- Melanie Dulbecco has been CEO of the syrup company Torani for 35 years.
- Dulbecco said layoffs are a choice, and that Torani's decision not to do them has helped with retention.
- She said that the company is hiring fewer people than it would be if Torani didn't use automation.
This as-told-to essay is based on a conversation with Melanie Dulbecco, the CEO of syrup brand Torani. She's based in San Leandro, California, where the company is headquartered. This story has been edited for length and clarity.
I may sound different than most CEOs.
I grew up in a blue-collar neighborhood, and my parents divorced when I was really young. When I was little, I saw my mom struggle so much, and I noticed that some kids around me didn't have the same opportunities.
I felt this sense of inequity, and that became a motivating and driving force for me. I tried working in politics, then nonprofits, and eventually went into business. I wanted to build an opportunity company. When I met the family from Torani, they liked that idea.
I was the ninth hire at Torani in 1991 and became the first CEO in 1995. We now have over 500 employees.
When I started, we made $700,000 a year in annual revenue. We've grown 20% a year on average, and this year, we plan to hit over $800 million in revenue.
But to us, growth is not a financial endeavor. The trailing indicator of success may be the financials, but we think our work together creates the momentum and value in the marketplace that drives our growth.
It's very easy for us to say layoffs are not our approach. I think layoffs are a choice. I get it if a company is going through bankruptcy and has to make extremely challenging choices. Otherwise, I think it's a financial exercise that doesn't consider how you're going to be resilient or regain momentum — because you do that with a team.
Our workers aren't concerned about being replaced by AI
Torani is currently hiring fewer people than it would be if the company didn't use automation. We use automation to deprioritize manual, rote jobs with limited career mobility. We also use AI for consumer and market research, sales forecasting, and demand planning.
However, our team doesn't get worried about things like AI because they trust that we will both automate and elevate the work, that we will never do anything that squashes opportunities for people, and that we are looking out for everybody's success.
We're often in hyper-growth mode, which means we need people to know how to work together. The ability to work together, to collaborate, to address challenges, to be resilient in tough times, is critical. This strategy has also helped with retention.
We were faced with a choice during the pandemic
We had been planning a move to our new location in San Leandro in March 2020. That happened to coincide with the stay-at-home order. It was one of those moments where, as a leader, you feel like you have to breathe into a paper bag.
We had borrowed a lot of money from the bank to build our new flavor factory. The loans were going to start coming due in April, so the executive team came together to look at what we needed to do to be OK.
Before we did that, though, we asked: What will make us proud when we get to the other side of this? We had a long discussion about it and decided that making it as one team — without any layoffs or furloughs — would make us proud.
So we we scaled back marketing and advertising expenses and paused all company travel. All departments had to review their budgets. They got scrappy to identify and eliminate non-essential costs.
During the early months of the pandemic, Torani prepared for a 50% decline in sales. Thankfully, there was only a 20% decline in April of 2020, and revenue was back up in May. We quickly pivoted to online retail and grocery to fill the gaps left by cafés and drink shops closing their doors. Torani ended 2020 with a 15% year-over-year revenue increase.
We moved to our new location in six months instead of six weeks, but we got there. We couldn't have done that if we laid off our team. We needed to come together at that moment.