Snak King’s new chips off the old block
Mention Snak King to most consumers and they’ll know just what you’re talking about: One of the largest snack food manufacturers in the U.S.
The company’s tasty snack products are everywhere. The enormous family of branded and private-label snacks include potato chips, extruded snacks, cheese puffs and curls, corn and tortilla chips, pork rinds, popcorn, nuts, pretzels and trail mixes. The quality organic, kosher, Hispanic and traditional snacks serve the national market, private labels and many of the world’s major food companies and retailers. Brands include El Sabroso, Granny Goose, Vitner’s, The Whole Earth, Jensen’s Orchard and, of course, Snak King, as well as numerous private labels available across the country.
The products are available in convenience stores, grocery, club and drug stores, mass merchandisers, vending machines and institutional/foodservice operations throughout the U.S. and via airlines.
How enormous is Snak King? The City of Industry, Calif.-based, company produces and packages a whopping 700 stock-keeping units (SKUs), based
on about 300 base recipes—an amazing amount even for snack royalty to maintain and track.
That’s one reason why the company is a driving force in the snack community. Always going a step further, Snak King has been able to move into new niches while growing from a regional player into a national one. That’s not easy when battling large competitors that often wage price wars. But it has remained distinctive in the market and nimble, as it can quickly move into new product categories.
How does Snak King do it all? “We have a guy that who sits in the back with a piece of paper, keeping everything straight,” modestly jokes Barry C. Levin, chairman and CEO. What he doesn’t say is that he and his talented team are highly organized at managing the operation, and take quite a bit of care in planning. They also have the technology and energy to keep everything running smoothly. “We are growing quite a bit right now,” he says.
A snack survivalist
Things weren’t always so rosy in the kingdom. The company has withstood some pretty tough times. It “survived” a devastating plant roof collapse (see Snack Food &Wholesale Bakery, November 2008) in the City of Industry plant several years ago, as well as a plant fire, economic struggles and cramped production quarters. Enter Levin, who took over a slumping Snak King in 1978 and jump-started the business with a fresh batch of enthusiasm, constantly searching for more efficient ways to run the then-small plant.
Levin and his team worked 24-hour days to get the damaged City of Industry plant (near Los Angeles) back into operation.
Several years and more than $30 million later, Snak King today shows no signs of slowing down. Production capacity has at least doubled and the 177,000-sq.-ft. City of Industry plant is thriving. It’s now equipped with a 100,000-sq.-ft. warehouse and what Snak King says is the largest single-oven tortilla chip line in the snack food industry, along with 12 state-of-the art, automatic production lines that have not only increased capacity, but are helping to enhance product quality and improve consistency.
Vying for Vitner’s
What’s more, Snak King now has two state-of-the-art facilities. In December 2011, Snak King purchased the 87-year-old, family-owned Vitner’s snack business from Chicago’s C.J. Vitner Co. and got a bustling production facility in Freeport, Ill. (among other things) out of the deal. Under the direction of Mark Schieldge, Snak King’s vice president of quality and innovation who masterminded the plant’s improvements, this second operation was expanded within a year to 220,000 sq. ft. so that it would be ready to manufacture and pack more products in addition to the Vitner’s line.
A $20-million investment was made at Freeport, including new packaging equipment, a new tortilla chip line and an extra 80,000-plus sq. ft. of finished-goods warehouse space, which has quickly jump-started capabilities, adds Levin. “The warehouse is massive,” he mentions. “The space is 45 feet tall, so we can store a lot there.”
New ovens and enhancements to existing production machinery also gave Freeport the royal Snak King treatment. The plant now has seven production lines, 31 packaging machines and two processing “kitchens” among its features and processes one-million pounds of potatoes each week, Schieldge says. “The amount of finished product we generate varies from week to week, but usually, it’s also one-million pounds,” he adds.
Vitner’s has been a Chicago institution, and Levin says that, as with many other Snak King brands, the company will continue to find ways to keep the tasty Vitner’s products in demand. “We have known the Vitner family for many years, both as distributors of El Sabroso products in the Midwest and as highly respected leaders in our industry,” Levin points out. “We’re very proud that they became part of the Snak King organization and are entrusting to us their heritage of more than eight decades of quality.”
No doubt, Vitner’s has quite a bit of brand loyalty, which stands for a lot, says Joe Papiri, vice president of sales and marketing. “We don’t intend to change the Vitner’s brand except to evaluate the product line in terms of market tests and update its packaging graphics,” he says. “Brands take a long time to build, so we’re positioning the Vitner’s line around Chicago as the hometown brand, with its heritage there. That’s kind of our marketing hub. We’re looking at everything made in the line, evaluating what we’re doing well and what can be improved. We’re also evaluating flavors to see what we might be missing, so we’ll be introducing some new flavors.”
Levin says Snak King found several operations in the country that could be potential purchases and also explored the idea of building a plant when the Vitner’s operation came up for sale. “We explored it because it had a lot of the things we were looking for: The production facility was up and running; it had an experienced workforce and talented management; and we thought it was a good opportunity and a good fit,” he remembers.
Currently, Snak King’s plants California and Illinois have a combined total of 950 employees (300 in Freeport), incorporate 19 processing lines and at least 59 packaging machines. “We’ve been very fortunate that our business has been growing and consumers like our product,” Levin says.
Internally, there is a heavy emphasis placed on food safety, quality and consistency, and the company is devoting time to bumping up its Safe Quality Food (SQF) program in Freeport. The level of quality has to be there because not only does Snak King pack its own products, the plants copack and manufacture private-label snacks, so consistency from plant to plant and quality have to be first-rate.
“In California, we’re certified at an SQF Level 3 and are working to get Freeport to that level as well,” Levin continues. “It’s currently operating at SQF 2, and was already at that point when we bought the company, so we’re going through the steps to move it up right now. We are frequently audited by other groups as well, probably once a month, between all of our private labeling and the self-imposed audits, so we’re really on top of keeping track of food safety.”
Niches are nice
Snak King has done its homework to broaden the distribution of Vitner’s products, as well as that of its high-end Jensen’s Orchard brand of dried-fruit snacks. Plus, it always seems to be expanding the number of products in the El Sabroso line, which is aimed at Latino customers, and nurturing its niches.
Niche products and new flavors are two of Snak King’s fortés, as it has also rolled out several variations of tortilla chips, such as Baja Lemon and Salsa Picante chips and other distinctive flavors. Guacamole tortilla chip sales have been hot, enough to catapult them onto the shelves of big-name, mass-merchandisers such as Wal-Mart.
“We make a lot of Hispanic items and those with Mexican seasonings,” says Papiri. The latest product rollout is El Sabroso Taco-Litos rolled tortilla chips. Available since late 2012, the rolled chips are packed in brightly colored 2- and 3.5-oz size bags. Flavors comprise Guacamole, Spicy Chile N’ Lime and Salsa Picante.
“Taco-Litos are a big part of that trend, which continues to grow,” he says. “The rolled tortilla chip shape is rather new for most of the U.S.”
The gluten-free market is another category the company may explore, Papiri says. “We have some items that are gluten-free now, so that’s an area we’re focusing on at both of our production facilities.”
The company’s top sellers are several varieties of potato chips and tortilla chips. “In California, we probably sell more tortilla chips and sales are pretty established on the west coast,” Papiri points out.
Adds Levin, “The plants each produce pretty much the same things, but Freeport produces some of the potato chips that we don’t make here in L.A., and L.A. produces pork rinds, nuts and trail mixes where Freeport doesn’t.”
Trends on the company’s radar include the move to natural and organic as well as better-for-you. And new flavors drive sales, Papiri tells SF&WB. “We see good growth potential with them in the food business,” he says. “We are also focusing on the better-for-you items. The healthy product category is where a good portion of our new items will be. We have to optimize things so they don’t have any more fat, sodium or calories than needed, but they have to deliver on flavor. Obviously, if something doesn’t taste good, no one’s going to buy it.”
What’s popping up next?
What’s next? The snack maker plans to soon roll out a pressure-popped snack that Levin describes as a popped crisp. “We don’t yet have a name for this product, but it can be made of different base ingredients (potato, rice or corn bases) and will come in different flavors.”
At this point, the company isn’t pursuing more acquisitions, because its plate is so full already, Levin adds. “We’ve made so many improvements in the last two years that we’re going to remain focused on production, continue to make good products consistently and keep watching the trends and perhaps create some new ones.”
Ron Jones, president and COO, echoes Levin’s statement. “We are trying to finish up our [upgrade projects] and complete the integration in Freeport. In Chicago, we have a direct-store-delivery system, so we have routes throughout the Chicagoland area, which means we have good control over the distribution aspect of the Vitner’s line.”
With all of the superior production equipment and technology, Levin believes that Snak King’s success in a sea of competitors is largely because of its superior products and team of employees. He has been known to say, “If [the product] doesn’t look good, consumers won’t buy it; if it doesn’t taste great, they won’t buy it again.”
Levin emphasizes that the Snak King staff is a main reason things are going well. “We’re most proud of the team we’ve assembled. We’re excited about the growth opportunities we see. It’s a really exciting time for us.”