Rebuilding The Kingdom
March 1, 2006
Rebuilding The Kingdom
By Deborah Cassell
Throughout History, Times of Turmoil Have Defined the Character of Born Leaders. When Disaster Struck Snak King in 2004, the Company’s Entrepreneurial Spirit Provided the Backbone of Survival … and the Motivation to Reconstruct its Kingdom.
As Soon as Ron Jones Heard the Crash, the new Chief Operating Officer of Snak King ran out of his Office in the City of Industry, Calif., Factory to see What had Happened.
“Initially, somebody thought there was an explosion in the plant,” he recalls.
Instead, a 12,000-sq-ft. chunk of the roof had collapsed, apparently weakened by the torrential autumn rains that had pummeled normally sunny Southern California for several weeks in October 2004.
Although no one was injured, the collapse could not have happened in a worse place — directly over three tortilla chip lines, a baking oven and a microwave dryer in the heart of the plant. One of the facility’s air-pollution devices was smashed into a fryer. And to make matters worse, two high-pressure, fire suppression water lines had burst. Although the water was turned off within 15 to 20 minutes, the plant was already flooded.
Talk about a royal mess.
“There was oil everywhere, because the water had actually gone down into the fryer and pushed out oil all over the floor, so it was slippery,” says Jones, who had joined the company just 10 months earlier.
Barry Levin, Snak King’s chairman and CEO, was on his way to a trade show in Las Vegas when the accident occurred. He high-tailed it back to Los Angeles after the normally unflappable Jones called to tell him what had happened.
“Ron’s pretty calm and easy-going, and [by the tone of his voice] I thought, it must be a big roof collapse,” Levin explains. “It was significantly worse than I ever envisioned.”
The disaster shut down the entire plant. Levin knew the implications would be quick and severe.
“Our entire life was on the line, 100 percent,” he says. “We had a tremendous amount of pressure, because it’s a food product, and every day you’re not on the shelf, your competitors are gladly taking your place. Time was precious.”
Within hours, Snak King began removing debris.
“The whole team jumped in,” Jones says. “We had managers and employees and firemen all working together.”
To add further disruption, the plant’s second air-pollution device on the remaining roof of the plant caught on fire just days later. Snak King employees located the first device — buried in the rubble of the collapse — cleaned it, and relocated it to the roof in just 12 hours’ time.
“Our guys were amazing,” Levin says.
In less than a week, the company got its pork rind line fired up. Although the department had been only minimally affected, the company needed the U.S. Department of Agriculture to make sure the product would not get contaminated. By the end of that same week, the management team had put together a plan of attack for the rest of the facility’s functions. Basically, there were two options. One was to take the insurance money and walk away. For Levin, leaving 300 people unemployed and throwing away nearly a quarter century of work was never a consideration.
The only viable choice was to rebuild.
“From day one, we knew we were going to get back up and running as soon as possible,” Jones says. “Our survival was at stake, and we knew that. We worked 24 hours a day, seven days a week, and we had the plant back in operation within about three weeks.”
Return of the King
Today, the entrepreneurial spirit is alive and well at Snak King. Production, albeit jerry-rigged into tight spaces, is running full tilt as the company remodels and reorganizes its 177,000-sq.-ft. plant. To say that the business is in a state of transition would be a major understatement, but change is something Snak King has grown accustomed to over the years.
“Some organizations are afraid to change,” Levin says. “We’ve grown up with having to change, having to adapt, having to figure out how to do things that we shouldn’t be able to do.”
True entrepreneurs like Levin “don’t see the possibility for failure all the time as much as they see the possibility for success,” Jones says. “That mentality, that culture, permeates Snak King.”
However, maintaining a sense of normalcy, especially with customers and consumers, hasn’t been easy.
As Snak King goes through its period of reconstruction, the company’s three brands — El Sabroso, Jensen’s Orchard and Granny Goose — continue to offer consumers throughout the West Coast, and even on a national level, a variety of snack food products, including tortilla chips, popcorn, caramel corn, cheese curls, cheese puffs, pork rinds, pork cracklins and nuts. (See “An Innovative Empire,” page 10, for details.) Snak King also maintains a private label/co-packing business.
Immediately following the disaster, times were trying, at best. In addition to focusing on the cleanup of the plant, for example, Snak King made sure to constantly communicate what was happening to its clients.
“Our customers were trusting and understanding at the same time,” Levin says. “We committed to be running on a certain day, and we were.”
Snak King also experienced an understanding, and generous, snack food industry. The manufacturer received numerous phone calls from colleagues offering advice, capacity, co-packing capability, spare equipment and additional assistance. At Levin’s request, one supplier even air-freighted seven packaging lines from overseas.
“It was a very positive experience,” Jones says.
It was surprising how the industry came together to support us, Levin adds.
From Rinds to Royalty
It’s not as surprising that the industry came to Snak King’s aid during a time of crisis when you consider the goodwill and good reputation the company had built up over the years. Its management team, for instance, has been actively involved in the Snack Food Association, with Levin serving as chairman of the group in 2001. And Snak King has long been known as a snack food innovator.
The company got its start back in 1978 at the hands of three investor groups — a pork rind/pellet manufacturer, a distributor and a manufacturing facility. At the time, one of the investors, Mike Levin, suggested that his son, then recent college graduate, Barry Levin, run Snak King’s pork rind plant.
“Frankly, I didn’t even know what a pork rind was,” Barry Levin says. “I had never eaten one in my life.”
But Levin learned the business quickly. “I was the machine operator, the fork lift driver, the truck driver, the bookkeeper,” he says.
After about a year, “I wasn’t sure I wanted to make pork rinds for the rest of my life,” Levin continues. But instead of going to graduate school, he decided to purchase one-third of the company … and the balance of it, shortly thereafter.
In 1982, Snak King left its original 1,200-sq.-ft. facility for a 50,000-sq.-ft. space, where it initially occupied 20,000 sq. ft. At first, the main focus was private label/co-packing, but within a few years, Snak King had decided to come out with a brand — El Sabroso (“The Tasty One”). The name was submitted by an employee during a company-wide contest.
El Sabroso became the first of three brands to eventually fall under the Snak King umbrella. Although pork rinds remain an integral part of its business, the company added popcorn and caramel corn to its line in 1984. It then expanded into cheese puffs and cheese curls before purchasing Jensen’s Manufacturing, a nut producer that had been around since the 1930s. Lastly, in 2000, Snak King acquired Granny Goose, a well-known West Coast-based snack producer. Since then, the snack manufacturer has become the king of creating unique products that only a forward-thinking industry leader can.
All the King’s Men
“We’re a very entrepreneurial company … and I think that has a lot to do with our success,” Levin says. Such entrepreneurship stems from the strength of Snak King’s management team. In addition to Jones, Levin’s loyal round table includes 16-year Snak King veteran and Vice President of Sales and Marketing Joe Papiri.
Together, the three have nurtured Snak King’s success, which lies in its ability to develop innovative, premium and often Mexican-inspired snacks that complement, rather than copy, what’s already on the shelf.
“We rely on Joe’s strength, from a creativity standpoint,” Jones says. “He’s really good at using not only his own personal ideas, but ideas that he sees in the marketplace, ideas that are on other products that aren’t snack foods, concepts, things that are hot, things that make sense. He’s able to throw out some ideas, and as a team, we’re able to pull those together and … take a look … at what makes sense for us.”
As chief operating officer, Jones initially focused on the operational and financial sides of the business, but he was promoted to president and began overseeing all daily operations just one year later.
“Ron’s brought a lot to the party,” Levin says. “He has more of the professional manager experience that we need at this point in our growth cycle.
“Over the last few years, I’ve been trying to professionalize many parts of the company,” he adds. “As you get bigger, you have to have more controls, the right controls, the kind of controls that help you deliver consistency and quality on a regular basis … but not so much control that they stifle innovation and creativity.”
To that end, Snak King recently strengthened its sales and operations team. As a result, the company has been running better than ever, Jones says, with higher levels of efficiency and quality, and consistent sales gains.
“We focused on what we could do to shore up some of the weaknesses — the consistency of the product, some of the cost-saving ideas, some of the professionalism on how we go to market,” Jones says.
The new management structure also has allowed Levin to “get out of the details of the day-to-day … and spend more time on the big picture,” he explains.
Keys to the Kingdom
The big picture has changed greatly since the disaster in 2004.
After Levin and his team were sure they were going to survive the tragedy, they started considering the future of the Snak King facility. They decided to take the opportunity to rebuild the plant for the better by investing in a new roof, a new floor and new equipment that would enhance their efficiency, consistency and capacity.
By the end of the year, the company plans to showcase its crowning glory: an operation that features some of the most automated, state-of-the-art systems in the industry. (See “Making the Best of a Royal Mess,” page 16, for details.)
“It’s easy to spend money, but it’s another thing to spend money wisely,” Levin says. “It sounds easy to build a plant, but it’s usually a multiyear project.”
“Especially if you’re not prepared,” adds Jones, noting that Snak King had to start over “from ground zero.”
Despite the struggle, Snak King has proven itself a survivor. By July of this year, the company will have rebuilt its kingdom and refocused on its mission of delivering both tried-and-true and truly original products to its loyal consumers.
“There are a lot of things on the drawing board, once we get our capacity back,” Papiri says. “We have some innovative concepts that we’re looking at for late 2006 into 2007.”
With its eyes on the future, Snak King soon will reign again. SF&WB
At a Glance
Company: Snak King Corp.
Location: City of Industry, Calif.
Products: Tortilla chips, extruded snacks, corn snacks, popcorn, caramel corn, nuts and pork rinds. Producer of conventional, Kosher and organic products.
Brands: El Sabroso, Granny Goose, Jensen’s Orchard, private label.
Plant: 177,000 sq. ft. Kosher certified, Organic certified and USDA inspected.
Chairman & CEO: Barry Levin
President & COO: Ron Jones
V.P. Sales & Marketing: Joe Papiri
When it comes to producing standout products, “we’re looking for that cult following,” says Barry Levin, Snak King’s chairman and CEO.
Case in point: On a recent flight to Oakland, Calif., Levin was talking to someone on the phone about Guacachips when a college student sitting nearby overheard him and yelled, “Guacachips are rad!”
It’s consumers such as this that Snak King craves.
“It might be a smaller population group that really adamantly loves our products,” says Ron Jones, the company’s president and COO, “but that fits us better than having something that’s a generic product that everyone is okay with, but that no one truly loves.”
An Innovative Empire
Snak King relies on innovative shapes, textures and flavor profiles to bolster the presence of its distinctive El Sabroso and Jensen’s Orchard brands and to differentiate them from the competition.
“Instead of doing topical seasonings, we wanted to make the product different, more three-dimensional,” says Joe Papiri, vice president of sales and marketing. “We play with the base material, different blends, ingredients.”
The ultimate goal requires the creation of proprietary products that are “completely different from anything that’s on the marketplace,” adds Ron Jones, president and COO.
The El Sabroso brand accomplishes just that, and in several ways. Although it initially offered only two products — pork rinds and cracklins — the line now encompasses traditional Mexican-oriented snacks, such as chili-and-citrus-seasoned Churritos. It also includes a variety of tortilla chips with great mass appeal, such as the top-selling Guacachip (“a savory corn snack with the buttery, rich flavor of ripe avocados,” according to company literature), Jalapeñitos (a combination of fire-roasted jalapeños, stone-ground corn and Manchego, Asadero and Cotija cheeses) and Salsitas (made with real tomatoes, avocados, stone-ground corn, and a touch of lime, and seasoned with tomato, onion, garlic, avocado and jalapeño spices).
About 40 to 50 stock-keeping units (SKUs) now make up the El Sabroso brand. The traditional Mexican snacks are sold nationally and internationally.
“El Sabroso has universal appeal, selling very well in the Mexican marketplace, as well as in the upscale markets, with its bold flavors and high quality,” Levin says.
Although it started out as a nut line, the Jensen’s Orchard brand now is positioned as a natural and organic foods brand, which includes Veggie Chips (made with real potato, tomato and spinach flavors) and the new tomato, olive oil and basil-based Bruschetta Chips.
Although the Veggie Chip is a specialty/gourmet-style snack marketed toward adults, Papiri was surprised to learn that children have embraced the product, too.
“Kids are very open to new ideas,” he says, citing the various colors of the potato-flavored chips.
Like all of Snak King’s products, offerings from Jensen’s Orchard are trans fat-free, which adds to the brand’s healthful storyline.
“Everything is clean — no artificial flavors or colorings,” Papiri notes. “We’re cultivating the traditional natural food stores, as well as the natural food departments in traditional grocery.”
Between its brands, Snak King offers an extensive array of products for all types of snackers. The company stays ahead of the competition by offering one-of-a-kind items that can’t be easily duplicated.
“We’re coming out with [fewer] new products, but what we’re coming out with is better,” Papiri says.
Brands of Opportunity
To reach as many consumers as possible, Snak King targets almost every trade channel, including convenience stores, grocery/supermarket, mass, club and vending. In some cases, different snacks find homes in specific parts of the market. The El Sabroso Guacachip, for example, has had great success at the grocery level. Consumers who shop traditional club stores also can find Snak King’s unique offerings.
“Your traditional club store is looking for innovative products that kind of challenge or provide a treasure hunt for their members,” says Joe Papiri, vice president of sales and marketing for Snak King.
The manufacturer sometimes provides product samples — a tactic that’s “highly encouraged” by club stores — to entice consumers to purchase and to spread word of mouth, Papiri adds.
In another effort to further its business, Snak King is updating much of its packaging to better reflect the quality and ingenuity of the product.
Last, but not least, Snak King will soon appeal to the diverse throng of baseball fans in the Los Angeles area through a new branding agreement.
“We just signed a deal sponsoring the L.A. Dodgers as part of our local marketing effort to get our authentic tortilla chip bags out there,” Papiri says.
El Sabroso tortilla chips will be served along with nacho cheese throughout Dodger Stadium this baseball season. The El Sabroso brand also will be plastered on menu boards and billboards throughout the stadium.