How A Restaurant Supply Website Created A Billionaire Family

Forbes

Fred and Gene Clark have devoured a fifth of the $18 billion industry by following the Amazon playbook. Now they’ve cooked up a plan for greater growth.  Read the full story on Forbes: https://www.forbes.com/sites/jeremybogaisky/2024/02/22/how-this-billionaire-family-built-a-restaurant-supply-fortune-in-amish-country/?sh=1d78ed7e7970  Forbes Daily Briefing shares the best of Forbes reporting on wealth, business, entrepreneurship, leadership and more. Tune in every day, seven days a week, to hear a new story. Subscribe here: https://art19.com/shows/forbes-daily-briefing  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 Here's your Forbes Daily Briefing for Saturday, February 24th.

00:05 Today on Forbes, how a restaurant supply website with a quirky name created a billionaire family.

00:13 On a snowy January morning in Lancaster, Pennsylvania, a flat screen monitor in a former Mennonite

00:19 elementary school displays the vital signs of Websterant Store, spelled like restaurant

00:24 but with web at the beginning.

00:27 Websterant Store sells everything a restaurant might need, from $25,000 walk-in freezers

00:33 to 15-cent takeout containers.

00:36 Business is booming.

00:37 By 9 a.m., Websterant Store, the internet storefront of Clark Associates, a 53-year-old

00:43 family-owned firm, has already rung up $800,000 in sales.

00:48 It bagged $8.6 million the day prior.

00:52 In a former classroom nearby, which still has a chalkboard on the wall, employees run

00:56 demand projections to ensure Clark's warehouses remain well-stocked with 35-pound buckets

01:01 of peanut butter, boot-shaped beer mugs, and the rest of the 420,000 products the website

01:07 offers.

01:08 It's a struggle to keep up.

01:11 Clark Associates' sales have ballooned from $80 million in 2009 to $4 billion today, an

01:17 eye-popping growth rate of 32 percent a year.

01:21 Over the same period, employee headcount has gone from 350 to 7,000, hence buying the elementary

01:27 school.

01:28 Clark's CEO, Gene Clark, says, "We were desperate for space."

01:33 Clark, who is 39 years old, took the helm in 2020 from his father, Fred, a blunt-talking

01:41 65-year-old former electrician and self-taught businessman with a penchant for bucking conventional

01:46 wisdom.

01:47 In particular, everyone thought restaurant equipment was too complicated to sell effectively

01:52 online.

01:53 A standard two-door refrigerator, for instance, can be configured 150 ways, depending on if

01:58 you run a busy seafood joint or a sleepy neighborhood cafe.

02:02 Fred disagreed, and it paid off handsomely.

02:06 Before Websterant's store launched in 2004, Clark Associates was one of hundreds of regional

02:11 distributors of restaurant equipment and supplies.

02:14 It also built commercial kitchens and operated a small chain of brick-and-mortar stores.

02:20 Websterant's store, which accounted for more than 80 percent of the company's revenue last

02:23 year, has transformed it into the industry's behemoth.

02:27 Clark Associates has taken roughly 20 percent of a U.S. market worth at least $18 billion,

02:33 mostly by marrying its digital storefront with a warehouse network and a so-called "pick

02:37 and pack" system that enables it to make deliveries nationwide within one or two days.

02:43 By 2022, Clark's revenues were roughly a billion dollars ahead of its closest competitor, Trimark

02:49 USA, according to a ranking in the trade publication Food Service Equipment and Supplies.

02:55 The Clarks say they've done it without a penny of outside capital, funding expansion by reinvesting

03:00 profits with a modest $275 million in bank debt now.

03:05 Like any distribution business, profits haven't been fat.

03:09 Associates estimate them to be under 20 percent gross, especially given its reliance on e-commerce

03:14 compared to the value-added design services that make up a greater portion of competitors'

03:18 business.

03:19 But it has been enough to turn the Clarks into a billionaire family.

03:23 Gene and Fred own most of Clark Associates, which, conservatively, is worth some $1.2

03:28 billion.

03:29 Three other executives hold small stakes.

03:32 Fred, sitting in the bright white-tiled break room at headquarters a quarter-mile down the

03:37 road from the Nerve Center in the elementary school, says, quote, "This was never a master

03:42 plan."

03:43 The all-important Webster-Ontz store, for instance, began life as a summer project for

03:48 Gene, a college student at the time, who snapped pictures of a few hundred products while home

03:53 on break.

03:56 For full coverage, check out Jeremy Bogaski's piece on Forbes.com.

04:02 This is Kieran Meadows from Forbes.

04:04 Thanks for tuning in.

04:05 [MUSIC PLAYING]

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