Skip to main content

Chef Solutions, Inc.

Chef Solutions, Inc.

120 West Palatine Road
Wheeling, Illinois 60090
U.S.A.
Telephone: (847) 325-7500
Toll Free: (800) 877-1157
Fax: (847) 325-7594
Web site: http://www.chefsolutions.com

Wholly Owned Subsidiary of Questor Management
Company LLC
Founded:
2001
Employees: 2,700
Sales: $570 million (2007 est.)
NAIC: 311991 Perishable Prepared Food Manufacturing

FRESH STARTS, 194285

MERGERS AND ACQUISITIONS: 19862001

AFTER THE CRASH, 2001 AND BEYOND

PRINCIPAL COMPETITORS

FURTHER READING

The formation of Chef Solutions, Inc., grew primarily from two prepared food companies: Sky Chefs and Orval Kent. Sky Chefs was created in the early 1940s and Orval Kent came along soon after as changes in American lifestyle created busier consumers who ate less at home and more often on the go. After mandatory food rationing, tight finances, and more women entering the workforce during World War II and beyond, American families wanted access to convenient, prepared foods instead of always relying on traditional time-cooked meals.

FRESH STARTS, 194285

In the 1940s and 1950s fast food took on new meaning with the advent of commercial airline travel. New planes were built with pressurized cabins and cities purchased airfields originally built for World War II use.

Millions of people discovered the efficiency and convenience of flight, and as their popularity grew so did the need to feed passengers. In 1942 American Airlines, one of the first commercial aviation companies, invested $500,000 to create Sky Chefs.

The new food catering service provided in-flight prepared meals and operated airport restaurants. Within ten years, the company managed kitchens in 14 American cities and prepared approximately three million meals a year. In-flight menus included full-course meals complete with potato, vegetable, and meat. The hot items were precooked on the ground, stored in aluminum containers, loaded into the planes closetsized kitchens, and served within an hour. Cold foods including salads, rolls, and desserts were packed in dry ice to maintain freshness. For more than 20 years, Sky Chefs earned a profit each year and by 1966 represented about 3.5 percent of American Airlines net profit.

Much of the companys success was due to its move toward diversification. In addition to in-flight catering services for nine different airlines, the company operated airport gift shops, cocktail lounges, and Flagship Hotels.Gross sales reached $37 million in 1966, up 40 percent from 1960s $22 million. Sky Chefs growth and profits continued to climb for the next several years.

As the 1970s came to a close, changes in the airline industry affected in-flight catering. In 1980 the American economy suffered a recession and surging fuel costs. As a result, domestic airlines experienced a 5 percent slump in passenger traffic, incurring more than $150 million in operating losses. The entire in-flight catering industry peaked at $1 billion in 1980, but the outlook for growth was dim.

With fewer passengers to feed, Sky Chefs recognized the continuing need for diversification and sought another market for food-on-the-go. Taking their focus away from the skies and onto the ground, the caterers found hungry travelers on the Governor Thomas E. Dewey Thruway in New York. In 1982, spending more than $4 million, Sky Chefs opened ten rest-stop restaurants along the Thruway. The chain, named The Chefs, improved the conditions of typical truck stops, offering modern décor, video game arcades, gift shops, and tourist information centers. For the next several years, Sky Chefs diversification grew and by 1985 the company had raked in revenues of $332.2 million and income of $13.6 million.

A year later, the AMR Corporation, parent of American Airlines, decided the catering business would be better off in other hands. In 1986 AMR sold Sky Chefs for $170 million to the Toronto, Canada-based Onex Capital Corporation.

At Onex Corporation, Sky Chefs would ultimately meet the prepared salad company Orval Kent. Boasting simple beginnings in 1952, Orval Kent was started in Chicago by a man bearing the same name. Kent operated a wholesale salad business until his death in 1970, when his college-educated sons, Richard and J. Vincent Kent, took over. The younger Kents disciplined financial oversight helped the company grow from $500,000 in sales in 1968 to $11 million by 1980. Financial indigestion arose when the Kents invested in the construction of a modern factory in Wheeling, Illinois. Debt forced them to sell the business to Kane-Miller of Tarrytown, New York, in 1985, still operating under the Orval Kent name. Kane-Miller also owned Delsaco Foods, a competing salad-making business based in East Rutherford, New Jersey.

MERGERS AND ACQUISITIONS: 19862001

By 1986 Orval Kent was in the black. With $100 million in sales and renewed confidence, the Kent brothers bought back Orval Kent and rival Delsaco Foods. With distribution centers on the East Coast, in the Midwest, and in Los Angeles, Orval Kent made salads for supermarkets, restaurants, and hotels across the country. One of their most successful products was called Signature Salads and was sold in supermarket delis. Presented in attractive porcelain crocks rather than traditional stainless steel bins, Signature Salads offered an upscale image in addition to good flavor. An estimated 5,000 of the 15,000 U.S. supermarket delis carried Signature Salads in 1986, and sales for the year reached $110 million. About the successful salads, Vincent Kent told the Chicago Tribune (March 20, 1986), Without mentioning Orval Kent, we will position Signature Salads as a standard of excellence.

The Kent brothers enjoyed a short span of ownership before history began to repeat itself. Three years after they purchased their fathers business back from Kane-Miller in 1985, the Kents again faced mounting debt and were forced to sell. In 1988 the Whitman Corporation paid $212 million to make Orval Kent part of its Pet Inc., a specialty foods company that made Old El Paso Mexican foods and Pet-Ritz frozen pie shells. With the sale, Richard and J. Vincent Kents involvement in the family business began to dwindle. Two years later, Richard relinquished his position as president and chief executive officer, telling the Chicago Tribune (May 1, 1990), I want to explore other business opportunities. They might include acquisitions and [to] be in the foods business. Older brother J. Vincent Kent stayed on as Orval Kents senior vice-president. Annual sales were reported at $190 million at the time of the Whitman purchase.

Three years later, in 1991, mismanagement again took its toll. By 1994 sales had dropped to $120 million and Orval Kent was looking for a new parent. This time the acquisition fetched a much lower price. For less than $50 million, a private equity investment firm, Horizon Partners of Milwaukee, bought Orval Kent from Pet, Inc. The Kent brothers, meanwhile, had moved onto new territories, acquiring a majority interest in a farmed sea bass company they named Kent SeaTech Corporation. For six years, Orval Kent thrived under the Horizon umbrella, and in 2000 the company finally met its unsuspecting partner, Sky Chefs.

COMPANY PERSPECTIVES

Chef Solutions is a leading provider of superior prepared foods and specialty bakery products and solutions to the retail and foodservice industry. Operating through their Orval Kent unit, the company specializes in home-meal replacement products such as refrigerated deli-style salads, mashed potatoes and side dishes, fresh cut fruit and desserts.

In 2000 Sky Chefs was a successful subsidiary of Onex Corporation, serving 260 airline customers from 159 kitchens in 29 countries. Looking to capitalize on the burgeoning refrigerated home-meal replacement (HMR) industry, Sky Chefs acquired Orval Kent, regarded as one of the top names in the field. As the second largest refrigerated salad company in the world and having a premier franchise name, strong customer relationships and state-of-the-art process technology, said Onex Managing Director Eric J. Rosen in a January 20, 2000, press release, Orval Kent provides a unique opportunity to build value in this attractive segment and diversify into other growth segments.

In addition to the Orval Kent purchase, Onex bought Pennant Foods, a bakery based in Lisle, Illinois, the same year. A year later, in 2001, I&K Distributors, another midwestern refrigerated food manufacturer, became a subsidiary of Onex. As a culminating effort, Onex President and CEO Michael E. Broll merged the companies into a new entity called Chef Solutions, Inc., specializing in convenient baked goods, prepared salads, and meals. Brolls leadership helped Chef Solutions sales grow to over $600 million in 2001; then came another change of hands.

Chef Solutions and partner Sky Chefs were sold in 2001 to LSG Lufthansa, an airline catering service operated as a subsidiary of German airline Deutsche Lufthansa AG. The June 1 sale provided Onex with a net after-tax gain of $944 million and launched Sky Chefs into the position of the worlds largest airline caterer. The new company, LSG Sky Chefs, had significant plans for growth. Instead, an unexpected disaster befell the airline industry and hindered their progress.

AFTER THE CRASH, 2001 AND BEYOND

The September 11, 2001, terrorist attacks on the United States, also labeled the largest airline disaster in history, nearly destroyed the airline industry. From 2001 to 2002 airline traffic plummeted to about 25 billion from 45 billion domestic travelers, and most airline caterers began offering no in-flight service on short-haul routes. Although LSG Sky Chefs revenue grew to more than $3 billion, an increase of 22.3 percent from 2001 to 2002, the growth was attributable to expansion in the consolidated companies. Removing the consolidation effect, revenue had declined by 7.9 percent, with Chef Solutions generating 19.5 percent of total revenue or about $585 million.

For the next several years, LSG Sky Chefs and Chef Solutions slowly glided into positive gains but not without some turbulence along the way. In 2002 Chef Solutions was embroiled in lawsuits that accused managers of sexually harassing several female workers. The workers at a Chef Solutions bakery in New Haven, Connecticut, which supplied bread and rolls to supermarkets and Subway sandwich shops, alleged the abuse was brought on by antiunion efforts. Many of the 200 employees were undocumented, immigrant workers and claimed the managers took advantage of their illegal status by threatening and harassing them so the United Auto Workers would be unsuccessful at unionizing the plant. By 2003 the National Labor Relations Board had charged Chef Solutions with over 20 illegal acts. A year later, Lufthansa announced it would sell the struggling Chef Solutions, with annual sales of $557 million and 2,600 North American employees.

In May 2004 Questor Management bought Chef Solutions from Lufthansa for over $100 million, carrying on a Questor tradition of buying underperforming companies. Questor Managing Director Dean Anderson told Buyouts Newsletter (June 7, 2004), The business has not shown a profit in some time, and given the companys position as secondary to Lufthansas core focus, the food maker was considered expendable by the airline. The management firm planned to achieve a turnaround with more efficient manufacturing and purchasing processes.

KEY DATES

1942:
Sky Chefs is created by American Airlines.
1952:
Orval Kent operates a wholesale salad business in Chicago.
1970:
Orval Kent dies and his two sons take over the business.
1982:
Sky Chefs opens The Chefs rest-stop restaurants.
1986:
AMR, parent of American Airlines, sells Sky Chefs to Onex Corporation.
1992:
The Kent brothers leave Orval Kent.
2000:
Onex Corporation buys Orval Kent.
2001:
Chef Solutions is formed through a merger of Orval Kent, I&K Distributors, and Pennant Foods; LSG Lufthansa buys Sky Chefs and Chef Solutions.
2004:
Questor Management buys Chef Solutions for $100 million.
2006:
Pennant Foods, bakery division of Chef Solutions, is sold to Fresh Start Bakeries.
2007:
Questor Management sells I&K Distributors to Countryside Foods.

One of Questors first initiatives was to create a more divisional structure by separating the prepared foods and bakery divisions, naming them Orval Kent Food, Pennant Foods, and I&K Distributors. Each division was managed by its own new president: Mark Brown hailed from ConAgra Foods before becoming president of Orval Kent; Dan Scales presided over Pennant Foods after a long career at Campbell Soup/Pepperidge Farm, Pillsbury, and Sara Lee; and Don Klausing oversaw the 40-year-old family-run I&K Distributors. All of Chef Solutions was managed by President and CEO Steve Silk, a Harvard Business School grad with a distinguished foodservice history including stints at ConAgra, Hebrew National, and others. Commenting on the new divisions, Silk told Food and Drink (JanuaryFebruary 2005), The designation of Orval Kent and Pennant as flagship brands with divisional entities will herald a return to the companys strong historic heritage, enabling us to develop targeted programs and product offerings that will enhance our service to our customers. Sales for Chef Solutions reached above $500 million for 2005.

Committed to streamlining its focus even further, Questor sold Chef Solutions Pennant Foods and I&K Distributors units. Pennant Foods, the baked goods distributor, was sold to Fresh Start Bakeries in 2006 for $240 million. In 2007, I&K Distributors, the refrigerated foods manufacturer of such brands as Yoders Salads, Renos Pizza, and Michigan Cottage Cheese, was snatched up by Countryside Foods.

By answering consumer demand for convenient, fresh-prepared salads and meals, Questor and Steve Silk positioned Chef Solutions to carry on the 50-year Orval Kent tradition. With less time to prepare meals as they go about their busy lives, Silk commented in Food and Drink, consumers need great-tasting food quickly and easily. Chef Solutions, with Questors backing, was ready and able to provide the goods.

Jodi Essey-Stapleton

PRINCIPAL COMPETITORS

Dole Food Company, Inc.; Resers Fine Foods, Inc.; Buds Salads, Inc.; Chiquita Brands International, Inc.;

City Fresh Foods; Harrys Fresh Foods; U.S. Foodservice, Inc.

FURTHER READING

Bernstein, Aaron, and Sheridan Prasso, The UAW Answers a Cry for Help, Business Week, November 18, 2002.

Gorman, John, Sons Keep Orval Kent in the Green, Chicago Tribune, March 20, 1986, p. 1.

Greenhouse, Steven, Immigrants Claim Harassment at Bakery, New York Times, February 2, 2003, p. 1.38.

Grossman, John, Name-Dropping at the Deli, New York Times, June 22, 1986, p. A7.

Lazarus, George, No Salad Days in Orval Kent Merger, Chicago Tribune, January 7, 1985, p. 5.

________, Orval Kent Is Sold, but Price Plummets, Chicago Tribune, December 2, 1993, p. 2.

________, Ownership Shuffle Takes Toll at Kent, Chicago Tribune, May 28, 1993, p. 2.

________, Pet Exec Takes Helm at Orval Kent Food, Chicago Tribune, May 1, 1990, p. 4.

Lufthansa Selling a Ready-to-Eat Meal Unit, New York Times, May 28, 2004.

McNish, Jacquie, and Cynthia F. Mitchell, AMR Corp. to Sell Airline Catering Unit to Onex, Wall Street Journal, January 15, 1986, p. 1.

Meeting Trends: Chef Solutions Says Its New Structure Will Allow It to Better Meet the Needs of Customers, Food and Drink, JanuaryFebruary 2005, p. 146.

Nagle, James J., An Airline Caterer Charts Expansion, New York Times, June 4, 1967, p. F13.

Pace, Eric, Inflight Food Sales at $1 Billion Record, New York Times, January 2, 1981, p. D1.

Questor Cooks Up New Turnaround, Buyouts, June 7, 2004, p. 6.

Rudd, David C., Whitman to Buy Orval Kent Food, Chicago Tribune, December 15, 1988, p. 1.

Sky Chefs Tries Out a Highway Market, New York Times, October 23, 1982, p. 43.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Chef Solutions, Inc.." International Directory of Company Histories. . Encyclopedia.com. 17 Nov. 2018 <https://www.encyclopedia.com>.

"Chef Solutions, Inc.." International Directory of Company Histories. . Encyclopedia.com. (November 17, 2018). https://www.encyclopedia.com/books/politics-and-business-magazines/chef-solutions-inc

"Chef Solutions, Inc.." International Directory of Company Histories. . Retrieved November 17, 2018 from Encyclopedia.com: https://www.encyclopedia.com/books/politics-and-business-magazines/chef-solutions-inc

Learn more about citation styles

Citation styles

Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).

Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.

Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:

Modern Language Association

http://www.mla.org/style

The Chicago Manual of Style

http://www.chicagomanualofstyle.org/tools_citationguide.html

American Psychological Association

http://apastyle.apa.org/

Notes:
  • Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
  • In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.