Munroe outlasts competitors sticking with home delivery

ROB ARMSTRONG grew up around the family business, A.B. Munroe Dairy in East Providence, but during that time had no interest in taking it over. / PBN PHOTO / BRIAN MCCDONALD
ROB ARMSTRONG grew up around the family business, A.B. Munroe Dairy in East Providence, but during that time had no interest in taking it over. / PBN PHOTO / BRIAN MCCDONALD

Rob Armstrong grew up around the family business, A.B. Munroe Dairy in East Providence, but during that time had no interest in taking it over. When his father retired 20 years ago, Armstrong had to be convinced to leave the delivery truck and sit behind a desk in the president’s office.
But it’s worked out well for him and the company. Founded in 1881 when milk was delivered by horse, Munroe Dairy’s cow-painted delivery trucks are now part of the resurgent online food-delivery world.
This spring Munroe’s success was recognized by the U.S. Small Business Administration, which named the company New England family-owned business of the year.

PBN: What did the SBA see in Munroe Dairy that led to the award?
ARMSTRONG: I think it was the fact that we are still around after 130-plus years. We have a 1952 phone book in the office and there are entries for 63 dairies in Rhode Island in it. Now only three are left: us, Christiansen’s Dairy [in North Providence] and S.B. Winsor’s [in Johnston.] They were pretty impressed by the fact that we were around so long and asked, “How come you guys are still in business when all these others are gone?” And that’s a good question. I think part of it is we remained home delivery – we decided not to go wholesale. Home delivery takes a lot of energy to make it work. We are hitting the target – I am not saying we are hitting the bull’s-eye – but we have been trying to make it work for a long time.

PBN: Are home-delivery dairies more popular in Rhode Island than the rest of the country?
ARMSTRONG: There are probably a couple of hundred in the country doing what we do. In the last 10 years or so there have been a few areas where there has been a surge of home deliveries: Chicago, Salt Lake City. There is definitely a market for home delivery, but it is labor intensive. I don’t think most people realize how much work goes into the business. PBN: As technology has evolved, online ordering has become a bigger part of the business. How much of your business do you get from online orders now?
ARMSTRONG: About half of the orders now are online and that is still growing. We just started accepting credit cards and that has helped to increase the online orders.

PBN: Has the Internet fundamentally changed what you do?
ARMSTRONG: It’s made it better for us. People buy more when they shop online. It has increased the cash flow a little bit because they can pay right there with a credit card. It has required a little bit more work on the distribution end because people order up until midnight for the next day’s delivery. So we have people here at midnight filling orders for the trucks to leave starting at 2 a.m. So it is a bit of a madhouse from midnight to 5 a.m.

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PBN: You now offer a wide array of food products beyond milk and cream. Is there a limit to how far you can go into different grocery items?
ARMSTRONG: We probably offer 250 products, where 25 years ago we maybe had 25 products. The trucks are only so big. They average anywhere from 80 to 100 deliveries a day. The average delivery is around $20 per drop. So we could do $50 drops if we had a bigger menu, but we probably wouldn’t be able to do as many deliveries per day. But if we were doing 50 drops at $50 per drop that would be OK.

PBN: Do you have plans to keep expanding? Do you have the space?
ARMSTRONG: We have been adding one or two trucks per year. Right now our customer count is around 12,000 homes. We just started making a push up towards Boston – Foxboro, Mansfield, Walpole – and that seems to be a great area. We have one truck there now and are looking at splitting that area into two trucks. That is how we grow: we go door to door offering samples. We don’t spend a lot on advertising. PBN: Your business now is part 19th century and part dotcom boom. How much of it is still about the milk?
ARMSTRONG: Milk is probably 50 percent of the business. Milk is what gets us in the door, because it is not sold in the store. It is exclusive in that the only way you can get it is to have it delivered to the home. It is a whole lot easier when you come up to someone and you are carrying a bottle of chocolate milk, because it is something they can’t get elsewhere. It is a great way to start off a conversation.

PBN: Do you ever get pressure to go to all grass-fed dairy cows?
ARMSTRONG: The milk that we get from Agri-Mark cooperative in Connecticut is pretty much that. They are small farms from 20 to 100 cows. They are pretty small compared to some of the dairies out there. And we are pretty fussy about the quality. If there is a farm that is having problems, we are not going to accept the milk. We test it every day for antibiotics before we unload the milk. We can’t afford to sell anything but quality.

PBN: Where is the public these days on the whole-skim-2 percent-milk continuum? Is one winning?
ARMSTRONG: Lowfat and skim are the big sellers. Whole milk is probably 15 percent of our business. Lowfat and skim are 75 percent. Flavored milks are also doing well.

PBN: How is coffee milk doing? Has the next generation caught onto it?
ARMSTRONG: It’s a pretty good item. It is doing well – not as well as chocolate. But in Rhode Island it is still the state drink, isn’t it? •

INTERVIEW
Rob Armstrong
POSITION: President of A.B. Munroe Dairy
BACKGROUND: Armstrong first started working at his family’s East Providence dairy in high school, learning the production and bottling process. While in college, he started driving a Munroe delivery truck and eventually dropped out of school to work full time. When his father retired 20 years ago, the family convinced Armstrong to come in off the road and into the office to lead the company.
EDUCATION: Graduated from Providence Country Day; spent two years at Boston University
FIRST JOB: Mowing the lawn at Munroe Dairy at age 10
RESIDENCE: Rehoboth
AGE: 61

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