After almost 10 years in business, High Road Craft Brands has begun to look outside of ice cream for products. They even purchased another company to fold into their operations.
With a company founded by, and still run by, chefs the opportunity to bring Ciao Bella Gelato and Sorbetto into the High Road Craft Brands family was too good to pass up. Ciao Bella has a long history in food service and it was CEO Keith Schroeder's heart that led to the acquisition of the company.
As the company prepares to move forward into 2020 and beyond, a restructuring of the parent company was necessary. High Road Craft Brands is now the home of 5 distinct brands and the ability to manage those brands, deliver quality products and win in the retail market means raising the game for the entire corporation.
Keith shares the inside stories on the mindset of purchasing another company along with the why and how the restructuring was necessary for High Road to continue to grow its market share moving forward. This discussion touches upon raising capital, what to consider when purchasing another company and thoughts on maintaining proper company structure as you grow and evolve.
This is the third of a three part overview discussion on the launch, expansion and future of High Road Craft Brands.
This episode features host Walter Biscardi, Jr., Executive Creative Director for High Road Craft Brands and CEO Keith Schroeder.
In addition to listening and watching the episode here, you can find Minus Twenty on most audio streaming services and YouTube. Full transcript below.
Full Transcript of the episode. Apologies for any typos.
Walter Biscardi 0:05
Hey folks, welcome back. I'm Walter this is Keith.
Keith Schroeder 0:08
Walter Biscardi 0:09
How you doing?
Keith Schroeder 0:10
I'm great. (laughter) We've been
Walter Biscardi 0:12
What are we looking at?
Keith Schroeder 0:15
we may or may not have shot multiple episodes in one.. you know
Walter Biscardi 0:21
We would never do that.
Keith Schroeder 0:21
Walter Biscardi 0:22
That would just spoil it for everybody if we did it all in one and then we released them over time.
Keith Schroeder 0:27
Oh, that's a bad idea.
Walter Biscardi 0:28
Yeah, it's a really bad (laughter) Alright, so we're on episode three. We're kind of talking through the history of High Road as it gets started. And where we left off in Episode Two. You had moved into this beautiful building. You finally figured out how to operate the machines.
Keith Schroeder 0:46
Walter Biscardi 0:46
Actually you finally figured out that you didn't want to operate the machine you got people to run the machine for him.
Keith Schroeder 0:51
Correct. Really, really talented machine operators
Walter Biscardi 0:55
Really talented. Some of the folks out there are just incredible at what they do. Yes and as Keith mentioned in the last episode, it's not just turn on the machine and run it. They're in there tweaking constantly.
Keith Schroeder 1:08
Imagine I mean, you have tanks filled with flavored ice cream mix. They get run through a variable frequency drive type pump to regulate the flow of liquid. To a continuous freezer which is a large stainless steel unit.
Walter Biscardi 1:31
Keith Schroeder 1:33
Very large cylinder in it. Blades that spin with compressed culinary air which is base, basically filter air going into the machine. So, these machines don't talk to the pump doesn't talk to the continuous freezer and the continuous freezer will pump ice cream, about the consistency of soft serve out to a filler. That has been no idea what it's being fed. It's just a receptacle, basically, or a channel and depositing heads that have have been calibrated to know that ice cream's coming through it, but it doesn't know what the setting is two machines back to the pump and aligning all of that takes a bit of alchemy.
Walter Biscardi 2:24
And there's always a little bit of temperatures are changing and thickness, like even on the fly
Keith Schroeder 2:28
and why, watching that. The line startup is the coolest thing in the world, and there's no one worse here at it than me. I'm the worst.
Walter Biscardi 2:38
So as we said in the last episode, hire people that are smart, and let them do what they have to do.
Keith Schroeder 2:43
I can formulate like nobody's business.
Walter Biscardi 2:46
You can make great ice cream.
Keith Schroeder 2:47
Walter Biscardi 2:48
And actually an amazing chef too.
Keith Schroeder 2:50
So yeah, yeah. So what I wanted to talk about now is like the next growth of High Road because as if running High Road Craft Brands was not enough, you decided to buy another company. You can see actually those of you watching on video, you can see all the brands sitting out here right now, but the one we're going to talk about is Ciao Bella.
Well, there are a number of reasons. This was the specialty food brand that as a chef I was most smitten with. So the history and legacy of the Ciao Bella brand is magnificent. It's been around since the 80s, early 80s.
Walter Biscardi 3:35
And oh I remember that. Yeah, I grew up in New York.
Keith Schroeder 3:38
Yep. So they had a small shop. And then two very talented food entrepreneurs scaled it. And really, I am in my humble opinion, we've not achieved yet the level of magnificence with the brand and the product that they were during that sweet spot growth phase of the business. So we're trying to to both both learn and get it back to its heyday. Then the company was sold to private equity focused in more more on retail. Ultimately some of the strategies that happens in private equity own companies that there's didn't necessarily go their way for the brand. And we didn't want to see it go away. So we figured out how to how to how to bring it in as part of the High Road family and we're, we're we're thrilled that. And so to honor the folks who we think did it the best.
Walter Biscardi 4:46
Keith Schroeder 4:46
we brought back their their iconic design. Then so you know, we made some tweaks to flavor profiles and added some some more currency to to the brand, but Yeah, we're really psyched to own the Ciao Bella brand. We're having fun making gelato and sorbet though and the Italian style and you know are committed to making this the best gelato and sorbet brand on the market.
Walter Biscardi 5:17
So why you know first of all, I mean you've got a very successful High Road Craft ice cream brand and you built quite the following both retail, food service. Why not just make your own gelato and sorbetto, why buy Ciao Bella,
Keith Schroeder 5:37
Couple of reasons. Number one, we believe that there are fundamental stylistic differences in approach to making an ice cream product. So the High Road brand is unabashedly French in approach. So we use a creme anglaise style base custard, it's very high in butterfat. There's something signature about the way we approach the High Road brand. And felt that to be more playful, lighter, brighter we were better off leveraging this, this brand Ciao Bella. And, and honoring the very, you know, Italian heritage of the brand. You know, there's a New York Italian edge to the brand. But we also felt that there was an opportunity to travel and explore the regional nuances of Italy. And that's where we'll be going with the brand as we introduce new new products in the years to come. Is to really focus in on Piedmont and Sicily.
Walter Biscardi 6:57
Oh yeah Sicily.
Keith Schroeder 6:58
Right You know, we have a friend who's there now, you know, all of Lifuria, right. We spend some time every couple of years we go to big gelato conference in Rimini, spend time in Emilia-Romagna. And yeah, I mean, we I think you need an Italian brand to explore Italy appropriately. And part of it is just the it's the heart sometimes you you do things because your heart's in it. And and our heart was squarely in in Ciao Bella and we didn't want to see it go away. And sure we could have come up with a sorbetto brand we could have said High Road explores Italy. We wanted Ciao Bella to live on. So that's why we did it.
Walter Biscardi 7:48
So you know what? I'm sure there's some people listening and watching right now who have a very successful business and maybe they they have an opportunity now that been presented to them where they see another company that they're like, oh, Maybe I want to buy this or absorb. How does how does this work? I mean, what what kind of advice or what, what? What concerns Did you have going into it? And and how did this ultimately come about? Or what kind of advice would you give to somebody that sees something like this on the table? I think I want to bring this into my company what what is the mindset? What are we thinking about.
Keith Schroeder 8:23
My position is yet you need to have a clear vision for what you want to do with the brand and rip the band aid off and shock the system as fast as humanly possible because you could, you could fall into a status quo situation where you acquire a brand and you slowly tweak it over time to allow the consumer base time time to adapt. But things move so fast in today's business world that it was my position today. I wanted to get out of plastic containers. I think they're wildly unsustainable. That that I don't think they're the ideal vessel for for ice cream products. So i like i like the classic paper container. Very opinionated about that for a variety of reasons including you know not not wanting a million square foot warehouse. These cups nest just fine and I think that consumer's more interested in what's inside then and you know whether or not I've selected the perfect unique brilliant innovative bottle shape, right? Good whiskey is good whiskey I don't care what bottle it comes in. So yeah. Ciao Bella represents another avenue. The other thing about Ciao Bella that was really interesting to us is that it was in regions that High Road wasn't. And so for logistical reasons, it made a lot of sense. We got introduced to buyers that we didn't necessarily have relationships with prior. Who are very loyal to the Ciao Bella brand and product line and via our new friend Ciao Bella, we were able to introduce our other our other ideas. It was also our position that buyers were getting tired of meeting with literally dozens and dozens and dozens and dozens of small startups every year. Some of whom are well equipped to get to market and some who aren't. Right. And so I think I think buyers enjoy meeting with companies, independent companies, for sure. But there's a certain level of convenience when you have matured as an organization and I'm when it was our position that Ciao Bella, would help indicate a certain level of evolution and maturity in our company.
Walter Biscardi 10:44
Well, that's a perfect segue into our next topic of conversation, which is actually the evolution of High Road
Keith Schroeder 10:51
Walter Biscardi 10:52
as a company, and we have this nice little suite of products out here. And we're making, we just went through a whole rebranding process. We've made the decision we slapped the table and said okay, the company is now High Road Craft Brands.
Keith Schroeder 11:07
Walter Biscardi 11:08
It's not High Road Craft Ice Cream. And it is now a food company. We're not an ice cream company any longer, just an ice cream company, we are now a food company. So now High Road Craft Brands is at the top of a pyramid of a family of brands. Correct. So let's talk about the mindset of that moving forward. Where did that come about?
Keith Schroeder 11:28
Well, again, I mean, we are, our talents lie, not an ice cream alone but in food in general, that, you know, we have a very talented crew of chefs and culinary professionals here at the business that, quite frankly, have a need to be creative. And you know, like any musician or artist, it's fun to mix up the media that you play with from time to time. And so we decided that it was important to the to the fabric and the culture of our business to permit our creative professionals to invent whatever they felt like inventing. And so the first of those was this idea that I had had years to do a super premium product honoring the culinary fabric of Mexico. When you when you work in major cities around the United States, it is not uncommon to become more fluent, or at least functional and Spanish. Many to most of the family meals and restaurants usually center around all things Mexico. There very, and their lush and beautiful, vibrant regional, personality. And it it is a cuisine like none other. My my personal chef idol I'm a fanboy of Rick Bayless. I think he is magnificent. The other person who I think is just the best of the best is Hugo Ortega from Houston. And I spend the lion's share of my time you did a video with me in a local Latin Latin and Mexican Foods Market. And it is, it is my interest that is those those flavors if I could uproot myself today and just plant somewhere, I'd probably, you know, move to the Yucatan and hang out and learn about the food of the Yucatan for the rest of my life. So we decided to do a product called Helados La Neta.
Walter Biscardi 14:01
Helados La Neta. What does that mean?
Keith Schroeder 14:02
Means la neta is slang for the truth, the real deal, I mean. It's slang for yeah this is this is "this is the shit." (laughter) Right I mean effectively that's that's what it means. A nd you know there there's any range of opinions and emotions when we present the Helados La Neta brand to folks but for folks who are on the more rock and roll side of things they they think it's really fun and playful if not a bit edgy. And so we believe that we've come up with a line of products for a market that deserves something super premium as well. You know, it's not uncommon for quote unquote Hispanic or Mexican products in the United States to be more value oriented. And we you know, we've seen companies like that Siete Foods do some beautiful things there are artisanal masa companies who are importing corn, heirloom corn to make beautiful tortillas. And you know there's infinite amount of food related documentaries on, well you like the Taco Chronicles. You turned me on to that.
Walter Biscardi 14:08
If you are, if you watch Netflix, check out the Taco Chronicles. It's crazy.
Keith Schroeder 15:24
Tears in my eyes. It's just magnificent. And so this was our opportunity to play. And we too have a number of key people on our team. A lot of our ice cream makers here at the business, the most experienced teammates that we have are from Mexico. And they counseled us on here, this is for them, right this is this is effectively their product line. And you know I'm so thrilled with the with the flavor so beautiful avocado ice cream the Ron con Pasas just this beautiful run rum raisin. Horchata
Walter Biscardi 16:01
Horchata, which is out here
Keith Schroeder 16:13
We've got a, you know, straightforward chocolate, but that has that cinnamon tinged drinking chocolate that's so common in Mexico. So yeah, I think we've, I think we've really done a beautiful job. The chefs and the team have come together the designers, and quite frankly, our buyers who gave us a ton of feedback on on this product line. I think it stands out. There was a time where gelato was the only alternative on the shelf and look, it's all ice cream.
Walter Biscardi 16:45
Keith Schroeder 16:46
but it's fun to put the word Helados on the package and bring it bring it in the mainstream where it belongs.
Walter Biscardi 16:54
Sure, sure. So and La Neta will be debuting in early 2020.
Keith Schroeder 16:59
Yes. Yes, we've got ice cream sandwiches as well. Introducing in the single pack The Wallops which are fun beyond belief. You had the opportunity to present them at Dragon Con to the sort of the cosplay crowd.
Walter Biscardi 17:14
Oh my gosh so Dragon Con is the second largest con in the United States. Y'all know Comic Con in San Diego is the second largest. And you can just see by the packaging how well it would fit in that comic cosplay world. And yeah, we had a heck of a lot of fun. The response not only to the product, which was God Damn, that's good. But just the graphic scheme people were stopping by just take pictures with our banners because they were having so much fun with it. So yeah. And now you've got another product coming around the Wallops banner.
Keith Schroeder 17:48
Yes. So now that we have become savvy in stuffing things inside cookie dough. I had this hair brained idea that it doesn't necessarily need to be ice cream in the center. What if we baked them and put brownie batter in the middle. So now you have a chocolate chip cookie or peanut butter cookie stuffed with brownie batter so when you bake it and then you break the cookie in half it's all oozy goosey and and warm, it's
Walter Biscardi 18:20
Keith Schroeder 18:20
Walter Biscardi 18:21
And like you said you bake it I'm showing you some footage right now for those of you watching it you actually bake this at home. So it's awesome you know families you got kids, you want a nice fresh cookie. The best part is don't even tell anybody about they're stuffed just let them bite into it
Keith Schroeder 18:35
right and it'll be in the cookie dough section next to like the Nestle Toll House, log sliced
Walter Biscardi 18:43
And when it when it when you think that's coming
Keith Schroeder 18:45
As soon as humanly possible. So given that this is LinkedIn if you're a buyer, this is Kyle's email address up on the screen, Kyle Baker. And reach out to him and you can be one of the first we have sent that The video to a bunch of people. And the response has generally been I actually got an OMG exclamation point exclamation point exclamation point exclamation point
Walter Biscardi 19:11
You did you send it to me.
Keith Schroeder 19:12
A quadruple exclamation of ooey gooeyness.
Walter Biscardi 19:18
It's because of the video actually because of my starring ability actually eating the cookie
Keith Schroeder 19:22
I agree with I believe you're very handsome you and a cookie.
Walter Biscardi 19:25
I think Rebecca had something to do.
Keith Schroeder 19:26
What could be better.
Walter Biscardi 19:27
Yeah, yeah. Me stuffing my face usually gets a bunch of OMGs.
Keith Schroeder 19:31
We also do private label too. And normally we can't talk about it. But Sam's Club has proudly announced that we're their partner on this product and there's a bunch on our website about our partnership with our vanilla partner in Tanzania. And in fact, I'm headed to Tanzania in a few weeks for a big vanilla conference. And to talk about all the nuances and all the socio political and socio economic challenges around the industry pricing, supply, quality, yada yada. But we are super proud to have created the first ever real Tanzanian vanilla ice cream. Just got a massive supply of it dropped off. It's not not easy to get stuff from, direct ship from Africa to here. But we were learning and we've figured out how to do so and we'll be releasing a Tanzanian High Road. Now that the supply is more vibrant. The next High Road vanilla pint will be using the Tanzania vanilla.
Walter Biscardi 20:41
And for those who don't know a private label just simply means that it is a High Road product actually inside the container but High Road's name is not on the outside. Sam's Club is not the only, we actually do for quite a few but they're the only ones we can talk about publicly. So there are brands across the nation that while it may not say High Road on the outside, it's actually our ice cream on the inside.
Keith Schroeder 21:01
Yes. And it's a lot of fun. We learn a lot by working directly with the retailers and develop a level of intimacy. I think you don't, you don't get by simply selling in your branded product.
Walter Biscardi 21:14
And why is that so important to. I get why why the retailers want to do it because they get a very high quality product inside. But what was the advantage to you selling a product that nobody even knows that's you.
Keith Schroeder 21:27
You become a partner to the retailer and you understand what their needs are. So when it comes time to offer other products to the retailer, you understand their, their shopper, much better than you would otherwise. Because you're typically privy to conversations that that speak to the needs and preferences and behaviors of their, you know, top tier shoppers. .
Walter Biscardi 21:53
Hmm, interesting. Very interesting. So, High Road Craft Brands is now a food company and we now have just just a list of brands again so your High Road Craft Brands is at the top. We've got High Road Craft Ice Cream. We've got High Road Pro. We'll talk about that in a second. We now have Wallops which is ice cream and cookies.
Keith Schroeder 22:14
Walter Biscardi 22:15
Really good. We have Ciao Bella. And then we have La Neta. So what, what does that mean? First of all High Road Craft Brands now being at the top of the pyramid, does this mean anything to our clients or customers? What does it mean to them?
Keith Schroeder 22:29
Well, what I'm trying to say is that, you know, you've had large companies for the past 50 to 75 years that have been affectionately dubbed the big CPG. Right. And it's our position that big CPG has had its day in the sun has dominated what we how we for far too long. And that a cohort of medium sized, independent, more independent minded consumer products companies are better for the retailers. Are better for innovation. Are better for the consumers. Of late have been more authentic in terms of their commitment to real food and real ingredients. Don't spend time trying to cost optimize and overemphasize brand, but to be a little bit simpler and more traditional in approach with a simple quality promise and clear branding and, you know, a portfolio of products that are intended to be a cut above the giant behemoth product lines. So, you know, it's for us, it's about enough money for the big companies. It's about more and more and more and more and more money and, you know, that's the nature of publicly traded organizations. And I think that there, there's a happy medium in there somewhere where you could stay deeply committed to food excellence and still have a very viable business.
Walter Biscardi 24:13
The one thing that I briefly touched upon with High Road Pro and this is it's literally like the latest brainchild just came up last couple days. So what what's the idea, especially for you chef and food service professionals out there, what's the idea with High Road Pro.
Keith Schroeder 24:26
Everything the company is built upon, is born of our heritage as culinary professionals. And so our original growth plan included starting with ice cream and then inventing other delicious products for the food service channel. And so now we're at a size and scale and position where we can do that we can afford to do it we could pull it off and there are a number of you know, a number of products that are that are ready for the market. One of the most fun ones that we've released is built off of our expertise in sorbet. But we'll be making cocktail mixers for the Margarita machines with really incredible fruits and herbs and bitters. And they will be unlike anything you've ever had in your local Mexican restaurants slushy machine.
Walter Biscardi 25:29
I'm just laughing cause those of you who follow my Instagram feed will know why I'm so excited.
Keith Schroeder 25:34
Walter makes a cocktail every night.
Walter Biscardi 25:36
I do at least one
Keith Schroeder 25:37
That's good. I'm sure you need one after working here.
Walter Biscardi 25:41
But you're also looking at offering professional products so right? For the chef and like, like even even materials to use, not even just food product but going on outside that.
Keith Schroeder 25:52
Yeah, we're we're wide open. We've got a commercialization team now. That I've kind of compartmentalize so they can run wild without having critics and naysayers. It's like here's here's a, here's a spot of the building where you guys could be as creative as as you want to. And so well, we'll see what happens. Yeah, it may it may it may include, you know, turnkey ice cream equipment installation, batch freezer slushy machine soft serve machines, and, you know, you know, let's say a hotel wants to put in a small High Road shop, well, they probably don't have the equipment expertise we have, so why not get into that game? So, you know, look, we're always thinking still at our core. Today, we're very focused ice cream company, but with an eye an eye on growth. So that's what we're going to do
Walter Biscardi 26:44
Wow. That's awesome. So that's over three episodes. We've gone from Keith, working in the music industry. To creating a business plan to launching a company to buying another company.
Keith Schroeder 26:57
Walter Biscardi 26:57
Keith Schroeder 26:58
Walter Biscardi 26:59
To going to Tanzania.
Keith Schroeder 27:00
Walter Biscardi 27:01
Which we'll talk about a lot more in another episode, but. But yeah, so moving into 2020 and beyond, you're now going to see High Road Craft Brands at the top of the pyramid, we're going to have a whole family of brands. In fact, by the time this airs in a few weeks, they're probably gonna be another brand to add on a graphic
Keith Schroeder 27:19
I hope not
Walter Biscardi 27:19
every day. There's another brand.
Keith Schroeder 27:20
Walter Biscardi 27:22
Yeah, so thanks for joining us. I'm Walter. This is Keith. See you next time.
Keith Schroeder 27:25
Transcribed by https://otter.ai