Cirelli Foods: Like Family
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Monday, 01 October 2007
rp Cirelli Foods: Like Family - American Executive - RedCoat Publishing
After a major transition, this family-owned food services provider is poised for rapid growth.
Sixty-one years ago, John Cirelli began purchasing Italian food products from suppliers in Boston’s North End and selling them door-to-door in nearby Brockton, Massachusetts. From those humble beginnings, New England’s largest family-owned food services provider was born.

Today, Cirelli is 94 years old and stands as the chairman of the board of Cirelli Foods, a company with more than 2,500 hotel and restaurant accounts throughout New England. Much has changed at the company over the years, but what made Cirelli successful as a door-to-door salesman is what still drives the company today: a promise that customers will be treated like family.

“We take a lot of pride in being family owned and run,” said Paul Morrissey, president and CEO. “And we truly believe we treat our customers like family. On a daily basis, we put the customer first. We’re not perfect; everyone makes mistakes. But when we do, our customers know we’ll be there to make it right.”

Cirelli Foods: Like Family - American Executive - RedCoat Publishing
Paul Morrissey, President and CEO
It’s a mantra that’s turned a one-man operation into a 124-employee, $80 million business. And having overcome the growing pains that accompanied a recent move to a state-of-the-art, 130,000-square-foot headquarters and warehouse complex, the future for Cirelli Foods has never looked so bright.

Movin’ on up
When Morrissey joined the company five years ago, it was as director of operations, and Cirelli Foods was still doing business out of its dated, cramped 60,000-square-foot warehouse in Brockton. Part of the reason Morrissey was brought on board was to help the company manage its planned move to a new facility in Middleborough, a town roughly 20 miles away. Sounds simple enough, but with the customer first in mind, Cirelli Foods wanted to make the move without missing a single day of shipping.

After nearly a year of planning, training, and coordinating, the move kicked off on an early Friday morning. A big part of the strategy for Morrissey’s team was to outsource the moving of products and equipment to a freight company. That freed up Cirelli Foods’ fleet of 21 trucks to focus on delivering orders.

At the new $13 million facility in Middleborough, rotating teams worked around the clock, unloading trucks and setting up. By Sunday at 5:00 p.m., the last of roughly 180 truckloads had been unloaded, not a single customer order had been missed, and the night crew was ready to start the first shift in its new home.

“We had a strong plan, set it up properly, and our people went to work,” Morrissey said. “It wasn’t perfect when we were done. Our first fill rate was 95%, which is just short of horrendous in this business, but we quickly closed the gap. Within two weeks, we were above 98% and moved quickly into the 99th percentile.”

It was the dawn of a new era at Cirelli Foods, but before the company could make its leap forward, it would have to take a step back.

Growing pains
According to Morrissey, the difference between the Brockton facility and the Middleborough facility is like night and day. In Brockton, there were only four docks. In Middleborough, there are 30 docks, 15 dry and 15 refrigerated. And that’s just the tip of the iceberg when it comes to comparing a warehouse built in the 1960s to one custom built in 2002.

The quirks that came with working in the old facility were ingrained in Cirelli Foods’ long time warehouse staff, and many had trouble adjusting to the new digs. Despite intensive training efforts, turnover rates grew. Other problems began to mount. The debt that came with the new facility and equipment wasn’t managed effectively, and when a major customer was lost, expenses and gross profits were thrown out of whack. In fiscal year 2006, the company posted a loss.

In March, the Cirelli Foods board named Morrissey president and CEO and tasked him with getting the company back on track. As a first step, the new chief executive conducted a thorough internal SWAT (strengths, weaknesses, and threats) analysis and quickly realized the company had a number of the right people on the bus, to quote Jim Collins, but didn’t necessarily have them in the right seats.

After some top-level changes and restructuring, Morrissey began to refocus the business on its core strengths. For example, the company had an underperforming coffee and juice machine business, with an entire department dedicated to installation and repair. The equipment and maintenance contracts were sold, saving Cirelli Foods an estimated $100,000 annually.

Morrissey also guided the organization in a philosophical shift, focusing on measuring to manage. A number of key metrics were established, and the organization began benchmarking itself against competitors. “We measure everything we do now. It allows us to find the problems quicker, and we’re focused on implementing better solutions and implementing them faster. It’s become our mantra: quicker, better, faster.”

Quick is the operative word in describing how long it took Cirelli Foods to get back on track. After just six months, Cirelli Foods’ debt is being managed effectively, expenses have been slashed, gross profits are up, and the company is energized and focused on improving key metrics. The goal now, Morrissey said, is to chart a course for the future.

“We hit a speed bump, and it hurt, but we’ve gone beyond it,” he said. “Now we’re about to engage in a strategic planning process so we can figure out where we want to be in 2010. We’re going to look at organic growth options and acquisitions, which we couldn’t even talk about a year ago.”

Morrissey said the company is capable of hitting the $100 million milestone in the next three years, something John Cirelli never could have dreamed of when he started the business 61 years ago.

“I see great things in the future for this company,” Morrissey said. “We have great people, a great facility, and room to grow. If we do things the right way in our business and continue to treat our customers like family, the Cirelli name will be around for another 61 years.”
 
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