4 Gatehall Drive, Suite 110
Parsippany, New Jersey 07054
Telephone: (979) 630-6400
Fax: (973) 364-1037
Sales: $351.4 million (2000)
NAIC: 311421 Fruit and Vegetable Canning; 311422 Specialty Canning
We here at B & G have achieved our enviable position through strict adherence to good manufacturing practices and efficient stock rotation. We're dedicated to providing our customers with the highest level of service found in the industry. And, as always, we regard quality to be our most important ingredient.
1996: B & G Foods is formed by investor group; company acquires Bloch & Guggenheimer and Burns & Ricker from Specialty Foods.
1997: Company acquires four Nabisco brands and Trappey's Fine Foods.
1998: Company acquires Maple Grove Farms of Vermont.
1999: Company acquires Polaner as well as the six Heritage brands of Pillsbury.
2000: Chef Emeril Lagasse launches line of products.
Established in 1996 by a coalition of New York investment firms, B & G Foods, Inc. has gathered together a number of well-known food brands, including B & G pickles, B & M baked beans, Louisiana Hot Sauce, Red Devil sauces, Underwood meat spreads, Ac'cent flavor enhancer, Los Palmas Mexican foods, the Polaner line of jams and jellies, Joan of Arc beans, Brer Rabbit molasses, Regina wine vinegars and cooking wines, Wright's liquid smoke hickory flavoring, Vermont Maid syrup, and the product line of Maple Grove Farms of Vermont. Already with major market shares on a regional basis, many of these brands have expanded their reach under B & G management. In 2000, B & G Foods also introduced an original product line with seasonings, salad dressings, marinades, and pepper sauces created by well-known chef and television personality Emeril Lagasse. B & G Foods is privately held, with more than 75 percent of its stock owned by the investment firm of Bruckman, Rosser, Sherrill & Co.
Creation of Specialty Foods in 1993: Forerunner of B & G Foods
Although B & G Foods is a young company, many of its brands have long and rich histories, with ownership changing hands a number of times over the years. The roots of B & G Foods as a collection of brands reaches back only to the mid-1980s, when Dutch conglomerate Artal NV began to buy a number of North American food businesses that included Bloch & Guggenheimer, Inc., makers of B & G pickles, and M. Polaner, Inc. Leonard S. Polaner, who had run his family's 100-year-old business before Artal gained control, now served as a president under Artal. In 1989 he hired David Wenner, an executive at Johnson & Johnson for 13 years, to serve as assistant to the president, responsible for the management of the Bloch & Guggenheimer subsidiary.
After several years Artal began to divest itself of its food products. First to go in March 1993 was the Polaner line, sold to American Home Products for $67.5 million. Then in June a group of investors led by Texas billionaire Robert Bass created Specialty Foods, which subsequently bought eight of Artal's remaining food businesses in a $1.1 billion leveraged buyout. Polaner and Wenner also joined Specialty Foods as executives.
The high debt incurred in the deal, however, proved onerous for Specialty Foods. Moreover, commodity price swings, in particular a decline in the price of meat and an increase in the price of grain, had a devastating effect on the bottom line. Operating profits of $83 million in 1994 were followed by a loss of $165 million in 1995. By June 1996 Specialty Foods hired Merrill Lynch & Co. to sell off noncore holdings, as the company opted to focus on its bread and cheese businesses.
In November 1996 New York investors, led by the firm of Bruckman, Rosser, Sherrill & Co. and aided by Polaner and Wenner, created B & G Foods to acquire Specialty Foods subsidiaries Bloch & Guggenheimer and Burns & Ricker, Inc. (makers of bagel chips, pita crisps, biscotti, and crispini). On December 27, 1996, B & G Foods purchased the stock of the two holding companies that controlled Bloch & Guggenheimer and Burns & Ricker. Polaner assumed the role of chairman of B & G Foods, with Wenner serving as president and chief executive officer.
Although an entirely new corporate entity, B & G Foods drew its name from the more storied of its two acquisitions, Bloch & Guggenheimer, well known for B & G pickles. Bloch and Guggenheimer were immigrants who sold pickles in the streets of Manhattan. In 1889 they founded B & G to produce pickles and relish, as well as other condiments. Their company would grow into a large retail and foodservice business and produce the top condiment brand in the New York City area.
In its first year of operations, B & G Foods quickly began to add to its business. On June 17, 1997, the company purchased four brands from Nabisco: Regina wine vinegars; Brer Rabbit, makers of molasses and syrups; Wright's, makers of liquid smoke hickory flavoring for use in marinades, sauces, soups, and stews; and Vermont Maid Syrup. On August 15, 1997, B & G Foods purchased Trappey's Fine Foods from the Louisiana-based McIlhenny Co., best known for its Tabasco products. Established in 1898 in the bayou country, and owned by McIlhenny since 1991, Trappey's produced Red Devil sauces, other lines of hot sauces, and a variety of pickled peppers.
B & G Foods Beginning to Grow Its Brands in 1997
The businesses B & G acquired in 1997 had established regional prominence over many years but had experienced a recent decline in sales. B & G Foods hoped not only to reverse that trend, through the introduction of new products, but also to extend the reach of the brands to the New York City area and to new regions through fresh distribution channels, such as mass merchants, nonfood outlets, and warehouse clubs. Financial results for 1997 indicated that the company was already showing signs of success. The Nabisco brands since July showed a 9 percent improvement over the prior year. Declining sales for Trappey products were halted in August and by the end of the year were up over the prior year. Furthermore, sales for B & G pickles and peppers grew by 8 percent, and foodservice sales of B & G products were up 18 percent. In all, annual revenues for the first full year of operations for B & G Foods stood at $151.6 million, compared with the 1996 total of $129.3 million for the same product lines under different management.
B & G Foods made yet another acquisition in July 1998 when it purchased privately held Maple Grove Farms of Vermont, Inc., makers of maple syrup and salad dressing under the Maple Grove Farm label, private-label maple syrup products, and natural foods under its Up Country Naturals label. With $37 million in 1997 sales, Maple Grove Farms was another brand with a rich history. The company was founded by Katharine Ide Gray, a member of one of the leading families of Vermont and an unlikely candidate to become a pioneer woman chief executive. In 1915 she began experimenting with maple sugar with her daughter, home for the summer from Columbia University where she studied Home Economics. Together with her daughter's friend, they created recipes for maple candy. A neighbor bought the first box of candy, and before long the women converted a back shed of Mrs. Gray's farm into a candy kitchen. The little business grew to the point that within four years it became a corporation and Mrs. Gray purchased an old mansion to convert into a factory. To lower overhead the mansion also became the Maple Grove Inn. As Maple Grove Candies expanded its offerings to include maple syrup and maple cream, as well as chocolates, Mrs. Gray purchased a maple reconditioning plant that became the basis of a second corporation, Maple Grove Products Vermont. To improve sales in New York City, Mrs. Gray would then open a restaurant and sales room on 57th Street, incorporated under the name of Maple Grove Products. Thus a kitchen operation would grow into an established business that by the end of the century would become part of a major food products company.
Financial results for 1998 showed an 18.6 percent increase in sales, from $151.6 million the previous year to $179.8 million. Maple Grove sales improved by $19.4 million, the Nabisco acquisitions by $10.3 million, and Trappey's by $10.2 million. Sales for B & G pickle and pepper products were relatively flat, increasing just 1.7 percent, or $.9 million. Sales for the Burns & Ricker snack food products, however, were disappointing, posting a loss of 11.2 percent, or $3.3 million.
Early in 1999, B & G Foods acquired the Polaner line of products, the family business of the B & G chairman with a history similar to that of Maple Grove Farms and Bloch & Guggenheimer. Polaner dates back to the 1800s when Max Polaner and his wife preserved fruit and pickled vegetables in a room next to the fruit and vegetable store they operated in Newark, New Jersey. Soon they were selling their products through other area stores, then across the Hudson River into New York City. As Polaner extended its reach over the years, it expanded its manufacturing facilities, especially after the increase in demand for its products caused by the post-World War II baby boom. Leonard Polaner joined the family business in 1956 after earning a master's degree from Harvard Business School. Almost 50 years later he would again be associated with the company that bears his name.
Whereas American Home Products had purchased Polaner in 1993 for $67.5 million, B & G foods paid only $30 million for the business six years later. American Home Products had little success with its food products holdings and in the face of declining sales opted to unload its brands in favor of concentrating on its core pharmaceutical and healthcare lines. The foods businesses were operated by a subsidiary, International Home Foods Inc., of which 80 percent was acquired in 1996 by the Dallas-based leveraged buyout firm of Hicks, Muse, Tate & Furst. B & G Foods hoped to use its expertise in operating smaller, specialty brands to revitalize the fortunes of Polaner.
Heritage Brands Acquisition: 1991
B & G Foods made its largest acquisition in 1999 with a $192 million purchase of the six 'Heritage' brands from the Pillsbury Company, which deemed them to be nonstrategic. Pillsbury elected to focus on international megabrands, such as Green Giant and Häèn-Dazs, and U.S. brands, such as Progresso and Hungry Jack. Generating $140 million in 1998 sales, the Heritage brands included B & M Baked Beans, Ac'cent flavor enhancer, Las Palmas Mexican food, Joan of Arc canned beans, and Underwood meat spreads.
The Heritage brands were similar in many ways to the other product lines of B & G Foods, in that they were specialty brands with rich histories. The roots of Las Palmas reach back to a Mexican housewife named Rosa Ramirez in 1920s Ventura, California. Working out of her home she began selling enchilada sauce made from a family recipe to friends and neighbors and, eventually, opened the Ramirez & Feraud Chili Company. In 1923 Las Palmas was established and began to offer a number of canned Mexican foods and sauces.
The origins of Ac'cent flavor enhancer actually can be traced back 2,000 years to the Far East, where the use of glutamate, discovered in the process that converted soya bean meal to soya sauce, was first introduced. During World War I, potash, used in munitions, was in great demand and manufactured from the byproducts of the beet sugar industry. According to legend, a Detroit beet sugar mill owner searched for a new use of beet sugar after the war and discovered that it could provide a plentiful supply of glutamate. A factory to manufacture glutamate opened in 1936, and by 1949 the flavor enhancer began to be sold in grocery stores. Created from glutamate, Ac'cent has no flavor of its own; rather, it compensates for the loss of glutamate in processed food, thus restoring flavor.
The ancestor of B & M Baked Beans was a Portland, Maine canning company established in 1867 by George Burnham and George B. Morrill. Products included canned meat and fish as well as vegetables. The company became particularly known for its canned corn, but as corn-growing shifted from the Northeast to the Midwest in the early 1900s, the corn canning industry moved as well, relegating B & M's product to regional status. To make up for the loss of income, B & M in the 1920s began to experiment with baked beans, which until that time had not been canned successfully. Using the traditional New England brick oven method, B & M introduced its Brick Oven Baked Beans in 1927 and soon began advertising on a national basis. As the company discontinued its fish packing and chowder products following World War II, baked beans became B & M's main product. In 1965 the company was sold to Wm. Underwood Company, and the two became part of the Heritage brands that B & G Foods acquired in 1999.
Underwood's history reaches even further back than B & M's, dating to 1822 when an Englishman named William Underwood started a small condiment business in Boston. Beginning with mustard, Underwood soon began selling ketchup, marmalade, cranberries, and pickles, which were stored in bottles and glass jars produced by Boston glassmakers. Underwood shipped his products all over the world, and by 1836 he had outgrown the production capacity of the local glassmakers and was forced to turn to canisters. Underwood's canned goods were sold to the pioneers traveling westward as well as the Union Army during the Civil War. He died in 1864, and his sons took over the business. They experimented with a process they called 'devilling,' which mixed ground ham with special seasonings. A signature product resulted, as did the Underwood Devil logo, which was trademarked in 1870, the oldest still in use in the United States. A hundred years later, after it purchased B & M, the Underwood Company was acquired in 1968 by Piermont Foods of Montreal. Pet Inc. acquired both companies in 1982; they were then inherited by the Pillsbury Company in a 1995 acquisition of Pet. Just four years later B & M and Underwood would become part of the B & G family of specialty brands.
With recent acquisitions making a partial contribution, B & G saw its annual sales increase by 87 percent in 1999, reaching $336.1 million. With the exception of B & G foodservice, all of the company's product lines showed some measure of increased sales. In 2000 B & G continued to absorb its acquired brands; at the same time it launched a completely new line of business: Emeril's Original, 14 products created by chef Emeril Lagasse, including seasonings, salad dressings, basting sauce marinades, and pepper sauces.
Lagasse was both a well-respected chef and a television personality with a mass following. In 1982, while still in his early 20s, he was chosen to succeed Paul Prudhomme as chef at the legendary Commander's Palace in New Orleans. In 1990 he opened his first restaurant, followed by a second venture in 1992. With the advent of cable TV's Food Network in 1993, Lagasse, through his cooking show, grew into a famous personality, as well known for loading up his food with butter, oil, cheese, cream, and his special spice mixture called Essence, as he was for his over-the-top personality and trademark utterances such as 'Kick it up a notch!' and 'Bam!' With four cookbooks in print and two television shows that aired twice daily, Lagasse was a prize catch for B & G Foods.
In the first year, Emeril's Original branded products produced $4 million in sales. Overall results for the company in 2000, however, were somewhat disappointing. Net sales increased just 4.6 percent, or $15.3 million, to $351.4 million over the previous year. Showing a decrease in sales were Polaner, Las Palmas, Underwood, B & M Baked Beans, and Burns & Ricker.
In January 2001, B & G Foods elected to sell its Burns & Ricker subsidiary to Nonnie's Food Company, Inc., with the proceeds going toward paying down debt. Although B & G Foods had success in revitalizing a number of specialty brands in a short period of time and appeared to have established a profitable franchise with its Emeril's Originals, its many acquisitions left the company highly leveraged. Entering 2001, B & G Food's long-term debt stood at $329.3 million compared with stockholder's equity of just $56.8 million, leaving the company somewhat vulnerable in the foreseeable future.
Principal Subsidiaries: Ac'cent; B & G Pickle and Pepper Products; B & M Baked Beans; Brer Rabbit; Joan of Arc; Las Palmas; Maple Grove Farms of Vermont, Inc.; M. Polaner, Inc.; Regina; Wm. Underwood Company; Vermont Maid Syrup; Wright's.
Principal Competitors: Aurora Foods Inc.; The J.M. Smucker Company; Vlasic Foods International Inc.
Burns, Greg, 'Too Much on Bob Bass's Plate?,' Business Week, July 15, 1996, p. 80.
Cohen, Laurie P., 'Bass to Acquire Food Companies for $1 Billion,' Wall Street Journal, July 27, 1993, p. A3.
Greer, Lois Goodwin, 'Katharine Ide Gray,' Vermonter, 1927.
Hayes, Jack, 'Emeril Lagasse: Bam! This Top-Notch Chef Kicks His Career Up to the Highest Rung of Culinary Fame,' Nation's Restaurant News, January 2000, pp. 108-10.
Topping, Dana C., 'Foodie Call,' Us, February 1999, pp. 84-87.
Source: International Directory of Company Histories, Vol. 40. St. James Press, 2001.