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Entrepreneurs
Business Observer Thursday, Mar. 19, 2009 12 years ago

Family Recipe

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Jim and Lisa Schalk have taken a recipe for toffee and turned it into to candy-making enterprise.

Jim and Lisa Schalk have taken a recipe for toffee and turned it into to candy-making enterprise.


Jim Schalk remembers eating his mom's homemade toffee in Indianapolis when he was growing up, thinking it was pretty good.

“It was like eating your mom's pasta,” Schalk recalls.

However, his family, neighbors and now his customers, were a lot more enthusiastic.

“One woman tasted it at an event and, well, you can't print her response,” Schalk says, pausing. “Let's just say that she was very, very happy.”

What began as a family recipe for toffee turned into holiday gifts for family and friends and eventually a South Tampa business, Toffee to Go, run by Schalk and his wife, Lisa, who grew up in South Tampa.

With many companies and stores making and selling toffee, the Schalks carve their niche by using no preservatives and making sure each batch of toffee is not under cooked, which tastes too granular, or overcooked, which tastes burned. In the cooking process, with butter and sugar, this is tricky. A few minutes can make a difference.

They also take their product on the road. After opening a small retail shop in 2004 attached to their commercial kitchen, Jim Schalk has been increasingly renting a van and driving to boat, home and other conventions around the Southeast. This makes up about a quarter of the company's sales. It is a growing segment and is a way to brand the toffee.

Besides shows and conventions, the company reaches four other markets: corporate, where companies give the toffee to their customers; wholesale, or sales to retailers and gift basket companies; retail, for Toffee to Go's walk-in customers; and the Web. It also sells toffee to meeting planners and hotels. As a member of the Tampa convention and visitors association, the company gets a list of the associations coming to Tampa.

Its flavors of toffee, displayed in ultra-closeups on its Web page, include milk chocolate almond toffee, dark chocolate pecan toffee and white chocolate macadamia nut toffee. Don't think Heath bar or candy store toffee. Think chunky chocolate gourmet treat.

“People taste our product and wonder why it's not like a Health bar,” Schalk says. “With our toffee, you are likely eating toffee Friday that was made Tuesday of that week. A Heath bar may have been in a warehouse for six months.”

Toffee to Go is encouraged by the growth of its convention and event sales, the response of people at those events, and Schalk is pursuing that. But he would like to boost its Web business, which only represents about 2% of sales. Selling from the Web doesn't require the expense and time of travel.

And some customers buy Toffee to Go and resell it under other names, or use it with other products. These customers include a Davis Islands ice cream parlor that mixes the toffee with homemade ice cream in three custom flavors and Tampa business icon and baker Phil Alessi.

Origins and operation
The idea for Toffee to Go grew from a suggestion by Jim's wife, Lisa Schalk. After one of her friends tasted it and raved about it, she and Jim began trying to recreate the recipe at home.

After several batches, they did it, added their own touches, and began making toffee for their family, as holiday gifts. Then they made it for friends.

Lisa Schalk went to a Tampa event with the toffee and came back to tell her husband about the response.

“She told me we were the talk of the show,” Schalk says.

So Jim Schalk left the hotel business and, with some personal savings, began the toffee-making operation out of their South Tampa home in 2002. They began making the toffee for customers and for church, craft and local Junior League events and shows. That led Lisa to create the name, Toffee to Go, because the product was traveling or people came by to get a box and leave. That first year from home, they sold more than 125 pounds of toffee.

Eventually, the business outgrew their home and in 2004, they leased a 1,000-square-foot building with a commercial kitchen and a 200-square-foot storefront about 10 minutes away in South Tampa.

Despite the move, Jim Schalk has been careful to not expand too quickly. While the company building is a little tight for three months, it is comfortable the other nine. He remembers an old adage he heard while in the hotel business, planning ballroom and meeting room sizes.

“A friend once told me, 'Don't build a church for Easter,'” Schalk says.

That's been his biggest CEO lesson: The value of being fiscally conservative and keeping expenses in check.

“We don't borrow more than we need or can pay back,” Schalk says. “We don't spend a lot on packaging. The only thing we don't worry spending on is the product.”

The Schalks can easily increase the toffee's shelf life with preservatives. But they don't because they don't want to affect the candy's quality.

Jim Schalk does not mind if the cooks have to pitch a batch of toffee or two if they don't turn out right.

“I'd rather have them toss the damaged batches than try to hide it and have packaging pick up on it,” Schalk says.

Hotel veterans
Jim does the cooking. Lisa does the packaging. Jim makes about 20,000 pounds of toffee a year, which is more than the weight of six mid-sized sedans. Jim also goes on the road with a rental van to take the Toffee to conventions.

Preparations for the all-important fourth quarter begin in June and July, when the business adds two seasonal cooks working two shifts a day. They make 300 pounds of toffee a day and freeze it. Fifteen seasonal and full-time employees pack tins and fill boxes at Christmas time.

The company can move about 1,000 boxes on a Monday at Christmas time. When the Schalks first started the business, they would pile the boxes into their car and drive it to the post office. Now the post office brings a truck to them.

The Schalks' business background comes in handy. They both worked in the hotel industry in Tampa. Jim Schalk, 50, started in the hotel business after college and continued for 25 years, eventually becoming a vice president of operations. He also worked in a restaurant kitchen and as a waiter before that.

“We have always waited on people,” he says.

The hotel business also taught the couple about supply and demand and how to maximize the busy season.

The Schalks would not reveal revenues for Toffee to Go, but they did confirm that sales and profit have increased every year, even in 2008, although the revenue increase last year was only 7%. They are hopeful this year might get them back to 10% growth.

“We are trying not to participate in the recession,” Schalk quips.

Reaching out
The future of Toffee to Go includes new products and possibly new events. There are other shows, such as RV events. Those attract customers who may like the product.

“People are telling me that those people have money to spend and they are your kind of customers,” Schalk says. “We are going to look into it.”

Toffee to Go is also looking at doing a sugar-free version for diabetics, which some diabetics have tasted and liked. It is also working on a chocolate-free version. For a few months in the Tampa winter, the Schalks can ship and store their product without ice. But as the temperature rises, like it is now, out come the ice packs.

Schalk is also working on a new product: caramel. But it may take time.

“I made six batches,” he says. “Two were unbelievable. Four were horrible.”

The company is also preparing a toffee sauce as a topping for ice cream, fruit and cakes. The Schalks hope to unveil the sauce, caramel and sugar-free toffee in the next 12 months.

REVIEW SUMMARY

Industry: Candy manufacturing and sales
Business: Toffee to Go
Key: Sticking to quality standards and getting in front of the right customers.

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