Being the president of a family owned business that opened its doors over a century ago has advantages. One of the most significant is the institutional knowledge and the confidence to forecast further than the next quarter or even the next fiscal year.
In the midst of this pandemic that is unprecedented in our lifetime, it is often difficult to see beyond the loss of life and the businesses that are struggling with losses or closure. None of us are completely immune to the devastating economic impacts.
Losing our entire school business last spring was tough, and as we approach the end on 2020, none of it has come back even as many children have returned to in-person learning. In total, we lost 85% of our foodservice business, and even on the most optimistic days, I know that it will take a long time to return; if it ever does.
I am here to tell you that businesses don’t get to 106 years and beyond without seeing ups and downs. No matter how dark the outlook may be at the moment, the sun will shine again.
Investing for the future
There were some on my leadership team who may have questioned my decision when I tasked them with investing over $1.5 million of unplanned funds into our infrastructure. For Velvet Ice Cream, it is a significant investment that while difficult to swallow during a hard time, is nonetheless necessary for today and, more importantly, as we look to the future.
We noticed that one trend in the dairy and frozen foods business was the increasing importance of food safety. It may have started with the ridiculous viral videos of product tampering that plagued several brands last summer, but in a COVID-19 world, it’s becoming even more critical. We have always had a safety-first mentality both in terms of our products and our work environment, but we needed to push even further.
As a result, we invested in a new filler machine to fill our 56-ounce cartons, and one that could add a freshness seal to our ice cream. We feel that it will be a point of differentiation and a selling point, but more importantly, we felt like it was our duty to add tamper-safe protection.
In a previous post, I wrote about the importance of diversification in our business. While we saw a virtual decimation of our foodservice business, our ability to quickly pivot and increase production made us invaluable to our retail partners.
I asked our team to build a larger stock position so that we could have plenty on hand, but there was a time when our ice cream was leaving our facility as quickly as we could make it. It led to having very fresh product available on the shelf and, in some cases, customers were purchasing ice cream that was only five to seven days from production to home freezer.
While there may have been some who viewed this upswing in the retail space as temporary, we see it as an unexpected but very real outcome of the pandemic. Customers are buying more and they’re buying larger. This equates to a 25-45% increase in our in-home demand, and we weren’t set-up to service our partners or our customers at that level.
We started to meet demand in the form of a new churn freezer that significantly increases our efficiency and allows us to produce more in a shorter time. Just as a cyclist wouldn’t want to put old tires on a brand-new frame, we purchased a Hoyer hardening tunnel and upgraded our conveyor system to ensure we can handle the additional demand all along the production cycle. Similarly, we have been upgrading our floors and our drains in our factory to complete our floor-to-ceiling makeover.
Reason for optimism
The work hasn’t stopped behind the scenes for us, though. We had to deal with canceling the 2020 Utica Sertoma Ice Cream Festival at Ye Olde Mill, which would typically bring over 40,000 guests to our site in one weekend. However, we are optimistic that we will be back to welcoming over 150,000 visitors annually and need to make sure we’re ready for them when they’re ready for us.
With a new roof and office infrastructure for our team, new bathrooms and a brand-new renovated museum for our guests, we feel we have done the best we could with the cards we were dealt this year.
There’s no question that COVID-19 has been devastating to our country and to our respective businesses. Looking back over the last 106 years of Velvet Ice Cream, I am confident in saying that “This too shall pass.” I am excited to share some of the capital investments and improvements we are making at Velvet Ice Cream and encourage you to think about how you’re preparing for the coming sunshine.