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"Schrafft's Buys Sedutto"

New York Daily News

May 22, 1987

 

 

Staten Island will be sweeter this summer.

Schrafft’s Ice Cream Co. Ltd. said yesterday it has purchased the Port Richmond-based Sedutto Ice Cream Co. and will move its own administrative offices to Staten Island from Pelham, N. Y., within the next few months.

In addition, Schrafft’s “quite possibly” will move its production facilities from Lancaster, Pa., to Sedutto’s operation in Staten Island, officials said.

Terms of the acquisition of Sedutto from Pillsbury, which also owns Haagen-Dazs Ice Cream, were not disclosed. Both Sedutto and Haagen-Dazs are super-premium ice cream brands, with higher butterfat content than other brands.

John LeSauvage, who runs Schrafft’s, said the firm had been looking at Sedutto since the end of last year and had closed the purchase within the past few weeks. “We believe Sedutto is without question the best ice cream available for sale anywhere in the country…And it also was a good strategic fit.”

A Pillsbury spokesman said his company had sold Sedutto because “we discovered we were able to adequately supply the food-service industry with a super-premium ice cream using the Haagen-Daz brand. The Sedutto proportion of the business was too small to generate a sufficient rate of return.”

The combination of the two companies will enable Schrafft’s to develop more high-quality specialty ice cream products and more items for restaurants and hotels, LeSauvage said. These will be produced under both the Schrafft’s and Sedutto names. In addition, LeSauvage said he would like to expand the Sedutto licensed store operation.

Family held until the early 1970s, Sedutto was owned by Chicago-based Consolidated Foods Corp. for several years, bought back by the Seduttos and then purchased by Pillsbury for an undisclosed amount in 1984. It manufactures frozen desserts for the food service industry and specialty desserts, distributed across the country. In addition, it operates ice cream stores under licensing arrangements in Florida, Washington, and the New York metropolitan area.

Originally a candy maker launched during the Civil War, Schrafft’s was purchased by Pet Milk in 1967 and later broken up into separate ice cream, restaurant, and candy companies. The present ice cream company is a private organization run by John LeSauvage, whose family has been associated with Schrafft’s since 1931. It produces a full range of packaged ice creams sold in supermarkets from the Northeast through the South. It also makes a line of Italian ices under the Centrone’s label.

Sedutto will be run as a separate division of Schrafft’s while Anthony Sedutto, who had been president of the Sedutto division of Pillsbury, will continue in that post. In addition, he will be an executive vice president of Schrafft’s.

The International Ice Cream Association estimates industry sales will reach $9.3 billion in 1987.

Schrafft’s purchase follows a flurry of other activity among super-premium ice cream manufacturers in recent years, including Pillsbury’s $76 million purchase of Haagen-Dazs in 1983 and Kraft’s purchase of closely held Frusen Gladje

"Sedutto Ice-Cream Company Sold to Schrafft's"

By Wendy Greenfield

Staten Island Advance

Friday, May 22, 1987

 

Sedutto Ice Cream, the Port Richmond-based specialty ice cream maker, has been sold to Schrafft’s Ice Cream Co., company officials announced yesterday.

The sale marks the third time in Sedutto’s 65-year history that it has been taken over by an outside company.

Schrafft’s acquired Sedutto from the giant Pillsbury Co., which had owned it since June 1984, said Schrafft’s president John LeSauvage. He declined to disclose the purchase price.

In 1971, Consolidated Foods acquired the ice cream company. But eight years later the Sedutto family bought it back after Consolidated decided it didn’t want to expand the company nationally.

LeSauvage said Schrafft’s was contacted by Pillsbury last June and by the fall both companies sat down to negotiate an agreement. The deal was consummated “a couple of weeks ago.”

Larry Haeg, a spokesman for Pillsbury said Sedutto was sold because it didn’t turn out to be a good business venture, though he said it is a “quality” product.

“We bought Sedutto in June ‘84 as a way for us to enter the restaurant-hotel institutional market in the Mid-Atlantic states,” Haeg said. “During the last couple of years we were not able to grow the business at a rate that would meet our rate of return.”

“The Haagen-Daz brand (which Pillsbury owns) was able to do all the things in the market we wanted to do in the first place. We didn’t see Sedutto as a growth vehicle, although it is a quality product.”

Haeg declined to disclose the sale price or Sedutto’s current assets. In 1983, the year for which the latest data is available, it had $5.6 million in sales.

Tony Sedutto, president of Sedutto and executive vice president of Schrafft’s, would only say that sales were “flat” during the three-year period the company was owned by Pillsbury. Sedutto was reportedly sold to Pillsbury for $10 million.

Concerning the acquisition by Schrafft’s, he said he is “tickled pink” about working with Schrafft’s management team. “I think the synergies between these two companies is nothing short of being ideal.”

Sedutto, founded in 1922, manufactures a wide array of frozen desserts for the food service industry, including bulk ice cream in 2.5 gallon containers, and specialty items such as spumoni, tortoni, tartufos, and Mud Pies. It is the country’s largest manufacturer of spumoni and biscuit tortoni, with spumoni sales accounting for 35 percent of its business.

About 80 percent of Sedutto’s products are sold to institutional customers such as restaurants and airlines, including the 21 Club, the Waldorf-Astoria and the Queen Elizabeth 2.

While distribution is centered in Staten Island and Washington, D.C., Sedutto is handled by more than 100 independent distributors in Boston, Philadelphia, Florida, Detroit, Denver, Dallas, and Los Angeles.

It also has 16 of its own ice-cream parlors in Manhattan, Long Island, and Westchester, in addition to its three Island stores--at its Port Richmond factory, in the Pathmark shopping center, Port Richmond, and on New Dorp Lane, New Dorp.

As part of the changes, LeSauvage said Schrafft’s manufacturing plant will be moved from Lancaster, Pa., to Sedutto’s Port Richmond factory “for better utilization of our assets.” With the move, he said the company will be looking to hire additional employees in production, sales, and distribution. Sedutto now employs 75 people.

Looking to the future, LeSauvage said he hopes to expand Sedutto’s ice cream into additional markets nationwide. He also said he hopes to introduce new flavors and additional banquet items.

“We believe the things that made Sedutto’s success will continue to be in the future,” he said. “Rather than being trendy, we’re the guy that makes the best quality product.”

Schrafft’s was originally formed in Boston in the 1860s and subsequently was taken over by the Shattuck family who developed it over time into a chain of restaurants. The company produces ice creams in quarts and pints, light ice milk, sherbets and Italian ice under the Centrone’s label. LeSauvage said the company also plans to reintroduce its candy line with a British company by late summer, early fall.