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Family Affair
Forbes By Stanley Angrist How a couple of young idealists eschewed the conventional life and made a lot of money without compromising their ideals. She was a vivacious New Yorker and passionate cook. He was a taciturn seventh generation Vermonter, a skilled carpenter who still helped in his father’s general store. Idealists both, they met in a counseling class in a small Vermont college in 1972, lived together for a year, got married in 1973, and set out to save the world. Start a specialty food business? Build its product line to 46 items, its annual sales to about $3 million? How reactionary. But then Robert Blanchard became discouraged with his social work program in St. Johnsbury, Vt. “One day I went to a meeting in Montpelier where a number of administrators sat around designing a form to manage the form they used in their programs,” he recalls. “I decided they would have to do that without me.” Melinda Blanchard also tired of her job with Planned Parenthood. Meeting their mortgage payments was taken care of when their house burned down, and the Blanchards collected $8,000 in insurance money. But what to do with the $8,000? In 1975 the Blanchards started their first business: Board and Basket in West Lebanon, N.H., a store offering high-quality cookware and tabletop items. “We outfitted our kitchen from Bloomingdale’s, and we figured other people who lived around here would like to do the same but without going to New York,” explains Melinda. Board and Basket prospered, so much so that they were offered $150,000 for it in 1978. The Blanchards took the money and headed for California. After moving around for eight months they returned because California didn’t seem a good place to raise their young son, Jesse. While living in their camper, Bob Blanchard used his carpentry skills, built a house on a 10-acre property overlooking the upper Connecticut River valley in Vermont, and looked for another business to start. In 1980 they again followed their personal tastes and opened a store in New Hampshire carrying quality children’s furniture and toys. The furniture did all right, but not the toys. They got out of the business three years later. Once again fortune in the form of a $4000 tax refund check from their failed store provided the startup capital for their next venture: bottling and peddling the sauces and salad dressing for which Melinda was making a name among friends and neighbors. “We put $2,000 toward our mortgage payments, and with the other $2,000 we went out and bought jars,” says Melinda, who used her husband as guinea pig for her concoctions. “The thing I disliked most when we were starting out was when I would come downstairs at 6 a.m. and Melinda would ask me to taste six mustards and tell her which ones I liked the best,” Bob recalls. “I really hated that.” By May 1983 Melinda had developed 26 items–8 salad dressings, 6 dessert toppings and 12 mustards. The Blanchards trekked out to the International Gourmet Products Show in San Francisco to market the line. “While I was busy in the kitchen,” says Melinda, ”Bob built display racks, so that retailers wouldn’t have to buy fixtures if they ordered our stuff. They got the complete package from us.” Success. The Blanchards returned from the show with 75 orders averaging $300 apiece. Then reality sank in. How were they going to fill all these orders? Most new business runs on improvisation. Into the breach went son Jesse, then 9. He became Blanchard & Blanchard & Son Ltd.’s. premier jar labeler. Six neighbors, without being asked or paid, helped fill and label the jars and pack them for shipping. Other neighbors, recalls Bob, “told us that if we needed working cash to get out the orders, here were two $5,000 signed checks that we could take to the bank. We cashed them.” The Blanchards corporate suppliers were less helpful. Melinda remembers packing up Jesse for a trip to Boston to buy bottles and jars for their products. She made a list of wholesalers from the Yellow Pages and started calling on them. None wanted to talk to a small timer like Blanchard. Finally the president of one family owned firm took her under his wing, explained quantity price breaks and other esoterica to her and filled her meager order. Says Melinda proudly, “Today I still buy from him, but now it’s by the trailerload shipped directly to us from the manufacturer. Presidents of some the other firms that wouldn’t talk to me in 1983 still call, trying to get our business. I tell them all the same thing—I hope I’ll never have to buy a jar from you.” Flush with their success in San Francisco, the Blanchards went to the New York Gift Show in August 1983. This time they came home with $45,000.00 in orders from stores such as Macy’s, Marshall Field and Neiman Marcus. Melinda still savors the thrill. “Never in my wildest dreams did I imagine a national business.” At this point, the Blanchards finally put together what they jokingly called a business plan on a yellow legal pad and went over to the bank in Hanover for a $75,000 working capital loan secured by their house. They bought a computer and rented a small building a few miles from their home and moved operations there. This was necessary because the local UPS truck driver had informed them that she would not come up the Blanchards’ long, steep hill to make pickups when winter came, no matter how much mustard, salad dressing and dessert toppings they gave her. With 21 full-time employees and 500 accounts to service, Blanchard & Blanchards & Son Ltd. is now in the process of building new headquarters in Norwich, Vt. In a world that is not exactly starving for new specialty food products, why have the Blanchards prospered? According to Ann Bromley, gourmet food buyer for Marshall Field in Chicago, the answers are service, attention to detail and more service. “We have handled the Blanchards’ products for three years and done well with them,” reports Bromley. “They support them well with in-store demos and recipes. Their customers seem to be willing to pay a little more for something different. “ Melinda still insists on personally checking the quality of nearly every batch produced and sometimes destroys a day’s production when it fails to meet her standards. For attention like this, the Blanchards’ fudge sauce was recently selected as the best in New England in a competition run by the Boston Globe. This year Blanchard & Blanchard & Son Ltd. will gross around $3 million, and the Blanchards say they expect sales of S6 million to $10 million next year. Gross margins are around 50%–although not all that accrues to the Blanchards. In 1984 they brought in venture capitalists who have now invested more than $500,000 and own 68% of the company’s equity. “We knew we could be sole owners of a small business, or minority shareholders in a sizable business,” says Melinda. “We chose the latter.” Today, the Blanchards’ future growth lies in higher-volume outlets–more supermarkets and fewer gourmet and specialty shops. “We want our products used every day, not just for gifts and entertaining,” explains Bob. This summer they cut their prices by as much as 27% to compete more effectively with the large competitors like Kraft, Heinz and Wishbone. A mail-order operation and institutional sales to restaurants and hotels are also on the horizon. But sales and profits growth is only a part, and not the most important part of this story. More important, the Blanchards’ business supports a lifestyle envied by many and achieved by few, one in which business and family interests are integrated and complement each other, rather than compete. Son Jesse, now 13, travels with his parents to all the food shows, where he makes sample hot fudge sundaes. Living two miles from their office, the Blanchards still use their kitchen as their primary R&D center and can take off to go skiing, canoeing or hiking. In a curious way they managed to blend their distaste for the conventional 9-5 life with a willingness to work hard and experiment. The end product was not do-goodism, but financial success. |
