Nash Finch Company

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Nash Finch Company

7600 France Ave. S.
P.O. Box 355
Edina, Minnesota 55435
U.S.A.
(612) 832-0534
Fax: (612) 924-4939

Public Company
Incorporated: 1894 as Nash Brothers
Employees: 11,888
Sales: $2.51 billion
Stock Exchanges: NASDAQ
SICs: 5141 Groceries, General Line; 5142 Packaged Frozen Foods; 5143 Dairy Products; 5147 Meats and Meat Products; 5148 Fresh Fruits and Vegetables; 5411 Grocery Stores

The third largest publicly owned wholesaling firm in the United States, Nash Finch Company serves approximately 5,700 supermarkets in 29 states. In addition, its retail operations, which account for 32 percent of sales, encompass some 89 corporate stores in 13 states. Like Nash’s large list of affiliated independent retailers and growing number of super warehouse stores, these outlets—Econofoods, Economart, Food Bonanza, Jack & Jill, Sun Mart Foods, Family Thrift Center, Warehouse Market, and Farm Fresh—feature the private label brands “Our Family” and “Buy ‘n Save,” which together represent approximately 1,400 dairy, meat, grocery, frozen foods, and health and beauty products. Nash Finch also owns Nash DeCamp Company, a produce marketing subsidiary based in California. Although Nash DeCamp contributes only one percent of overall sales, it is nonetheless considered a valuable asset for its penetration of markets worldwide and its ability to generate as much as five percent of total operating profits.

Nash Finch Company began in 1885 when Vermont native Fred Nash, after traveling west and toiling at several unpromising jobs, invested $400 and established a candy and tobacco shop in Devil’s Lake, a Dakota Territory boom town. Nash soon enlisted his two younger brothers, Edgar and Willis, to join him. All three benefited from having worked in their parents’ general store back East, and they shared a determination to live frugally so that their business might succeed. By the time North Dakota achieved statehood in 1889, the brothers had opened three additional stores, suffered the loss of one and severe damage to another from separate fires, and, finally, consolidated their operations in the emerging urban center of Grand Forks.

The year 1889 proved pivotal to the company for two reasons. The first stemmed from the serendipitous arrival in Grand Forks of a boxcar of peaches for which no buyer existed. Although primarily retailers, the Nash brothers had conducted some fruit wholesaling and quickly decided to secure a bank loan for the peaches. The venture was a large gamble—the brothers’ only collateral was the Grand Forks store—but it paid off when sales were made to retailers throughout the region. Two years later the Nashes became wholesalers exclusively and earned the distinction of founding both the first and largest of the state’s wholesaling firms. The second turning point came when Edgar contracted tuberculosis (then known as consumption) and moved to California for health reasons. While Edgar’s new contribution as West Coast fruit buyer aided the growth of the company, a replacement was needed at the Grand Forks headquarters. That person was 14-year-old Harry Finch, who several decades later became president of the company. (A legacy of Finch management continued in the hands of Finch’s grandson, Harold B. Finch, Jr., who was the company’s chief executive officer and chairman of the board in the early 1990s.)

Although 1896 was overshadowed by the death of Edgar Nash in January, later that year the company celebrated its first expansion beyond North Dakota with the acquisition of the Smith Wholesale Company of Crookston, Minnesota. Harry Finch, still relatively young but now with seven years of experience in clerking and sales, was placed in charge of the Crooks-ton operation, which was renamed Finch-Smith Company. After the turn of the century, Nash Brothers solidified its position as North Dakota’s leading wholesaler with the successive purchases of Minot Grocery Company and Grand Forks Mercantile Company. A 1905 partnership forged with a budding Red River Valley produce brokerage named C. H. Robinson—to which Finch was elected vice-president—further broadened Nash’s service base. After Nash Brothers acquired control of Robinson in 1913, branch offices were established in Minneapolis, Sioux City, Milwaukee, Chicago, Fort Worth, and virtually everywhere else the parent company had sprouted its own warehouse facilities. Until 1966, C. H. Robinson served as the produce procurement branch of Nash Brothers, because, at that time, the Federal Trade Commission succeeded in limiting Nash’s broker-buyer monopoly. Ten years later, C. H. Robinson became independent and has since blossomed into a $935-million concern headquartered in Eden Prairie, Minnesota.

From 1907 to 1918, Nash acquired 54 fruit wholesalers spread throughout the northwestern United States and Canada. Highlights of this era included the establishment in Lewiston, Idaho, of White Brothers and Crum, the company’s first fruit growing and shipping venture; the creation of the Randolph Marketing Company in Los Angeles to package citrus fruit; and the formation of Nash DeCamp, which would prove to be one of the company’s most prized concerns. By 1919 Nash Brothers had become so vast that it required a more centralized headquarters. The logical choice was Minneapolis, which had developed into the nation’s seventeenth largest city, a premier milling center, and the wholesaling hub of the Northwest. According to historian Bruce Gjovig in Boxcar of Peaches: The Nash Bros. & Nash Finch Company, “Although the loss of the Nash Bros, headquarters was a blow to Grand Forks, the move made good business sense. … [In] Minneapolis, the Nash Bros, had joined the ranks of the Pillsburys, Cargills, and Hills.” Two years later, the firm reincorporated under the name Nash Finch Company and consolidated its more than 60 businesses, which had previously functioned as separate units with independent officers. Canadian operations were united under Nash-Simington Ltd. while C. H. Robinson Company and Nash Shareholders became the corporation’s primary subsidiaries. As the corporation’s first president, Fred Nash oversaw the complex consolidation process, which was completed in 1925. His death the following year resulted in Harry Finch’s elevation to president. Willis Nash remained as corporate treasurer and also served as president of the Nash Company, the Nash family’s own investment corporation.

At the onset of the Great Depression in 1929, Nash Finch ranked as one of the foremost food distributors in the Midwest, with sales of more than $35 million. Because of its firm foothold within a recession-proof industry, Nash weathered the 1930s better than most U.S. manufacturers. The only year in which the company failed to turn a profit was 1932, generally considered the worst year of the Depression. During the 1930s, one of the most significant advances for the company came with its large-scale introduction and promotion of the Our Family brand, which had become a symbol of the company’s operating philosophy and a favorite of Nash consumers by the 1940s.

During the early 1950s, Nash Finch re-entered food retailing with the purchase of 17 supermarkets in Nebraska. The move proved crucial to the company’s future health, for it allowed Nash to remain competitive with much larger food concerns, including Eden Prairie-based wholesaler and retailer Super Valu Stores, Inc. From 1960 to 1969 Nash saw its sales grow from $91 million to $248 million. As the company increasingly diversified within its industry and offered a greater variety of services to its retailers, growth in overall revenues became even more impressive during the 1970s and 1980s. By the mid-1980s, Nash ranked as the nation’s tenth largest grocery wholesaler, with sales of $1.3 billion. Its geographic sphere of influence, however, was still confined largely to the rural Midwest, which at the time represented a conspicuously slow-growth market. This, and just a five percent compound increase in earnings over a ten-year period (Super Valu’s increase, over the same period, was 23 percent), had perpetuated what Dick Youngblood termed the company’s “comparative anonymity.” In an effort to improve his company’s rankings within the food industry, Chairman Harold Finch, Jr. announced a sweeping expansion plan designed to nearly triple earnings and double revenues by the end of the decade.

The 1985 acquisition of M. H. McLean Wholesaler Grocery Company effectively inaugurated the plan. A North Carolina distribution facility serving approximately 60 Hills Food stores, the McLean Company signified additional wholesale revenues of roughly $100 million. More important, though, was Nash’s consonant commitment to the South, with its higher-than-aver-age population growth. A series of purchases, including that of Georgia’s second largest food wholesaler as well as that of Colorado’s largest wholesaler, highlighted the next few years. Yet, the Nash Finch Company entered the 1990s somewhat precariously; quick profits had not followed quick expansion. Instances of store closings and margin problems related to three separate acquisitions led to notable charges against shares and, although revenues and book value climbed steadily, net income stagnated in 1988 before it plunged by 27 percent in 1989.

Nonetheless, optimism has predominated at the company and among its shareholders as Finch continues its strategy of achieving expansion through acquisition and improving profitability through broadened services and updated facilities. The early 1990s have been singularly bright for Nash Finch. Following a slight dip in net sales from 1990 to 1991 (during which time profits increased by seven percent), the company topped the $2.5 billion mark in 1992 revenues while posting its highest earnings ever—more than $20 million. Two Mid-Atlantic acquisitions in 1992, Virginia-based Tidewater Wholesale Grocery and a prominent division of Maryland-based B. Green & Company, fortified Nash’s position as one of the largest distributors to the U.S. military. That same year, the company sought overseas growth by participating in a group venture to acquire 75 percent of Hungary’s largest wholesale food company, Alfa Trading Company. The December 1992 loss of an account with Lunds Inc., a $120-million upscale Minnesota retail chain, seemed hardly to hinder the company; within four months it had reached an agreement to acquire Easter Enterprises, a 16-store chain with sales of $250 million. Headquartered in Des Moines, Easter consists of 11 stores in Iowa, three in Illinois, and two in Missouri. Perhaps the sweetest part of the deal is the lost business that it represents for Easter’s former provider, Super Valu. The purchase also serves notice that Nash has no intention of abandoning its bread-and-butter Midwest market, which according to most recent estimates still represents approximately 70 percent of sales. That, no doubt, would be received as welcome news by the company’s founder, a pioneering Midwesterner who, in February of 1989, received the high posthumous honor of being inducted into the North Dakota Entrepreneur Hall of Fame.

Principal Subsidiaries

GTL Truck Line Inc.; Nash DeCamp Company; The S. C. Shannon Company; T & H Service Merchandisers Inc.; Thomas & Howard Company of Hickory Inc.; Thomas & Howard Company of Rocky Mount Inc.; Timberlake Grocery Company of Macón Inc.; Virginia Foods of Bluefield Inc.