Perry's Ice Cream Company Inc.

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Perry's Ice Cream Company Inc.

1 Ice Cream Plaza
Akron, New York 14001-1031
U.S.A.
Telephone: (716) 542-5492
Toll Free: (800) 873-7797
Fax: (716) 542-2544
Web site: http://www.perrysicecream.com

Private Company
Incorporated: 1946
Employees: 290
Sales: $86 million (2006 est.)
NAIC: 311520 Ice Cream and Frozen Dessert Manufacturing

Based in Akron, New York, near Buffalo, Perry's Ice Cream Company Inc. is a major regional ice cream and frozen dessert manufacturer. While about 70 percent of the company's products are sold under the Perry's label, the company also does private label and custom packing work. The company's fleet of 150 trucks also distributes such national brands as Ben & Jerry's, Nestlé, and Häagen-Dazs. Perry's is the dominant ice cream brand in western New York and the company's geographic reach includes the rest of the Empire State, Pennsylvania, Ohio, Virginia, New Jersey, Connecticut, Vermont, and Massachusetts. Perry's 90,000-square-foot plant and eight production lines are capable of turning out 15 million gallons of ice cream, novelties, and frozen desserts each year. The company serves both the supermarket and food service markets, its customers including convenience stores, club stores, vending machine companies, schools, hospitals, and prisons. Perry's product lines are varied and extensive. The company is especially known for its unusual premium ice cream flavors, which include varieties such as Bananas Foster (banana ice cream with brown sugar–cinnamon-nutmeg swirls and banana toffee pieces), Fools Gold (peanut butter ice cream with peanut butter candy swirls and chocolate-covered toffee pieces), Panda Paws (peanut butter "panda paw" cups and swirls of thick, rich fudge), and White Christmas (mint and white chocolate ice cream with red and green mint flakes). Perry's also offers light, no sugar added light, and no sugar added fat free ice cream, as well as vanilla and chocolate custard available at ice cream stands. In addition, Perry's produces several flavors of frozen yogurt and sherbet, and a wide variety of novelties, including ice cream bars and sandwiches, as well as more exotic fare, such as cherry cordial bars and Piece of Cake bars. Perry's is majority owned by the third generation of the Perry family, with a fourth generation poised to carry on the tradition.

EARLY 20TH-CENTURY ORIGINS

The Perry family patriarch, who started the business, was H. Morton Perry, a broom maker. In 1918, he paid $600 to purchase a small Akron, New York, dairy, along with a horse and wagon and the right to distribute milk in the town. On his first day, using the horse and wagon, he delivered 29 gallons of fresh milk. Gradually he built up his home delivery business, and two years later he was able to hire his first employee. He did not become involved with ice cream until 1932, when the dietician at Akron High School asked if he could supply ice cream to the cafeteria. Using a family recipe given to him by his mother, he prepared a batch of mix on his kitchen stove, and then froze it using a common two-gallon, hand-cranked ice-and-salt freezer. The school was pleased with the result and provided Perry with a much-needed sideline that helped to keep the business afloat during the Great Depression of the 1930s. Assisted by his son, Marlo, each night he made a fresh batch of ice cream for sale to the high school. Word spread about the flavorful ice cream and soon he was making bulk ice cream for local stores and restaurants, and the milk delivery business was phased out. In 1935 the company branched out and began producing ice cream novelties as well. A year later Marlo joined the company on a full-time basis after earning a degree from Cornell University.

A major step in the growth of the business was the 1940 acquisition of the Frontier Ice Cream Co. in Buffalo, which gave Perry's entry into the large city market, albeit one that was already populated with a large number of small ice cream companies. Additional freezers and equipment were purchased as the company enjoyed steady growth in the post–World War II era. In 1946 the family business was incorporated as Perry's Ice Cream Company Inc. Perry's distinctive red logo first made its appearance in the 1950s, applied to new round pint containers that featured a plastic window on the lid. Perry's was one of the first ice cream companies in the United States to adopt the small tub format. The ice cream was packed in the company's new freezer room.

A third generation of the Perry family became involved in running the company in 1963 when Marlo's son Thomas joined his father after earning a degree in food science from Michigan State University. He was familiar with the business, having worked for Perry's while growing up. It was still very much a small business in 1963. "I remember saying to dad," he recalled years later in an interview with Business First of Buffalo, "'We're going to be a million dollar business,' and he said, 'Don't worry about that too soon.'" The younger Perry's optimism proved too modest, however. The Buffalo area began to see the winnowing out of small ice cream companies, and in the late 1960s and into the 1970s, Perry's took advantage, acquiring a number of them to further expand its market.

NEW FACILITY OPENS: 1971

For years Perry's had operated in a small plant in Akron but by the 1970s had long since outgrown it. The company bought an 8.5-acre piece of property in Akron and built a new storage freezer and distribution facility, which opened in 1971. By this time, Thomas Perry had been joined by his brother Dale. Thomas became operations manager while Dale handled administration and sales. By the late 1970s, due to the company's strong growth, they found themselves stretched too thin, and began establishing a corporate structure that would grow and remain in place into the new century.

In the early to mid-1980s Perry's enjoyed strong growth, spurred by increasing supermarket sales. To keep pace with demand, the company moved into a new 6-million-gallon-per-year facility in 1982, a significant improvement over the previous 2-million-gallon capacity. In that same year, Perry's supported its novelty business by purchasing a Vitaline machine capable of producing six individual stick products simultaneously. A larger model was added five years later, boasting a capacity of eight "drops."

Consumer concerns about cholesterol in the latter part of the 1980s hurt ice cream sales, which nationwide dipped 8 to 10 percent. Perry's fared better than most, but it was still adversely impacted. In 1988 Thomas Perry succeeded his father as chief executive officer and chairman, and the following year brought in executive C. Jonathan Hauck to restructure the operation in light of market conditions. A self-described mechanical engineer with an MBA who had worked on a number of restructurings, Hauck assembled a new management team to relieve the Perry brothers of much of the dayto-day operational burden of running the company. Revenues quickly rebounded, increasing from $32 million in 1989 to $35.6 million in 1990 and $39 million in 1991. His task completed, Hauck left in November 1991, almost two years after joining the company.

COMPANY PERSPECTIVES

Celebrating your birthday. Hitting your first homerun. Curling up with a good book. Finishing the last load of laundry. For all of life's moments, there's Perry's Ice Cream. Since 1918, the Perry's family has created the one-of-a-kind flavors that make every occasion even better. Find out for yourself why life is a bowl of Perry's.

Aside from the addition of new executive talent, Perry's also installed a new computer system during this period to greatly improve customer service. The previous inventory control system had been saddled with a major shortcoming. Because it was not robust enough, sales representatives could not confirm an order while a customer was calling it in. Instead, the order had to be written down and then entered into the system hours later. Not only was this inefficient, it often caused problems with customers who might think they had an order in place only to be told later that an item was out of stock. In the later 1990s the company decided to invest in a new system, which included a Digital Equipment Corp. computer and a software suite from Datalogix International, Inc., that linked inventory, sales, and other functions. The system was activated in April 1991, and the benefits quickly became apparent. Customer relations were greatly improved, and Perry's order-entry operation improved productivity on a large scale. During the peak summer season the company had typically employed 13 people who collectively worked 30 hours of overtime each week. With the new system in place, only seven people were needed to do the job and they worked only 16 hours of overtime over the entire summer.

A new president came to Perry's in 1994 when Geff Yancey, who had been president of Heluva Good Cheese Company for the previous decade, invested in the company, taking a minority position while the Perry family retained a controlling stake. Also in the 1990s a fourth generation of the Perrys became involved in the business, including Thomas Perry's son Brian and sonin-law Robert Denning. The company continued to expand geographically as well, reaching out to Central New York and into New York City, as well as northern Pennsylvania, New Jersey, and into New England. A major reason for the company's success was the creation of unique and appealing ice cream combinations, many of which were offered on a seasonal basis. In the winter of 1997, for example, Perry's introduced Zero Visibility, a white coconut ice cream with a hint of rum and coconut flakes, and Hot Chocolate ice cream, which combined chocolate butter fudge ice cream with whipped cream flavored ice cream, mixed with hot cinnamon swirls and mini marshmallows. Annual revenues for Perry's by this point reached the $50 million mark.

WORKERS UNIONIZE: 1998

For Perry's the decade of the 1990s was not free of concerns, however. The company resisted having its workers join the United Auto Workers (UAW) union. An organizing drive was defeated by a comfortable margin in 1995, but three years later workers once again voted, and by the margin of 56 to 49, they elected to be represented by the UAW. While management was clearly displeased by this development, the company found a productive way to work with the union. A joint operations-leadership team was formed to bring both parties together in order to grow the business, thereby providing workers with job security and pay increases while improving profitability. Another area of concern for Perry's in the 1990s was its relationship with its neighbors, who were displeased with the foul odors that emanated periodically from the lagoon in the company's wastewater treatment plant. The state became involved in the matter and finally a settlement was reached with the attorney general's office in July 2001, resulting in the closing of the lagoon and a major upgrade of the wastewater treatment facility. Just as community relations improved, however, Perry's experienced a pipeline failure in the early morning hours one day in November 2002 that released about 100 pounds of ammonia gas, part of the plant's massive refrigeration system, creating a strong, pungent, odor. Although no one was harmed, neighbors were inconvenienced, as about 90 people were evacuated from their homes by order of Erie County officials.

KEY DATES

1918:: H. Morton Perry buys Akron, New York, dairy.
1932:: Perry begins making ice cream for sale to the local high school.
1946:: The business is incorporated.
1963:: Thomas Perry, grandson of H. Morton Perry, joins the company.
1971:: New storage freezer and distribution facility opens in Akron.
1988:: Thomas Perry becomes CEO.
2000:: Capital improvement effort is begun.

As the new century dawned, Perry's underwent a number of changes. Yancey left the company in 2000 and Perry's began recruiting a new management team. In that same year, the company announced a three-year, $4.8 million capital improvement plan. It would have to be scaled back, however, when one of its contract customers, HP Hood, lost the right to sell Borden's half-gallon ice cream in the eastern United States. Perry's made up for the loss by increasing its novelty product business, but because these items used less ice cream the company no longer had the need to expand its mix department as had been planned. As a result, capital improvement costs were trimmed to about $3 million, of which $1.2 million was devoted to upgrading the wastewater treatment plant. The rest of the funds were used to expand the novelty division (increasing production capacity by about 22 percent), to improve the company's electric service, and to upgrade the plant processing software.

A major factor in Perry's continued success was it innovative flavors. In the first decade of the new century the company introduced ice cream products that incorporated Andes Candies. Perry's became involved in other "inclusions" as well, establishing a new Pastry Shoppe line of ice creams that included cake, brownies, pie pieces, cookies, nuts, fruit, and other items. Varieties included Boston Cream Pie, German Chocolate Cake, Dulce de Leche Cheesecake, and Lemon Meringue Pie. In 2006 Perry's was recognized by its peers. At the IDFA Ice Cream Technology Conference Perry's won a pair of top prizes in an ice cream flavor contest sponsored by trade publication Dairy Foods. In the Most Innovative Flavor competition, Perry's Bananas Foster took home top honor while the company's Light Vanilla also won in the Favorite Light Ice Cream category.

The Perry family insisted that it had no intention of selling the business, which would remain family-run for the foreseeable future. There were challenges ahead, however. The ice cream industry was not enjoying strong growth, and the field was saturated with products. Moreover, Perry's primary market, Buffalo, continued to see its population shrink. To remain competitive, Perry's would have to continue to expand into new markets, either through internal means or by the acquisition of other regional ice cream makers.

Ed Dinger