Is Stewart’s Shops’ President Gary Dake the Last of His Kind?

It’s a tough, but uniquely Saratogian, conversation to have. I’m talking about telling your boyfriend (or any other newbie or visitor not from Upstate New York) that you’re taking him to a gas station for ice cream. It’s awkward, because while he is staring quizzically at the four gas pumps and a wall of cigarettes for sale, you are daydreaming about sporting your soccer jersey back when you were 10 years old, taking the first victorious lick of your single-scoop Peanut Butter Pandemonium cone.

The first clue that Stewart’s Shops isn’t your average convenience store lies in its history of producing said ice cream. In fact, long before Stewart’s started selling cigs and gas, it was actually solely an ice cream shop. Back in 1921, brothers Charles V. and Percy W. Dake, whose father owned a dairy farm near Middle Grove, joined forces to create Dake’s Delicious Ice Cream. Throughout the ’20s and ’30s, they built their business hawking their frozen flavors out of a Model-T delivery truck in Saratoga, Troy, Schenectady and Albany for $5 per five-gallon can; and building an ice cream plant in Ballston Spa. Then, in 1945, the pair purchased a small dairy and ice cream business, also in Ballston Spa, from a man named Don Stewart, and opened the first Stewart’s Ice Cream Shop storefront at their ice cream plant.

That was 75 years ago, and throughout those seven-and-a-half decades, Stewart’s has remained family owned. In the same year that the brothers purchased Stewart’s Ice Cream, Charles V.’s son, Charles S. (“Charlie”), returned home from serving in Europe during World War II to join the family business; and 15 years after that, his brother, William P. (“Bill”), a recent Cornell University engineering graduate, was brought on as well. With Charlie and Bill in charge, operations grew to three divisions—Stewart’s Ice Cream Shops, Stewart’s Soup ’N Sandwich Shops and Stewart’s Bread ’N Butter Shops—which gave rise to the idea of Stewart’s as the all-in-one convenience store it is today. In 1985, Stewart’s welcomed its third generation of Dakes, when Bill’s son, Gary, began working in the Stewart’s dairy plant.

Today, Gary serves as the president of a Stewart’s that has grown to 337 stores and employs approximately 5,000 people from Orange County to the Canadian border, and Western Vermont to the shores of Lake Ontario. In his 17 years in the position (prior to which, he worked for 17 years in the Stewart’s plant and dairy), Gary has doubled annual sales to more than $1.6 billion, and Stewart’s now serves an average of two million customers a week. He’s also overseen the renovations of dozens of shops across Upstate New York and Vermont. As Stewart’s has transitioned into more of a prepared-food retailer, serving up everything from fried chicken sandwiches and pizza to macaroni and cheese and chili, the shops’ kitchen spaces have needed to be expanded. Gary’s father, Bill, who at 85 remains chairman of the board and CEO, and Gary actually share an office space at the Stewart’s corporate offices in Malta. Gary’s stepmother, Susan, serves as the president of the Stewart’s Foundation, the company’s philanthropic arm.

Stewart’s Shops President Gary Dake with employees
at the Stewart’s on Woodlawn Ave and Church Street in Downtown Saratoga. (Dori Fitzpatrick)

In remaining family owned for all these years, Stewart’s has pulled off quite a rare feat. The company is one of just a handful of family businesses—30 percent, according to the Harvard Business Review—that has handed down down ownership to a second generation of owners, and one of 10 percent to make it to the third generation and still be active and privately held. So how did Stewart’s do it? “I think there’s a lot of luck—we were in the right place at the right time an awful lot of times,” Gary says. While this may sound like good, old-fashioned modesty, there is some truth in it: When Percy and Charles V. first opened Stewart’s Ice Cream Shop, WWII had just ended, and with it the rationing of ice cream. Ravenous for the sweets they had been missing during the war, customers came in in droves, giving their business a helpful boost in the early years. Gary continues: “I think there’s a lot of willingness to look long term. The sharing with our employees has been a huge part of it, which builds a whole lot of trust.”

In fact, it is profit sharing that Gary says he’s most proud of when it comes to the company, which says a lot, because Stewart’s does a lot of things well (more on that shortly). Stewart’s employees own 40 percent of the company through an Employee Stock Ownership Plan (ESOP). Every employee who is at least 19 years old and works 500 hours a quarter or 1,000 hours a year—whichever comes first—is enrolled in the plan, which, unlike a 401k, is 100 percent company paid. After six years with the company, an employee is fully vested, and his or her ESOP balance should equal a year’s worth of pay. Through ESOP, Stewart’s has created a total of 90 millionaires, some of whom had only a high school education before they joined the company and simply worked hard at their jobs. “That whole sharing, not-being-too-greedy thing has helped a lot of us actually end up with more by sharing than if we tried to be greedy,” Gary says. “The family’s 60 percent ownership of the company is probably worth more than if we maintained 100 percent ownership and had not given the employees any of it.”

Of course, creating a smart profit-sharing model doesn’t have anything to do with luck; it’s simply good business and about valuing your employees. And likewise, luck hasn’t had anything to do with the string of wise business decisions Gary has made over the years that have not only helped the company, but also the community, grow. For one, Stewart’s gets all of its milk and eggs from local farms, supporting family-owned operations like its own. In fact, this past May, when a milk surplus, caused by the closure of schools, forced many dairy producers to dump milk, Stewart’s decreased its hauling charge, increased its premiums In remaining family owned for all these years, Stewart’s has pulled off quite a rare feat. The company is one of just a handful of family businesses—30 percent, according to the Harvard Business Review—that has handed down and decreased retail milk pricing to provide relief to its producers and customers. It was able to do this, in large part, because of the company’s vertical integration—or combination of multiple stages of the production process within the organization—which is another one of the Dake family’s winning business innovations. “The fact that we’re vertically integrated, I think, is surprising to some people,” says Susan, who became the face of Stewart’s in the early ’80s when her “Hi, I’m Susan” advertising campaign took off. “About two-thirds—
maybe even three-quarters—of everything you see in a Stewart’s shop comes from our plant. That control allows us to keep the prices down and also to keep the quality up.” In other words, Stewart’s doesn’t just sell the milk produced by local farmers: Its drivers pick the milk up (more than 25,000 gallons a day) directly from the farms and deliver it to the Stewart’s dairy, where Stewart’s employees put it through the testing and pasteurization processes and pour it in cartons made at the Stewart’s manufacturing plant. Drivers then distribute the milk in reusable Stewart’s milk crates all over the region, where it is sold by Stewart’s retail workers using promotional materials—signage and the like—produced in the Stewart’s plant. In total, it takes less than 48 hours for the milk to get from the farm to the shelf. The company also has its own real estate division and geologist, who cleans up gas pollution at new properties, a fleet of gas tankers that are serviced in-house, and its own IT department. And it’s even forward-thinking environmentally, with an acre of its own solar panels that produce an estimated energy savings for the company of more than 600,000 kilowatt hours per year.

Besides simply being able to grow its own business, Stewart’s is also ahead of the curve when it comes to growing the surrounding region’s communities. For example, its Make Your Own Scholarship program helps pay college tuition for children of its employees, and most notably, Stewart’s has had a longstanding reputation as one of the region’s most philanthropic organizations. “The overall commitment is to give back to all the communities in which our shops are located,” says Susan. “We try to keep all the dollars working locally, with the exception of Huntington’s [disease] research, because Philly”—Charlie’s wife and the namesake of the popular ice cream flavor Philly Vanilla—“passed away from that. Then we give to Cornell University. That also affects the local community because Cornell Cooperative Extensions are very active in all the communities where we’re located now.” Annually, Stewart’s gives $2.5 million to charity, which includes product and gift certificates, as well as the match of the funds raised during the company’s Holiday Match program (customers can make donations at Stewart’s Shops from Thanksgiving to Christmas, and the company matches the funds raised and donates the total to local children’s charities). Then, another $5 million is donated annually by the two Dake family foundations. 

Like many regional businesses, the COVID-19 crisis has thrown Stewart’s its fair share of curveballs. “One of the advantages of doing something for 35 years is you don’t see a lot of new stuff,” Gary says. “You can say, ‘Oh, I’ve dealt with this before.’ But I’ve never had, in a four-month period, more decisions that I never faced before, besides, probably, in my twenties. Without a doubt, masks have been the number one headache.” Navigating the ever-changing Centers for Disease Control and Prevention (and state) guidelines regarding mask-wearing in public—and then following those guidelines—has been tough for some people to swallow. And after Stewart’s put in place a policy requiring all customers to wear masks in its shops in early July, Stewart’s employees were handed the not-so-enviable task of having to enforce the company’s mask-wearing rules. One customer at a shop in Glens Falls, Gary said, actually spit on two employees when they told him they wouldn’t check him out unless he had a mask on. “The number of complaints has gone down since we have gone to 100 percent requiring masks,” Gary says. “But now I get an equal amount of comments that I’m not aggressive enough in enforcement as I do comments that I am trampling people’s civil rights by requiring them to wear a mask.”

As Gary contemplates retirement in the next five years or so—he’s turning 60 in November—Stewart’s is quickly approaching a future in which a Dake won’t be running the company. Though Gary has two sons, one of whom has worked for the family business in the past, both have gone on to pursue other passions. “I talked with my senior staff about what it will be like when I retire,” Gary says. “They’re afraid of what happens when the Dakes aren’t here. But the only thing worse than not having a Dake in the business is having the only Dake not be happy.” It’ll no doubt be a tough conversation to have, telling his employees and the community his family has served for close to 100 years that he—the last remaining Dake in a third-generation, family-owned business—is leaving the company for good. Of course, he’s set them up for success, talking at length about the values that have made the company what it is, and telling them that, while they should be respectful of the history of the brand, they should never feel constrained by it. Once he’s done all he can do, they’ll come around. And, as for that boyfriend, who thought he was too good for gas station ice cream? After he’s had his first taste of a Mint Cookie Crumble Make Your Own Sundae, he’ll come around, too.  

4 Questions With…Gary Dake, president, Stewart’s Shops

What is the most “Saratoga” thing about Saratoga?
Broadway has got a character unlike other downtowns that I know. It makes Saratoga so special.

What is the single most important thing that Saratoga needs to ensure its survival for years to come?
Saratoga today has got a college, a good manufacturing base, SPAC and the track. It needs to maintain its mix and diversity so that if one segment takes a hit, it doesn’t  put [the city] underwater.

What is your favorite flavor of Stewart’s ice cream?
Well, I’m not supposed to have favorites…but probably Chocolate Peanut Butter Cup or Cherry Vanilla.

What’s your favorite Saratoga activity?
Just going out and taking a walk and people-watching in Saratoga.

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