Leveling Up: Parlaying “Lessons Learned” Into New Perishable Shipping Business
When Danny Catullo took over as president of his family's butcher shop in Youngstown, Ohio, times were tough. Although this third-generation institution was known for quality meats and personal service, a stagnant local economy had Catullo Prime Meats struggling.
Catullo had an idea. What if he could bring the personalized service and undisputed quality of the neighborhood butcher to everyone — even if they're 500 miles away? What if he could transform the business into something that expanded "the neighborhood," and the market potential, without opening new stores?
And, Catullo Prime Meats' e-commerce store was born, bringing these friendly butchers of Youngstown to any town in the United States. The challenge really wasn’t finding the customers. It was finding a way to get meat from the physical store into the waiting hands of those customers. A challenge that, for the past six years, with help from FedEx, Catullo has worked to overcome.
"It's been an ongoing learning experience: looking at new materials, trying out different packaging. Step one was getting our products where they needed to go without spoiling," Catullo said. "From there, we continued to ask questions and look for new ways to increase our efficiency and lower costs."
As he was learning to master the nuances of shipping perishables, Catullo saw a gaping market need.
The Right Time, The Right Place, The Right Service
"I went to the Internet Retailer Conference + Exhibition (IRCE) to talk to companies about fulfillment. Of the 16 companies there, none were even doing perishable shipping, much less experts at it," Catullo said. "The closest thing I could find was a company that shipped chocolate."
Then, Catullo started looking at the capabilities of his own Youngstown, Ohio, facility.
"We have a location in the middle of the country to drive efficient perishable shipments. Companies could send their product to us. We could store it correctly, then, when an order comes in, drop ship it and also handle the customer communication for them," Catullo said.
So, with the help of two business partners, Catullo parlayed his "lessons learned" into a second business: Perishable Shipping Solutions, a company that enables food manufacturers and artisans to outsource product inventory, fulfillment and shipping.
Not only does Perishable Shipping Solutions make it easier for food companies to get their products into the hands of their customers, it can improve efficiency and reduce costs, as well.
"Consider a West Coast company shipping seafood to an East Coast customer. That’s a long way to go, and a lot of dry ice," Catullo said. "By offering economies of scale, our expertise and our location, we could save a company like that a dollar a package. When you scale that up to hundreds or thousands of orders, it’s pretty easy to see the value."
From a market perspective, Catullo and partners launched their new venture at the right time. Retail analysts agree: e-commerce food startups have become a hot trend. Not only does the direct-to-consumer model eliminate the barriers of getting into traditional grocery stores, it's also a cost-effective way to introduce new products to the growing crop of "foodies."
"People today are more aware of what they’re putting in their bodies. They want to know where their food is coming from," Catullo said. "Small companies actually have a leg-up on supermarkets in this area, because all grocers have is label and nutritional information. With e-commerce, you can tell the story of your products and yourself — find a way to really connect the consumer to your brand."
The Fine Art of Leveling Up
Although the market is ripe for what Perishable Shipping Solutions has to offer, how did Catullo know it was the right time for him to launch a second business — particularly when he’s still running Catullo Prime Meats?
"If you hold your breath, waiting for business to come to you, you eventually run out of breath," Catullo said. "When you see an opportunity, you have to explore it. I don’t think there’s ever a perfect, totally safe time to jump in. You have to trust your instincts."
According to Catullo, although it’s always a little scary to take on something new, by "leveling up" with Perishable Shipping Solutions, he's actually mitigating his risk.
"We've done great things with Catullo Prime Meats but it has limits in terms of how much more it can grow," Catullo said. "While it's always a little frightening to expand a line of credit or take on a new business, I am much more confident in my ability to run a business, and my decisions about people, than I was when I took over the family business. I know what’s working and what’s not working — and I'm not afraid to make changes."
Catullo’s entire business approach has also matured, moving from a day-to-day to a more long-term management strategy.
"When I started running Catullo Prime Meats, I wanted to win every day, to make money every day — and that’s exhausting. As I got smarter, I started trying to win the week. Still, if you do that, you’re going to leave money on the table. You’re going to cut help trying to win the week but not have the people in place to fulfill more or bigger orders," Catullo said. "Now, I'm more of a long-term player. I focus on winning the year, or whatever the end of the cycle is deemed to be. That may mean renting a warehouse or doubling the workforce to prepare for the holiday rush and, by doing so, doubling the business."
He also knows that he can't go it alone.
"One of the reasons I'm able to do this is because I’m working with two great business partners. More than capital, they bring a depth of experience I don't have on my own. They are older, so they were running a business before e-commerce," Catullo said. "They’ve seen the shift in how people buy, and their expectations."
Catullo, who was among the first FedEx Small Business Grant Contest winners, is still grateful for the benefits that the contest, and his ongoing relationship with FedEx, has brought him.
"Winning the grant was great. The grant has value in itself, but there's tremendous added value in the publicity, video and contacts I gained from the experience," Catullo said. "I gained so much confidence from working with a company that took an interest in me. That’s why I'm in the position I'm in today."
Sounds like another success story in the making.