Ventura Foods LLC
Ventura Foods LLC
40 Pointe Drive
Brea, California 92821
Telephone: (714) 257-3700
Toll Free: (877) 836-8872
Fax: (714) 257-3702
Web site: http://www.venturafoods.com
Joint Venture of CHS Inc. and Mitsui & Co.
Sales: $1.5 billion (2006 est.)
NAIC: 311225 Fats and Oils Refining and Blending; 311930 Flavoring Syrup and Concentrate Manufacturing
Based in Orange County, California, Ventura Foods LLC is a joint venture of CHS Inc. and Mitsui & Co., offering branded and private-label foodservice products, mostly in bulk quantities. The company's more than 7,000 products include margarine and butter blends, shortenings, liquid butter alternatives, and pan coatings. Ventura also produces premium salad oils, mayonnaise, and salad dressings under the Ventura, Hidden Valley, and Marie's labels. Meat flavor bases sold under the Classic Gourmet and Chef's Pride brands are used to make soups, sauces, and gravies. Ventura's concessions product line includes "popping and topping" oils, used to prepare popcorn as well as to flavor it. In terms of sheer tonnage, Ventura's highest selling product is shortening. Ventura maintains a culinary staff to develop recipes, including healthier menu items, using the company's products. The recipes are available on the company's web site, which also offers advice on how to best use Ventura products and a service called Salad Bistro, providing recipes, industry trends, and merchandising tools related to salad bars and entrée salads.
Foodservice customers account for about two-thirds of revenues and include major wholesalers, large retailers, and restaurant chains such as Burger King, Papa John's, and Subway. In addition to its Brea, California, headquarters, where no manufacturing is conducted, Ventura maintains three culinary centers for product development, and a dozen production facilities located in Alabama, California, Illinois, Louisiana, Minnesota, Missouri, Oregon, Pennsylvania, and Texas. Ventura also sponsors a program for aspiring chefs at the Culinary Institute of America in Napa Valley, which houses the 8,000-square-foot Ventura Foods Center for Research and Development to help restaurants develop menu concepts.
PETALUMA, CALIFORNIA, ROOTS: 1919
Although formed in 1995, Ventura traces its history to the start of Wilsey Foods, established in Petaluma, California, in 1919 by Hayes Wilsey as a butter and egg distributor. The company began to package its own butter to make ends meet during the Great Depression of the 1930s, and with the opening of a new plant in Los Angeles in the 1960s diversified further to include the production of margarine, shortening, and oil. In the 1970s, Wilsey expanded geographically, opening plants in City of Industry, California; Salem, Oregon; Fort Worth, Texas; and Atlanta, Georgia. Wilsey set its sights on international markets after being acquired in 1989 by Japan's Mitsui & Company as a platform for Mitsui's entry into the United States' value-added food products market. With Mitsui's backing, Wilsey became involved in the consumer premium salad market in 1994 by acquiring Lou Ana Foods, Inc., an Opelousas, Louisiana-based producer of salad dressings and vegetable oils.
Wilsey was doing business with some of the largest restaurant chains in the United States when it joined forces with the Holsum Foods division of Harvest States Cooperative to create a joint venture called Ventura Foods. Harvest States was created in 1983 through the merger of two regional farmers cooperatives: North Pacific Grain Growers, Inc. (NPGG), and the Farmers Union Grain Terminal Association (GTA). NPGG was founded in Lewiston, Idaho, in late 1929. The cooperative relocated to Portland, Oregon, in 1938, the same year that GTA was organized in St. Paul, Minnesota, by 121 local cooperatives. Four years later GTA became involved in wheat milling through the acquisition of Amber Milling Company, and in 1943 lumberyards and three elevator lines were added. During the post–World War II years both NPGG and GTA prospered. Looking to become less dependent on grain, GTA diversified in 1977 through the acquisition of Waukesha, Wisconsin-based Holsum Foods, which provided entry into the processed foods market, essentially converting commodities such as wheat and soybeans into food products that fetched a higher price than the ingredients themselves. It proved to be a wise decision, given the problems that befell the farming industry in the 1980s which resulted in a number of cooperatives being forced out of business. GTA was one of the healthy concerns that could at least merge with another cooperative to remain competitive. In 1983 GTA and NPGG consolidated their operations, forming Harvest States Cooperative.
The processed foods business of Holsum Foods became an increasingly important element of Harvest States' success, spurred by such acquisitions as Chicago-based Great American Foods, Omaha-based Lewis Albert & Sons, and Philadelphia-based Private Brands. By the early 1990s processed foods accounted for more than $450 million in annual revenues. Although it represented a small portion of Harvest States' total revenues of $3 billion, processed foods offered better profitability than the grain trading business, which had been experiencing a steady erosion in margins. Growth through acquisitions continued for Holsum Foods in the early 1990s. Portland, Oregon-based Gregg Foods was added in 1992 and two years later, Los Angeles-based Saffola Quality Foods was purchased. Holsum also expanded by way of joint ventures. It teamed up with Farmland Industries to start a pet and dairy food business, and formed a canola oilseed company with a Mitsubishi SeedTec International subsidiary.
VENTURA FOODS BEGINS AS JOINT VENTURE: 1995
The 1995 joint venture between Harvest States' Holsum Foods and Mitsui's Wilsey Foods was formed to purchase Portion Pac, a Chambersburg, Pennsylvania-based unit owned by H. J. Heinz Co., maker of bulk mayonnaise, salad dressings, and sauces. In March 1995 Portion Pac began doing business as Ventura Foods. Not only did the deal expand Holsum Foods' U.S. business, the association with Mitsui was seen as a way to possibly sell to the Pacific Rim markets. The increased emphasis on value-added products was also in keeping with the philosophy of Harvest States' new chief executive officer, John Johnson, a former livestock feed salesman who had assumed the post in early 1995 after nearly 20 years with the cooperative. His marketing background was in stark contrast to Harvest States' three previous CEOs who came up through the ranks as grain merchandisers.
The roots of Ventura Foods began in the country's richest growing regions during the early years of the 20th century. The company evolved, built on a tradition of hard work, quality products and listening to our customers. By specializing in a select group of related products, including edible oils, shortenings, dressings, margarine, sauces, and flavor bases, Ventura Foods has been able to develop efficiencies and economies of scale that provide our customers with products, services and programs that will enhance and grow their sales.
The Ventura Foods venture proved so successful that little more than year later Harvest States and Mitsui decided to merge Holsum Foods and Wilsey Foods, along with the joint venture. The resulting entity was incorporated in 1996 as Ventura Foods, LLC. Wilsey provided slightly more than half of Ventura's $800 million in revenues as well as its leadership. Wilsey President and CEO Jack Davis assumed the chief executive post. The company's headquarters were initially established at the Wilsey facility in City of Industry, California.
With Davis at the helm, Ventura enjoyed steady growth in the late 1990s, fueled by a pair of key acquisitions and a licensing deal, and a strategy that emphasized more profitable value-added products such as sauces and dressings over commodity shortening, oil, and margarine. In late 1997 Ventura reached an agreement to acquire foodservice products from Lipton/Unilever Foodservice, part of the giant Dutch conglomerate Unilever Group, which had decided that the brands involved were not part of its core U.S. business. When the transaction was finalized in 1998, Ventura picked up the Van de Bergh Foods edible oils brands, including Citation, Mel Fry, and Phase. As a result, Ventura significantly increased its market share of the premium shortening and oils and liquid butter alternatives sold to the restaurant, bakery, and concession markets. Next, in early 1999, Ventura acquired Birmingham, Alabama-based Sunnyland Refining Company, a transaction that made Ventura the market leader in the foodservice margarine category. Several months later, in July 1999, Ventura forged a licensing agreement with the Hidden Valley Foods division of Clorox Professional Products Co. to manufacture, sell, and market the Hidden Valley brand of pourable salad dressings and portion packs. Hidden Valley foods retained the brand for other products, such as the Hidden Valley Dry Mix.
External growth continued for Ventura in the new century. In June 2000 the company added Los Alamitos, California-based Sona & Hollen Foods, Inc., a manufacturer and contract packager of condiments, sauces, dips, and marinades. The acquisition expanded Ventura's portion control capabilities.
Ventura grew internally as well, bringing new products to market. In early 2001 the company introduced a new line of clam, chicken, and beef flavor bases with no MSG added, and low-sodium chicken and beef bases, followed by Hidden Valley Ranch Fat-Free Dressing, available in 1.5-ounce portion packs as well as one-gallon containers. Later in 2001 Ventura unveiled Churn Spread, a butter alternative. Other new products in the early 2000s included Trail Hand Buffalo Wing Sauce, and a butter alternative product called Ultra Sunglow.
Ventura also beefed up its customer support operation in 2001 with the creation of the Operator Support Services group, a collection of centers staffed by professional culinarians, food technologists, and research and development specialists to assist customers in production application and performance. For example, customers looking to replace trans fats in their menu items faced a daunting challenge but could turn to Ventura food technologists, experts in food oils, for a solution. By creating a custom blend of fats and oils to match the customer's process, Ventura could forge a long-term relationship that benefited both parties.
- Wilsey Foods founded.
- Harvest States Cooperative formed.
- Mitsui & Company acquires Wilsey.
- Harvest States and Mitsui create Ventura Foods joint venture.
- Harvest States and Mitsui units merge to create Ventura Foods LLC.
- Van de Bergh Foods acquired.
- Deans Foods brands acquired.
NEW CEO: 2005
At the end of March 2005, Davis retired as Ventura's CEO. His successor, Richard L. Mazer, was already in place, having taken over as president several months earlier. Mazer earned a pair of degrees from the Massachusetts Institute of Technology, in management and economics, and then studied industrial engineering at Stanford University before becoming a consultant at Boston Consulting Group and Deloitte & Touche. He struck out on his own in 1992, forming Mazer Group to provide strategic and financial consulting services to food companies. At the time Ventura was formed he was serving as consultant to Wilsey Foods. He joined Ventura in 1997 as an executive president and later chief operating officer. He played a key role in Ventura's rise to prominence as a provider of margarine, edible oils, mayonnaise, condiments, and other items to the foodservice industry. Upon Davis' retirement, Mazer took over what he called a "big little company," which employed about 2,500 people and had all but doubled in size in the previous ten years, posting annual revenues of $1.5 billion. Mazer quickly established a goal of again doubling in size, this time in five or six years. "It might be an ambitious goal," he conceded in an interview with the San Diego Business Journal, adding, "but I think it's possible."
To achieve his goal Mazer planned to follow a strategy similar to the one established by his predecessor: invest in research and development to create new products for sale and add others through acquisitions. In particular, he was interested, according to the San Diego Business Journal, in "large business units of companies with national brands." A ready example of the organic approach to growing the business was the development of a vitamin powder mix for milk that in addition to finding a market with nursing homes and hospitals could also be sold to consumers through supermarkets. Also introduced in 2005 was Mel-Fry Free, a canola-based multipurpose oil that was better tasting than other trans-fat-free oils. Later in the year, Mazer landed some of the national brands that he targeted. Ventura reached a long-term licensing agreement with Deans Foods Co. for use of the Deans' trademark on dips and also acquired Deans' line of Marie dressings. The $198 million deal provided Ventura with a pair of brands at the top of their categories. Ventura looked to grow them further through what Mazer described as "an aggressive marketing program." Two years later, in Cooperative Partners Online, he gave a state-of-the-company assessment of Ventura after its first decade in business, stating: "We increased our new product development tenfold and automated our warehouses so we can seamlessly handle the more than 7,000 different products we offer. We are as different from the Ventura of 10 years ago as anyone could have imagined."
Wilsey Foods, Inc.
Del Monte Foods Company; Heinz U.S. Consumer Products; Kraft Foods Inc.
Cruz, Sherri, "New Ventura Foods Chief Aims to Double Size," San Diego Business Journal, April 18, 2005, p. 26.
Graham-Peterson, Lisa, "Soybeans Fuel Foodservice Growth," Cooperative Partners Online, May 29, 2007.
Kennedy, Tony, "Harvest States CEO Had Fruitful Timing," Star Tribune, April 17, 1995, p. 1D.
——, "Harvest States Cooperative Plans Joint Venture with Japanese Firm," Star Tribune, March 14, 1995, p. 1D.
"Ventura Foods," Snack Food & Wholesale Bakery, December 2003, p. 36.
"Ventura's Davis Set to Retire," Nation's Restaurant News, January 10, 2005, p. 44.