Rich Products’ Topping Idea
Food company uses ingredients from its early days to mold ROAR Logistics unit.
In 1945, the late Robert Rich Sr., a dairyman intrigued with research being done with soybeans, created the world’s first nondairy whipped topping. The Buffalo, N.Y.-based company he created, Rich Products Corp., has grown into a diversified food company with annual sales of $3.7 billion. Today, his son, Robert Rich Jr., is chairman of the company.
Rich Products is also the parent of a growing transportation company, ROAR Logistics. In May, ROAR continued its expansion by acquiring Integra Logistics of Houston.
The president of ROAR — the company’s name is an acronym for rail, ocean, air and road — is Robert Rich III, who talked to American Shipper about the company’s history and plans for the future. ROAR can trace its roots to the private fleet Rich had operated. Rich said his grandfather, in his early days as a dairyman, thought company drivers driving a company truck emblazoned with the company’s logo would present the best image for delivering his product and give it a logistics edge over the competition. As the company expanded its product lines by acquiring other companies, it also grew its fleet — and name recognition with brands like Coffee Rich creamer, Farm Rich frozen foods, SeaPak, Byron’s BBQ, Casa Meatballs and Carvel Ice Cream Cakes. “When deregulation hit in the late ’80s, it really hurt the fleet to the point that by the end of the ’90s it wasn’t that viable for us to maintain trucks anymore,” Rich said. In 1997, Rich outsourced its fleet.
Icing on the Cake. However, the company had established a brokerage as part of its trucking operation, he explained, because even when it had company trucks, there were times when Rich Products needed to rely on outside carriers. It maintained that business and decided to get back into transportation as a non-asset-based carrier. “We saw that refrigerated intermodal was becoming very popular, and we thought that having a firm that was company owned would be a good opportunity to augment what we were doing in our own logistics department at Rich Products Inc. That is where we got the idea of starting ROAR back in 2003.” While the ROAR name encompasses all four of the major transport modes, Rich said, “We primarily started the business as an intermodal marketing company because we felt that rail was going to be our biggest opportunity to explore for some new avenues for cost savings for Rich Products.”
The firm started with four phone lines and offices in Buffalo and Atlanta “primarily because our rail guru was in Atlanta and he didn’t want to move to Buffalo and I didn’t want to move to Atlanta,” recalled Rich. Sales have grown over the past 15 years. Based on the first five months of this year, sales amount to about $115 million on an annualized basis before the Integra acquisition. If all goes according to plan, with Integra, sales will be close to $185 million per year, Rich said. He said when ROAR was created, it was with the understanding “we have to be able to stand on our feet.” Before the Integra deal, moving cargo for Rich Products accounted for less than 10 percent of ROAR’s business. After the Integra deal, he expects that will drop to around 6 percent. When bidding for Rich Products’ business, ROAR has to compete against many common carriers and contract carriers, Rich said.
Stiff Peaks. “At ROAR, if we’re not competitive or if we can’t service the lane, we won’t take it on. It’s a situation where nothing is guaranteed. There’s no subsidy. Either sink or swim,” he said. And while ROAR has talked to Rich Products about doing more business with its parent, with tight trucking capacity, this might not be the right time for a change, Rich said. “You can’t change horses in the middle of the stream and that stream has become a rapids. “Every shipper out there is getting beaten up so bad by carriers. I don’t want to go back to corporate and say, ‘Look, here are the outrageous rates right now,’” he said. “Everybody’s rates are going up, but we don’t want to be the one to deliver the bad news.” Frozen foods and other groceries, building materials and nonalcoholic beverages are among the major commodities ROAR handles. Refrigerated cargo accounts for about 10 percent of ROAR’s rail business and 35 percent to 40 percent of its trucking business, and Rich believes that will grow because of the expertise of its parent company in being a frozen food manufacturer. “We understand the perils and the challenges of dealing with the food houses and the frozen manufacturers. We understand temperature control, we understand temperature tolerances,” he said. “You need to understand how products behave when they go over the mountains. You have to understand how they behave when you’re going through the desert.” Rich said the key to ROAR’s success is the employees. “The root of anything you do has to be your team … because when you’re selling truck brokerage all you’re doing is selling good intentions. If you’re selling rail, you’re relying on the railroads to do the best that they can to help you out. “In this market you do a little bit of praying there that the railroads actually have the capacity and that you’ll actually be able to find a truck to haul something across the road without gouging yourself and then you find yourself in the red for the year.” He estimates the company’s domestic business is split about half and half between rail and truck.
Cream of the Crop. ROAR has eight offices throughout the United States and 128 different agent offices. While most of its offices are in big cities, the company also has a small office in Pekin, Ill., near Peoria. Rich says talent is the reason why. “We found a team in Pekin that we felt fit our vision and our model and we brought them on board,” he said. “They’ve got a small handful of customers. They’ve been loyal to us and we’ve stayed loyal to them. I’d rather have them on my team than compete against them.” While 90 percent of ROAR’s business is domestic, about 10 percent is international and the company is an NVOCC as well as a forwarder and a customs broker. He said the majority of the business that the company does internationally is for Rich Products, shipping to its customers and plants around the world. In addition to food and beverages, he said ROAR has built a specialty in the movement of building materials and repositioning 40-foot ocean containers domestically. Repositioning creates “savings for our customers and options for shipping flexibility. You’re not always relying on a rail container, you’re looking at ocean containers that can be reused for domestic consumption,” he said.
As for future growth, Rich said, “We’re not looking to be big for the sake of being big, but if we find the right business that has the right culture and the right fit, we will definitely take them on. We’d like to keep growing, but we’re trying to do it at a pace that we can control. “I feel if you’re a good manager and a good leader of a company you really need to know everybody in the company and you should be able to have a 20-minute conversation with them over coffee about anything and everything. We have 120 associates so I need to learn another 43 people” because of the Intergra acquisition, he said. The Integra deal will add offices in Chicago, which he noted is the intermodal hub of the United States, as well as Dallas and Houston. “When you talk about Houston, and you talk about import, export and petrochemical, and you talk about plastics, we see this as just a tremendous opportunity to extend our reach into the Gulf in an area that we feel gives us the ability to build our intermodal presence there as well as build a real strong truck operation,” he said. “While it’s a difficult time, I think the Gulf, Houston and that whole area is a great area to do trucking.”
BY CHRIS DUPIN |AMERICA SHIPPER WEDNESDAY, JULY 11, 2018