March 21, 2016
2016 Business leader of the year

2016 Mainebiz Small Company Business Leader of the Year: Gelato Fiasco co-founder Joshua Davis

PHOTo / Tim Greenway
PHOTo / Tim Greenway
Joshua Davis, co-founder and CEO of Gelato Fiasco in Brunswick, in a new freezer stacked high with pints of gelato.
PHOTo / Tim Greenway
Josh Davis, co-founder and CEO of Gelato Fiasco, in the new expanded production area in the Flavor Foundry in Brunswick.
PHOTo / Tim Greenway
Joshua Davis, co-founder and CEO of Gelato Fiasco, talks with Kyle Wardwell as he stirs blueberry crisp in the Flavor Foundry kitchen in Brunswick.

Joshua Davis: Small Company Business Leader

CEO and co-founder, Gelato Fiasco

Age: 33

Favorite place outside of work: I'm definitely a world traveler, but I do love traveling within Maine. Haybrook Falls, near Baxter State Park, is my favorite part of Maine. I also love being in the alleyways and off-the-beaten-path areas of Asia, like in Seoul, South Korea.

Leadership icon: There's a great guy named Ernie Thebado, the program director of the Watertown (Mass.) Boys & Girls Club. I worked there all four years of college. He was an important role model to me. I watched how he interacted with children and adults. He was dynamic, fun to work for. He had such a presence.

Maine's biggest challenge: Maine's biggest opportunity is also its biggest challenge. Maine's geography is a challenge for us every day. The [lack of] population growth, the aging population. The challenge of how to attract young people. I went away [to college in Boston] and thought I'd never come back here, but I ended up missing the lifestyle.

Maine's biggest opportunity: The food movement is such a good fit. The rest of the country looks to Maine as a place where good things come from. We talk about how do we lower the cost of distribution, fill in the gaps. The great thing about starting a business is raising capital in Maine. It's a small group of people, but they're very dedicated to Maine. You don't want to burn bridges. That's one of the things I love about Maine: it's a small pond. But I could see starting other businesses in Maine.

Best business advice: It goes back to delegation. It's especially important to learn. You have to hire the best possible people. We hold them accountable. I tell them, The first mistake is on me. But after that, it really is on you. You're expected to solve a customer's problem. You don't need to check with me on everything. If we set the goals and expectations out there, they should know to go ahead and do it.

Gelato Fiasco

2 Industry Road, Brunswick

Founded: 2007

CEO and co-founder: Joshua Davis

Business: Gelato, both retail and wholesale

Employees: 49 FTE, with as many as 25 additional part-timers in summer

Revenue: Under $10 million in 2015

Contact: 207-607-4002

Keeping up with Joshua Davis is a challenge. He darts through Gelato Fiasco's Brunswick headquarters like he's walking across hot coals.

In the past year, Mainebiz's 2016 Business Leader of the Year in the small company category has grown Gelato Fiasco's sales to nearly $10 million (double that of the previous 12 months), expanded its wholesale network to 4,100 supermarkets nationwide (from 600) and has overseen a $2 million expansion of the operations on Industry Road in Brunswick.

Yet the breakneck pace seems to suit Davis, 33, who continues to tweak the business and come up with new ideas. On the tour of Gelato Fiasco's headquarters and plant, he races between cluttered old sections of the business and the gleaming, newly equipped new sections. Everywhere he goes, employees are asking him questions and he's answering on his feet. A born entrepreneur.

Davis, who was born in Waterville and raised in Belgrade, graduated in 2005 from Bentley College in Massachusetts, where he studied corporate finance and accounting. It was at Bentley that he met Gelato Fiasco co-founder Bruno Tropeano, another natural entrepreneur. Tropeano is from Connecticut but moved to Maine to be with his girlfriend.

"We started to think of the 'next' thing, the next idea. We both liked eating food, we liked talking food. We both grew up in entrepreneurial families," Davis says.

At the time Gelato Fiasco was created, in 2007, frozen yogurt shops were sweeping the nation, dazzling people with the notion that you could eat a healthy version of ice cream, even if piled high with gummy bears.

To its credit, Gelato Fiasco doesn't pitch itself as a wonder food. It's a good, old fashioned indulgence.

At its inception, gelato was also relatively new in the United States.

"Bruno is first-generation Italian American. In Italy, there are 30 million people and 100,000 gelato shops," Davis says. "But we didn't want to replicate what they do in Italy. We wanted to create a business where we'd want to go."

They opened the Brunswick store, at 74 Maine St., in August 2007. The store has a sleek look, with wood-and-steel chairs, a few comfortable arm chairs and a nice nutty smell from the toasted waffle cones. On a recent late morning, the place was buzzing with moms and toddlers. After one child asked for a second helping of gelato, her mom cried out in mock despair, "Gelato — it's what's for lunch!"

The partners developed their roles: Tropeano created and tested recipes. Davis managed operations.

Early on, they did much of the fit-out work themselves. In the Brunswick store, for instance, Davis installed the wood floors. At the time, Davis was living above the shop, so long hours were just part of the bargain.

"We were here noon to midnight. We worked, we learned the business," Davis says.

One of the early hurdles was introducing customers to gelato, which was initially a mysterious product.

"We had to get the marketing right," Davis says. "There was a bit of an identity crisis. No one knew what gelato was."

The "fiasco" in the name is a playful conceit to what life was like before gelato.

Early on, customers started asking for pints to go. That meant developing packaging and branding for the labels.

Gelato Fiasco got its first wholesale order from the A1 to Go store in Gardiner.

"We'd pack it in a case and drive it up there," Davis recalls. "I was the delivery driver and salesman."

Soon, Bow Street Market in Freeport was ordering batches. Within the first year, Davis was making weekly or twice weekly trips to Belfast and Portsmouth, N.H.

But even if the product was gaining followers, bankers were not among them.

"We pitched the business to 11 banks. They all said no. One said, 'No banker is going to lend you money with fiasco in the name.'"

They persisted, investing their own money and any profits. Eventually, they found a willing network with Maine Angels and CEI.

'An emotional product'

Unlike frozen yogurt, the gelato makers did not try to promote the product as health food. Under marketing director Bobby Guerette, Gelato Fiasco stresses its Maine roots. Labels are clear in mentioning that it's a Maine-made product, and the company is proud of relationships with suppliers like Houlton Farms Dairy. It also stresses real ingredients. Davis said the company steered away from the term "artisan" when it became a staple of fast-food marketing.

"It's an emotional product," Davis says. "It's something you eat with friends. It's for when you've had a [bad] day, when you're looking forward to that pint on the couch."

In addition to the Brunswick store, there's a location in Portland's Old Port neighborhood, at 425 Fore St., opened later. Gelato Fiasco promotes its shops as "safe, inclusive places" where people can share desserts and coffee, operated by nice people. (As a side note, the company gives back $15,000 a year through its Scooping for Community program, helping local schools and nonprofits.)

"It comes back to authenticity. We want people to have a great experience. We put our heart and soul into the stores," Davis says.

At the same time, the wholesale side of the business is taking off, accounting for 90% of sales and helping double growth every year. The staff has grown as well, and the company now has 49 employees, including several senior managers.

Recognition for gelato, the product, has been greatly helped by Talenti Gelato & Sorbetto, a Unilever brand that's sold by Walmart, Target and supermarkets.

"That opened up the category like Chobani opened the door in the yogurt category," Davis says. "We're basically the top-shelf version. Initially, there was a lot of confusion: Is it Italian ice? Is it pudding? Now, you need it and you're willing to pay $7 or $8 a pint."

Steve Smith, Gelato Fiasco's company's director of sales, helped get products into Fresh Market's Boston stores, then into another 200 stores nationwide.

Advisory board helps growth

It wasn't long before Gelato Fiasco found it could not keep up with its own distribution. They'd maxed out their own truck and shipping was prohibitively expensive. Davis cultivated an advisory board that included Pine State Trading Co. principals Gena Canning, Keith Canning and Nick Alberding, who helped with a distribution strategy.

To finance the growth, Gelato Fiasco did eventually find a willing banker: Dave McLaughlin of Bank of Maine, which has since been acquired by Camden National Bank.

"Dave McLaughlin really believed in us," Davis says. "At one point, the financials could have gone either way. But we had a good business plan and we have over-delivered at every level."

"He's the quintessential entrepreneur," says McLaughlin. "One thing about Maine, by virtue of our blood lines, we have a lot of individuals and a lot of entrepreneurial spirit. Josh's generation could have more of this, and Josh is a proven leader."

With financial backing, Gelato Fiasco has deepened its supermarket relationships. In the past 18 months, the company has jumped from supplying 600 stores to 4,100, including Kroger. This year, it will go into Publix and Ahold-owned supermarkets.

On a tour of the newly expanded facility, Davis showed off brand new gelato-mixing tanks, a room full of electronics and server data. There's a new refrigerated area and warehouse, both of which can be accessed by workers on forklifts. The new capacity will help the company meet its growing demand from supermarket customers.

To manage the larger plant, Gelato Fiasco hired Molly Delan, a veteran of AdvancePierre Foods and Inland Seafood. It hired a quality control manager (known as director of perfection), Lila Wilmerding, whose background is in food and supermarkets.

"Our goal is for the customer to walk out of here and say, 'That was fun.' We're not selling gelato, we're selling the experience."

Read more

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