October 10, 2013

Schlotterbeck & Foss growing in stealth mode

The Maine specialty foods maker succeeds by giving the spotlight to its customers.

By J. Craig Anderson canderson@pressherald.com
Staff Writer

Paul and Kathie Dioli, the husband-and-wife owners of specialty foods maker Schlotterbeck & Foss, like to keep a low profile.

click image to enlarge

click image to enlarge

Sam Mangino, a chef and sales representative for Schlotterbeck & Foss, makes roasted garlic chicken with a new cooking sauce while working in the pilot lab.

Gabe Souza/Staff Photographer

Since buying the nearly 150-year-old Portland company a decade ago, they haven’t added their last name to the letterhead or starred in any commercials. In fact, they barely do any marketing at all.

And don’t bother trying to pressure them into having their pictures taken for the local newspaper. It won’t work.

“You know how many times I’ve had my picture taken? This many,” said Paul Dioli, touching together the tips of his thumb and forefinger to form a zero.

The Diolis’ preference for stealth is more than just a matter of modesty. It’s the cornerstone of their company’s growth strategy.

While Schlotterbeck & Foss sells its own branded sauces, toppings, dressings, marinades and other specialty food products at Whole Foods, the biggest and fastest-growing part of the business is creating “co-branded” products for grocery stores.

That means Schlotterbeck & Foss often doesn’t get the recognition for its creations, which are sold by various retailers under their own brands.

“I think it’s fair to say that other products that people have in their cupboards are probably us,” Kathie Dioli said.

For example, the company has created more than 50 different gourmet food products for Hannaford Bros., which are sold under the Scarborough-based grocery chain’s Taste of Inspirations brand, Hannaford spokesman Michael Norton says.

The relationship between the two companies is highly interactive, he says. They work together to develop and perfect unusual gourmet recipes.

“That brand is really about unique flavor profiles,” Norton said.

Other retailers sell Schlotterbeck & Foss products under their own brands, too, but the Diolis are reluctant to talk about them. They’re not interested in taking the credit.

“We like to be people’s best-kept secret,” Paul Dioli said.

Co-branded products have become such big business that Schlotterbeck & Foss is preparing to relocate from its historic, five-story building on Preble Street to a larger, single-story manufacturing facility in Westbrook. The Diolis hope to complete the move next year.

The relocation will allow the company to grow beyond its current status as a regional player on the East Coast and give it the capacity to offer co-branded products to bigger retail chains, they say.

“It will allow us to go after larger customers that fit our space,” Paul Dioli said, “because not everyone is a good fit.”

What sets the company apart from competitors is the way it makes products in small batches, he says.

Consider the way Schlotterbeck & Foss would produce a peach topping, compared with most other food manufacturers, Paul Dioli says.

Most would cook the topping in a massive kettle that would heat a large amount of product, thus requiring a great deal of agitation to keep the sauce moving around during the cooking process.

That degree of agitation would essentially puree the peaches, leaving behind barely any chunks of fruit.

Schlotterbeck & Foss gets around that problem by using smaller kettles, Kathie Dioli says.

“We have whole chunks of things in our products,” she said. “When it says peach, you can see a peach.”

The Diolis say they have learned a lot about making gourmet food products since buying the company 10 years ago.

Paul Dioli is an engineer who has worked for companies such as General Electric, Idexx Laboratories and WEX Inc. Kathie Dioli is a registered nurse.

(Continued on page 2)

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