Granny Goose Foods, the largest snack food manufacturer in California, will buy Country Club Foods on Wednesday for $17 million pending approval of the bankruptcy court.
If the sale is approved, Country Club, based in Kaysville, will be in the hands of owners who have already turned around one financially troubled snack food company.Country Club manufactures and markets Clover Club, Red Seal and La Famous brands of salted snacks. It employs 325 people.
No layoffs are planned, according to Jack Doty, the chief financial officer for Granny Goose.
"It is the policy of Granny Goose to preserve jobs," Doty said. "We see that senior and general management will be moved to a consolidated headquarters. In the short run, we see no changes being made."
As for people who work on the potato chip assembly line, "we see no reduction in jobs," Doty said.
Although it earns $45 million annually and has been in business for 58 years, Country Club has seen a lot of troubles in the past few years.
The firm declared Chapter 11 bankruptcy in November 1995.
In addition, the company was accused of several poor sanitation practices by the Utah Department of Agriculture during the summer of 1995, although the company was later cleared by state inspectors after the problems had been corrected.
Despite the troubled recent history, Granny Goose officials said the purchase will be valuable.
"We're buying it because Country Club is the regional snack food company for the Intermountain and Rocky Mountain states and the Southwest. Granny Goose has an opportunity to expand beyond being a West Coast regional company to being a super regional for the United States with this acquisition," Doty said.
Among other things, Country Club Foods has "a good solid manufacturing facility" in Kaysville and an excellent distribution system, which is essential to the snack food business, Doty said.
"What Country Club brings to the table is distribution and that should mean the chain of transportation and sales reps and all the things that get it from plant to shelf," Doty said. "It also brings the shelf space itself with the brands on it."
Granny Goose, meanwhile, offers the ability to consolidate overhead and bring in more efficient and up-to-date electronic systems.
"The combination of those factors means that not only will Country Club become more profitable, but there should be a synergism between the firms to lower overall costs throughout," Doty said.
The new owner, Keith Kim, and a team of managers purchased Granny Goose Foods in April 1995, only a few days before it was slated to close because of financial problems. That would have put 600 employees out of work.
Kim stabilized the company, retained about 500 of the jobs and eventually added more jobs that brought it back to its original work force size. Under Kim, Granny Goose's sales volume doubled to more than $100 million and its sales region grew.
How did he do it?
"Keith brought in several of us who were experienced in turn arounds and we did a number of things," Doty said. "We emphasized efficiency in manufacturing and distribution, taking advantage of the logistics and electronic systems that were at Granny Goose but were not being fully utilized."
Other things that helped were the cooperation of labor unions at Granny Goose and the demise of another snack food company, Eagle Foods, Doty said.