Snack World - May 2012 - 10

75th Anniversary
2010, Shearer’s acquired Snack Alliance. Kettle Foods, Salem, OR, produced its first potato chips in 1982. In l988, following a motorcycle trip taken by founder Cameron Healy and his son, the company established a UK branch in a converted shoe factory in Norwich, Five years later, Kettle opened a new factory on the outskirts of the city. In addition to a major presence in the US kettle chip market, Kettle also has a network of independent distributors in the Middle East and European countries. In 2010, Kettle Foods was acquired by Diamond Foods, San Francisco, CA, which also had purchased the Pop Secret microwave popcorn business from General Mills two years earlier. In 1979, Barry Levin, a 21-year-old Californian with a business degree, began his career with Snak King Corp., a startup producer of pork rinds and pellet snacks. The company had two other employees in its 1,200-sq-ft Los Angeles facility. Hired as a machinist, Mr. Levin was expected to help grow the business. A year later, he bought out his partners, and he would eventually craft one of the most impressive stories in the history of the industry as Snak King now employs more than 400 people and markets greater than 650 products. He was honored by his peers by being elected SFA chairman in 2001. When entrepreneur Alan Wareheim of Hanover, PA, dispatched his 29-year-old son, Michael, to manage sales and marketing at a snack company operated by the family in 1970, little did he know that one day the young man would eventually change the face of one of the snack industry’s major product categories. Under Mike Wareheim’s guidance, Snyder’s of Hanover became a pretzel powerhouse, which would eventually capture 40% of the US pretzel market and sell its twisted products in more than 40 countries. But Mr. Wareheim’s plans for Snyder’s of Hanover didn’t stop with pretzels. Last year, Snyder’s of Hanover and Lance, Charlotte, NC, joined forces to create Snyder’s-Lance, Inc., a national branded powerhouse in pretzels and other snack products. In 2000, Palladium Equity Partners, New York, NY, purchased Wise Foods from Kohlberg, Kravis, Roberts and Co. and set sail on a course to revive the company, which had been acquired by Borden Condensed Milk Co., now known as Borden, Inc., in the mid-1960s. Wise had acquired Moore’s Quality Snack Foods in 1989, and Palladium eventually sold Moore’s plant in Bristol, VA, and production of both Wise and Moore’s snack products consolidated at Wise’s Berwick, PA, plant. All of the aforementioned companies would be part of one of the most challenging periods in the history of the snack industry and its bellwether association, from 2000 until its 75th anniversary in 2012. The run-up to the association’s 75th anniversary produced a number of challenges and opportunities that will continue to play out as SFA heads toward its 100th anniversary, a quarter of a century down the road. sw

The Wal-Mart Effect
Wal-Mart plays a major role in the industry as it continues to grab a larger share of the food business, more than 20% in most regions and greater than 50% in its strongest markets such as the Southeast. “They are certainly the most important player in the region for us,” said David Jones, executive vice-president of operations for Golden Flake, Birmingham, AL. “It’s a tremendous challenge to make sure that we do business with them and do business with them in a successful way.” Nick Chilton, CEO, Wyandot Foods, Marion, OH, said Wal-Mart’s growth and dominance, the rising strength of club stores and other niche food chains, and the consolidation of retailers have really tested the snack manufacturers’ mettle during the last dozen years. He explained the “Wal-Mart effect.” “That’s the impact that Wal-Mart has had on who makes the decisions in the supply of food products to the American consumers,” Mr. Chilton observed. “It used to be that marketing people worked with consumers to find out what they wanted, designed the product, advertised to them and the people bought the product. Today, the power resides with the retailer, and the retail buyer is the one who’s calling the shots on what products they want in the store. And it is a completely different dynamic.” Mark Winkelman, president of Better Made Snack Foods, Detroit, MI, concurred. “A lot of consolidation has given retailers more tools and information about what their consumers want,” he said. “And they’re helping to really drive product offerings, packaging, nutritional content and, now, even sustainability.” David Ray, CEO of Mike-sell’s Potato Chip Co., Dayton, OH, pointed out that a lot of positive things have come out of Wal-Mart’s growth in the food business. “Wal-Mart is a very solid customer for everybody,” he said “It’s our second biggest account at Mike-sell’s.”

Snack World

May 2012

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Snack World - May 2012

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