From left to right: Charles S. Dake, Percy W. Dake, Charles V. Dake, William P. Dake.
Welcome to our new quarterly feature on multi-generational businesses. We begin with a family, whose business literally keeps us all running. I am of course speaking of the Dake Family and Stewart’s Shops.
THE YEAR WAS 1917.
Like all dairy farmers, Percy (Bill Dake’s Uncle) and CV (Bill Dake’s Father) didn’t feel they were getting paid enough for their milk. So, they decided to make butter and ice cream. They had the milk for it, and they also happened to have a bright red Model T Ford truck, recalls Bill.
The Dake brothers capitalized on the combination of mechanical refrigeration and transportation to expand their market. By the end of their first year, Percy and CV had sold 4,000 gallons of Dake’s Delicious Ice Cream, delivering to customers in Saratoga, Ballston Spa, Schenectady, Albany and Troy.
By 1929, Dake’s Delicious Ice Cream had become a regional household name and the brothers’ business expanded from 4,000 gallons in their first year to a whopping 100,000 gallons.
HOW STEWART'S GOT ITS NAME...
Fast forward 2 decades.
After a series of events, business moves, and possibly a little serendipity, in 1945 the Dake brothers purchased Stewart’s Ice Cream Company from Don Stewart and kept the Stewart’s name. Because NY state licensing laws limited which townships a dairy could sell their milk in, purchasing the Stewart’s dairy allowed the Dakes to expand their area of operation.
Stewart’s Shops was born.
Your Ice Cream Shop
Your Dairy Shop
Your Gas Station
Your Coffee Shop
Your Beverage Shop
Q: What is your company ethos that helps to drive the success?
Bill: Stewart’s is a sharing company with 40% ownership by our Partners through an ESOP, and also sharing with our customers and their communities with $9 million of annual contributions from Stewart’s and related family foundations. We also share more than most between departments, shops, and Partners which why we can afford to do the first two.
Gary: After sharing, I think it’s CPR – the Confidence to Pursue Reality. Bill has that on a sign on his credenza. Accepting the truth and sharing between departments rather than having friction, rather than trying to wish problems away is a huge part of what we do.
Q: Share some significant milestones that stand out in the history of Stewart’s Shops?
Bill: In the early ‘80s I overruled the rest of the management team’s objections and mandated that we were going to let customers make their own coffee. The District Managers were sure that customers would break pots and create a mess. Our customers loved it and we really became a disruptor in the coffee business as one of the first places in the area to allow people to make their own coffee. Customers ended up breaking fewer pots than employees do. It’s the reason we’re so dominant in the coffee business today.
Gary: Another important tipping point was getting into the gasoline business in the late ‘70s. Bill had been buying obsolete gas stations from the oil companies and finally Mobil decided they wouldn’t sell the Hudson location to him if we didn’t sell gas. We bought the site, sold gas, and haven’t looked back.
Left Photo: Charles S. Dake (left) and William P. Dake (Bill) (right). Right Photo: Bill and Gary Dake.
Our emphasis on sharing sounds a bit philosophical, but it really is meaningful and effective. - Bill Dake
Q: Who had the vision for, and when was the ice cream bar added to the stores?
Bill: You’ve got it backwards! We started as ice cream shops and added the rest of the store. First we added milk, which we were selling elsewhere, when we successfully challenged New York State for the right to sell our milk in our own shops. After that we added some groceries, and eventually added more traditional convenience store items evolving into what you see today.
Q: I know vertical integration has been an important piece of your strategy. Can you expand on that?
Gary: We exercise a tremendous amount of control by manufacturing and distributing a large portion of our product line. 85% of everything in the store came on our own trucks from our warehouse. This was particularly important during the challenges of COVID. We also don’t get caught trading off quality when cost pressures hit.
Bill: More than just the products, we support the shops in personnel, accounting, marketing, and facility issues. It comes back to the sharing we talked about earlier.
Q: One thing that makes Stewart’s stand out is your ESOP plan. Tell us about that, and how it has helped to shape your team? Any standout success stories?
Bill: My brother and I started a profit sharing plan back in the ‘70s. We really believed that sharing the ownership of the company, and the rewards of its success, with the employees, more than the grandchildren, would make the business more successful. That first year our contribution to the plan was $150,000. Last year the contribution to the ESOP was over $20 million. Much of that growth is because the front-line employees, the management team, and the family all had the same goal – to grow the company. We converted to a full ESOP in 2001.
Gary: I came up through the manufacturing side of the business and it felt so good to watch guys I’d known most of my life who joined the company right out of high school or the service work hard and retire with over $1 million dollars without contributing a dime of their own money. It’s a gift to be able to help those hard-working people maximize the fruits of their efforts.
Q: Talk to us about your real estate division.
Bill: I bought a lot of old gasoline locations in the ‘70s, ‘80s, and ‘90s as the major oil companies decided the old two-bay garage with two pumps out front no longer fit their model. These were great locations but were simply too small for what they wanted to do. We got prime locations with room for parking to bring people into the stores.
Gary: We are a bit unusual in the industry in that we own nearly all of our real estate. Not paying rent to outside parties adds to the bottom line and gives us a tremendous amount of control. We have been buying adjacent parcels and expanding shops pretty regularly over the last several years. Those have been very profitable rebuilds.
Q: As a company, and as business leaders, how do you balance civic responsibility vs. profitability?
Gary: I don’t see them in conflict with each other. Strong communities are a good place to do business. We also get a tremendous marketing value from the reputation of giving back to our communities. When we’re not perfect, we often get the benefit of the doubt because we are known to be fair and generous, as opposed to being a big, evil corporation.
Bill: This all goes back to the concept of being a sharing company I spoke about earlier.
Q: I would imagine that coffee is one of your biggest single revenue line items. Am I correct? What are your top 3?
Gary: Actually, coffee comes in third. Cold beverages are number one, prepared foods are second, and coffee is third.
Bill: We have become the diner in many small towns, and even in some cities. Our variety of products make us the perfect place to eat. We like to say we have 100 ways to get you un-thirsty.
Q: What do you see as the biggest growth opportunities for Saratoga County in the next decade?
Bill: People often fail to realize how balanced the economy of Saratoga is. We’re a resort community, a college town, a bedroom community, and have a strong industrial base, even preceding Global Foundries. We also tend to benefit from the fact that we draw employees from some surrounding counties which have fewer job opportunities but are nice places to live.
Q: When owners/CEO’s make the decision to keep management of their company within the family, I imagine there are many stumbling blocks to avoid. Stewart’s Shops has successfully navigated through multiple generations. What is the best advice you can offer families preparing for that transition?
Gary: We all worked for the company as kids. We have a rule that you have to work somewhere else for at least three years before coming back to the company. That’s a great practice that we would encourage everyone to follow.
Bill: We’ve had several family members come back to work here only to find out that it wasn’t for them. No one should work in their family business out of a feeling of obligation.
Q: Many entrepreneurs tap into the brain power of business leaders who have come before them. Is there a specific person, or two, who have impacted your outlook on leadership? If so, who are they and do you have a favorite quote?
Bill: We can’t think of any specific individuals that influenced our thinking, but our family was full of stories, phrases, and key words that were constantly creating a philosophy of how to properly run a business and live life.
Gary: I also believe that there’s something to learn from anyone. Everyone knows something you don’t. Having enough respect to be willing to learn from anyone, regardless of their station in life is paramount.
Q: Total locations by 2025?
A: Maybe 375. We don’t set artificial targets – we take what the market offers.
Q: Favorite ice cream flavor?
Bill: Espresso Therapy.
Gary: Chocolate Peanut Butter Cup.
Q: Cups of Stewart’s coffee per day?
A: Almost 100,000
Q: Books on your bedside table?
A: While it’s not on either of our bedside tables right now, everyone should read or re-read Atlas Shrugged. The parallels are a little frightening today!
Q: Favorite Saratoga restaurant?
A: There are too many good choices to pick just one. We are so fortunate to have so many good options.