Crossing Over The Crowleys own two businesses--a ski area and a soda bottler--with nothing in common. Or so you might think, until you look beneath the surface.
(FORTUNE Small Business) – Chris Crowley, arms folded over his crisp yellow tie, is staring at a very loud, very wet machine. The contraption--a $600,000 Crown Simplimatic soda canner he bought for $225,000--is working flawlessly, sweating out a cooling mist of Polar Orange Dry soda pop. A tropical tang suffuses the bottling-factory air. The humid, citric spritz would be calming if it weren't for the noise. The machine roars: In the minute he stands there, the Simplimatic fills, tops, and seals 1,200 cans. In the next 60 minutes, 72,000 of them will fly by.
Crowley, who is vice president of the Worcester, Mass.-based Polar Beverages, motions me over, pointing at the aluminum blur and the rows of cans gliding toward the end of the production line. "Look at all those skiers," he shouts over the din, "getting on chairlifts."
Skiers? Chairlifts? Who looks at soda cans and imagines snow? A Crowley does. All five members of the entrepreneurial Crowley clan do, in fact.
The two older Crowley siblings, Chris and Ralph Jr., run Polar--at $200 million in annual sales, the largest independent soda bottler in the Northeast and the second largest in the U.S. The younger siblings, David, Jeff, and Carolyn Crowley Stimpson, run the nearby Wachusett Mountain ski area--on a small, nondescript monadnock in Princeton, Mass.--and have taken it from near insolvency in 1982 to New England dominance 20 years later.
But the unusual thing is that the younger Crowleys point to the bottling plant, not the mountains, as their most frequent font of inspiration; they say they've applied knowledge gleaned from their years under the wing of their late father, Ralph Sr., who owned Polar before them. "A lot of what we do at the ski area is directly linked to our experience watching Dad run Polar," says David, 47, who serves as Wachusett Mountain's COO and general manager.
Apparently, skiing and soda mix. While ski areas have been dying off (from 735 nationwide in 1982 to 483 today), with smaller areas bearing the brunt of that contraction (for more on smaller ski resorts, see page 112), under the Crowleys Wachusett has never posted an unprofitable season. In fact, last year, the lightest snow year in the 130 years Massachusetts has kept records, Wachusett had its third-best revenue performance ever. Its annual operating profit margin has recently hovered in the 30% to 40% range, while the national average stands at around 12%.
The Crowleys' secret? They've managed to grasp a concept that has eluded many of their larger competitors: namely, synergy. Not that they have any attachment to that--or any other--overused buzzword. For them, synergy doesn't mean selling their family's brand of soda at their ski resort (although they do), nor is it about using ad space on root beer cans to promote their ski area. They've dug deeply to understand their business and unearth the similarities between the two disparate concerns--finding, in the process, some surprising techniques for lifting profits.
Both of the Crowleys' businesses share a common enemy: unused capacity. "The idea of downtime being terrible is part of our instinct," says David. "It's something that I remember vividly from when I was a kid at Polar, running around like a maniac with a nine-sixteenths wrench, trying to change the bottling machine over quickly from a two-liter to a one-liter."
Not surprisingly, then, the Wachusett Crowleys have created ingenious ways of wringing full capacity out of a chronically cyclical ski day. First, they don't consider the sport of skiing to be patronized by one broad demographic called "skiers." Instead they define the sport, and the customer, by the hour. To wit: The Crowleys sell the same product in three different ways to three different groups at three different times in a single day.
"It's seniors, housewives, and third-shift factory workers from 9 A.M. to 2:30 P.M.," says David, "teenage groups 3 to 7, and race clubs and families who like the lower ticket prices 7 to 10 P.M." On weekends families and night owls, respectively, take center stage.
The result: The ski area is hopping virtually every moment of its operation--which now spans 14 hours. Viewing the switch on a midweek December afternoon is like watching the bottling plant go from ginger ale to root beer, especially when the high school groups show up.
"Actually, the kids are less like ginger ale and more like Drano," says Mason Flagg, a member of the Wachusett Old-Timers Skiers club, a collection of seventysomethings who arrive at 7 A.M. midweek for an hour of kibitzing before skiing. "When those yellow school buses show up at 2:30, it flushes us right out."
The buses are part of a 10,000-member midweek program that started 20 years ago, when schools approached the Crowleys looking for afternoon activities, and has been expanding ever since. On average, 65 buses and 2,500 teenagers roll in every afternoon. It's a heady cocktail of hormones and hopeful glances--and skyrocketing French fry sales--that doesn't subside until dinnertime, when the kids go home.
Then, around 7 P.M., a new group is king of the hill: ski racers and singles. The area's floodlights go up on the Crowleys' busy racing league--800 adult racers every week who aim for prizes and bragging rights, and perhaps a beer or three at the base lodge's Copper Top bar. Most resorts close at 4 P.M.
But the mountain's most successful new strategy for maxing out capacity is called the Century pass. Introduced three years ago, the pass is valid when the area isn't operating at full tilt. Steeply discounted, the Pass costs $189, vs. $595 for an unlimited pass, and it is highly popular--15,000 were sold last year. In food service alone, the added traffic generated an uptick in revenues of more than $400,000. The bar, which was about to close in 1999, "now needs a staff of three to run it," says David.
Wachusett is developing yet another niche customer for its ski day--the corporate suit. When the Crowleys expanded their base lodge, they came up with a novel plan for the second floor of their new wing: luxury boxes, which the Crowleys call Mountain Suites. A suite--filled with plush furniture, a dining room table, a private bathroom, a kitchenette, and cable TV--costs $350 a day, or $50,000 for the season. In addition to other services, suite customers can have any food Wachusett makes brought right to their room. Seasonal customers get eight transferable corporate ski passes and eight VIP parking spots next to the lodge. In their second year the Mountain Suites grossed $300,000, covering the mortgage on the lodge expansion.
Back in Worcester, in a quieter corner of the Polar plant, Chris Crowley is standing beneath a two-story, 15-ton tsunami of 20-liter spring-water jugs. The bottles don't look like the standard, barrel-shaped, water-cooler variety found in offices; they're squat rectangles.
"It seems basic, but our trucks used to be able to hold a lot more than we were able to put in them," Chris explains, "mostly because of the shape of our old bottles. So we designed new ones, which pack more efficiently, don't break as much, and cost $1.50 less each to make."
Over at Wachusett the "truck" they have to fill every morning--and then empty quickly--is the rental shop, where 3,000 skiers and snowboarders arrive at 7:30 on weekend mornings. Average ski-rental operations are almost always profit centers--a daily reselling of a product that has been purchased once and is paid for after a few uses. But rental shops are also Kafkaesque time dumps, where disoriented beginners wander for an average of 50 minutes.
At Wachusett the area's vice president in charge of rental operations, Carolyn, and her brother Jeff have cut the whole thing to ten minutes, start to finish. "It's like the plant--you're watching bottles go through the manufacturing process and making sure none of them sit still too long," explains Carolyn. Sound impersonal? Good. "People want to be treated with courteous efficiency in the rental shop," says David. "Customers respond adversely to too much time spent in the system. As do bottles of soda--for both, you don't want to let the bubbles go out before the cap goes on." Key efficiencies include the separation of skiers and snowboarders: "It's cans vs. bottles at this point," says Carolyn. Also, don't let customers try on boots, she says; just ask them what size they are and give them the appropriate pair. And finally, use step-in snowboard bindings only--they're much faster than the old, slow strap-ons.
Other critical (if invisible) efficiencies include minimizing the ski area's energy consumption and maximizing floor space. Jeff, the area's director of operations, hunted down the maker of a new snowmaking system and purchased about $450,000 in snowmaking guns. Wachusett's energy consumption fell by 90%, saving about $750,000 annually. He also redirected heat generated by the system's air compressors back into the lodge to warm the building, recovering 200,000 kilowatts. "It's amazing to me that other ski areas would let that heat go into thin air," he says.
Speaking of thin air, anybody with a radio who lives nearby has heard the Crowleys' ode to marketing efficiency: the Wachusett theme song. The Crowleys spend about $600,000 annually on ads that feature the unforgettable tune.
Taken from the 1962 hit "The Watusi," the song, according to company research, is correctly identified by more than half of all listeners. In fact, the gleefully corny ads have rubbed off on the older siblings over at Polar, which has begun to soften its image: On the plant roof a mama bear and her cub (Polar's logo is a polar bear) will now be sitting next to an igloo. If it' s sunny, the cub will be out. If not, the cub will be inside the igloo. "The only problem," says David, "is that bear cubs don't live in igloos." Not every aspect of one business, it seems, can be easily transferred to another.
Paul Hochman is the ski-test director for Ski Magazine.