Home and Away
Perry’s Ice Cream is a regional brand favorite and a nimble co-packer.
by James Dudlicek
Brian Perry knows what it takes for a smaller regional processor, like the one his great-grandfather founded in 1918, to survive in this age of industry consolidation: corporate professionalism.
“Our company, unlike so many other family-owned regional businesses, has been able to grow to the next level of professional management,” says Perry, executive vice president and vice chairman of Akron, N.Y.-based Perry’s Ice Cream. “A lot of times, family members of the older generation want no part of that. They’re stuck in their ways and don’t want to change and won’t hesitate telling their employees who signs the checks. They can never get from the entrepreneurial stage of the first generation to setting up departments and giving department managers the autonomy to make decisions.”
A combination of nurturing family management and sophisticated corporate structure has served Perry’s well, yielding $73 million in annual sales with some 450 SKUs for its own brand and others, encompassing packaged ice cream and frozen novelty items.
The brand leader in upstate New York and Buffalo’s hometown favorite, Perry’s not only has the pulse of its consumers but has proven itself a nimble contract manufacturer unwilling to shy away from challenges that clients might throw its way.
“Last year, we put our operations team to a challenge and picked up some ice pop business,” Perry recalls, as an example. “To be able to create the capacity, give the customer the quantities they needed and not affect our current level of customer service, a new production team was assembled to run Friday afternoon to Monday afternoon around the clock. They pushed themselves, and within three weeks, we were up and running 72 hours straight. In past years, we wouldn’t have even attempted it.”
Strike Up the Brand
Perry’s offers a wide assortment of flavors, from time-honored favorites like vanilla and chocolate, to the decadent creations in its Pastry Shoppe line, to seasonal favorites and regional delights with which hometown consumers can identify. Perry’s also has advanced the cause of portion control with the All Mine half-pint line of upscale flavors and expanded better-for-you offerings with its successful Carb Delite line of reduced-carbohydrate ice cream.
“We just converted our half-gallon line to a 56-ounce brick. That hit the marketplace in January,” says Bob Denning, president and chief executive officer. “Our Perry’s Temptation pint line is a premium ice cream with a high level of condiments at a value price point. It has filled a niche in the mid-market away from superpremium.”
Denning says sales of low-carb ice cream are softening in pints but holding steady in 56-ounce in the supermarket channel. In fact, the Carb Delite line is expanding to include Peanut Butter Cup as a new packaged flavor and Raspberry Truffle Bars as one of two novelties new to the line.
The next step for Perry’s, as well as other ice cream makers pursuing the better-for-you segment, will be a combination of reduced sugar and “light,” or lowfat, products, Denning says.
Meanwhile, the company does a booming business in sherbet. “We have dominant market share of sherbet because we have stuck with a formula that is the best tasting, bar none,” Denning says.
What gives Perry’s an edge against its competition? “I think it would be our unique flavors and commitment to great taste,” Denning says. “We change our flavor offerings four to six times a year. We try to stay in touch with local flavor trends and create a buzz that resonates with the community.”
The company creates special flavors for institutions in the region, such as ‘Cuse Crunch, for Syracuse University, as well as other projects for the Buffalo Zoo, the Buffalo Sabres hockey team and the AAA baseball Buffalo Bisons. “We try to maintain that touch to the local community,” Denning says. “And we’re quick to respond to trends. In fact, we first developed our Pastry Shoppe line with cake-based flavors several years ago and now the large national brands are jumping on the bandwagon.”
Selling points for the company go beyond the ice cream itself. “We talk about cooking ice cream the old-fashioned way. It’s still vat pasteurized. It has a creamier taste and holds up in the distribution channel better,” Denning says. “We’re a local provider of jobs and we’re involved in the community; we participate in hundreds of events a year, either through product donations, volunteers from our plant serving samples of product to people or taking our own marketing tour — a scoop shop on wheels. Then there’s our Ice Cream Bowl to benefit pediatric cancer research.” This annual city festival lets people sample all the ice cream they want for a $5 entrance fee, along with music and activities for all ages.
Beyond its packaged ice cream, Perry’s also provides product for a string of independently owned dipping stands throughout its region, some flavors made exclusively for these seasonal venues. Rounding out Perry’s offerings is a broad range of novelties, from ice pops to sundae cones to the Buddies line — sherbet with a vanilla ice cream core — to the newest creation, Simply Vanilla — just rich superpremium vanilla ice cream on a stick.
“Our success really has been due to an unyielding commitment to quality,” Denning says. “[Company chairman] Tom [Perry] has passed that to us, and his father and grandfather passed that to him. H. Morton Perry [the company founder] always said, ‘Are you putting enough of the good stuff in it?’”
Leader of the Pack
Perry’s output consists of about 70 percent branded product and 30 percent private label and co-packing, Denning says, divided into two divisions: direct-sales distribution and manufacturing.
The company manufactures ice cream for a wide range of grocery retailers and national brands. “We currently have 13 co-pack customers across a wide range of products,” Perry says. “We’re big enough to be competitive — give a competitive price — yet our machines aren’t as big as some larger independent companies. So it gives us a niche and the ability to co-pack for other like-minded, quality-committed companies.”
Denning describes Perry’s as a turnkey co-packing solution, “from ordering ingredients, coordinating packaging, to delivering to their warehouse or store, to full-service R&D assistance.”
Perry elaborates: “Once we pick up a co-pack account, it’s a hands-off process for them. Once a forecast is given to our production and planning group, we work them into our plant in time and make to ship prior to their due date. They don’t have to worry about ordering packaging or anything else. Once you give us your forecast, we’ll get the product to you as you request.”
All bases are covered, explains Robin Waite, quality control team leader. “We like to get the R&D group and the QC group involved right at the beginning, meet with the customer and understand what their needs and expectations are,” she says. “We also are looking for where they’re going to distribute the product and how that affects us for licensing and regulatory concerns. Once we determine what the needs are, a bill of materials is developed and samples are made.”
The Perry’s co-pack team encompasses folks in charge of manufacturing, purchasing, quality control, finance and forecast analysis. “We’re extremely team-based here,” says Kevin Thomson, manufacturing team leader. “One of my responsibilities is to provide the team with as much business information as I can to help them make decisions, and analyze how well we’re operating to execute long-term strategies.”
The team structure is part of the corporate framework that keeps Perry’s competitive with larger players. “In the old days, I used to do everything, from soup to nuts,” Perry says. “Today, with a phone call, anyone at this table becomes part of the process. I’m confident in what they do. I’m just feeding the group, and they take it from there. It makes us pretty nimble.”
The company’s level of service and expertise offered to customers is “an intangible you can’t replicate with a national player,” says Ken Kwarta, vice president of sales. Perry’s stresses four key areas: ease of doing business, quality and consistency of product, dependability and price. “If we can’t address the other three,” Kwarta says. “price is irrelevant.”
An important part of that service is the company’s team of DSD drivers who are crucial as front-line salesmen. “Survey after survey shows our drivers are one of our best attributes,” Kwarta says. “They close the loop. They take pride in their business and it shows day after day with our customers.”
The current corporate structure at Perry’s began in the late 1970s, when Tom Perry — Brian’s father and now company chairman — ran day-to-day operations, and Tom’s brother, Dale, oversaw administration and sales. “They decided they couldn’t run it and make all the decisions, especially when they moved from 2 million to 6 million gallons in a matter of a few years,” Brian Perry says. “They set up a corporate structure, and we continue to develop it today. Bob and I, in July of last year, after nearly 5 years, recruited our team to move the company forward. It’s an ongoing process, but we wouldn’t have been able to get to where we are today if the culture of passing responsibilities from one generation to the next wasn’t already established. We’d still be back fighting fires every day.”
Capacity at Perry’s is up to 15 million gallons annually, even more reason to have a well-oiled corporate structure and talented people to guide it. “We’ve gone as far as Boise, Idaho, to get topnotch management talent in here, and we’re not afraid to go into large companies to bring that talent and experience to our small business,” Denning says. “We do team-based interviewing, with about 15 people on the interview teams. We make sure that, not only to they have the skills and expertise to do the job, but they will fit with our culture.”
In fact, the company worked on its hiring process with a consulting firm that specializes in family businesses. “As a result of improvements to our hiring and training practices,” Denning says, “we have been able to reduce turnover in operations by nearly 70 percent.”
The focal point of Perry’s operational philosophy is QCDSM — quality, cost, delivery, safety and morale — the guiding lights for company employees, or team members, as they’re known here.
This philosophy helps foster a sense of ownership among the team members, and gives them the information and resources they need to run the company and solve problems more efficiently, without routing every decision through managerial red tape.
“We don’t want day-to-day concerns coming up to managers or supervisors,” Perry says. “In fact, we don’t have supervisors any more — we basically have foremen on the floor, team facilitators and the manufacturing team leader. They are capable and empowered to address any problems that arise.
“Part of the QCDSM method is a ‘stop, challenge and choose’ mentality. If you don’t think it’s right, time out — you stop, you challenge and you choose. The leadership of the organization is here to support their choices, not dump it on them and run.”
And team members can share in the company’s success through an incentive program known, appropriately, as Share Our Success, or SOS.
“A big part of our job is trying to provide the information and tools so the team members are running the business and making the decisions,” Thomson says of the team leaders. “Our job is to develop the culture and provide the tools so the team members really run the business.”
The process has inspired employees to go the extra mile. “The more educated they get,” forecast analyst John Fridmann says of team members, “the more information they want.”
Managers ensure they keep getting it, too. “At the town hall meetings we run quarterly, the quality of the questions is very similar to the ones we receive from our board of directors. Our hourly team members are very sophisticated in their questions and the answers they’re seeking,” Denning says. “They thrive on challenges. When we bring them something, they have a real can-do attitude. That’s one of our competitive advantages — a can-do attitude, from the operations team all the way across the board, whether it’s maintenance, machine operators, lab technicians or the mix room.”
For further education, Perry’s in 2002 launched Ice Cream University, or ICU, to enhance the employee training experience. The company also collaborates with other eastern regionals to evaluate each other’s strengths in the face of larger competition.
“Clearly the multinationals are going to continue to grow, and I think for regionals like ourselves, to survive and thrive, there’s going to have to be further collaboration,” Denning says.
The entire dairy industry has been at the mercy of a volatile commodities market. But ice cream manufacturers have been dealt multiple blows, as prices of vanilla and cocoa have soared along with butterfat.
“Last year was the double whammy — a cool summer and high butterfat prices,” Denning says. “We haven’t had ideal weather, and with our dip-stand business, that’s very important.”
Another challenge is competition from a range of sweet and salty snacks vying for consumers’ taste buds. “It’s not a growing industry. You’re losing market share of ice cream — share of stomach — same as the [fluid] milk industry,” Tom Perry says.
Just competing for shelf space with bigger companies can be an arduous task. “We don’t have the deep-pockets of some of our competitors,” Brian Perry says. “We have to rely on the strength of our consumer and our knowledge of the marketplace.”
To better coordinate market-share data, the company is in the process of installing its Early Accessible and Reliable Information, or EARI, system, explains David Hodgson, chief information officer.
A team will be in charge of coordinating all the data on the system that will begin as a sales-reporting system for the company’s 6,800 delivery points and grow from there, likely with a Web interface, as needed. “It will open up a world of reporting opportunities,” Hodgson says.
A significant problem facing the company’s home region is having enough stomachs to satisfy. “Population in upstate New York hasn’t grown in more than a decade — it’s been shrinking,” Denning says, noting also the demise of independent grocers in the area, with which Perry’s traditionally has done good business. “Flipping it to a positive, Brian and I maintain a very close relationship with our top customers. We meet with them face to face. We also both go to dip stands and meet with the dip stand operators. So we have to stay not only close to the consumer as we go forward, but we have to be more closely aligned with our customers.”
Marrying a commitment to manufacturing excellence with sales and marketing excellence will help Perry’s surmount challenges the company faces, Denning says. “We completed last summer a two-year process of rebuilding, reinvigorating, rejuvenating all our sales and marketing efforts,” he says. “We put professionals in place, and as a regional company, I believe that’s another separating point for us — a commitment to topnotch talent that we’ve put in a position to be successful.”
Perry adds: “We’re a regional company that thinks and acts like a multinational company. We know the smaller companies aren’t surviving the consolidations. We see the auction notices coming out. It’s a sad reminder that if you don’t develop a plan for growth, you won’t be around.”
Growth and the Future
Entering new markets, hedging raw ingredients to control costs and maximizing co-packing talents will be important to continued growth for Perry’s, its top executives say.
“One of our strengths going forward is what we can do for private label customers,” Tom Perry says. “We’re small enough but we can still do a very thorough job in something more than just a half gallon, or a 56, as we call them today.”
Diane Austin, vice president of marketing, adds: “As manufacturers get larger, they’re less inclined to take that mid-level private label or co-pack customer because it just doesn’t meet their needs. We’re still in that zone where private label customers are very important to the strength of our business. And we can continue to be flexible enough to meet their needs.”
So, over the next five years, as smaller players get gobbled up and raw costs continue on their serpentine path, where will Perry’s stand?
“We need to be ready to either acquire other regionals or launch into new regions,” Brian Perry says. “To move outside of our current area, we can either do it through acquisition or slow grassroots-type marketing and sales. Either way, our population is shrinking, so we’ve got to expand our pie. Dad has asked for years, how can we predict a 5 or 6 percent increase in sales when people are leaving the area? If that number’s shrinking, how can you predict a larger sales number when we saturate most of the market already?”
Niches created by changing nutritional and health needs also will be important. “If you look at the aging population, we have to respond to the consumers’ changing needs,” Denning says. “We’ve all experienced low-carb; it came about and grew tremendously, and it changed and shifted, and it’s migrating now to a low-carb, lowfat-type product with reduced sugar. So in five years, to survive and thrive, we have to be closer to the consumer. The trends are microtrends — they’re coming about quicker and fading quicker. Regional companies have to jump on those trends fast, get in and get out of them.
“In five years, I see more synergies, more collaborations with other regionals, other super-regionals, to extend reach, to offering varying product capabilities. There are regionals right around us that have different competencies than we do, and I think we will see leveraging of those competencies.”
What is Perry’s most unique aspect? Management seems to agree it’s quality of people just as much as quality of product.
“We believe that the more our team members know about our business, our customers, our products, our competitors, the better off they can be,” Denning says. “We have our team members visit our customers, our customers come talk to our line operators. That commitment to the culture, to an open-book style, commitment to safety and the process.”
It’s about leveraging talent and empowering your team to make the right decisions every day. “It’s people, but you have to have a culture so the people can grow and succeed,” Perry says. “We can hire the best people in the world, but if Bob and I sat here every day and made every decision, we wouldn’t be making the right decisions.” m
Perry’s Ice Cream was founded in 1918 when H. Morton Perry, a broom maker, purchased a small dairy in Akron, N.Y. On his first day, he delivered 29 gallons of fresh milk by horse and wagon to customers in town.
The dairy operated as a home delivery and wholesale business until 1932. That year, Akron High School’s cafeteria manager asked Perry if he could supply ice cream to the school. Excited about the prospect of growing his fledgling company in the midst of the Great Depression, Perry used a family recipe for ice cream that his mother had given him.
Each evening, Perry would make a small batch of mix on the kitchen stove, and he and his son, Marlo, would freeze the mix in a hand-cranked, 2-gallon ice-and-salt freezer and store it for delivery to the school the next day. As demand increased, the Perrys began delivering bulk ice cream to local stores and restaurants in and around Akron.
In the early 1950s, Perry’s was one of the first companies to package ice cream in a round pint container. This package, with a plastic window on the lid, was the first product sold under the Perry’s red logo.
By 1970, the company had outgrown its facility on Pearl Street in Akron. Perry’s acquired an 8.5-acre parcel within the village of Akron and constructed a new storage freezer and distribution facility. Continued growth prompted expansion of this facility, and by 1982 the company moved its administrative, manufacturing and storage facilities to its current home at One Ice Cream Plaza.
Since then, Perry’s has continued to grow and innovate with new products, imaginative flavors and a brisk co-packing business. The company’s primary marketing area is New York state, with distribution in Pennsylvania, Ohio, New England and the Baltimore/Washington, D.C., area.$OMN_arttitle="Home and Away";?>