5 Minutes with . . . Stew Leonard Jr.

When we interviewed Stew Leonard Jr. for our June 2008 cover story (see Report Link #65884), the second-generation head of the socalled “Disneyland of Dairy Stores” told us how he expanded his father’s super-successful fresh-food grocery from one store to a chain of four, and opened seven Stew Leonard’s Wines stores.

The company now has nine wine stores, and when NY Report managing editor Lee Lusardi Connor caught up with Leonard, he was scouting locations for a fifth grocery store. Despite the chain’s continuing success, Leonard admits that the economic downturn of the past two years has caused him to find new ways to appeal to customers. He shared his advice for business owners, and his proactive program for keeping the family business strong well into the third generation.

NY Enterprise Report: What trends are you seeing in your customers’ buying habits, and how has that changed the way you sell?

Stew Leonard Jr.: You’re really in a much more value-conscious economy than you were two years ago. You see that the customer who, for example, used to buy filet mignons for the whole family now buys filet mignons for the adults and hamburgers for the kids. Overall, people have pulled in the reins a little bit.

For a business, that means you have to really be on the customer’s side of the table right now. Maybe a couple of years ago you were selling wines that were $50 to $100 a bottle. The lesson now is, take off your ascot, roll up your sleeves, and start selling $10 to $30 bottles of wine.

Another example: We sell Parmigiano-Reggiano cheese, which is the best you can buy;  it’s $13.99 a pound. We used to sell onepound wedges in the store all day long. Now we cut down the size of wedges and sell them for $9 apiece. We call it pocketbookfriendly.

NYER: You now have nine Stew Leonard’s Wine stores. Isn’t there a lot of competition in that space?

SL: Here’s something to tell your entrepreneur readers: There’s lots of competition everywhere. Any business you’re in is competitive, but passion will win in a competitive environment. Who loves what they’re doing the most?

You’ve got to be out there looking at your competitors, and making sure you’re on top of your game. You can’t win if you’re sitting on the back of a boat in Florida, fishing.

This is the kind of passion we’re trying to teach over and over and over again with our management team and our family.

NYER: What’s your strategy for bringing the third generation along in the family business?

SL: We take it extremely seriously. We’ve had top-notch family business advisors for 30 years now. [For more on the importance of succession planning, see page 30.] The decision is, do you want to sell your business and go fish in Florida? Or do you want to transfer it off to another generation?

We created the Leonard Family Handbook, which talks about our family business philosophy and how we expect the family to act, in the business and in the community. We caution about something called “The Leonard Badge,” which is sort of your entitlement badge. If you want to get something done within the company, we don’t want family members to pull out this imaginary badge and say “Do it.” We also talk about career planning. Every member of the third generation has to work outside the family business for three years after graduating from college.

Every two years we have a big family reunion and give everybody a copy of the handbook and we review it. It almost has to be a loose-leaf notebook because it changes so much as the kids get older and new things come up.

For more of this interview, click here.