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8:00pm EDT June 29, 2005

Joe Greubel's ice cream cone motif necktie isn't just a novelty. It's a symbol of his attitude toward life and business: They both ought to be fun.

As the president of Valley Dairy Inc. guides his Nissan Maxima over twisting two-lane roads through small towns in upper Westmoreland County, he spins a few stories about his father, friends and business. During a busy lunch hour at the company's newest restaurant in Blairsville, Greubel talks about his fondness for rubbing elbows with his vendors, customers and the locals, including Latrobe native and golf legend Arnold Palmer.

The stories sometimes find him as the butt of the joke, like when he tells about making a banana split for a customer as a lad ... and leaving out the banana.

A new look

With 11 restaurants, Valley Dairy is not as large as two other regional chains -- Eat 'n Park, with 78 locations and King's Family Restaurants with 37 locations -- but the 400-employee Latrobe-based company has carved out a niche in small-town Western Pennsylvania. In burgs such as Butler, Kittanning and Connellsville, the chain has enjoyed long, successful runs with its restaurants, most of them in shopping center storefronts.

"We've known for a long time that in smaller communities, customers are more loyal, you have a better chance of getting good employees," says Greubel. "It's an opportunity to grow your business and become a part of the community."

Greubel isn't about to give up Valley Dairy's role as a hometown institution in the towns where it does business, but the company is at something of a crossroads, changing its look and operations to fit shifts in the marketplace. To begin with, it is remodeling its stores. Five have been revamped so far -- bumping up sales by about 10 percent at each unit -- while two more will be revamped by the end of the year, and the remaining stores will get a facelift within the next two years.

Valley Dairy has experienced success with its established shopping mall stores but sees its future in a different place -- freestanding stores. Mall and shopping center locations were once prime spots, but they don't have the visual impact that freestanding restaurants offer.

The company has developed a prototype for a new, freestanding store model that will be used for all future restaurants. Its stores will be a little smaller than its competitors' typical units, making business slowdowns a little easier to handle, Greubel says. The new Blairsville store, on a busy and developing stretch of Route 22, embodies the new concept -- more visible, larger than existing stores, with modern dcor and furnishings.

"I think we pretty much figured that with freestanding units, you could do more dollar volume," says Greubel. "We're pretty much of the opinion that freestanding or maybe end-capped on a shopping center are the two better ways for us to go, and if we want to own property and be our own landlords, we have to look at trying to acquire some property and build freestanding units."

There are other benefits to the new freestanding model. Melissa Blystone, vice president of the company and Greubel's daughter, says the company wants customers to build their shopping experience or routine around a trip to a Valley Dairy restaurant, not stop in as an afterthought or as an impulse decision.

"I think another reason we wanted to push for this is to become more of a destination," says Blystone. "I want to be out there on the highway. I want people coming to us."

And while the company is making changes, Valley Dairy isn't planning a large-scale, rapid expansion of its restaurant group. Instead, it wants to retain the hometown flavor of its stores and grow at a comfortable rate.

"We want to grow at a pace we can keep up with," says Blystone.

"We want to keep those old, basic concepts in place and find a balance," says Mary Jo Sell, Greubel's other daughter, who oversees Valley Dairy's back office and IT operations.

Ron Sofranko, the S&S Group principal who is consulting with Valley Dairy on its growth plans, agrees.

"I feel you could grow that company [by] two or three units a year without a problem," he says.

And with the company's model of locating in small markets, the cost of development and threats from competition are lower, he says. But lower risk doesn't mean no risk. Greubel is a business owner who knows that being in business isn't a cakewalk, and realizes that hard work, a willingness to assume risk and the ability to change are the ingredients for success.

"I think you have to be risk-oriented, and you have to be willing to work whatever amount of time it takes," says Greubel.

But Blystone says the payoff will make it all worthwhile.

"Over the years, we've seen the malls come and go.," he says. "We want to build an identity of our own."

Changing focus

The company is relying on ice cream to help build its identity. While Valley Dairy isn't as large as Eat 'n Park or King's Family Restaurants, it has something that neither of those chains has -- its own ice cream production plant.

Greubel believes the Windber production facility is an asset, with huge potential to increase output.

Sofranko says the ice cream business is relatively easy to expand because it requires little or no additional investment. And because there is excess capacity at the plant, Valley Dairy can acquire new customers in the near future and meet increased demand by ramping up production without huge capital outlays.

"For a while, we were more focused on the restaurants than on the ice cream business," says Greubel. "We want to grow our ice cream in terms of the institutional distribution."

Valley Dairy has sold its ice cream in its restaurants, at tables and over the counter, and has distribution through six Wal-Mart stores and several independent Shop 'n Save and Giant Eagle stores. The company sells its ice cream products in Pennsylvania, Ohio, West Virginia and New York.

The company sees opportunities to expand that portion of the business and increase sales to foodservice distributors.

"Our big goal this year has been to focus on the bulk product," says Blystone.

The company's efforts to boost its ice cream sales are paying off -- Blystone expects sales of ice cream products this summer to better last year's mark by 35 percent.

Ice Cream Joe

In keeping with its small-town values and traditions, Valley Dairy remains a family business. In addition to his daughters, Blystone and Sell, Greubel works with his wife, Virginia, who handles marketing and advertising, and serves as the corporation's secretary.

But there is another, more visible character who plays a role in growing Valley Dairy -- Ice Cream Joe. The trademarked character was created by Greubel, and is featured in his own book, "Ice Cream Joe: The Valley Dairy Story."

But even Ice Cream Joe is family -- the character is based on Greubel's father, Joseph Fleming Greubel, the original Ice Cream Joe and founder of Valley Dairy. The book was a family project, and while it helps promote the Valley Dairy brand, it also helps tie the company's family-focused past to its future, because while the company executes its growth plan, Greubel, 67, and his daughters are preparing a succession plan.

"You have to reach a point where you have to start to think about backing off a little," Greubel says.

Both Blystone and Sell are eager to take the reins, and Greubel isn't holding back because he lacks confidence in his daughters' ability to run the business. He's struggling to let go completely because he still enjoys being involved.

Rich Snebold, co-founder of The Family Business Center at Citizens National Bank, suggests that business owners who want to stay connected to the business but pull away from the day-to-day operations need to shift roles, from an operations-focused position to something more like chairman or company ambassador.

"[Business owners] need to have a second dream," Snebold says. "Part of the reason they don't want to walk away is that the business is their dream."

Greubel sees himself fitting into another role, one that keeps him connected to the past and lets him continue to be a part of the company's present and the future. The new role may include, at least in part, spending time as the Ice Cream Joe character.

Says Greubel: "That's probably the most natural way for me to go.

How to reach: Valley Dairy Inc.,; The Family Business Center at Citizens,, S&S Group, (724) 935-2776