Fifth-generation owners have brought the perfect mix to Fee Brothers

They have no sales manager, no sales force and no marketing staff.

And yet in the past two years, revenue for Fee Brothers, Inc., has nearly doubled, continuing a skyward trajectory that began in 2009 after a decade of mostly flat sales.

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The popularity of classics such as Manhattans, martinis and old-fashioneds — which require a dash or two of bitters to bring about the perfect alignment of flavors — is helping to make Fee Brothers recession-proof. A lot of people like a cocktail or two, and a lot of bartenders prefer the beverage additives made by Fee Brothers.

“Few people are as lucky as we are to be the stewards of this business,” said Jon Spacher, who, along with his younger brother Benn, are the fifth-generation owners of Fee Brothers. Jon is the chief executive officer. Benn is the chief operating officer.

They took over ownership to start 2021 and not only have maintained what was put in place by their aunt and uncle, Ellen and Joe Fee, but taken operations — and sales — to a new level.

“Ellen and Joe had already pulled back the arrow,” Jon Spacher said. “We just let it go. They built the momentum and the employees have been doing an incredible job.”

Fee Brothers relies on a network of distributors in the U.S. and importers across the globe to sell their 19 flavors of bitters, 51 flavors of cordial syrups, nine flavors of cocktail mixes and 17 coffee flavorings.

They do sell their products over the counter at their headquarters at 453 Portland Ave. in the city of Rochester, but those casual cash-register purchases make up just two-tenths of a percent of overall sales.

“Our distributors are our lifeblood,” Spacher said. “Distributors are our customers, and the bars, restaurants and coffeehouses are their customers.”

Two firms distribute Fee Brothers in Rochester, Palmer Food Services and Regional Distributors, Inc. Elsewhere, most markets have just one distributor, and that’s perhaps for an entire state.

Fee Brothers has been a Rochester business institution for 159 years. Margaret Fee and her son James operated a sandwich shop in 1863, and over the years they changed focus as business dictated, from a deli to a saloon to the manufacture of whisky and wine.

But prohibition helped guide the company to where it is today. Homemade alcohol didn’t taste that good, so in the 1920s Fee Brothers made flavorings so the illegal concoctions of others were palatable, Spacher said.

Those additives and flavorings have been the focus for more than 70 years. Syrups and mixers for decades produced most of the revenue. Now bitters make up 80 percent of sales; the revival in popularity of mixed drinks is why, Spacher said.

The success starts with happy workers. Minimum wage at Fee Brothers is $15 an hour, and this year’s profit sharing will add $4,000 to $6,000 to the annual salaries of most of 33 employees. The company pays 75 percent of health care premiums under the Excellus Platinum Plan and 100 percent of vision, dental and disability insurance. The benefits package also includes free AAA membership, 100 percent of costs associated with leadership development and access to legal counsel.

“If they want to fight a parking ticket or close on a house, the attorneys fees are covered,” Spacher said. “I love this job for that reason. At the end of the day, our people can take care of their families.”

Those employees are busy, too. They’re backlogged about three and a half weeks on bitters orders, but they’ve whittled away on what was a five-month backlog.

In a 2022 report on the top revenue-producing manufacturers of bitters by Owler, Fee Brothers ranked second behind only Angostura, an industry mainstay headquartered in Trinidad and Tobago.

For Spacher, there’s no urgency to reach the top of that list.

“My two concerns are, No. 1, are we taking care of our employees?, and No. 2, is the company producing a profit, do we have a reasonable margin?” Spacher said. “If we’re doing those two things, then we’re already on the top of the hill.

“Besides, if you’re No. 1, then there’s only one way to go and that’s down.”

As a Rochester company, Fee Brothers is loyal to the area. The sugar syrup used to make flavorings comes from Sweeteners Plus in Lakeville. Eagle Graphics, Inc., makes the 4.2 million labels needed each year for bitters bottles. Iron Smoke Distillery provides the spirits barrels for special, limited edition bitters: gin barrel-aged orange bitters and whiskey barrel-aged aromatic bitters.

When Jon and Benn took over, they didn’t introduce new flavors or change much in the manufacturing process. They knew not to mess with a good thing.

Oh, they have some ideas on what they’d like to perhaps change. Increasing the popularity of their coffee flavorings is one. All but two of their products have been certified kosher, and they’d like to get gluten-free and vegan certification on all products. And since New York State law requires that a beverage contain alcohol in order to be sold in a liquor store, they’ll perhaps considering adding alcohol to some products.

But their first concerns as new owners were bringing business processes into the 21st century, from banking to legal to human resources. They began to trademark intellectual properties. They enhanced all aspects of human resources.

“All we’ve done is put those business practices in place and let the company soar,” Spacher said.

The brothers had grown up being around the Portland Avenue facility, either for family visits or for employment; Benn worked there before heading to college.

When Joe Fee died in February of 2020, his sister, Ellen, decided it may be time to hand over the reins. Her nephews were ready to dive in.

Jon, 46, had spent the previous 24 years in the insurance industry. Drink additives and insurance seemingly have the same similarities as forestry and auto repair, but he said the objectives are much the same: each has a distributor selling a product. Benn, 36, worked in information technology at Rochester-based CaterTrax.

“You can’t pass up an opportunity like this, a company with worldwide reach that is growing and profitable,” Jon said. “Benn is really good at creating processes and really good with machinery. I’m the 40,000-foot, Mach 5, big-picture guy.

“The history of Fee Brothers is a story of reinvention. The day will come when we will need to remake ourselves again. I just hope I’m surrounded by enough smart people so we can figure it out.”

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