How’s this for a business plan? Make a gob of money in the summer. Lose a gob of money in the winter. Hope that summer’s gob is greater than winter’s.
That’s how Rich Trotter describes the business of selling Italian ice (or water ice as it’s known around the Philadelphia area). “I was never comfortable with that model,” he said.
There’s no doubt Trotter has a sense of humor, but the CEO of SR Rosati Inc. is serious about evening out the ups and downs of monthly sales. He has expanded his customer base, which includes school foodservice directors across the country, regional supermarket chains and local scoop shops around Philadelphia and the resort towns of the Jersey Shore. And he is exporting a specialty product to Mexico.
All of that has resulted in consecutive years of 30%-plus sales increases. 2015 figures to be a record year, Trotter said. Sales in March were the best ever for this 103-year-old maker of frozen treats based in Clifton Heights, Pa. But Trotter will tell you that he himself had very little to do with the success.
“That’s not false humility,” he told me when I visited him in March. “There is tons of knowledge here,” he said, gesturing to some members of his executive team gathered in his cramped office in a 60-year-old building that includes the manufacturing plant. In the last five years he hired experts in product development, general management, warehouse management, production efficiencies and sales. But more about them later.
Just what is this product that Rosati makes?
“Water ices are frozen desserts that consist of mainly water, sweetener, acidulant, flavor, color and stabilizer,” according to the book “Tharp & Young On Ice Cream, an encyclopedic guide to ice cream science and technology” (DEStech Publications, 2013). “As such, they can be considered as sherbets in which no dairy ingredients are present.”
Rosati packages these ices into 4-ounce cups for schools and 6- and 10-ounce cups for retail. It offers a 2-quart “party pail” and a 3-gallon tub for scoop shops. Acme Markets and Weis Markets are among the supermarket chains retailing Rosati’s products in the Northeast. Whole Foods and Costco have expressed interest in carrying the products.
Mango is the top seller among the company’s 100-plus SKUs. Traditional flavors include lemon, cherry and root beer. A red-white-and-blue item called Patriot Ice is made with cherry, lemon and blue-raspberry flavors. The flavors are courtesy of Vice President Al Everetts.
Five years ago Trotter met Everetts who owned a business in the Wilkes-Barre/Scranton area. He hired Everetts to re-formulate the legacy flavors and to develop new ones, like coconut water ice, birthday cake and mangoneada. The latter is a mango ice blended with a spicy chili sauce.
Everetts also re-engineered the products sold to schools. He removed artificial colors, which won over janitors because the ices do not stain tabletops. And Everetts replaced sugared water with apple juice in order to sell a no-sugar-added product.
Schools, retailers, scoop shops
Schools account for about 60% of Rosati’s annual sales. The company also has grocery store customers and scoop shop buyers. The ices appeal to children and adults. Kids like the sour Cry Babies formulas. Adults go for the traditional flavors.
The decision to get into the school market was to help the company get through the cold months until demand picked up again in the summer. Selling the school product falls to The Three Amigos, Trotter’s nickname for son Sean, Nate Todd and Greg Hoffman. Trotter put them on commission to incentivize them and to give them a sense of ownership in the company. They increased sales from 35% of the company’s annual revenues to 60%.
The three are all in their early thirties and each became first-time fathers at about the same time. They are competitive, but get along and support each other. The Three Amigos travel to school districts across the United States and they exhibit their products at trade shows.
School foodservice directors have a unique set of challenges. They must abide by strict nutrition guidelines written by the federal government, they must serve a great-tasting food that children will want to eat and they have to do it all on a small budget, Sean Trotter explained to me.
The Cry Babies products are the heart of the school line. The product is based on Tootsie Roll Industries’ line of sour candies. While the ices used to be served monthly, they are now so popular that some schools offer them more frequently, Trotter said. An ice counts as a half-cup fruit component, and that can help to overcome some objections from buyers. And because of the nutritional content, the ices stack up well against certain other treats, like cookies or cupcakes. Everetts developed Happy Birthday ice to give schools an alternative to serve for birthday celebrations. The 100% fruit juice product tastes like cake icing. Speaking of this product, Rich Trotter said, “Of everything that Al does, this is the most impressive.”
Following a promotional format that has proved successful for ice cream processors, Rosati developed a seasonal line of ices that schools can serve during specific seasons and holidays. It has flavors for Halloween, Christmas/winter, Valentine’s Day, St. Patrick’s Day, New Year’s and Easter. Rosati also sells a line of sports-themed ices (baseball, football, basketball and soccer) called Polish Fruit Freeze Sport Cups. Rosati developed the recipes and manufactures the ices for TLC Refreshments, a company with about 20 scoop shops. The Polish products have a slightly different texture than Rosati’s versions. Rosati pays TLC Refreshments a royalty; the deal with owner Thomas B. Curyto was done on a handshake, Trotter said.
Exporting to Mexico
The company does not lack creativity. Trotter said the company has ideas for the next three years. Some ideas are home-grown; others come by speaking with customers. One notable new product is the mangoneada, a mango ice with a spicy chili sauce.
At traditional food stands in Mexico, consumers pour a sauce, called chamoy, or they sprinkle chili powder on top of flavored ices. What Rosati didwas to formulate an ice with the sauce swirled into it. Rather than source a chamoy from a supplier, Everetts made his own, tinkering at his workbench to develop a flavoring that delivers just the right amount of heat. When I tasted Rosati’s mangoneada, I began to feel the heat from the sauce on the back of my tongue after the cold sweetness of the mango faded away.
Through a USDA food export program, Trotter met Edgar Garcia, a food broker in Mexico that is selling Rosati’s mangoneada.
(Rosati also sells this product in western and southwestern stores in the United States with large Mexican populations.)
Garcia has lined up customers throughout Mexico, including Sam’s Club and Casa Ley. Garcia said consumers like the Rosati product because it is not too spicy or too sour. It is premium-priced, but below the price of a premium ice cream.
“It’s the perfect balance,” he said. “They recognize it as a very quality product.”
Building a team
Trotter seemingly has a nickname for everyone. Besides the Three Amigos sales team, he’s tagged general manager Denis Collier as Big Dog. He is also known as Batman to Warehouse Manager Rob Tarpey’s Robin. Collier, in turn, calls Tarpey “Rain Man” because of his memory for details, like the Dustin Hoffman character in the movie of the same name. Flavor specialist Everetts is The Mad Scientist.
I asked Collier if Trotter has a nickname. He calls the boss The Ringer, after seeing him in the weight room at the health club. Trotter, who is 22 years older than Collier, was lifting almost the same amount of weight, so Collier said he had to up his game. Trotter is also known as Sean Connery because of his resemblance to the actor. But Trotter complains that he would rather be compared to the younger James Bond version of Connery.
All of this teasing and camaraderie is because of the trust Trotter puts in his employees and the respect he has for the jobs they do. He said he gives each employee general parameters of what he wants accomplished, and then he lets them get to work.
Trotter knows a few things about team building. The trophies that clutter his office are mementoes of his 30 years of coaching youth basketball. He is also a 1977 graduate of West Point, where the business of leading a team can be a life-or-death matter.
After graduating from West Point and five years of service in the Army, Trotter sold Michelin tires and pest control services. Then he joined his father in a soft pretzel business. When his father sold that business to J & J Snack Foods, Trotter went looking for a company to run.
He knew the owners of Rosati’s because they distributed his soft pretzels. In 1997, Rosemary (daughter of the founder Sam Rosati) and her husband, Jim Salomone, sold the company to their son-in-law Dave Schumacher and Trotter. In 2010, Trotter bought out his partner. Trotter took to the road to sell and he hired Everetts to run the plant and mind the store. Trotter said Everetts knows all aspects of the business and is “a Jack of all trades and master of some.”
But something wasn’t right. Trotter had been working at Rosati’s since 1997 and “I felt we were waffling for an extended period of time. I didn’t want to survive, I wanted to thrive,” he said.
While he had top- and bottom-line financial goals, he said it “transcended” that. “I wanted an attitudinal change” within the company.
He didn’t dwell on old times, but Trotter talked about some employees resisting changes he wanted to make. Trotter said he questioned whether he was at fault because he was not communicating his vision clearly or if employees just did not want to follow his lead. Convinced that he was being clear about his direction, Trotter said he gave everyone a chance to buy in. Some did while others did not. So Trotter said he “drained the swamp” of naysayers and made “an overhaul” in personnel.
A business advisor encouraged him to have employees with “skin in the game.” That’s why he went with commissioned sales people. It was the easiest place to start, he said. He and Everetts also looked for individuals with “desperately needed” skill sets. General Manager Collier answered an ad on Craigslist, as did Production Manager Hamed Seresty. Collier brought in Tarpey, a friend from childhood.
The change in mindset from the old to the new was obvious one day when a buyer from Costco called sales specialist Paul Kelly and asked for 100 samples on short notice. Collier was in the middle of a production run, but his team found time to make the samples. Trotter admitted that that would not be unusual for other companies, but it was significant for Rosati.
“Everyone was motivated to do that,” he said.
I asked Trotter if he wanted to make these changes to get the business from mass retailers, or if he secured the business because of the changes. “The second,” he said.
Todd, one of the Three Amigos, said Trotter has created an environment where employees “are taking ownership. They are operating their part of the business as if they were the owner.” He added, employees are asking “How can we grow this company as a family?”
Giving back to veterans
Soldier Socks is a 501(c)(3) charity aiding U.S. troops and veterans serving in the wars in Afghanistan and Iraq. Begun by Chris Meeks, Solider Socks originally sent care packages of tube socks and baby wipes overseas. Since then, it has morphed into an organization that offers cutting-edge medical technologies and educational scholarships to assist wounded soldiers. So-called “wearable robots” or bionic arms and legs allow paralyzed vets and those who lost limbs to be mobile again.
Beginning in the fall, Rosati will begin a promotional partnership with Soldier Socks to raise awareness and funds for the charity.
“It’s a major initiative for us,” Trotter said. “In our small way, we can be helpful to them.”
Committing to a cause like this likely would not have been possible five years ago. Trotter was too busy putting out fires. By getting buy-in to his vision for Rosati Ice, and focusing the sales and production sides of the business on excellence and execution, Trotter freed up his time to look for and find opportunities where he could give back to the community. That’s what teamwork can do.
