches into 128 countries around the world, employing close to 3,000 people. This year the group will generate revenue of close to $1 billion, up from $600 million in 2011.
A native of Dundalk, Dr Pearse Lyons – as he is addressed by almost every employee at Alltech, including some who have worked for him for several decades – is a self-confessed workaholic. Dubbed “the energy bunny” by his close friend (and household name in the US) basketball coach John Calipari, Lyons is constantly on the go.
When he is not in Kentucky, he is on the road – sometimes up to 300 days of the year. He hops from Alltech location to Alltech location (a growing list) in his Gulf Stream jet, often accompanied by an entourage of senior management, accounting, legal and marketing staff.
Right now, Alltech is on a buying spree – snapping up companies all over North America – as it seeks to expand the multiple strands of its business.
Getting a handle on exactly what Alltech does is difficult, simply because it does so many things. But at the heart of it all, as Lyons himself will tell you, is yeast.
“Our whole business is based on yeast,” he says, in his stately office at Alltech HQ in Kentucky, as he began to explain how he got to where he is today.
Lyons studied biochemistry at UCD in the 1960s at the insistence of his mother (“I was a reluctant university student,” he explains) and graduated with first class honours.
Having worked for Harp lager in Dundalk while he was studying, Lyons decided he would become a brewer. So he went to the British School of Malting and Brewing in Birmingham and did a doctorate in brewing.
After qualifying with his PhD, he went to work for Irish Distillers, which he describes as “a dream job”.
“They were building the new distillery in Midleton and there were three or four of us on the design team. I was the process person on the team. It was magic,” he recalls.
Returning to UCD to study commerce by night, Lyons subsequently left Irish Distillers to take a much-coveted place on UCD’s newly-minted MBA programme.
He hated it, and dropped out, going back to brewing and taking a job with a company in England.
“I got to know the brewers again. My job was to go out and ask them, ‘What’s your problem?’, and develop products to solve their problems,” he explains.
A short time later Lyons was asked to move to the US, where he did the same job for another three years, based out of Kentucky.
In 1980, his employers offered him a small shareholding in the company. But his uncle – an entrepreneur – advised against it. “The sprat to catch the salmon, he called it,” recalls Lyons.
It was then that he decided to go out on his own.
“I gathered together my money, and went back to doing what I’ve always done, which is to ask a question and come up with a solution,” he says.
With an initial investment of $10,000 and enough money set aside to pay the mortgage and buy groceries for the family for a year (by this stage he was married with two children), Lyons used his fermentation expertise to continue helping brewers.
“We started in October and we were in profit by Christmas,” he says. “We had to be in profit by Christmas.”
Not only was Lyons in profit by Christmas, but he did a million dollars worth of business in his first year. “And that first million became two ... We have never, ever had a month where Alltech has not made a profit, a good profit,“ he says. “We’ve been growing at 20 per cent for the best part of 30 years.”
Carlsberg don’t do private companies, but, if they did . . . Alltech would have to be a contender.
Along with solving brewers’ problems, Lyons was also bringing the science of yeast and fermentation to the world of animal nutrition. He began creating feed supplements that would, among other things, aid animal digestion.
By 1985, the animal nutrition side of the business had superseded the alcohol side in importance “even though there are similarities between the products on both sides”, Lyons notes.
Today, Alltech is one of the top 10 animal health and nutrition companies in the world, and the only one focused on “natural scientific solutions” (ie, not pharma).
But the entire Alltech line of products and activities goes far beyond that, ranging from beers, whiskey and Kentucky bourbon to fibre-based corn feed substitutes for chickens; from premium beef bred on the Lyons Farm to Nutrigenomics-based Vitamin E replacements.
It is also involved in crop science, aquaculture, algae and much, much more – even stretching to research into Alzheimer’s (the company will shortly begin stage-two clinical trials on patients in the US). The list is seemingly endless, and is constantly growing.
Three years ago, Alltech added a horse feed supplement to its line of products ahead of one of the biggest events in its corporate history – the Alltech-sponsored 2010 World Equestrian Games, which took place in Lexington.
Originally a $10 million investment, the company ended up spending over $30 million and dedicating more than 70 full-time, Alltech staff (many of them top-level scientists) for six months leading up to the games.
“I knew I could fit it into my marketing budget, and I went for it. It changed the company,” says Lyons, recalling his initial, snap decision to take on the sponsorship role. “It brought $500 million into the state of Kentucky,” he adds.
“That was a very big time for Alltech and a time when [the company] maybe attained more respect from the industry, and from society generally,” agrees his wife, Deirdre, who looks after every Alltech-related design project (from the construction of new buildings to the unique art work that litters every one of them – she currently has 34 projects on the go from Dunboyne to China and Idaho).
“And Pearse absolutely loved it,” she recalls. “He’d be out there at the horse park every morning, driving around, handing out doughnuts on a little golf cart. We called it his popemobile,” she laughs.
Whatever the rationale behind taking on the Equestrian Games (and the company is going big for the games’ next incarnation in Normandy in 2014), there is little doubt that something has given Alltech a boost. Revenues have almost doubled since 2010 to this year’s anticipated $1 billion.
Lyons himself says the secret of Alltech’s success is the company’s ability to react quickly to capitalise on opportunities as they arise. If Lyons sees an opportunity to buy a company, he just buys it – sometimes making the decision in a matter of hours.
“Speed, speed, speed is what it’s all about,“ he says emphatically. “And since we don’t have to worry about outside investors or a board we can focus all our attention on those things that really matter.
“We have not one dollar of outside capital in our business,” he stressed. Oh, and, by the way, Alltech is not for sale – “at any price”.
Lyons has full control. And that’s just the way he likes it. It means he can plough every last cent of profit back into the company, with nobody to stake a claim to it.
“It’s been the fundamental philosophy – just reinvest, reinvest, reinvest,“ he says.
It also means he can buy a Canadian distillery (for which he has not yet found a use) on a whim. He can have an Irish pub (and this is no Mickey Mouse operation) built in the middle of his HQ, or choose the extravagance of an in-house television and multi-media production studio. Walking through Alltech HQ is a bit like walking through the Wonka factory. Each room is more extravagant than the last.
But these indulgences aside (“Pearse’s follies”, as the man himself calls them), most insiders will tell you the key to Lyons’s success is Lyons himself. Staff members talk about having “grown up” at Alltech and how they love the place, how the research being conducted by scientists at the company’s many state-of-the-art laboratories is second to none, and how Dr Lyons works harder than any of them, thus commanding unparalleled loyalty from all of his staff – even though a shareholding in the company will never be on the table.
It is perhaps no coincidence that the Godfather is Lyons’s favourite film. “He’s watched it over a hundred times,“ says Deirdre. “I know he’s worn out at least three copies of it.”
In many ways, Lyons is the Don. A devout Catholic who considers his family his “greatest achievement”, he has full control (and a hand in literally every aspect) of a money-making machine that he lives for. You could well imagine him taking work calls on his daughter’s wedding day.
But Lyons is not as joyless as Vito or Michael. He also has the flair and the charisma of Sonny. At a recent fundraiser for Haiti (where Alltech grows coffee and supports two local schools) held at the Alltech distillery in downtown Lexington, Lyons evoked a bow tie-wearing frontman of the old showband era as he entertained guests with stories of Ireland and Alltech’s push to create sustainable jobs in Haiti.
But while Haiti is the focus of his philanthropic work, Ireland’s plight is never far from his mind.
“The current situation in Ireland is very sad. But it’s over, it’s done, it’s behind us. And it’s a tragedy that the rest of us as Irish taxpayers will have to pay for, for the unforeseen future,” he says.
“Now we have an asset – our people, our location, our wonderful reputation here in the US. We need to use them to generate opportunities for our young people,“ he says, before stressing again that education is the key.
“Let’s put groups together, use the Smurfit School, use the biochemistry talents and let’s create some businesses. But not just in software. Almost by definition it’s transient. We must put some real businesses in place.”
In the next four years, Lyons intends to quadruple Alltech’s revenue to $4 billion, hence the continuing slew of acquisitions (at what many would consider breakneck speed – there have been six so far this year).
And the plan is to do it without borrowing any money. Sounds crazy? Lyons says they can do it.
“Profit to us is a ticket to freedom, the freedom to do things,“ he says.
And despite how off-the-cuff some of those acquisitions may appear, according to his brother (his consigliere, of sorts) John Lyons, “there is always a plan”.
Name: Dr Pearse Lyons
Position: Founder and president of Alltech Inc
Family: Married to Deirdre; two children, Aoife (38) and Mark (35)
Something you might expect:Lyons will receive an Award for Outstanding Achievement from the Ireland-US Council in New York on November 8th
Something that might surprise:Both his father and mother were teetotal and members of the Pioneer Total Abstinence Association