The Sanna family of Chicago saw the end of the milkman and needed adapt their dairy business for the future. Hello Swiss Miss.

Dave Young:

Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.

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Dave Young:

Welcome back to the Empire Builders Podcast. I’m Dave Young and Stephen Semple sitting here. And he just told me what the topic is. And it took me back to, gosh, it took me back to my young teens sitting in a ski lodge drinking some hot chocolate.

Stephen Semple:

There you go. That’s a good one.

Dave Young:

This was the innovation in hot chocolate, and we’re going to talk about Swiss Miss.

Stephen Semple:

Yes.

Dave Young:

All right. And I’m trying to think of when that would’ve come out. Probably, I’m guessing the ’60s, ’70s?

Stephen Semple:

Yeah, it was ’60s.

Dave Young:

And it wasn’t long before my mom had a recipe for it would make a giant tub of it. It wasn’t Swiss Miss obviously, but it was like it’s powdered milk and cocoa and whatever else. I would just eat it by the spoonful dry.

Stephen Semple:

Wow. Really? Okay. There you go.

Dave Young:

Sure. I was doing those kinds of YouTube challenges before YouTube was around all by myself in my mom’s kitchen.

Stephen Semple:

Well, Swiss Miss was actually launched in 1961. 1961. It was created by the Sanna family, as you’ll learn in this. And it’s a bit of an interesting story. It’s almost like a seven-act play in terms of-

Dave Young:

The Sanna Family?

Stephen Semple:

Sanna family. S-A-N-N-A, Sanna.

Dave Young:

Sanna. Okay.

Stephen Semple:

Yeah. And it said it’s a bit of an interesting journey. It’s almost like a seven-act play in terms of the stuff that happened.

Dave Young:

And I don’t know where this is going. I’m going to throw a weird guess out.

Stephen Semple:

Okay.

Dave Young:

One of the things that my mom put in her hot cocoa recipe was a powdered milk. And we used to drink this, a powdered milk called Sanalac.

Stephen Semple:

You’re right on the money, Dave.

Dave Young:

Is that right? Okay.

Stephen Semple:

Yep. Once again, ding, ding, ding. Dave nails it.

Dave Young:

All right, continue.

Stephen Semple:

Okay. Well, we’re done. We’re done now.

Dave Young:

For some reason, I saw it with one N, but yeah, it was weird. There was a period of a couple years where she didn’t buy milk at the store. She bought powdered milk and we had these jugs that had these plungers that stirred it up and we had powdered milk. It was almost like war rations in the ’70s or something. I don’t know why we did it.

Stephen Semple:

So this is a big part of the story. Now, Swiss Miss was started in ’61. It was sold in 1967 to Beatrice Foods. Now, the price wasn’t disclosed, but it’s estimated it was somewhere in the $10, $12 million range, which is not bad for 1967. Today, they’re owned by Conagra, and it’s estimated that they sell 50 million boxes a year of Swiss Miss hot chocolate, which is pretty-

Dave Young:

That’s a lot of hot chocolate.

Stephen Semple:

That’s a lot of hot chocolate. Our story starts with Anthony Sanna, who’s an Italian immigrant in Chicago, who starts Sanna Dairies, which is a milk distribution company. And at the time, milk was a really regular delivery. There was the milkman who came to the neighborhood delivering bottles of milk.

Dave Young:

Yeah. And we had a milkman. Maybe she didn’t like him and decided, “Sorry, we’re going the powdered route.” I don’t know. I don’t know.

Stephen Semple:

Interesting.

Dave Young:

We’ll never know.

Stephen Semple:

Following World War II, US consumers start going through a large transition. Suburbs, boom, refrigeration in the home becomes common, grocery stores emerge. Guess what? The writing on the wall for home milk delivery is there.

Dave Young:

The refrigerated section of the grocery store. Yep.

Stephen Semple:

Right. So Anthony sees this opportunity to create maybe what he should do instead of he’s got to pivot the business away from whole milk delivery to, “I’m going to build a shelf-stable milk product.”

Dave Young:

Okay.

Stephen Semple:

So now at the time, powder milk existed and had for generations, but the problem was it wasn’t convenient. It tended to float on the surface, formed like these stubborn lumps. It created a lot of dust. It required really vigorous mixing and it didn’t dissolve well in cold water. So shelf-stable, but not convenient. What Anthony Sanna developed was this milk drying. He did this more of this milk drying that turned it into Sanalac, which is one N.

Dave Young:

Sanalac.

Stephen Semple:

Yeah.

Dave Young:

Oh, is it? Okay.

Stephen Semple:

Yeah. It’s spelled with one N, but the family name is two Ns. And basically promote it as the first...