Episode Transcript
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Speaker 1 (00:02):
Grow, Sell and Retire is the podcast for the lazy overachiever.
Bad Dalton, author of the assistant Purchase, True Gravity and Grow,
Sell and Retire, is here to give his twenty five
years of secrets, tips and assistants to take your business
to the next level. This podcast is for anyone who
wants to sell more, work less and make better business.
(00:24):
Now here's your host, Bad with today's GSR podcast.
Speaker 2 (00:30):
Hey, everybody, Beat Dalton Here, Growth, Sell and Retire podcast.
And if you've ever had an Italian ice, if you've
ever had a flavored coffee, you're going to be very
excited to be sat here with me to dake. So
I'm here with Melanie Dulbecco and I come in my
head before the show, I kept on saying tolbuco and
I don't it just goes all there the but of
(00:52):
the Torani company. And I've been following you for years
and years and years, ever since I came back from
Spain and went to Actually, you guys used to be
in Starbucks a lot until they started doing their own brands.
But over to you to kind of walk through family
company been around since nineteen twenty five. And then how
do you come into it and where do we go?
And we'll go into a lot of management and other
(01:13):
things that we've you've worked on. But a fabulous company.
But welcome, Melanie, thank you.
Speaker 3 (01:18):
I'm really happy to be here. Well, I've been with
Tarani for thirty three years. It's a really long time.
And over that period of time, we've grown on average
twenty percent a year, which means that we've doubled in
size roughly every four years. So we've gone from a
very small it was a second and third generation family
(01:40):
business to a large mid market company. So we've gone
from less than a million dollars in revenue to over
five hundred million dollars in revenue and we're just getting started.
So when I joined, I was not part of the family.
It was second and third generation and a wonderful family
(02:02):
in a neighborhood in San Francisco that needed jobs, needed
economic development, and that's what motivated me to talk with them.
I grew up knowing to Ronnie, it's a local San
Francisco barry a brand and I really liked it, but
it hadn't been popularized yet. So when I talked with
a family about my interest in creating jobs, and what
(02:25):
we could do together. They brought me in and we
started on a tear. So here we are all these
years later, having grown the business a lot.
Speaker 2 (02:35):
And you came in in ninety one, so Schultz and
everybody with Starbucks, and it started bringing cafe culture into
Seattle from Seattle in the eighties. So were you guys
able to really ride that wave of cafe culture and
did that accelerate or were you guys at the beginning
when you stepped in, were they still focused on Italian
(02:56):
ice and kind of the novelty side.
Speaker 3 (02:59):
I would say that helped us a lot, and that
we also taught Starbucks how to make flavor drinks. So
up until the nineteen eighties, well into the nineteen eighties,
coffees and European style cafes were very much more traditional.
So I had cappuccinos when I went to college, and
(03:20):
we had invented the flavored latte in the early nineteen eighties,
but we hadn't popularized it. And we had started to
teach cafes, including Starbucks in the Northwest, what to do
with flavor, and a lot of the traditional Italian community said,
you want to do what to your espresso? It was
sacrilegious to even think about that, right, But it made
(03:42):
it approachable and made it fun, made it delicious and
personalized the experience for people. So it got going. Now,
when I joined Trani, you might know us now for
coffee or you might think of syrups. We think of
it as a flavor company, but when I joined, it
was described by the family members to me as a
(04:06):
liquor business. Wow to imagine, right, So I think the
craziest thing that we've ever done at Trani was completely
change our business model. And I think of it not
as a business model but as an era of growth.
It's the way we talk about growth internally at Trani
that every single team member, from frontline team members, hourly
(04:28):
team members and manufacturing, distribution, other roles up through food
science and you name it. Everyone can talk about an era.
And when we talk about the liqueur and cordial era,
we talk about how when prohibition was repealed, we started
making flavor in alcohol. We made Italian soda flavors, and
(04:49):
then we were doing it in another form. And the
craziest idea was to say, look, we've invented this, we
haven't popularized it. What if we shifted the focus of
the business to this new idea. So that was pretty remarkable.
I think that the second generation family member, Harry, said
let's do it. He was a man who was in
(05:12):
his seventies, who had built the success of the business
to that date that supported the family, and decided that
a change would be a good idea. So that's that's
pretty bold and exciting.
Speaker 2 (05:24):
So when you're on this journey and you're going from
this turnover to the mega turnover that you're at now, Yeah,
how do you keep things fun and not feeling? It's
hard to do in corporate I think going from family
business to a big corporate or mid market or whatever
you call it, most people would consider it a decent
(05:45):
sized business. Yes, how do you keep it fue.
Speaker 3 (05:47):
It's a large mid market company. So first of all,
you said one word that we put a red circle
line through, which is corporate. I think business doesn't have
to be corporate, no matter how big we get. Our
whole objective is to keep it personal, to stay connected,
to be connected, and our larger purpose is to build
(06:11):
an opportunity company. We really believe that businesses can and
should create more opportunity and more success for everyone. Right,
not just for shareholders, but for all the individuals involved,
our team members, our customers, our stakeholders. So it's a
(06:31):
stakeholder capitalism model, and we think a lot about our
frontline team members and our internal team members. If we're
doing right by our team, we will be there for
our customers and it creates a generative cycle of success.
Speaker 2 (06:47):
So yeah, that so are you an employee owned company
or it's yes.
Speaker 3 (06:54):
We have a ten percent AESOP, which has been pretty exciting.
So as we've we've gone about building opportunities and job
opportunities and all kinds of career opportunities for people. Internally,
we started off right away when I joined, making sure
that everybody was above market rate pay in all the
(07:15):
different positions, and we look a lot at living wage
and what that target is. We also establish right away
profit sharing and another thing that I think makes a
big difference is bonus for everybody in the company. It's
not typical for hourly team members to be bonus based
on top line revenue and bottom line profitability. That's something
(07:36):
that I think connects us all here. So we in
our town hall meetings quarterly, we share our financials, we
build financial literacy, across our whole team, and people know
how we're doing, and we celebrate successes together, we brainstorm
around how we're going to navigate challenging circumstances. So Bonus Forever, Buddy,
(08:01):
profit trank for everybody. And then when we had the
opportunity to buy what we could of the company ourselves
when there was some when one of the unfortunately one
of our family members at Trani passed away, and we
were able to buy ten percent of the company ourselves
to turn into an ESOP. And that has added as
(08:23):
well to our team's success. So the idea of shared
success is hugely motivating to all of us here.
Speaker 2 (08:29):
So a bit of a tricky one here, But how
about if you were to go back through that level
of success and you were to pick a mascot for Trani. Yeah,
what would you turn it into or what would you
say is of the journey? What does that mascot look like?
How does it feel?
Speaker 3 (08:48):
Yeah? Well, let me start with if I were to
reframe the name of your podcast for us, yes, a
mascot for that Instead of gross, sell and retire, it
would probably be grow, create success for many and pass
the torch. And I think about how we create legacy
(09:13):
how we do other things. I think if we had
to pick a mascot, most of them are kind of
funny characters. I don't think it's a funny, but I
think it's a joyful character. It would be somebody who's
an explorer. It would be somebody exploring the potential of
what could be done. And it's not exploring unknown lands,
(09:33):
it's re exploring the lands that we're already in with
a new eye. So when I think about the way
business is conducted and what I learned in business school,
we work on spreadsheets, we work on income statements, we
work on driving profitability for shareholders, and that is driven
(09:54):
into us at business school, right, But I think long
term success for shareholders starts with success for our team
members and our customers, and that if we keep that
order in mind, that we will generate a lot more
long term success. So it's a rethinking of business, especially
when we get to hard time. So the explorer is
(10:15):
the person who's taking a fresh eye to the lands
that we're already in.
Speaker 2 (10:21):
Awesome, So an explorer. So in that so you have
Lewis and Clark and all these other people. So what
was a best collaboration that you guys came up with
over the last thirty years, whether it was a flavor
collaboration or a branding collaboration, what was one of the
best things that's come up for you. Oh, so we're
(10:41):
working with another company. Yeah.
Speaker 3 (10:44):
I think business is a circle of success, So in
this idea of shared success, I think one of the
most smart collaborations we ever did was to get launched
into the what we call now the cafe era. Right, So,
first we had we had the taste of the homeland era.
When we got started, it was family members bringing recipes
(11:08):
from Italy to an Italian immigrant community in San Francisco.
Very local prohibition is repealed, they both get licensed right away.
We didn't bootleg. We always did things when they were
legal and right right. So then we go into the
liqueur and cordial era. We moved into the cafe era,
grew like crazy. We're in a new era now. We
(11:30):
could talk more about that, but when I think about
how we launched the cafe era and the collaboration there,
we didn't have enough resources to go to market completely
on our own. We had to figure out a scrappy
way to do that, and I think where a lot
of small businesses get into trouble is when we borrow
(11:51):
too much money or we get outside financing that says
go go go, because outside financing can take a lot
of risk, right, and they might invest in many companies
and just say go go go, and we get ourselves
into trouble. So I think more, how do we bootstrap
our way to that growth? So not only have we
(12:12):
gone from a small company to a large mid market company,
we've done it through our own cash flow.
Speaker 2 (12:19):
Wow.
Speaker 3 (12:20):
And the way we went to market was through collaboration
with coffee roasters. So they were already in cafes, educating
on their coffee, they were making deliveries. Rather than borrow
money to invest in a fleet of trucks and try
to figure out the whole normal like, this is the
way you do it? We thought, why don't we collaborate
(12:40):
with coffee roasters. This is an added sale for them.
Let's think of them as our extended team, and let's
build a team that works with them. And that way
we could really get it rolling. And it worked. Now,
many many others followed in those footsteps afterwards, but we
were the first to do that, and it created a
(13:03):
whole way to go to market that was shared. So
nobody'd ever heard of a vanilla a latte, yet nobody
had gone through coffee roasters to go to market in
that way. So it created a circle of success, putting
cafes and Barisa's at the center.
Speaker 2 (13:21):
So when you're doing this, because you guys are also innovative,
because you like one of the you were one of
the first sugar free syrups that I saw out there
way back in the day. So when you when you're
in a how do you innovate or how do you
you guys look at things and say, actually, we need
to go in this direction.
Speaker 3 (13:39):
Yeah, so, oh my gosh. We love flavors so much
and getting flavor to people that allows them to have
flavor in the way they want it. So we think
of flavor in two ways. One is flavor is obviously
what we make, and I'll tell you about how we
innovate that. We also talk about flavor being what we bring.
(14:00):
So each person brings their own flavor, Each person has
their own way of expressing themselves, and we want to
make sure that we're offering flavor in a lot of
different ways. So, yes, sugar free was a really important
project for us. Having lots of different flavors in different
formats is important to us. And then when we're working
on unique flavors, something that's new, we have a gold
(14:21):
standard process. So I don't know if you're familiar with
our flavor of the year, No, you might not be.
So this is a project that's really fun for our
team and fun for our customers. So each year we
think about what is an up and coming flavor or
what is a signal of the times in terms of flavor.
(14:41):
In twenty twenty four we launched Galaxy. It's our first
fantasy flavor. Okay, there was a lot of talk about
space this year. We had an eclipse and we thought,
you know, there's a lot of knowledge about the g alexy,
but what would it taste like. So our food scientists
(15:05):
worked with space scientists to try to understand what the
taste of space would be. Now, normally, if we have
something like if we're working on a flavor like dragonfruit,
which is a flavor we have, what we would do
is buy dragonfruit from the store. We might talk with
Vietnamese cafe that we're friends with and say, how do
(15:28):
you think of dragon fruit? What are the best dragon
fruit products you've had. We have a gold standard process
where we taste and we figure out what that true
taste would be, We describe it, and then we replicate
it by working with flavor companies from around the world,
and then we mix the right flavors together. Now with Space,
it's a little bit different, so we know. We worked
(15:50):
with them to identify that there's a compound in space
that's also found in raspberries. So that way we could
take raspberry as the bay flavor and create a fantasy
flavor that pat raspberry a little hint of rum, non alcoholic,
but a little hint of rum flavor which is also
in that same compound, and then add some minerality to it.
(16:13):
So it makes a really fun soda or it's great
in an energy drink, or you could put it in
a white mocha or something like that, and coffee drink
as well.
Speaker 2 (16:23):
Very nice.
Speaker 3 (16:24):
So it's really fun to create new flavors.
Speaker 2 (16:27):
So then on that same line of innovation and everything,
how do you guys fail fast or how do you
say that actually doesn't work at all, or or if
the public says we're not buying that, or we've moved on,
or something goes wrong, how do you fail faster? How
do you move on?
Speaker 3 (16:46):
Yeah, that's such an important concept and it's one we've
learned again and again. I think the way we innovate
has changed at different sizes of company, different resources, different
stages of growth. First we were our own best consumers,
working directly with cafes, figuring out what the needs were
(17:07):
and moving pretty quickly. Then when we got a little
bit larger, we had to start thinking about how do
we learn before we go to market so that we
can fail early when it's not costly. Right, So that
might be a go to market test with a series
of cafes. That's what we did before. To launch things,
(17:30):
we would start with a smaller volume with a few
places to test something out. Now, at this stage of growth,
what we think a lot about our consumers and what
consumers want. So we're in the consumer era now, and
for us that means not only do we want to
be in people's home kitchens, which we really do. We
want to be in people's homes, we want to be
(17:51):
within arm's reach of flavor. But we also have helped
our cafe and drink shop customers grow by really understanding
consumers well and saying you know what, here's what your
young consumer is looking for. So we do a lot
of original research and we look at what the trends are,
what people are drinking, like right now, coffee. If you
(18:13):
are a person in your early twenties, you're not going
for coffee probably you might be you might be going
for cold coffee drink, but you're probably reaching for an
energy drink with flavor in it. That's really popular. So
we want to make sure that at this stage we
have the right information about consumers, and then we might
learning launch things online with a small group of consumers
(18:37):
or with one of our partners so that we identify
what the right consumer aspects are and then test it
out and then hone it, hone it, hone it before
we do a major launch.
Speaker 2 (18:50):
That's awesome. So when did we transition because you just
went from cafe era, know you want to talk about
now consumer era? When did when did we transition from
cafe era which the Shultz and you guys and everybody else,
and then when do we go from that era to
now this the pink fluffy drink era or consumer era?
Speaker 3 (19:09):
Yeah, so you know there are all these there are
all these hurdles of growth, and I found that the
eras really help us focus and make choices. Right, so
we're strategy geeks around here. We love strategy and strategists
means that we're making really good choices about where we're
(19:30):
going to focus. So the ERA helps with that. The
other thing that we've noticed is that that at different
sizes of company, we have to really rethink our leadership.
So when we were knocking on the door of fifty
million dollars in revenue, and now we get hit that
in a month, right, But when we were knocking on
(19:52):
that for the year, it was a really big change
in leadership style for me and for our team. We
had to really think about how do we build out
more leadership in the company and more shared leadership and
shared approaches to our projects. I would say that again,
it happened at about one hundred million dollars in annual revenue.
(20:15):
At two point fifty was another breaking point for us,
and then we started to learn about how it would
be at five hundred million, which is where we heard.
The next breaking point was now we're hearing it's a
billion for the next one. So we learned by going
and talking with people who've been there, done that. What
did you experience when you shifted from this size to
(20:35):
this size? What did you learn? What worked? What would
you do all over again because it didn't work? And
what we learned at this stage is it's all about scaling,
culture and connection. So that's where we are now. So
that's that's a subtext to the era. So in the
(20:55):
cafe era, we reached a point where we had a
lot of competitors, like we all reach that in business
at a certain point. Right, you create a category, new
competitors come in, great, it should make us better and better,
and then we start to reach a point where we
realize to really do well, we need to add more value.
(21:17):
How do we add more value? And our whole goal
is not to sell. What we see happening with smaller,
smaller companies all around us is that they reach a
particular size where it's hard to grow, and they'll sell
out to a huge company, a goliath, a big and
(21:42):
they get gobbled up and the culture and what made
them special gets gobbled up into the spreadsheets. We don't
want to do that. We want to create a business
that can sustain itself for a long term success and
sustain the team, mem our customers, our stakeholders, our shareholders,
(22:04):
the community, and be successful in the long run. So
this idea of passing the torch at some point in
time and in the cafe era, we weren't going to
be able to do that if we just stayed where
we were, So it was a big internal debate. We
had a lot of people who said, let's just double
down on this and keep it going. And what we
(22:25):
realized when we hit the Great Recession was not only
did we hit a bump in the market, but our
business model was going flat as well. And why not
use the opportunity of the Great Recession to reset the
team and say it's time to innovate how we operate.
(22:46):
So let's hold the business study. In our now ninety
nine year history BD, we've never had a layoff and
we tend to make it through every business challenge with
team members first. So we know that in order to
grow on average twenty percent a year, we need to
retain our team. We have a very high retention rate,
(23:07):
so there's magic and having people who've been here a
long time and people who joined the company with fresh
ideas and approaches that's the way we keep that mix going.
So when we were hitting this this flat time, right
with the threat of going down in revenue, we really
we went out and explored for a year what have
(23:32):
other companies done when they've hit this point? How have
they innovated?
Speaker 2 (23:36):
How they are as you're going through this, I want
to interrupt because threads great. Where did you go? Where
did you go to find this? Because I think that's
what a lot of people have a hard time saying,
going to somebody and saying I'm having a problem, could
you please help? Or how did you solve this? People
don't have that friendship group typically, So where did you
go to find that information?
Speaker 3 (24:00):
Me? It started personally and then went to team. So
back to that time when we were knocking on the
door of fifty million dollars in annual revenue. I reached
a point where I was feeling uncomfortable with how we
were doing things and I was working. I was working
all the time, and we weren't going to be able
to grow if I didn't do things differently. So I
(24:20):
did join a CEO peer learning group that helped me
reflect a lot better, and I started to talk with
people who'd been there done that. So I said, hey,
you know Cliff bar down the street. Their CEO went
past fifty million dollars. They are now one hundred and
ten million dollars at the time. Can you make an introduction?
(24:42):
I talked to our banker, can you make an introduction?
I'd like to go talk with the CEO there? And
then I started to do that. I called people, I
hopped in my car at conferences. I would talk with
people after talks, and I learned from people who'd navigated
that particular, that particular inflection point. Right. So what happened
(25:05):
at that next inflection point is rather than do that
on my own, we did it as a team, and
it created something that we now call learning journeys. We
didn't call it that at the time, but we fashionated ourselves.
We said, Okay, what are we trying to do? What
is the purpose? What are we trying to learn about?
What are some of the key areas of learning? What
are some of the questions? Now, if we could talk
(25:28):
to anybody, who would it be? And we scoured books
and conferences and all kinds of things, and we said,
let's pick up the phone and call these folks. Let's
call let's call Chris at Ido, who leads their food practice,
and tell them we're on a learning journey and see
if and you know what was amazing. People said, you're
(25:49):
doing what? Okay, yeah, we'll talk with you about that,
because they were they were curious about how we were learning,
and we ended up making all kinds of friends along
the way. So what we did at the end of
that year is we downloaded our learnings, we figured out
the key learnings, and then we uploaded them to new
strategy and we entered the consumer era with a whole
(26:10):
new business model. We're in the process of doing that
again now, and not because our business model is worn,
but because we see the market changing so quickly, we
see technology advancing really quickly, and we see that young consumers,
especially in their teens and early twenties, are so different
(26:32):
than the generations before us that we're learning all over
again about what the future might look like so that
we can build for that future.
Speaker 2 (26:42):
So if we talk about that, what are you guys?
How are you using technology in the business and technology
for yourself? So let's talk about the business, and then
how about you as a CEO, what are you doing
to make it so you can focus through times like this,
and we'd be able to help us and talk to
(27:02):
people like on Gross Ollwing Retire podcasts. So you know, yeah,
you're building time into your schedule to do fun and
cool things.
Speaker 3 (27:10):
Yeah. Well, you know, we all have to support each
other and get through these tough moments. And if we
can have more people that operate their businesses for long
term success with a people first focus, then that's what
we live for at TRANI. We really think that businesses
(27:30):
can be run more successfully with a different focus, so
we want to talk about that. So in terms of
technology focus strategy, it's really important for us to start
with a vision of success. So we look at what's
the context of the era we're in, and then we
always look out five to seven years, what what does
(27:52):
success look like like? Right now we're working against twenty thirty.
We had a twenty twenty five vision. We're right on
top of it and we're hitting it. So we a
couple of years ago we created our twenty thirty vision
and then we look at that as the context within
the era, and then every year we do a three
year plan and we talk about is this and what
(28:13):
are the five or six strategies that are our focus?
What are we focused on? So we pick five or
six things and we talk about them, and each year
we say is it a tweak? Our strategy is working
so it's just a tweak, or is it an overhaul?
And then we enlarge the group and then we do
an annual plan. Right, so we start with a group
(28:36):
of very long term strategic thinkers, about a dozen people.
Last week we had our we had our planning for
next year, strategic planning for next year. We had a
group of thirty eight people.
Speaker 2 (28:49):
Wow.
Speaker 3 (28:49):
And what we think about is, if you're a leader
in TRANI, your role is not just to represent your function.
It's not just that you're from it or you're from
manufacturing or you're from marketing. You are a leader across
the whole company. So your role in that meeting is
(29:10):
not to represent your function, but to learn about these
strategies that maybe you're uncomfortable with because you're not that
familiar with them. But if you can talk about the
strategies with your team, that's exactly what we want. And
also you'll be able to ask the right questions so
that we can make the strategies clearer. And then we
(29:30):
create cross functional teams against them and then we go
like crazy. So it's like stretching a rubber band and
letting it go. When we have so many people aligned
on where we're headed.
Speaker 2 (29:41):
That's fabulous. Okay, So we're coming to the end of
the podcast, and we always do the rewind moment. So
if you can give us one thing, So if they
listen to just the last minute of this and they think, actually,
Melanie sounded really good, I'm going to rewind and listen
to the whole thing again. What's your top tip or
your thought. I think I can get it, but I
(30:01):
want to how do you bring us into it? So
your top tip or rewind moment from Melody.
Speaker 3 (30:10):
I have two ooh, look at this, I have two.
The first one would be if I could rewind my
own trajectory or this podcast, I would go back to
learning from the start to always talk with people who've
been there, done that. It doesn't mean you have to
(30:30):
follow their way, learn from people who've done it all
different ways, and decide what's right for you right and
then as that explore, use your own compass. When I
think about what drives us and motivates us, purpose and
having a sense of purpose and what we're building for
the shared success of many motivates us to run our
(30:52):
business and make different choices rather than purely looking at
the bottom line and running it from an income statement.
We've had very good long term many years and a
good trajectory of financial success based on operating on principles
of shared success and people first. So I would say,
(31:15):
get comfortable with your own compass in making your choices.
Speaker 2 (31:19):
That is fabulous. Belli Dbeco. That was fabulous to have
you on the Gross Selling Retire podcast. Thank you so
much for your time and your amazing thoughts. It was
great to have you on.
Speaker 3 (31:30):
Thank you, b D. It's really great to be here.
Speaker 1 (31:35):
Thanks for joining us on Grow Sell and Retire. For
more information tools or to book one of our team members,
to work with your team business, or to speak at
your event or conference, visit rockfind dot co dot uk.
If you like the podcast, you'll love one of BD's
three books, The Assisted Purchase, True Gravity, and the book
The podcast is based on, Grow, Sell and Retire. If
(31:59):
you want to work for the rest to your life,
that is your business. If you don't, that is ours.