#231: Perry Stancato (Signature Sauces) — The Secret Sauce of Sauces

Perry Stancato [00:00:00]:
So many people call and tell me they have their grandma's recipe, their dad's barbecue, their one so's product, and they'd like to go to market with it and how do I get started? And they, they think they have this recipe with just a few ingredients and you just put it in the kettle and pack away and go to market and everybody wins. Unfortunately, it isn't that easy. So what makes yours different? Developing your formula and getting it to a safe place. That's easy. Are you ready to really go out there and push?

Jeffrey Stern [00:00:39]:
Hello everyone. I am Jeffrey Stern, your host of today's Ohio Fund Report with Perry Stancato, founder and CEO of Signature Sauces and third generation operator of the beloved Cleveland institution St. Stancato's Italian Restaurant. This conversation with Perry explores the entrepreneurial journey of someone who grew up in the family restaurant. From standing on a milk crate as a kid making waffles for Sunday on brunch, to running Stancatos today while simultaneously building Signature Sauces into a premier national food manufacturing company based here in Ohio. Perry founded signature sauces in 2005 with a simple idea to bottle his own family's legendary red sauce after customers kept asking for it. What started as a way to serve Stancato's loyal patrons quickly evolved into something much larger. Perry discovered a real market opportunity in food service, helping other restaurants scale their secret sauces.

Jeffrey Stern [00:01:34]:
Today, Signature Sauces has become the quiet force behind the scenes of the food industry that helps restaurants make the product that has made them famous, serving clients from local Ohio favorites to national brands like Bob Evans, Momofuku, Benihana, Barrio and many others. In our conversation today, Perry shares the challenges of stewarding Stancatos across the generations, the journey of getting Signature Sauces off the ground and the resilience it took to keep it going, ultimately scaling it to where it is today with tens of millions in sales and a 100,000 plus square foot production and distribution facility here in Ohio, we talk about the different lessons learned from retail versus food service and what Perry is most proud of. Seeing team members who started his dishwashers grow into leaders in his businesses and knowing that his work helped thousands of diners enjoy meals every day. So with that, please enjoy this fun and insightful conversation with Perry Stancato. Lay of the Land is brought to you and is proudly sponsored by Roundstone Insurance, headquartered in Rocky River, Ohio. Roundstone shares Lay of the Land's same passion for bold ideas and lasting impact from our community's entrepreneurs, innovators and leaders. Since 2005, Roundstone has pioneered a self funded captive health insurance model that delivers robust savings for small and medium sized businesses. They are part of the solution to rising healthcare costs, helping employers offer affordable, high quality care while driving job creation and economic growth throughout Northeast Ohio.

Jeffrey Stern [00:03:08]:
Like many of the voices featured on Lay of the Land, including Roundstone's founder and CEO Mike Schroeder, Roundstone believes entrepreneurship, innovation and community to be the cornerstones of progress. To learn more about how Roundstone is transforming employee health benefits by empowering employers to save thousands in per employee per year healthcare costs, please visit roundstoneinsurance.com Built for entrepreneurs, backed by innovation, committed to.

Disclaimer [00:03:36]:
Cleveland hello everyone and welcome to the Ohio Fund Report, a show dedicated to raising the collective ambition of Ohio. Before we dive in, just a quick this podcast is for informational purposes only. Nothing you hear today should be taken as investment advice, a recommendation or an offer to buy or sell any securities. Please note that the Ohio Fund and its affiliates may maintain investments in the companies discussed. Any forward looking statements you hear today are based on current expectations and may change. Please do your own research and consult with your advisors before making any investment decisions. For more information on the Ohio fund, please visit theohiofund.com.

Jeffrey Stern [00:04:12]:
I would love to start with the multi generational context of the story behind Stankatos. You know, going back to the late 1930s and Grandpa Stancaro selling coffee and donuts, you know, out of a push cart to local workers. Knowing how far the institution of stenkados has come today and that you've been able to carry the entrepreneurial torch into a new venture on a national stage like Signature Sauces, which we'll talk about. But when you reflect to your childhood and growing up in the family restaurant and business, did you always imagine that you'd kind of follow in those footsteps and take the business to where it is today?

Perry Stancato [00:04:55]:
No, I actually I, I always enjoyed being at the restaurant and my dad had his brothers as partners and it was a big family business and his advice was go to go to college and run. Unfortunately I, I, I did fall in love with the business and I did go to culinary school and never imagined I was going to come back home. You know, I had dropped dreams and aspirations to do work out of the country, maybe a cruise ship and work for other restaurant entrepreneurs. Really the thought of coming home was never on my mind and unfortunately my father got ill and passed away at a young age and there I was with my ma and I had to just jump in. So taking over the family Business was not on my radar.

Jeffrey Stern [00:05:51]:
What. What was it like growing up in the family business? What. What did you love about it?

Perry Stancato [00:05:55]:
It's interesting because there was many businesses. There was the food trucks, as you mentioned. And at the time, the restaurant was actually the smallest part of their business. They had vending machines, a coffee service, off site catering, where we did halls and stuff around Cleveland. And I did all of them, you know, as a young kid, as 13 years old, I was washing the coffee jugs for the trucks, watching the food trucks after school. And then as I got older, working in the restaurant. But I can remember standing on a. On a milk crate making waffles for the brunches, the Sunday brunches.

Perry Stancato [00:06:36]:
So I've been in and out of that restaurant my whole life. And, you know, in march It'll be 55 years and.

Jeffrey Stern [00:06:44]:
Yeah. How, how have you seen the. The business evolve? If you were to kind of outline the. The chapters of it. Take us through the, the stages of it.

Perry Stancato [00:06:53]:
Yeah, like anything, you know, things change. And it's always been a red. So I call it a red sauce joint. It's always been a red sauce joint. And the key is to just stay in your lane of that. Don't drift off and make sure you know who you are. And because the community. The community, community knows.

Perry Stancato [00:07:12]:
So you can't do too much change. Yeah.

Jeffrey Stern [00:07:16]:
Well, we'll certainly unpack the red sauce joint as inspiration for signature sauces. And I know you and I have talked before about Stancato is really, as a Cleveland institution for many decades, how you approach taking care of that legacy while also making it your own. And the challenges that come with, you know, trying to, to change what has worked over time.

Perry Stancato [00:07:45]:
Yeah. Because think things evolve. Each generation likes different things. Today. Call out words and food is pretty important. People don't just like a plain jane meal. They want some excitement. They want to hear about Calabria and chilies and how truffles, a mainstay.

Perry Stancato [00:08:04]:
And today's menu and environment is pretty wild. So for us, we, even though we're that red sauce joint, how do we still keep it with bold flavors and staying on trend a little bit where yet at the same time not veering off too far left where we lose our base and sometimes that base as you are going to lose them. Right. Because you're. We've been around for generations and we see people that are three different generations in between. Right now is our customer base. So we are going to lose some. We are going to lose some.

Perry Stancato [00:08:38]:
Right. We got to make sure the ones that we're grooming right now when we see them at their high school dance, that we're doing their baby shower naps and from the baby shower and anniversary party. So we have to stay relevant too, to each generation.

Jeffrey Stern [00:08:53]:
Yeah, I mean that's, that's pretty remarkable to be a business that gets to work with families over the course of their generations, you know, let alone your, your own family. So I'd love to talk about signature sauces. I love the story about how it started that literally you began bottling your family's recipe because customers kept asking for it, you know, this legendary red sauce. So I'd love if you could just share a bit about how that idea grew into the business that it is today.

Perry Stancato [00:09:27]:
So this is, was my mom's idea. We were doing a lot of drop off catering in 2005 where drop off catering really didn't. Not too many people knew what drop off catering was. Today every, everybody does drop off catering. She wanted to put our pasta sauce in our gift baskets that we would, were doing a lot of corporate gift baskets and she wanted, she says, hey, why do we have like the palmy imported Italian tomatoes? Why don't we, you know, how do we get our sauce in the jars? So that's really how, how this all started. And we started doing research and realized that it was very hard for a small startup to have a manufacturer make the product. And it became even more difficult with the steps. Meaning our pasta sauce is roasted with pork neck bones and cook caramelized onions and bloomed garlic.

Perry Stancato [00:10:26]:
And then it's simmered for four hours and then it's strained and you have this. Some would call it a Sunday sauce, some would call it Sunday gravy. Either way, for us, it's our premier sauce. And we couldn't find a manufacturer to do that for us. It was like one teeth. The feedback I got, all the reasons why I got, we couldn't do it right. So that's how the idea started. And then from there it just bloomed.

Perry Stancato [00:10:57]:
I found a manufacturer that was going to help us. I had to push them, push them and push them. And finally I worked with that manufacturer for about five, about five years. And one day he approached me and said, hey, you know, I'm going to get out of this. I'm either going to sell it or I'm going to sell it to you. I say the rest is history. We ended up purchasing the plant and kept it. It was in Canton, Ohio, so it was about an hour and a half hour and 15 minute drive each day, each way.

Perry Stancato [00:11:32]:
In 2008, we decided, we moved it to independence.

Jeffrey Stern [00:11:36]:
At that point in time, when you decided to acquire the business, did you have a sense that you would begin to help other people manufacture their own sauces or was the vision at that point still just how do we own this process of building our own sauce at scale?

Perry Stancato [00:11:56]:
I had zero idea. No, zero idea. The thought process was when he decided he was going to sell it, I told my ma, I said, listen, if he sells it, we're in trouble. I couldn't find somebody to do this for us. And then if he sells it. At the time we started using it as a commissary for our restaurant. So our kettles we got rid of and it simplified our operation beyond belief. We were able to do more business and no, we had no idea what we were doing.

Perry Stancato [00:12:27]:
So it was, it was our commissary. So when I moved it to independence, we built it as a just a red pasta sauce manufacturer. Nothing else, shelf stable, no, no other really ingredients outside of what you would use for pasta sauces. We did that for a few years and that was a, that was struck. That was a struggle. It's hard to get that, that type of customer, a startup customer in, into the building. There's, there's so many hoops and then you're stuck with your. We moved from a 4,000 square foot little plant to 30,000 square feet.

Perry Stancato [00:13:08]:
And you know, at that time we're like, okay, what are we going to do throughout the week? What are we going to do with this facility? So we struggled with the retail for a few years before we realized we could start working with some other restaurants. Really, food service, maybe that's a better avenue. So we, we picked up a couple customers and from there our business model completely changed. We, we just realized quickly that our passion was more with restaurants than it was with retailers. Besides it being not as cutthroat, the. They have the, you know, there's a passion there because I speak the language, right. I'm dealing with either chefs or operators that all have the same passion as I do from the, from the restaurant business. So when a restaurateur guest leaves, there's some self, there's gratification, instant gratification, right? Yeah.

Perry Stancato [00:14:10]:
It's the same way with us when we nail, when we start making their sauce. And it's consistent every time. It's just a, it's a good feeling. It's a proud moment that you've created a partnership together that works for Both of us. So that's how that happened. That's how we moved to independence. And it's right on Pleasant Valley. So it's three miles from the restaurant.

Jeffrey Stern [00:14:33]:
You mentioned to me before. This kind of stark difference between the cutthroat retail market and the more maybe collaborative food service world, despite all being grounded in food, ultimately, what are some of those other differences between those two worlds that. That kind of surprised you as you made the transition from. From one to the other?

Perry Stancato [00:14:57]:
Yeah, you know, the. The. Anybody can make a. Not anybody. You can create a great product. Yeah, that's only the first part of it. The financing of getting onto store shelves, the marketing to have people grab it. The important.

Perry Stancato [00:15:13]:
Some people don't realize the importance of the labels. Your most important part of the business, if you don't get consumers to grab that label and take it home and try, can go nowhere. And that's one piece of it. Right. So I just felt like the restaurant. For me, working with the restaurants were much easier. We spoke the same language. The person buying for the grocery stores doesn't really care about your history, doesn't really care about what's in the bottle.

Perry Stancato [00:15:47]:
All they're there to do is to order products and make the margin.

Jeffrey Stern [00:15:51]:
Damn. There's a lived empathy there, too, with yourself and them as operators. You've mentioned to me before that ultimately the business of signature sauces is kind of like the secret sauce is making the sauce that makes other people famous, you know, and helping them figure out their signature dishes.

Perry Stancato [00:16:16]:
Yeah. Because whether it's a Mexican concept that, you know, the salsa or the queso, that's what made them famous. It's not the corn shell. It's not maybe the meat meat, but it's really the sauce. It's like that with the barbecue sauce joint. It's like that with an Italian joint, Indian cuisine. The sauce, typically, is what makes them famous. It's the flavor that everybody remembers.

Perry Stancato [00:16:43]:
We play a crucial role in this. It's very important that it comes out consistent. Every single batch.

Jeffrey Stern [00:16:51]:
Yeah. So I'd love to hear some of the stories behind the sauces. And ultimately, you scaled from a few local partnerships to serving nationwide brands like, you know, ones that people would know. Bob Evans, Momofuku, Benihana. What does it look like working with those restaurants to develop their signature products? And how do you go about, you know, landing those kinds of larger clients, and what did it mean for your company's growth at the time?

Perry Stancato [00:17:24]:
Yeah, so the key thing, a lot of people ask, you know, do they bring a recipe. No, most of them don't have recipes. And if they do, we have to reverse engineer em. Whether it's they've never had it made for them or it's coming from another manufacturer, maybe the manufacturer that they were working with, for some reason, it's just not working out any longer. So when we get involved, we have a development team and we can't bring in everybody's branded items, say tomatoes or vinegars, or we have to, we have to make the product with our ingredients, you know, so we have science that we work with as far as ph and bricks and all this stuff that make a product consistent and safe. So we develop incredible products for, for these chains. What's it look like? They call us and, and we get busy, we tell them, show us a gold, gold standard and how do we make it better? How do we create more shelf life without using preservatives? How do we make things more stable? How do we make it stick better on a tortilla chip? How do we make it. Word doesn't evaporate, water doesn't get evaporated.

Perry Stancato [00:18:42]:
With the pasta sauce, you know, there's a lot of things we do, but it's all, all based around science at the end. That's why it's like a, it's chef driven, but it's really science driven as well.

Jeffrey Stern [00:18:54]:
Right. I mean, you imagine at the quantity, the scale at which you're producing these big batches of sauce, there is like a blending of culinary art and food science. But you have to control for it at scale. I mean, how would you outline what it takes to ensure that making a sauce, you know, in a hundred gallon kettle still tastes like the one that you perfected in a small pot? What should more people understand about what this process actually looks like?

Perry Stancato [00:19:26]:
Well, unfortunately, the scale up, it does not always work out. Sometimes your first two batches could go down the drain. Or if the customer is okay and it's not branded, we could send it to the food bank. But yes, there is some scale issues. There could be viscosity, like thickness issues. There could be when you're working with peppers, different types of peppers, like habaneros or cayenne, it could be too hot, right? The heat ramped up. The vinegar sometimes could be a tad stronger when you go to that scale up. So there is some challenge.

Perry Stancato [00:20:02]:
But we do test runs and typically we will make a 4, 4 pound bench sample for a customer to approve. And from there we go to a 3,000 pound test run. And yeah, that is there's, there's a lot of dollars in the, in the beginning that go to waste, unfortunately, because you do have to make sure that the scale up is correct. Typically, once you go from £3,000, though, you can go to 6, 7, £8,000 with no problem.

Jeffrey Stern [00:20:32]:
How would you describe signature sauces today? What it, what does the business look like? And how do you. How do you think about it?

Perry Stancato [00:20:40]:
Today we have partners of all types. Right. And the key for us is how do we become somebody that they just want to be? You know, we're completely integrated with their. Their back of the house. Meaning we don't only just want to do your barbecue sauce. We want to make your coleslaw dressing, your Mac and cheese sauce, your dessert, you know, could be banana pudding. We want to make sure that when they think of, hey, we should be having this made, well, let's just call signature and see what we can do. And that's what our success is really based on.

Perry Stancato [00:21:21]:
And for us, as far as our growth goes, we're adding other equipment for different packages so we can be that partner.

Jeffrey Stern [00:21:30]:
How has the entrepreneurial journey itself been from solving your own problem ultimately, to servicing as many restaurants as you do, thousands and thousands of people, ultimately, that are eating the food that comes out the other side. How have you scaled the business itself and just kind of take us through your own entrepreneurial journey?

Perry Stancato [00:21:55]:
Yeah, I mean, looking back now, I can't even begin to tell you how crazy the journey really has been. And that starts off with just purchasing raw ingredients. I mean, you know, the whole thing has evolved. And honestly, our products, when I first started, it was kind of throw it in a kettle, mix it, cook it, and pack it. I mean, that's what the customer kind of wanted. Right. And I started off with much simpler items. Wing sauces and barbecues and like I said, some pasta sauces.

Perry Stancato [00:22:30]:
Right. That's how we kind of how it kind of started evolving into what it's become today. And then as I started taking on some bigger customers, you know, they started requesting different ingredients. And then before you know it, we started sourcing better ingredients. We went from a one leaf balsamic to a two leaf balsamic. And then we went from a two leaf to importing balsamic. And it's the same thing with a lot of our raw ingredients, from cheeses to, you know, we import Italian tomatoes over here, now olive oils. And we do that for a lot of different cuisines.

Perry Stancato [00:23:07]:
Indian cuisine has got works with a lot of specific spices. And how you go about cooking those spices in the kettle, it's, it's an art. So, so our business has evolved so much looking back that it's in fact we're getting ready to rebrand and instead of signature sauces, we're getting ready to, you know, we're going to launch Signature Kettle Crafted. And we really don't need to. We're blessed with the phone. Typically they call us when there's so. But we are changing because we do so many soups and dressings and all these different things now. You know, what started off as a sauce manufacturer has really evolved.

Jeffrey Stern [00:23:52]:
So what is the vision today? How would you articulate it?

Perry Stancato [00:23:56]:
The vision today is that we want to be the most trusted partner that a chef or an operator can call and say, hey, we think we're going to have the best manufacturer for our business. Right. Somebody that isn't going to be switching out raw ingredients on them. Somebody that's not going to be cheating the formula to put more margin at the bottom line. Somebody that's not going to not treat it like, like their own. Right. So for me, these, these, these partners, these, these restaurateurs are some of them I, I've been with since, since I started with. Right.

Perry Stancato [00:24:34]:
So. And you've seen some real growth and the keys to grow with them too. Some of them are growing at such a speed. Right. A lot going on in the fast casual business right now where, you know, these QSRs are growing quickly. 10, 15 locations a year. So the key for us is we gotta make sure we're growing with them as well.

Jeffrey Stern [00:24:55]:
Yeah. What, what, what is that? What does that look like as far as the build?

Perry Stancato [00:24:59]:
Well, the building this year. So the building, when I purchased it, I, you know, we had 30,000 square feet. We're in 72,000 square feet today. And we also have a off site distribution center that's 50,000 square feet. When I started, we used to be a Just in Time manufacturer. Covid has changed that and so has our customer. So today, since we are shipping just in about every state, very important for us to make sure that distributors have the product, whether there's one location in that state or there's 20 locations. So we produce enough to forecast for their 60, 90 day period and make sure the distributors are always ready, no surprises.

Perry Stancato [00:25:51]:
So I never thought about a distribution center. I never thought about a plant being 70,000 square feet. And today I can't believe I'm looking for another facility for another plant.

Jeffrey Stern [00:26:04]:
Yeah. What are you most excited about? What do you find yourself Looking forward.

Perry Stancato [00:26:09]:
To, you know, that the first five years, I don't count. I don't know if I count the first 10 years either. Some days. Right. It took that long to become sometimes not an overnight success, but it took a long time and a lot of struggles and sleepless nights to get to this point. So today it's, how do we keep growing and not mess it up?

Jeffrey Stern [00:26:35]:
What do you feel kept you going during those 10 years?

Perry Stancato [00:26:41]:
Just the drive. You see it, but you want to be better. So how do we be better? And what do we have to do to get there? Don't lose curiosity. Right. How do we strive to get the best product? And that's whether it's mine or the person we're making it for. And it's not easy. Right. There's a lot that go into it.

Jeffrey Stern [00:27:07]:
What do you feel you've learned about entrepreneurship from running and managing a restaurant? And which of those lessons do you feel are most transferable?

Perry Stancato [00:27:18]:
Well, I'll tell you. The restaurant. There is nothing as hard as running a restaurant. And I think everybody should work in a restaurant at least once in their life, even if it's 30 days. But there's a lot of details in the restaurant business, right. From the time you touch the door handle entering to the time you leave. And there's a lot of people that could unfortunately mess up that guest's experience. Not only the food.

Perry Stancato [00:27:50]:
We always say a good server can fix a bad meal. A bad server, good food can't fix a bad server. So there's a lot of details with the restaurant from start to finish. The manufacturing, once you get it, you know what you're forecasting, you know what you're purchasing. You're leading a team that understands the playbook, the restaurant. Even though there's the playbook, there's a lot of ways it can go off the rails.

Jeffrey Stern [00:28:18]:
There's the. There's the human element. It's harder to control for you.

Perry Stancato [00:28:24]:
Got it? Yep. And then as far as the plant, you know, even we still make our mistakes. The key is not to make sure that our consumer never sees that. Right. Like, hey, it never leaves the plant. Yeah. We made a mistake or diff. Wrong label.

Perry Stancato [00:28:41]:
Different in smoke. Wrong smoke. Went into the product. I could tell you many things that go wrong. You know, there too. But the key is to fix it. And there's a root cause analysis that goes into that. And you don't have that in a restaurant too often.

Perry Stancato [00:28:59]:
But I still enjoy the restaurant a lot still. Yeah.

Jeffrey Stern [00:29:05]:
What, What. What brings you the the most joy from the, the restaurant experience.

Perry Stancato [00:29:11]:
The customers for sure, working with the staff to see it. Especially when it's busy. You know, when it's busy and you see that well oiled machine just running and people are happy, leaving, happy coming in. I mean it's, it's, it's a great feeling.

Jeffrey Stern [00:29:27]:
How do you like to, to balance your time between all the different initiatives?

Perry Stancato [00:29:32]:
That's a tough one. It depends on what's really going on, right? Or where I have, where I have to be and where I want to be. But I'm at, I'm at the restaurant every weekend, typically a couple hours during the week. It's probably just a check in, but most of my time is spent at the plant now, Monday through Friday.

Jeffrey Stern [00:29:50]:
How has being based here in Ohio influenced your journey? Obviously, you know familial history here and you've collaborated with Ohio Brands, even Ohio State University for the tailgate sauce line. What do you feel is special about building a food business in Ohio?

Perry Stancato [00:30:11]:
Well, look, there are many, many, many small food incubators here. Cleveland especially has such a wonderful food scene and especially farmers markets and small startups. It's really amazing how many, and I try and talk people out of it, don't do it. But no, it's incredible. And then as far as Columbus goes, look, Columbus is the, if you want to know if a restaurant's going to make it, Columbus is where you open your first restaurant and see where it goes. And I'm very blessed that Columbus is here with our business for the fact that it's a two hour drive and 90% of our customers, not 80% of our customers are out of Columbus. Any chain restaurant, we're, we're working with them. So that's very helpful for us in our growth.

Jeffrey Stern [00:31:12]:
How do you think about success?

Perry Stancato [00:31:14]:
Yeah, so this is interesting. So I think of success as I have a few team members that started with me as dishwashers. Three of them to be exact. Four of them to be exact, started with me when I was just shy of getting out of college. And they worked as, started as dishwashers, then went to kitchen managers and, and one of them is my, the GM at the restaurant. Today it'll be 25 years. He'll be with us. I have two at the plant, VP of Ops and our business manager and one's our logistics manager.

Perry Stancato [00:31:59]:
Seeing the growth of all of us has really been probably my success today. Knowing that we all started from this community Italian restaurant. They started as kids and have now taken the reins. Really, if I disappeared. I think it would run still today without me. Yeah.

Jeffrey Stern [00:32:25]:
Do you think about succession and legacy and the way that you've carried the torch in your family about what legacy and succession even means to you?

Perry Stancato [00:32:37]:
No, I have not. Truthfully, to me, it's still. We're not done and there is no succession right now. We still have a lot to grow here and let's keep rolling our sleeves up and doing it.

Jeffrey Stern [00:32:52]:
Yeah. I mean, you've mentioned this desire to improve, this kind of iterative, how do you get better at what we're doing kind of mindset. And I know it's kind of permeated all aspects of the business to a degree where, I mean, there's even like software that, that you are working on to, to kind of ameliorate the business. What has it been like to, to start working on technologies and innovations from within to, to better the business?

Perry Stancato [00:33:23]:
Yeah. So that software is called Caterbytes. It is a software that my GM that I mentioned to you has been with us for 25 years. We have both started to develop it and we found a need for a catering software that works with fast casual or single independent restaurants. That there's nothing on the market like it. So. And when I say that, it's interesting because the software business is something again, I know nothing about. I love, I love what it does for us and I love the tools that it provides for us to be better operators.

Perry Stancato [00:34:13]:
But I've never launched a software. So that is on our. We hope to start showing it to customers sometime in the second quarter of next year.

Jeffrey Stern [00:34:26]:
What's a sauce that you're. You're most proud of?

Perry Stancato [00:34:30]:
Oh, you can't do that. Other people. I don't want to get mad at me. Wait, you're putting me on the. That's not fair. I love them all. I love them all. You love them all? Yeah.

Perry Stancato [00:34:43]:
I would tell you, you know, we, we for us, when restaurateurs call us and say, hey, you know, here's our formula, here's what we do, here's the headaches we're having. We make this much Mac and cheese, but we have this much leftover sauce at the end of the night. Or I like to hear all their challenges and say, how do I help them with those challenges? How do we make a smaller pack? Or how do we make, you know, if they're Mac and cheese recipe only needs 3 pounds and how do we make a 3 pound pouch instead of a 4 pound pouch? How do we get rid of those process steps where they're roasting veal bones and chilling them at the end of the night, and then they're making sauce the next morning. And I like all those challenges and headaches that they're having. So they're all great sauces when I'm done with them.

Jeffrey Stern [00:35:36]:
Is there a trend or from your perspective, getting to work with so many different restaurants, is there something that you see happening in the culinary world that is of interest to you at the moment?

Perry Stancato [00:35:50]:
Probably prepared foods, I would say. Unfortunately, I think prepared foods have really improved drastically over the years and every life is crazy for everybody anymore. So the idea of even just a pasta sauce, the idea of going home and making pasta and cooking sauce, that's not simple enough for most consumers anymore. They like the idea of throwing something together much quicker than they used to. So we do a lot of. We are starting to do a lot of work with commissaries that are doing prepared foods. You have some big brands out there, like the health meals, even right where we're making the sauces for them and they're, they're putting them together. So they're just putting the entrees together and we're doing the sauce.

Perry Stancato [00:36:49]:
I think that really is interesting right now because frozen meals back, you know, Lean Cuisine meal won't do it today. You need to have all those flavors and textures and with a better quality prepared foods, you know, in the frozen food section. So we do a lot of that too. We send, if you ever grab like frozen vegetables out, like a Martha Stewart's vegetable out of the frozen, you know, if you see kung Pao green beans, or if you see Sichuan Brussels sprouts, or if you see a brown butter bourbon carrots, those are sauces we're making. And they're going to the vegetable suppliers where they're spray coating those sauces on the vegetables, freezing them, so the consumer can just pull it out and go. And I think that's probably the most business that we are going after more today.

Jeffrey Stern [00:37:48]:
When people think of stinkados today and 10 years from now and 20 years from now, what do you hope comes to mind for them?

Perry Stancato [00:37:59]:
It's wild because I hear that today. I can't tell you how many people say, oh my gosh, we got married there or we did this there and I would like the next, whoever it is takes it over, that you still hear those stories in 10, 10, 15, 20 years. You know, like it's been there, it's been a legacy. It's very tough to run a legacy restaurant because people typically, they Always want something. What's new and what's next. Right. So how do you stay, again, relevant? And it's. So it's difficult, but that's what I would like to see.

Perry Stancato [00:38:34]:
I'd like to see the kids that are, like I said, are at prom today, still coming to the restaurant. In 20 years, what do you feel.

Jeffrey Stern [00:38:43]:
You'Ve learned about leadership and managing a team of people aligned around the goal?

Perry Stancato [00:38:53]:
We have a lot of staff. Even the restaurant has, I think, 80. We're trying not to go over 90. Then the plant has 80. And working with all those personalities, whether it's the leadership team or somebody that's just starting. Right. Getting to know the people and what makes people tick is probably what I like the most. I like seeing people that just start off that, knowing that they could be on the bench for the next level up.

Perry Stancato [00:39:26]:
And how do they. How do we keep grooming them and how do we keep grow. Having them grow with us so we can keep this rate of growth. Right. When you're growing 20, 25% a year, it's. It can get really challenging. So the key is to groom for bench strength. I would say that's probably my favorite part of my newer journey.

Jeffrey Stern [00:39:50]:
What. What would you tell yourself in. In 2005, not knowing what you know today about how the. The journey unfolds?

Perry Stancato [00:39:57]:
Well, risk is scary, right? So the risk for me to go from 5,000 to 30,000 square foot building was scary. I wish I. Maybe I should have been thinking even bigger then, but we are this time around.

Jeffrey Stern [00:40:12]:
Yeah. Were there decisions that you made that felt risky at the time, but, you know, now turned out to not be so much, or at least they were the right decisions to have made?

Perry Stancato [00:40:25]:
Yeah, they were the right decision. They were still risky, and they were the right decisions. It just took us longer to get there than, you know, think. You know, I worked the restaurant, and the restaurant funded this sauce plant for many a years. Not. Not too many people are in that position where they're working their. Their day job and doing something at night. Right.

Perry Stancato [00:40:48]:
For me, we rolled up our sleeves. I worked seven days a week, and we made it happen. Like I said, it took 10 years for us to really start to really know the business.

Jeffrey Stern [00:41:01]:
How do you think about risk today?

Perry Stancato [00:41:04]:
I would tell you, today there's risk with the software that I want to launch that. Right. So that I'm starting to understand, like, what. What risk do we want as far as the sauce plant? Now we know the business. The risk isn't so. Isn't There too much right now to build another plant. We know the people, structure, we know the vendors, we know that who the. We even know who the customers are.

Perry Stancato [00:41:28]:
Right. When you started a business from the ground up scratch, you're not only creating a brand, you're creating a. Trying to get people to know who the brand is and who are they and can they be trusted. Right. So today, the risk. I don't think about risk for the sauce plant. I know that we have all the risks covered. The software, there's going to be.

Perry Stancato [00:41:54]:
There's a lot of risk. You know, we're building something that the restaurant couldn't support today, you know, just to have it for the restaurant. If we don't go out and sell it to people, there's a lot of dollars at risk at first. But I think once we have a couple customers under our belt to see if it truly does have legs, there may not be as much risk. There is my first go wrong with starting signature.

Jeffrey Stern [00:42:22]:
Right. And I have to just imagine when you make what makes them famous, you get certain evangelists from your customers that powering their business is your business. And that's the kind of engine for their success in a lot of ways.

Perry Stancato [00:42:43]:
Yeah, for sure. We help each other, right. They're sharing a headache. I'm trying to listen to the headache and figure out how can we help them, how can we become a better partner. And sometimes that takes you into. Although you want to stay in your lane, sometimes it takes you into another lane for the fact that if they can't find somebody to do that. And when I say that, it could be another line, Right. It could be now, sudden we have a PC line.

Perry Stancato [00:43:15]:
We didn't want to be in portion pack machines. But you know what? Our customer needed it. There was a void there in the market. We do it. And that's sometimes difficult too, because it's hard to say no to your current customers. Right.

Jeffrey Stern [00:43:31]:
How do you decide when to say no or yes?

Perry Stancato [00:43:35]:
Well, it's funny because nine, I'd say 95% of our calls say no to. It's really bizarre because, you know, at the restaurant, coming from there, you don't say no to nothing. Everything's yes, we'll figure it out. Yes, we can do it. Yes, whatever you'd like. But in at the plant, most of them are no. And it's sometimes sad for me too, for the people that do call that are looking to launch a new product, and I'm like, no, no. The decisions are based on sometimes the washouts of kettles or there's not enough volume or it's going to take a lot of dollars up front to make sure that we nail the product.

Perry Stancato [00:44:18]:
Like I was mentioning about the waste factor, you know, and there's not enough. They're not going to sell enough product to cover those costs. And I see a lot of brands start and that are funded and last maybe a year, year and a half, and then they get out quickly. We say no to somebody sometimes for ounce, for costing. Right. Just a product we're not interested in looking at. Or if somebody doesn't call us and starts telling. Telling me in the beginning of our conversation about what makes their sauce special and the customizations of it.

Perry Stancato [00:44:55]:
Like I said earlier, they want the garlic bloomed or they want Calabrian chilies from Italy or they want. Need to hear all the specialty stuff about it for. Because I need to get excited as well. They're not only selling me. I'm not only selling them, you know, they have to sell me as well to say, hey, why do I want to do this with you? Are we going to work out? Are we going to work together? Saying no is, oddly enough, to say that often.

Jeffrey Stern [00:45:27]:
Yeah, we can work to bookend the conversation here. Is there something you wish we had talked about?

Perry Stancato [00:45:34]:
One of the questions you asked was about wisdom, advice you'd offer to aspiring food entrepreneurs. Okay, so for us, you know, we mentioned so many people call and tell me they have their grandma's recipe, their dad's barbecue, their.

Jeffrey Stern [00:45:51]:
Oh, yeah.

Perry Stancato [00:45:52]:
Product, and, you know, they'd like to go to market with it. And how do I get started? And they, they think they have this recipe with just a few ingredients and you just put it in a kettle and pack away and go to market and everybody wins. You get this. How exciting to see your label on the store shelf. And unfortunately, it isn't that easy. There's. There's a lot of grit that goes into this. And unfortunately, marketing, Marketing and self education have to be key for this because you need to know not only what sets your.

Perry Stancato [00:46:29]:
Your product apart, because everybody's got a barbecue sauce, an Italian dressing, you know, know they all have it. So what makes yours different? And then why, why does. How are you going to sell to the buyer? The buyer gets hundreds of calls a day for people that have new products. Where's your cost per ounce going to be? Where's your costs going to be for distribution and storage and warehousing? And there's so much that goes into these new products that you really do have to look at the margin, you know, when you say there's nothing out there like it, well, that's great. But how do you tell the story to the consumer and how do you get that out to people? You can't just go in and do demos at stores and hope that it sells right. So being curious about what the market has is really key. And then from there, you start off small. Everybody wants to land a 200, 300 store giant eagle or a Myers or this where they really have to get their feet wet just with boots on the ground at local stores and, and see how it does.

Perry Stancato [00:47:41]:
And that could mean delivering the cases yourself and doing the tastings and doing the marketing on social media. And there, there's a lot that goes into it before you start to build a food company. And I try to explain that to a lot of people in the beginning, that you need a lot of money for marketing just right up front. Forget me, I'm the easy part. Developing your formula and getting it to a safe place, that, that's easy. Are you ready to really go out there and push?

Jeffrey Stern [00:48:15]:
Yeah. Is there a pattern you've seen amongst the products that have been able to achieve real success relative to the ones that haven't?

Perry Stancato [00:48:28]:
No. Truthfully, there's a few that have and they're mostly local. Like I always say, in your backyard, just think about your backyard. There's enough here in your backyard. You don't need to go think about national. Just right here in your backyard, there's plenty of your competition, if it's a red sauce, is, hey, I can't ever compete with a Ragu or a Prego. Right. But who can I compete against and how can I get our taste profile out there? But yeah, there's plenty of local companies we work with and most of them are out of state.

Perry Stancato [00:49:06]:
Actually, they're in their local communities. They're the ones that succeeded. As far as the national level, no, we don't do. We don't have any customers on a national level, but all local and not, not, not our local, like Cleveland local. I mean, like outside of. Because the taste profile in Michigan, just Alfredo sauces alone, we make 30, 40 different Alfredo sauces. And guess what? Every state, every state has a different taste profile. It's kind of like that with pizza.

Perry Stancato [00:49:36]:
Right. Michigan pizza is different than Chicago. Chicago's different than New York. And then we have our own Cleveland style pizza.

Jeffrey Stern [00:49:43]:
Yep.

Perry Stancato [00:49:44]:
So it's nice for us. We try to work with companies that are local to that community. And we know there's, there's A success story there.

Jeffrey Stern [00:49:52]:
What, what are you most proud of?

Perry Stancato [00:49:54]:
Oh for me personally, yeah, I, you know I started Signature Sauces with same thing, a hope and a dream. Right. We wanted to bottle our sauce and go to market and that was extremely tough. You know, when I launched Stancados we lost, we lost big time because took on too many stores and it wasn't moving. But for me, mine is starting Signature Sauces a ground up company. You know the restaurant. Although I went to school and did all this other stuff, you know, I came back with a brick and mortar something. Whether it was what it is today or not, I had something to get started with.

Perry Stancato [00:50:36]:
Right. Got the plant we started from ground up. No name, no brand recognition. Today here in the call, here in the calls come into us is pretty exciting.

Jeffrey Stern [00:50:50]:
Yeah, I have to imagine it is. So I'll ask then some closing questions here. I, you know, I can't ask you for your favorite sauces so I feel like this one's kind of like that one. But what, what would you plug as. As favorite restaurants in, in Ohio?

Perry Stancato [00:51:07]:
Oh my gosh, come on. I work with some of the best restaurant tours in Ohio. Yeah. I'm, I'm going to tell you, I don't have a favorite. It depends what I'm in the mood for. And then if I'm doing my own studying. Right. If it's, even if it's Italian.

Perry Stancato [00:51:24]:
Right. And some of these guys I work with. But it could be, you know, Cameron Mitchell has restaurants, you know, all types of restaurants. Right. He's also a customer. But sometimes it could be taco concept where I'm going not only to Barrio but maybe one of its competitors because I want to see what if there's anything that we should be doing that that were not. So I, I eat out quite a bit and but it's typically for learning, mostly learning purposes. I don't have like a favorite.

Perry Stancato [00:51:59]:
Oh you'll find me there spot. I, I drift quite a bit.

Jeffrey Stern [00:52:04]:
Yeah. Do you, do you, you still like to cook?

Perry Stancato [00:52:07]:
Oh yeah, yeah, I love cooking. Yeah, I love cooking. I don't have enough time for it truthfully. But yeah. And I, I love cooking in my own restaurant still. Yeah.

Jeffrey Stern [00:52:17]:
Well we can bookend it there. If folks had anything they wanted to follow up with about they wanted to go to Stancado's, they wanted to learn more about Signature. Where would you point them?

Perry Stancato [00:52:29]:
I tell even the people that are always looking to acquire us, I tell them, I go, if you really want to acquire your house, you'd know where to find me. I'm at their restaurant seven days a week. That's true.

Jeffrey Stern [00:52:41]:
Just go to the restaurant there.

Perry Stancato [00:52:43]:
Like you don't need to email me that I'm going to delete it or you know, leave me voicemails.

Jeffrey Stern [00:52:49]:
Just come to the restaurant.

Perry Stancato [00:52:51]:
Yeah, we're not looking to sell though, but so don't waste your time.

Jeffrey Stern [00:52:55]:
Oh, a plug for Cincinnatus is a perfect way to end it. Okay, Perry, I just want to thank you very much. I know this is not something you do often, and I very much appreciate you taking the time and and sharing your thoughts and reflections on the whole journey.

Perry Stancato [00:53:13]:
Thanks for having me.

Jeffrey Stern [00:53:15]:
Absolutely.

Perry Stancato [00:53:16]:
Thanks Jeff.

Jeffrey Stern [00:53:17]:
Thank you for tuning in to the Ohio Fund Report. If you enjoyed this podcast, we'd love for you to leave a review on your favorite platform and subscribe to stay updated on all future episodes. You can subscribe via Apple Podcasts, Spotify, YouTube, or directly on our website at TheOhioFund.com the information shared on this podcast is for informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy any security. Past performance is not indicative of future results. The views and opinions expressed by our guests are solely their own and do not necessarily represent those of the Ohio Fund. A guest's participation in this podcast does not not imply an endorsement or an investment recommendation by the Ohio Fund. This podcast may include conversations with leadership of a company in which the Ohio Fund or its affiliated funds have an investment and as such, financial interest in the success of this company and there may be a conflict of interest in presenting information about the company and its performance. Any forward looking statements or projections discussed during this episode are based on current expectations, assumptions and estimates.

Jeffrey Stern [00:54:30]:
Actual outcomes may differ materially due to a variety of risks, uncertainties and other factors. Listeners should consult their own legal, tax and financial advisors before making any investment decisions. For more information about the Ohio Fund, including our Form 80V, other regulatory filings and additional conversations, please visit TheOhioFund.com.