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Curtice-Burns Foods, Inc.

Curtice-Burns Foods, Inc.

90 Linden Place
P.O. Box 681
Rochester, New York 14603-0681
U.S.A.
(716) 383-1850
Fax: (716) 383-1281

Wholly Owned Subsidiary of Pro-Fac Cooperative, Inc.
Incorporated:
1961
Employees: 4,450
Sales: $739.09 million (1996)
SICs: 2033 Canned Fruits, Vegetables, Preserves, Jams & Jellies; 2037 Frozen Fruits, Fruit Juices & Vegetables; 2096 Potato Chips, Corn Chips & Similar Snacks; 2099 Food Preparations, Not Elsewhere Classified; 3411 Metal Cans

Curtice-Burns Foods, Inc. (Curtice Burns) is a fruit, vegetable, and food processor that packages, ships, and markets a range of food products. Curtice Burns is wholly owned by Pro-Fac Cooperative, Inc., an agricultural cooperative formed in 1960 to process and market crops grown by its more than 650 members. The relationship between Pro-Fac and Curtice Burnswhich dates back to the founding of both firmsis such that Pro-Fac supplies crops and additional financing to Curtice Burns in return for Curtice Burns providing a market and management services to Pro-Fac. Curtice Burnss range of products includes canned and frozen fruits and vegetables, canned desserts and condiments, fruit fillings and toppings, canned chilies and stews, salad dressings, pickles, peanut butter, and snack foods. These products are sold in three main categories: branded, private label, and foodservice.

Roots Traced to Curtice Brothers and Burns-Alton Corp.

The fruit and vegetable processor got started through the work of the Curtice brothers and the Burns-Alton Corp. late in the nineteenth century. First, in 1868, brothers Simeon and Edgar Curtice founded a small grocery store in Rochester, New York. Soon thereafter, they formed a canning business called Curtice Brothers to save surplus vegetables and fruits they could not sell in the store. Working first from a Water Street plant, the business expanded to Curtice Street, and before long additional plants were built in Vernon, New York, and Woods-town, New Jersey.

At this time, the commercial tinning and canning industry was still developing. Technology for mass market preserving was rudimentary, and the use of chemical preservatives brought occasional digestive side effects. Nevertheless the Curtice Brothers business grew; the company, along with other food processors, discovered that products tastefully packaged could find strategic markets.

In 1920, both Curtice brothers having died, control of the company was handed over to the Security Trust Company, which shortly thereafter sold its stake to Douglas C. Townson.

The Burns half of Curtice Burns began as the Burns-Alton Corp. in Alton, New York. In 1900 founder C. F. Burns began packing dried and fresh apples and dried beans. His son Ed joined the family business in 1925, and the companys name was changed to C. F. Burns and Son, Inc. Much of the companys food products at this time were shipped to Europe, a market that slowly shrank during the 1920s. In 1927 the Burnss plant was re-equipped to process applesauce. One year later, 50,500 cases, mostly applesauce, had been processed at the plant.

Merger Created Curtice-Burns Foods in 1961

The merger of the Curtice Brothers and C. F. Burns & Son operations occurred in the early 1960s. Both companies were active in the fruit and vegetable growing regions in central and western New York state. They and other food processors were adjusting to the end of lucrative government contracts for canned food during World War II. With sales down, companies found fixed and overhead costs rising.

A shakeout of the regional industry was inevitable, with resulting mergers among rivals. One consolidation involved talks beginning in 1958 between Curtice Brothers, Burns-Alton Corp., and Haxton Foods Inc. of Oakfield, New York. All of the owners of these companies were getting along in years and wanted to retire, so their main goal was to find a buyer for their companies. Additional aims were locating capital to fund the purchase of new labor-saving equipment and obtaining an increased market share in the expanding frozen food business. The obstacle was continuing pricecutting in the marketplace, which further dented already slender profit lines achieved by each company.

The merger talks did not progress well. A large agricultural cooperative, Cooperative Grange League Federation Inc. (GLF) of Ithaca, New York, was recruited in early 1959 to seek ways to establish a joint venture of farmers and processors involving the three companies. That year, the death of George W. Haxton led to the withdrawal of Haxton Foods from the joint venture talks. GLF consultants were left to establish the processing venture with Curtice Brothers and Burns-Alton.

Further study concluded that the best solution would be to merge Curtice Brothers and Burns-Alton into a new operating company with a contractual arrangement for marketing cooperation, owned and operated by farmers. So, in October 1960, Pro-Fac Cooperative, Inc., opened for business (Pro standing for producers and Fac for the facilities owned by them). By March 31, 1961, more than 500 central and western New York state fruit and vegetable farmers had bought common stock in Pro-Fac. They pledged to deliver a predetermined tonnage of raw produce to the cooperative over the next three years.

This agreement meant that Curtice-Burns Inc. would be incorporated to process and sell to supermarket chains products grown and delivered by Pro-Fac Cooperative. Achieving this vertical integration called for Pro-Fac to acquire the plants and equipment of the former Curtice Brothers and Burns-Alton operations for approximately $3 million. The new, merged company achieved sales of $13 million in 1962, its first fiscal year.

In June 1962, Haxton Foods was ultimately bought by Pro-Fac and Curtice Burns for $1.5 million. Haxton Foods brought to the deal such branded products as its Blue Boy food line as well as operating plants in Oakfield, Waterville, LeRoy, Barker, and Wyoming.

Regional Focus Launched in Early 1960s

Beginning in 1962, Curtice Burns, under the leadership of President Stanley Macklem, set about becoming a regionally focused company. The idea was to operate a series of small, locally based businesses on a cost-effective basis, enabling Curtice Burns to become a national force serving regional markets in ways that large, national competitors could not.

The company came by this grand strategy the hard way. Beginning as a processor and marketer of Pro-Fac products, Curtice Burns served the private label business, marketing canned string beans, beets, corn, and applesauce to such supermarket chains as Shop Rite Foods Inc. and Grand Union stores. Serving private label chains was profitable when national brands were in short supply. But in periods of oversupply, Curtice Burns suffered. In 1962, for example, the companys second year of business, prices for private label food products plummeted, and the company lost money. Worse, Pro-Fac growers received 15 percent below the average market price for their raw product.

Curtice Burns sought to establish a regional edge to stabilize its earnings. A mere ten percent fluctuation in the national supply of a product group could greatly alter a companys profit and loss statement. The unpredictability of supplies is often driven by crop yields, themselves subject to weather and annual planting patterns. A plan to diversify regionally allowed Curtice Burns to give Pro-Fac members more than full market value for their raw product in all but two years between 1962 and 1980. Curtice Burns began offering frozen vegetable products with regional appeal, marketing, for example, southern style frozen vegetables in the southern United States. The company could also provide quick delivery of products.

In 1963 Morton Adams, who had been executive vice-president of Burns-Alton when it merged with Curtice Brothers in 1961, became president of Curtice Burns. Two years later, in September 1965, Curtice Burns purchased the canned sauerkraut maker Empire State Pickling Company, based in Phelps, New York, adding the well-known Silver Floss label. The company also added can-maker Finger Lakes Packaging to its operations portfolio. Pro-Fac built two can-making plants in Alton and LeRoy, New York, that year and leased them to Continental Can Co.

In February 1967 Curtice Burns expanded outside New York state when it purchased the P. J. Ritter Company, headquartered in Bridgeton, New Jersey. Along with Indiana-based subsidiary Brooks Foods, P. J. Ritter made branded tomato ketchup and specialty bean products under the Brooks label. P. J. Ritter/Brooks products were sold in one-third of the U.S. market. Acquiring them allowed Curtice-Burns to further diversify regionally in the United States and decrease its weather and national oversupply risks by adding branded commodity products and growing areas to its portfolio.

1970s and 1980s Dominated by Acquisition Activities

Curtice Burnss next big acquisition came in June 1972 with the purchase of Pennsylvania based Snyders Potato Chips. Snyders packaged its chip products in foil bags aimed at the convenience food market. The company also sold other potato chip, corn chip, and snack products.

A year later, Curtice Burns issued 220,000 shares of common stock with a value of $10.50 each. The shares were to be listed on NASDAQ, a stock exchange for emerging publicly listed companies. The proceeds of the 1973 issue helped in that years purchase of Michigan Fruit Canners, headquartered in Benton Harbor, Michigan. The acquired companys products, marketed mainly under the Thank You brand label, brought Curtice Burns into markets ranging from Denver to Pittsburgh and Atlanta.

In July 1975, Curtice Burns moved west by purchasing Nalleys Fine Foods, based in Tacoma, Washington. Bought from W.R. Grace & Co., Nalleys had four main product groups: canned meats, pickles, salad dressings, and snack foods. Nalleys brand products were sold mostly in the western U.S. market. Later the same year Curtice Burns made a second public offering of 413,294 shares, valued at $11.50 each. Early in the following year, the companys stock gained a listing on the American Stock Exchange.

More companies were brought under the Curtice Burns umbrella in the ensuing years. In 1976 the company acquired Nalleys Canada Ltd., based in Vancouver, British Columbia. In May 1977 Curtice Burns acquired Comstock Foods, headquartered in Newark, New Jersey, from Borden. A year later, the Canadian arm of Curtice Burns purchased Bonus Foods for $428,000.

Curtice Burns had by now installed Hugh Cummings as president of the company. He oversaw the June 1979 acquisition of National Brands Beverage Division, which was bought from Canada Dry Bottling Co. of Syracuse, New York, for approximately $1.7 million. For the first time, Curtice Burns had entered into the branded soft drinks market, initially in New York state.

Earnings at Curtice Burns were dented by the early 1980s slowdown in the U.S. economy, which squeezed profit margins. Company sales in 1980 totaled $357.6 million, compared to $303.7 million posted a year earlier. Net income fell in that period from $5.13 million in 1979 to $4.6 million in 1980. However, Curtice Burns recognized that a slumping market is a good time to buy struggling rivals. In January 1980, the National Oats Co. Inc., headquartered in Cedar Rapids, Iowa, was picked up from the Liggett Group. National Oats produced milled oat food products and corn for popping.

Curtice Burnss U.S. expansion was furthered a year later when Lucca Packing Company, a California-based canned and frozen Italian and Mexican food maker, was purchased. Soon thereafter, Curtice Burns bought the southern division of Seabrook Foods Company. Henceforth to be named the Southern Frozen Foods division of Curtice Burns, the newly acquired company sold primarily McKenzies brand southern style frozen vegetables in 11 southeastern states.

In February 1984 Curtice Burns purchased the 7-Up Bottling Company of Binghamton Inc. from a private concern for $1.15 million. Two years later, the company added fruit fillings, frozen fruits, and maraschino cherries to its line when it bought for $41 million the assets of Wilderness Foods, Naturally Good Foods, and Cerise Foods Divisions of Cherry Central Cooperative Inc. The acquired company served markets in the western United States from its Sodus, Michigan, headquarters.

The acquisitions were meant to serve the companys long-term growth. As company president David McDonald expressed in 1988, Our principal focus in any year is not on short term earnings, but on the structuring of Curtice Burns in a manner that will, over the long term, maintain a rate of growth that is at the top of the industry. Curtice Burnss marketing strategy included achieving dominant positions in niche food categories; for example, two meat snack companies were purchased, the Smoke Craft Division of International Multifoods, in December 1986, and, in December 1988, Lowreys Meat Specialties, Inc., based in Denver. Lowreys was the leading maker of meat snack products, including beef jerky, for which Curtice Burns became the largest supplier in the U.S. market. The two companies later merged to form the Curtice Burns Meat Snacks division. Other important acquisitions in this period were Adams, a producer of natural branded peanut butter, and Farman Brothers Pickle Co.

Another niche market was Mexican frozen food products, part of the larger frozen dinner market then becoming popular in the United States. In January 1989 the company acquired from Pillsbury the Van de Kamp Mexican Frozen Dinner line. Sales of frozen Mexican food were then increasing 16 percent annually in the U.S. market. Eighty percent of sales were made in the growing San Francisco and Los Angeles markets.

The company was also making cuts wherever possible to remain a low-cost producer. Due to a variety of factors, mainly competitive, Curtice Burns got out of the branded soft drinks market in 1988 when it sold its National Brands Beverage business to 11 separate bottlers. Only private labels were retained in a series of deals that netted the company $6.6 million in profit.

Perhaps more importantly, the company was focusing on growing low per capita food categories in its regional brand marketing. For example, in 1988, sales of canned vegetables nationwide reached around $63 million, and canned desserts attained $105 million in sales. Although small in size, Curtice Burns believed no food processing giant could make inroads in such markets by advertising on television at great cost. The battleground for such products as sauerkraut and fruit toppings shifted from the living room to the grocery store shelf, where Curtice Burnss cost effective operations could successfully outplay bigger companies in the market.

The companys two-year acquisitions spree that began in 1986 led to a sales increase that in 1989 reached $807.2 million. Reflecting this growth, stock in Curtice Burns soared 34 percent, to $32. By now, the Pro-Fac Cooperative numbered 774 members; Curtice Burns itself had more than 7,000 full and seasonal employees on its payroll.

1990s Brought Streamlining and Change of Ownership

Adverse weather conditions and high raw product costs contributed to earnings falling 22 percent to $11.6 million in 1990. The early effects of the recession in North American markets was being felt. That year, the company was decentralized into ten major operating divisions: Southern Frozen Foods, headquartered in Montezuma, Georgia; Comstock Michigan Fruit, based in Rochester, New York; Finger Lakes Packaging, operating out of Lyons, New York; Snack Foods Group, head-quartered in Rochester; Curtice Burns Meat Snacks of Denver; Nalleys Fine Foods, based in Tacoma, Washington; Nalleys Canada Ltd. in Vancouver; Brooks Foods, headquartered in Mount Summit, Indiana; Lucca Packing of San Francisco; and National Oats Company, based in Cedar Rapids, Iowa.

Curtice Burnss acquisitions continued apace. David Mc-Donald, the companys president and chief executive officer, announced in July 1992, according to Refrigerated & Frozen Foods: If we could find an acquisition that would get us into another part of the country on an economic basis, we would make that acquisition. Wed buy any size company. Weve bought them as small as a couple of million or as big as $100 million. It depends on the company.

McDonalds boldness came at a time when the recession was further affecting the companys balance sheet. Sales in 1991 remained stagnant at $933 million, compared to $926.8 million a year earlier. Profits were down from $7.4 million in 1990 to $3.6 million in 1991. The earnings decline was most marked in oat cereal sales. Following an oat bran craze that required increased plant capacity, demand nationally for oat products decreased, and the company had to adjust its National Oats division to market erosion and reduced profit margins. Two other major factors in the earnings decline were oversupply in vegetables and high material costs for meat snacks.

The early 1990s recession also meant widespread price cutting in the snack food industry and record low earnings by North American food retailers that the company served with private label products. In 1992 Curtice Burns achieved a 68 percent jump in earnings to $6.14 million, but this profit was well below the levels of the 1980s, when sales were much lower. Return on average shareholders equity was only 5.8 percent in 1992, less than half of the 1986 figure of 12.1 percent, which itself was the low mark of the period from 1983 to 1989. Results for 1992 were helped somewhat by cost efficiencies made possible with the opening that year of the companys first national sales office.

The competitive pressures of the food industry forced Curtice Burns to take a hard look at its operations portfolio in 1993. That year, the company embarked on a restructuring program in order to shed unprofitable businesses. Early in the year Lucca Frozen Foods was divested, and in November the oats portion of the National Oats division was sold to Ralston Purina for $39 million, with National Oats popcorn business being transferred to Corn-stock Michigan Fruit. Also in November, the Hiland potato chip business was sold for $3 million. In February 1994 Curtice Burns sold its meat snacks business for $5 million, and following year the company sold Nalley Canada Ltd. and the snack food line of its Nalleys Fine Foods division. Following these divestments, Curtice Burns had six divisions: Comstock Michigan Fruit, Nalleys Fine Foods, Southern Frozen Foods, Snack Foods Group, Brooks Foods, and Finger Lakes Packaging. In October 1996, to further focus on core operations, Curtice Burns sold Finger Lakes, a maker of sanitary food cans, to Silgan Containers Corporation for $30 million.

Meanwhile, during the early stages of this restructuring, Curtice Burns was for sale. This change-of-control process was initiated in April 1993 when Agway Inc. announced its own restructuring and its intention to sell its controlling stake in Curtice Burns, about one-third of the companys stock. Agway was a farm supply cooperative based in Syracuse, New York, which had played a key role in the formation of Curtice Burns and in the establishment of the relationship between Curtice Burns and Pro-Fac. It initially appeared that Curtice Burns would be bought by Dean Foods Company, which in June 1994 offered $20 per share, or about $456 million. But disputes between Curtice Burns and Pro-Fac over how much of the proceeds from the sale should go to Pro-Fac members led Dean Foods to withdraw its offer. Then, in September 1994, Curtice Burns accepted a $19 per share offer from Pro-Facabout $433 millionand became a wholly owned Pro-Fac subsidiary, thus cementing the longstanding relationship between the two firms.

With the restructuring largely complete and the question of ownership resolved, Curtice Burns set out in the mid-1990s to bolster its core businesses and solidify its relationship with Pro-Fac by making acquisitions and entering into partnerships that would enable it to buy more crops from Pro-Fac members. In July 1995 Michigan-based food processor Packer Foods was acquired for $5.4 million and was merged into Comstock Michigan Fruit. In mid-1996 Curtice Burns bought Matthews Candy Co., which was placed in the Snack Foods Group. In April 1997 the company entered into a partnership with Flanagan Brothers, Inc., of Bear Creek, Wisconsin, through which the two companies would merge their sauerkraut production operations.

In January 1997 Dennis M. Mullen took over as CEO of Curtice Burns. Mullen aimed to reduce debt at the company, improve its profitability, and eventually increase sales from the $739 million of 1996 to $1 billion. He had Curtice Burns off to a good start on meeting these goals as the company posted net income of $13.1 million for the first nine months of fiscal 1997, a vast improvement over the $2.3 million loss for the same period in fiscal 1996.

Principal Divisions

Comstock Michigan Fruit; Nalleys Fine Foods; Southern Frozen Foods; Curtice Burns Snack Foods Group; Brooks Foods.

Further Reading

Adelson, Andrea, Food Maker Turns Down Dean Foods, New York Times, September 24, 1994, p. C5(N).

Cochran, Thomas N., and Pauline Yuelys, Curtice-Burns Foods Inc.: Its Secret Is in Finding the Sauerkraut Markets, Barrons, September 26, 1988, p. 63.

Cook, James, Tea for Two, Forbes, March 2, 1981, p. 78.

Curtice Burns Foods Inc.: A History, Curtice-Burns Public Relations, November 1991.

Jaffe, Thomas, Sleeper, Forbes, December 26, 1988, p. 154.

Lively, Janet, Curtice Burns Prospects Blossom, Democrat and Chronicle (Rochester, N.Y.), July 15, 1997, pp. 8B, 10B.

Regional Edge, Refrigerated & Frozen Foods, July 1992.

This Co-op Really Cooperates, Food Processing, March 1996, pp. 78-79.

Etan Vlessing

updated by David E. Salamie

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Curtice-Burns Foods, Inc.

Curtice-Burns Foods, Inc.

90 Linden Place
P.O. Box 681
Rochester, New York 14603-0681
U.S.A.
(716) 383-1850
Fax: (716) 383-1281

Public Company
Incorporated: 1961
Employees: 7,400
Sales: $896.9 million
Stock Exchanges: American Midwest
SICs: 2033 Canned Fruits & Vegetables; 2099 Food Preparations Nec; 2011 Meat Packing Plants; 2037 Frozen Fruits & Vegetables; 2096 Snack Foods

Curtice-Burns Foods Inc. is a fruit, vegetable, and food processor, that grows, packages, ships, and markets a range of food products internationally. The companys range of products include canned and frozen fruits and vegetables, desserts, oat-based cereals, condiments, snack foods, microwaveable main dish meals, and breaded specialty vegetables.

The fruit and vegetable processor got started through the work of the Curtice brothers and the Burns-Alton Corp. late in the nineteenth century. First, in 1868, brothers Simeon and Edgar Curtice founded a small grocery store in Rochester, New York. Soon thereafter, they formed a canning business called Curtice Brothers to save surplus vegetables and fruits they could not sell in the store. Working first from a Water Street plant, the business expanded to Curtice Street, and before long additional plants were built in Vernon, New York, and Woodstown, New Jersey.

At this time, the commercial tinning and canning industry was still developing. Technology for mass market preserving was rudimentary, and the use of chemical preservatives brought occasional digestive side effects. Nevertheless the Curtice Brothers business grew; the company, along with other food processors, discovered that products tastefully packaged could find strategic markets.

In 1920, both Curtice brothers having died, control of the company was handed over to the Security Trust Company, which shortly thereafter sold its stake to Douglas C. Townson.

The Burns half of Curtice Burns began as the Burns-Alton Corp. in Alton, New York. In 1900, founder C. F. Burns began packing dried and fresh apples and dried beans. His son Ed joined the family business in 1925, and the companys name was changed to C. F. Burns and Son, Inc.

Much of the companys food products at this time were shipped to Europe, a market that slowly shrank during the 1920s. In 1927, the Burnss plant was re-equipped to process applesauce. One year later, 50,500 cases, mostly applesauce, had been processed at the plant.

The merger of the Curtice Brothers and C. F. Burns & Son operations occurred in the early 1960s. Both companies were active in the fruit and vegetable growing regions in central and western New York state. They and other food processors were adjusting to the end of lucrative government contracts for canned food during the World War II years. With sales down, companies found fixed and overhead costs rising.

A shakeout of the regional industry was inevitable, with resulting mergers among rivals. One consolidation involved talks beginning in 1958 between Curtice Brothers, Burns-Alton Corp., and Haxton Foods Inc. of Oakfield, New York. All the owners of these companies were getting along in years and wanted out of the business, so their main incentive was to find a buyer for their companies. An additional incentive was locating capital to fund the purchase of new labor-saving equipment and obtaining an increased market share in the expanding frozen food business. The drawback was continuing pricecutting in the marketplace, which further dented already slender profit lines achieved by each company.

The merger talks did not progress well. A large agricultural cooperative, Cooperative Grange League Federation Inc. (GLF) of Ithaca, New York, was recruited in early 1959 to seek ways to establish a joint venture of farmers and processors involving the three companies. That year, the death of George W. Haxton led to the withdrawal of Haxton Foods from the joint venture talks. This left GLF consultants to establish the processing venture with Curtice Brothers and Burns-Alton.

Further study concluded that the best solution would be to merge Curtice Brothers and Burns-Alton into a new operating company with a contractual arrangement for marketing cooperation, owned and operated by farmers. So, in October of 1960, Pro-Fac Cooperative Inc. opened for business. By March 31, 1961, more than 500 central and western New York state fruit and vegetable farmers had bought common stock in Pro-Fac. They pledged to deliver a predetermined tonnage of raw produce to the cooperative over the next three years.

This meant that Curtice Burns Inc. would be incorporated to process and sell products grown and delivered by Pro-Fac Cooperative to supermarket chains. Achieving this vertical integration called for Pro-Fac to acquire the plants and equipment of the former Curtice Brothers and Burns-Alton operations for approximately $3 million. The new, merged company achieved sales of $13 million in 1962, its first fiscal year.

In June of 1962, Haxton Foods was ultimately bought by Pro-Fac and Curtice Burns for $1.5 million. Haxton Foods brought to the deal such branded products as its Blue Boy food line as well as operating plants in Oakfield, Waterville, LeRoy, Barker, and Wyoming.

Beginning in 1962, Curtice Burns, under the leadership of President Stanley Macklem, set about becoming a regionally focused company. The idea was to operate a series of small, locally based businesses on a cost-effective basis, enabling Curtice Burns to become a national force serving regional markets in ways that large, national competitors could not.

The company came by this grand strategy the hard way. Beginning as a processor and marketer of Pro-Fac products, Curtice Burns served the private label business, marketing canned string beans, beets, corn, and applesauce to such supermarket chains as Shop Rite Foods Inc. or Grand Union stores. Serving private label chains was profitable when national brands were in short supply. But in periods of oversupply, Curtice Burns suffered. In 1962, for example, the companys second year of business, prices for private label food products plummeted, and the company lost money. Worse, Pro-Fac growers received 15 percent below the average market price for their raw product.

Curtice Burns sought to establish a regional edge to stabilize its earnings. A mere ten percent fluctuation in the national supply of a product group could greatly alter a companys profit and loss statement. The unpredictability of supplies is often driven by crop yields, themselves subject to weather and annual planting patterns. A plan to diversify regionally allowed Curtice Burns to give Pro-Fac members more than full market value for their raw product in all but two years between 1962 and 1980.

Curtice Burns began offering frozen vegetable products with regional appeal, marketing, for example, southern style frozen vegetables in the southern United States. The company could also provide quick delivery of products.

In 1963 Morton Adams, who had been executive vice-president of Burns-Alton when it merged with Curtice Brothers in 1961, became president of Curtice Burns. Two years later in September of 1965, Curtice Burns purchased the canned sauerkraut maker Empire State Pickling Company, based in Phelps, New York, adding the well-known Silver Floss label. The company also added Finger Lakes Packaging to its operations portfolio. Pro-Fac built two can-making plants in Alton and LeRoy, New York that year and leased them to Continental Can Co.

In February of 1967 Curtice Burns expanded outside New York state when it purchased the P. J. Ritter Company, headquartered in Bridgeton, New Jersey. Along with Indiana-based subsidiary Brooks Foods, P. J. Ritter made branded tomato ketchup and specialty bean products under the Brooks label. P. J. Ritter/ Brooks products were sold in one-third of the U.S. market. Acquiring them allowed Curtice-Burns to further diversify regionally in the United States and decrease its weather and national oversupply risks by adding branded commodity products and growing areas to its portfolio.

Curtice Burnss next big acquisition came in June of 1972 with the purchase of Pennsylvania based Snyders Potato Chips. Snyders packaged its chip products in foil bags aimed at the convenience food market. The company also sold other potato chip, corn chip, and snack products.

A year later, Curtice Burns issued 220,000 shares of common stock with a value of $10.50 each. The shares were to be listed on NASDAQ, a stock exchange for emerging publicly listed companies. The proceeds of the 1973 issue helped in that years purchase of Michigan Fruit Canners, headquartered in Benton Harbor, Michigan. The acquired companys products, marketed mainly under the Thank You brand label, brought Curtice Burns into markets ranging from Denver to Pittsburgh and Atlanta.

In July of 1975, Curtice Burns moved out west by purchasing Nalleys Fine Foods, based in Tacoma, Washington. Bought from the W.R. Grace & Co., Nalleys had four main product groups: canned meats, pickles, salad dressings, and snack foods. Nalleys brand products were sold mostly in the western United States market.

In December of 1975 Curtice Burns made a second public offering of 413,294 shares, valued at $11.50 each. Early in the following year, the companys stock gained a listing on the American Stock Exchange.

More companies were brought under the Curtice Burns umbrella in the ensuing years. In 1976 the company acquired Nalleys Canada Ltd., based in Vancouver, British Columbia. In May of 1977 Curtice Burns acquired Comstock Foods, headquartered in Newark, New Jersey, from Borden. A year later, the Canadian arm of Curtice Burns purchased Bonus Foods for $428,000.

Curtice Burns had by now installed Hugh Cummings as president of the company. He oversaw the June 1979 acquisition of National Brands Beverage Division, which was bought from Canada Dry Bottling Co. of Syracuse, New York, for approximately $1.7 million. For the first time, Curtice Burns had entered into the branded soft drinks market, initially in New York state.

Earnings at Curtice Burns were dented by the early 1980s slowdown in the U.S. market, causing squeezed profit margins. Company sales in 1980 totalled $357.6 million, compared to $303.7 million posted a year earlier. Net income fell in that period from $5.13 million in 1979 to $4.6 million in 1980.

At the same time, Curtice Burns recognized that a slumping market is a good time to buy struggling rivals. In January of 1980, the National Oats Co. Inc., headquartered in Cedar Rapids, Iowa, was picked up from the Liggett Group. National Oats produced milled oat food products and corn for popping.

Curtice Burnss U.S. expansion was furthered a year later when Lucca Packing Company, a California-based canned and frozen Italian and Mexican food maker, was purchased. Soon thereafter, it bought the southern division of Seabrook Foods Company. Henceforth to be named the Southern Frozen Foods division of Curtice Burns, the newly acquired company sold primarily McKenzies brand southern style frozen vegetables in 11 southeastern states.

In February of 1984 Curtice Burns purchased the 7-Up Bottling Company of Binghamton Inc. from a private concern for $1.15 million. Two years later, the company added fruit fillings, frozen fruits, and maraschino cherries to its line when it bought for $41 million the assets of Wilderness Foods, Naturally Good Foods, and Cerise Foods Divisions of Cherry Central Cooperative Inc. The acquired company served markets in the western United States from its Sodus, Michigan, headquarters.

The acquisitions were meant to serve the companys long-term growth. As company president David McDonald expressed in 1988, Our principal focus in any year is not on short term earnings, but on the structuring of Curtice Burns in a manner that will, over the long term, maintain a rate of growth that is at the top of the industry.

Curtice Burnss marketing strategy included achieving dominant positions in niche food categories; for example, two meat snack companies were purchased, the Smoke Craft Division of International Multifoods, in December, 1986, and, in December, 1988, Lowreys Meat Specialties, Inc., based in Denver. Lowreys was the leading maker of meat snack products, including beef jerky, for which Curtice Burns became the largest supplier in the U.S. market. The two companies later merged to form the Curtice Burns Meat Snacks division. Other important acquisitions in this period were Adams, a producer of natural branded peanut butter, and Farman Brothers Pickle Co.

Another niche market was Mexican frozen food products, part of the larger frozen dinner market then becoming popular in the United States. In January of 1989 the company acquired from Pillsbury the Van de Kamp Mexican Frozen Dinner line. Sales of frozen Mexican food were then increasing 16 percent annually in the U.S. market. Eighty percent of sales were made in the growing San Francisco and Los Angeles markets.

The company was also making cuts wherever possible to remain a low-cost producer. Due to a variety of factors, mainly competitive, Curtice Burns got out of the branded soft drinks market in 1988 when it sold its National Brands Beverage business to eleven separate bottlers. Only private labels were retained in a series of deals that netted the company $6.6 million in profit.

Perhaps more importantly, the company was focusing on growing low per capita food categories in its regional brand marketing. For example, in 1988, sales of canned vegetables nationwide reached around $63 million, and canned desserts attained $105 million in sales. Although small in size, Curtice Burns believed no food processing giant could make inroads in such markets by advertising on television at great cost. This meant the battleground for products like sauerkraut and fruit toppings shifted from the living room to the grocery store shelf, where Curtice Burnss cost effective operations could successfully outplay bigger companies in the market.

The companys two-year acquisitions spree that began in 1986 led to a sales increase that in 1989 reached $807.2 million. Reflecting this growth, stock in Curtice Burns soared 34 percent in value to $32. By now, the Pro-Fac Cooperative numbered 774 members; Curtice Burns itself had more than 7000 full and seasonal employees on its payroll.

Adverse weather conditions and high raw product costs contributed to earnings falling 22 percent to $11.6 million in 1990. The early effects of the recession in North American markets was being felt. That year, the company was decentralized into ten major operating divisions: Southern Frozen Foods, headquartered in Montezuma, Georgia; Comstock Michigan Fruit, based in Rochester, New York; Finger Lakes Packaging, operating out of Lyons, New York; Snack Foods Group, headquartered in Rochester; Curtice Burns Meat Snacks of Denver; Nalleys Fine Foods, based in Tacoma, Washington; Nalleys Canada Ltd. in Vancouver, British Columbia; Brooks Foods, headquartered in Mount Summit, Indiana; Lucca Packing of San Francisco, California; and National Oats Company, based in Cedar Rapids, Iowa.

Curtice Burnss acquisitions continued apace at this time. David McDonald, the companys president and chief executive officer during that period, announced in July of 1992, according to Refrigerated & Frozen Foods: If we could find an acquisition that would get us into another part of the country on an economic basis, we would make that acquisition. Wed buy any size company. Weve bought them as small as a couple of million or as big as $100 million. It depends on the company.

McDonalds boldness came at a time when the recession was further affecting the companys balance sheet. 1991 sales remained stagnant at $933 million, compared to $926.8 million a year earlier. Profits were down from $7.4 million in 1990 to $3.6 million in 1991. The earnings decline was most marked in oat cereal sales. Following an oat bran craze that required increased plant capacity, demand nationally for oat products decreased, and the company had to adjust its National Oats division to market erosion and reduced profit margins. Two other major factors in the earnings decline were oversupply in vegetables and high material costs for meat snacks.

The early 1990s recession also meant widespread price cutting in the snack food industry and record low earnings by North American food retailers that the company served with private label products. Still, through 1992, Curtice Burns achieved a 68 percent jump in earnings to $6.14 million. Cost efficiencies were made possible that year with the opening of the companys first national sales office in Memphis, Tennessee, to aid in customer sales and servicing.

Curtice Burnss earnings recovery continued into fiscal year 1993. First-quarter income jumped from $1.1 million a year earlier to $1.33 million. Looking to the future, Curtice Burns hoped to profit from its continuing focus on core businesses in regional markets, where a cost effective dominance of that product category could be maintained. When the product commodity cyclesworsened by the recession of the early 1990sreturn to stability with the recovery, the companys earnings would likely show similar improvement.

Principal Subsidiaries

Southern Frozen Foods; Comstock Michigan Fruit; Finger Lakes Packaging; Snack Foods Group; Curtice Burns Meat Snacks; Nalleys Fine Foods; Nalleys Canada Ltd; Brooks Foods; National Oats Company.

Further Reading

Curtice Burns Foods Inc.: A History, Curtice-Burns Public Relations, November 1991; Regional Edge, Refrigerated & Frozen Foods, July 1992.

Etan Vlessing

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