30 Years of Manufacturing Excellence

30 Years of Manufacturing Excellence
I
n 1926, only four short years after the
founding of Certified Grocers of
California, Ltd. (now Unified Western
Grocers), a bakery manufacturing facility
was built on Santa Barbara Avenue just
southwest of downtown Los Angeles.
A couple of miles away, the Union Ice
Plamann
Company was operating a manufacturing
plant that supplied ice to Los Angeles
restaurants and railroads. Owned and operated separately, both
businesses were successful and prosperous for many years.
In 1974, both of these businesses were purchased by
Certified Grocers of California (although the ice company
had since been converted into a dairy). These two business
transactions not only turned the local food industry upsidedown, they were events that would change the future of
Certified Grocers by enhancing its ability to provide its
Southern California retail grocery members with the “right
perishable food products at the right time.”
This is the story of our company’s successful entry
into the food manufacturing business and the high quality
products and services that we have delivered to retailers
throughout Southern California for the past 30 years. This
is the story of Unified Western Grocers’ Manufacturing
Division.
Alfred A. Plamann
President and CEO
Unified Western Grocers, Inc.
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P
Dairy Division
ost World War I Los Angeles was a boomtown with
the real estate and the oil industries leading the
charge. The success of these and other industries (such as
filmmaking) attracted job seekers from across the U.S. and
caused the local population to swell at a rapid pace. An influx
of new residents led to the need for more manufacturing
facilities throughout the metropolitan area and, thus, a
wave of factories and warehouses began to dot the Southern
California landscape.
When the Union Ice Company opened a manufacturing
facility in 1917 on 11th Avenue in Los Angeles, it was one
of several such plants that the company owned in the
metropolitan area. In addition to manufacturing ice, the
facility had plenty of cold storage space that it often leasedout to various companies that needed to keep food and other
products “on ice” until they were ready for market.
The Marantz Era
Not long after the end of World War II, two entrepreneurial
brothers, Leo and Jack Marantz, expressed interest in the cold
storage space at Union’s 11th Avenue plant. The Marantzes’
plan was to establish a dairy that would serve retail grocery
stores throughout the Los Angeles area — stores that had a
difficult time competing with such rapidly growing retailers
as Ralph’s Grocery Company, which had recently built its
own dairy.
There were a host of other dairies in the late 1940s in
Los Angeles, as well, making it one of the most competitive
milk products markets in the country. Among them,
Adohr Farms, Golden State Dairy, Arden Farms, Jersey
Maid Farms, Challenge Dairy, and many others. Such a
competitive local environment only added more risk to
the Marantz brothers’ prospective venture at the Union
Ice plant.
Realizing they would need an “edge” for the enterprise
to succeed, the Marantz brothers decided on a gimmick
to get their dairy products
noticed by local retailers.
Traveling from store to
store throughout Southern
California, they gave
away free milk and dairy
products to retailers. When
they returned for a second
visit to see if the product
had sold, a second order
for products generally was
taken, followed by a third,
fourth, and so on. This is how
the Marantz brothers’ Golden
The early days — pouring ingredients in by hand.
Dairy
Memories...
George Mashy
Plant Manager
Certified Dairy
“Before they hired me, they
brought me to the dairy to look
around, see what I thought. I
told them that I would take the
job, but only if the company
made a commitment to do
things right. The first step, I
told them, was to get rid of all
of this obsolete equipment.”
uuuuuuuuu
Leonard Leum
President
Pioneer Markets
“These two guys, Jack and
Leo Marantz, came by our
store one day and were giving
out milk. No one had ever
heard of their company before
and we were shocked that
they were giving away their
product.”
Crème Farms
dairy (later to
become known
as Golden Pride
Creamery) began
to establish a
foothold in the
competitive Los
Angeles dairy
market.
For the next
two decades, the
dairy continued
to grow with
relatively
A Change in Ownership
Keeping pace with the fast growing
industry, however, proved to be a difficult
ongoing proposition for the Golden Pride
Creamery. As other dairies increased their
production volume, they lowered their prices
— meaning the Marantz brothers would
need to do the same if their enterprise would
survive. Without a larger base of customers,
Golden Pride’s prices would no longer be
competitive.
In 1974, the Board of Directors at Certified
Grocers
of California, the largest wholesale
Stocking milk at a retail
store, circa 1980.
grocery cooperative in the western U.S., arrived
at essentially the same business decision — but
steady annual increases in volume. Like other
from a different point of view. The Board
independent dairies, however, Golden
decided that in order to truly provide its
Pride would occasionally suffer the loss of a
independent retail members and customers
retailer’s business when it (the retailer) was
with the products and services they needed to
acquired by another supermarket company
remain competitive with other retailers in the
and the dairy manufacturing business was
marketplace, the company would have to enter
consolidated into a different production
the food manufacturing business. A decision
facility. Over the years, some of Golden
was made and in September 1974, Certified
Pride’s retail customers who were acquired
purchased the Golden Pride Creamery from
by others included ABC Markets, Food Giant,
the Marantz brothers.
and later Smith’s Food King.
From the very start, Golden Pride and
In spite of the occasional loss of a retailer’s
Certified were natural partners. In fact,
business, Golden Pride entered the 1970s as
many of Certified’s largest retail customers
a successful, well-established independent
already were steady
dairy that produced
customers of Golden
an array of regular-,
Pride and some,
flavored- and low-fat
such as Certified
milk products, fruit
Board members
punch, whipping
Ben Schwartz and
cream, half and half
Arthur Reicher, had
and a variety of other
been instrumental in
p ro d u c t s . I t a l s o
helping the Marantz
kept pace with other
brothers get their
Increased demand for milk forced the dairy to stop
innovations that swept
venture off the
making its own juice products in the early 1980s.
t h ro u g h t h e d a i r y
ground nearly 30
industry at the time, such as using plastic
years earlier. The business, everyone believed,
gallon jugs for milk instead of the traditional
was primed for success.
wax paper cartons that consumers had
Though successful as a wholesale distributor
grown familiar with over the years. Initially,
of groceries, Certified was inexperienced at
Golden Pride purchased the jugs from an
milk processing. To counter this, Certified
outside supplier.
installed John “Andy” Andikian, one of its best
2
Automation has helped increase production
volume at the dairy over the years.
marketing and
sales employees,
as the general
manager of the
new dairy. It
wasn’t long,
however, before
A n d i k i a n
realized that
running a
dairy was a bit
more complex
than he — and
Certified — had
anticipated.
product per week and the new equipment had helped
extend the shelf life of milk products to 17 days.
Another key hire by Andikian also came in 1974
when John Bedrosian began working at the dairy as a
lab technician (quality assurance). Before joining the
company, Bedrosian had spent five years in a similar
position at Challenge Dairy, a California-based dairy
products manufacturer.
Keeping Pace With Consumer Trends
Gradual public acceptance of plastic dairy
containers prompted Certified to purchase its
own blow molding equipment in 1978 so it could
m a n u - f a c t u re i t s
own containers and
With the blessing of Randy Price, Certified’s president,
Andikian hired George Mashy, an experienced dairyman
who had spent 21 years at Borden and, later, Knudsen Farms
(Borden’s successor company in California). At Borden,
Mashy had risen through the ranks to become vice president
of research and engineering.
Under Andikian’s and Mashy’s direction, a program to
overhaul much of the equipment and design of the dairy
— the bulk of which had been in place for more than 30
years — was initiated. The overhaul included new filling
equipment, processing equipment, automated cleaning
equipment and a redesign of the loading dock for greater
efficiency and improved productivity. By the end of 1974,
the dairy was producing approximately 120,000 gallons of
eliminate the markup on jugs that it
was paying to
outside suppliers.
Although the company was still using
wax paper cartons
for approximately
50 percent of its
milk production,
the new blow
molding equipment
substantially
One thing hasn’t changed — milk
reduced
t h e cases are just as heavy to move
today as they were 30 years ago.
c o m p a n y ’ s
container costs — to
approximately 6 cents per unit. The success of this
equipment led to the installation of a second blow
molding unit at the plant three years later.
By 1980, production volume at the dairy had
increased three-fold — to 375,000 gallons per week. The
primary reason behind this growth was an increase in
the overall size and success of Certified Grocers, which
continued to add new retail members to the cooperative
throughout the 1970s and ’80s. With increased demand
for its products and a growing customer base, Certified’s
dairy continued to set the pace for competitive pricing
throughout the Southern California market throughout
the reminder of the decade.
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3
Dairy
Memories...
“There was an event one night,
before Certified owned us, where
something had broken and water
got into the processing machines,
pipes, ammonia — everything.
We couldn’t pump it out, so we
drained everything down to the
floor, cleaned it, dried it all out
(manually) and actually got the
place running again by 6 p.m.
After that, a decision was made
to keep a mechanic here 24 hours
a day.”
Floyd Smith
Chief Engineer
UWG Dairy
“Do I remember any products
that didn’t work out? Sure.
We tried iced tea, but we just
couldn’t get it right. We also
made a watermelon sherbet
when we were still in the ice
cream business. We couldn’t
give that stuff away.”
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John Bedrosian
Vice President,
Manufacturing
Unified Western
“One day I’ll always remember
was in 1976 when we achieved
our goal of 50,000 units in a
single day. Our competition
said we’d never do it because we
didn’t know a thing about dairies.
That day showed everyone that
we were for real in the dairy
business.”
Continued Growth and Success
Because of seemingly endless increases
in consumer demand for milk and milk
products throughout the 1980s, management
discontinued making ice cream at the dairy in
1989 and converted the area into additional
warehouse space and a truck load-out facility.
This allowed the dairy to concentrate more
of its efforts on the profitable milk business
while improving the efficiency of its overall
distribution system. At year end, the dairy
was producing approximately 600,000 gallons
of product per week.
The ever-increasing Hispanic population in
Southern California was one of the reasons why
Certified’s dairy became the first company in
the U.S. to obtain a license to process and bottle
Tampico, a juice-like product that is targeted to
Hispanic consumers. In 1991, its first full year of
production, Certified’s dairy produced 500,000
gallons of Tampico. (In 2004, the dairy produced
approximately 10 million
gallons of Tampico.)
As the 1990s began,
the grocery industry
was entering into a
period of consolidation
— a time when many
retailers decided to
merge with or acquire
other retailers in order to
increase their economies
of scale. As the retail chains
grew, so did their dairy orders. This, in turn,
sparked a period of consolidation among
many of the dairies that served the Los
Angeles area, creating a new breed of larger,
more formidable competitors.
But Certified’s dairy continued to grow
as well. By 1995, the facility’s production
volume had grown to 700,000 gallons per
week. Additionally, the company had kept
pace with the ever-changing tastes and
preferences of consumers by introducing new
low-fat products, and also milk for those who
were lactose intolerant.
Always an efficient and well-run facility,
Certified’s dairy was also a major contributor
to the company’s financial success during the
4
Unified’s dairy as it looks today.
late 1990s, a trend that continues to this very
day. In addition to its annual contributions
to the success of Certified, the dairy was an
excellent investment for its retail owners who
benefited both as dairy customers (re-selling
milk products to their customers) and as
dairy owners (receiving regular patronage
dividends from the facility).
A New Corporate Parent
In September 1999, Certified Grocers
merged with United Grocers, Inc., Portland,
Oregon, and emerged as Unified Western
Grocers. The dairy, however, was virtually
unaffected by the merger and continued to
operate as it had since 1996 — at or near
its capacity (meaning 1.2 million gallons of
product produced per week) and serving a
wide variety of retailers throughout Southern
California.
It was the Southern California dairy’s long
history of service to retailers and profitability
that prompted the company to initiate an allnew dairy program in its newly-formed Pacific
Northwest Division — which provided dairy
products to the cooperative’s newest retail
Dairy Product Volume
Units Per Week
1,200,000
600,000
375,000
120,000
700,000
members in Oregon and Washington. The success of
the Southern California dairy also was the inspiration
behind company efforts to launch a new dairy program in
its Northern California Division.
There have been many changes in the dairy business
since the early days of the Golden Pride Creamery
— new manufacturing procedures, new equipment, new
companies, new consumer preferences and, of course, new
products. In the past 30 years, however, there has been
only one constant in the Southern California dairy business
— Golden Crème milk and dairy products — available at
independent retailers and enjoyed by millions of Southern
California consumers annually.
The Dairy Division at Unified is proud to celebrate its
30th anniversary of manufacturing quality products and is
looking forward to continued success with our retail partners
and their customers for many years to come.
Dairy Products Manufactured Today
A Certified dairy truck from the early 1980s.
Golden Créme
Homogenized
Acidophilus
2 % Reduced Fat
Fat Free
1 % Low Fat
Springfield
Homogenized
2 % Reduced Fat
Fat Free
1 % Low Fat
Drinking Water
Tampico
Citrus Punch
Tropical Punch
Mango Punch
Island Punch
Peach
Wild Berry
Springfresh
Homogenized
2 % Reduced Fat
Fat Free
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I
Bakery Division
n the 1950s, the Gordon Bread Company was a busy,
well-established, Los Angeles-based bakery company with
a 1920s-era manufacturing facility on Santa Barbara Avenue
(known today as Martin Luther King, Jr. Boulevard), just
southwest of downtown.
The company had carved out a successful niche in Los
Angeles as a manufacturer of high quality bakery products,
particularly its namesake product — Gordon Bread —
which was sold widely throughout the
city and surrounding areas. Over the
years, many Los Angeles residents
came to know Gordon Bread as
the company that gave away
all kinds of “freebies” with
i t s b re a d . A m o n g t h e
s u c c e s s f u l p ro m o t i o n s
the company developed
were a collector’s series
of trading cards that
featured pictures of
animals, cars and
planes, as well as a
The Gordon Bread Company as it looked in the 1930s.
sponsorship tie-in with “Flash Gordon” comic books.
As Los Angeles grew during the 1950s, many of the
established supermarket chains began to supply their stores
with their own bakery manufacturing facilities. Independent
bakeries, like Gordon, were numerous in 1950s Los Angeles,
and many competed heavily with one another for business
from local restaurants, bakery retailers and independent
retail grocery stores.
Selling to independent grocers, however, was not a
lucrative business. Because many independents were
located in economically disadvantaged areas of the city, the
bread they sold to their customers had to be cheap — often
in the 18-20 cents-per-loaf range — and this price left little
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Bakery
Memories...
Jim Teague
Plant Manager, Bakery
Unified Western
“I’ll never forget that first job
I had at the bakery. We were
supposed to put the lids on
the sandwich pans before they
went into the oven. Not only
were those lids heavy — about
eight pounds each — no one
told us that those lids were
still hot from the oven. Having
burned myself several times
on my first night, I’ll admit
I had second thoughts about
continuing to work at this
place.”
uuuuuuuuu
“In those days (prior to owning
a bakery), independents were
buying bread from all over, there
was no one dominant player.
And because the drivers got a
commission for all the bread they
sold, the loyalty was more to the
driver than the manufacturer.
That’s when we (Certified)
decided we had to get into the
bread business.”
Ben Schwartz
Board of Directors
Certified Grocers of
California
Quality assurance at the Gordon Bread Company.
room for profit for the supplier. Also, because
independent grocers of that era tended to be
one- or two-store operations, most bakery
accounts were small, leaving little opportunity
for the manufacturer to grow production
volume and, ultimately, economies of scale.
On top of pricing and volume issues,
independent bakery manufacturers often lost
business when independent grocers were
acquired by larger supermarket chains. As
the chains increased their production volume
and lowered their costs, independents like
Gordon were forced to scramble to replace the
business.
A New Era
By 1974, the owners of the Gordon Bread
Company were ready to sell their business and
the officers and directors of Certified Grocers
of California, the largest wholesale grocery
cooperative in the western United States, were
For many years, baking was a manual business.
6
eager to purchase a local bakery. Gordon
officials had grown tired of the constant
battle for business; Certified had a huge base
of independent retail grocery store members
who were ready to consolidate their business
into a single facility for greater production
volume. In June, a deal between the two
companies was struck and Certified officially
entered the Southern California bakery
business.
For the first six years of Certified’s ownership,
the bakery operated much as it did under the
Gordon regime. Most of the equipment was in
good shape and usable, so it was not replaced.
Design and layout seemed to work well, so it
was not altered. And although the customer base
had widened to include many of Certified’s retail
members in Southern California, the bakery still
continued to serve other customers that weren’t
in the grocery business, including local Arby’s
and Jack in the Box fast food restaurants. Shelf
life for all products was three days.
By 1980, the bakery’s business had grown to
a production volume of 400,000 units per week
and employed about 120 workers. The plant was
manufacturing 15 to 20 different products, all of
which fell into one of three categories — breads,
buns or rolls. Growing demand for baked
goods from member retailers helped convince
Certified’s management to convert the bakery
into a “members-only” business. As result, all
non-retail business was curtailed.
Increased production, however, also
increased the strain on the plant’s equipment,
The Bakery in the ’90s
“Andy” Andikian, general manager; Randy Price,
president; and Charlie Sapp, vice president, manufacturing, with the first loaves of bread out of the
bakery in June, 1974.
In 1991, Jim Teague, a 13-year employee who
had performed nearly every job in the plant, was
named plant manager of the facility. Teague was
a logical choice, his father was an employee at
Gordon Bread Company when it was purchased
by Certified.
Bakery
Memories...
John Bedrosian
Vice President, Manufacturing
Unified Western Grocers
Later that year, the bakery lost its largest
customer when Boys Market — an account
responsible for nearly 35 percent of the facility’s
business — was sold to another retail chain.
Because this loss of volume could not be filled
by additional business from independents, a
decision was made to open the bakery’s customer
base to include schools (Los Angeles Unified
School District), caterers, restaurants and nonmember customers.
The bakery also began to look at creative
ways to add value to its products. In 1995,
bakery personnel used flour starch enhancers
and new ingredients to extend the shelf life of
products to seven days — an achievement that
allowed retailers more time to sell the product
and reduced the amount of stale returns to the
bakery. It also allowed the facility to extend its
sales territory to northern Ventura County on
the northwest, Indio and other desert areas on
the east and Calexico and other border towns
Bakery Product Volume
Units Per Year
(Millions of Units)
30
Millions of Units
much of which had survived since the early
days of Gordon Bread. In 1990, Certified’s
Board of Directors decided to invest $10 million
to automate the bakery’s production process,
an investment that would pay great dividends
in terms of increased productivity and greater
overall efficiency of the operation. Included in
the renovation was equipment that loaded pans
into the ovens, removed pans from the ovens
and stacked them for wash and reuse. New
equipment that enabled baking ingredients to be
added to the process in liquefied form also was
installed, eliminating the need to manually lift
and dump bags of ingredients into hoppers.
One part of the process that was not
automated, however, was the old fashioned
sponge and dough system — a big brewery-like
hopper in which wheat is allowed to ferment with
yeast for three hours before sugar is added. This
process brings out the best flavor in the wheat and
is done specifically to enhance the overall quality
of the baked product.
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26.0
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15
19.7
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10
7
24.7
26.1
“A dairy man my whole life,
my first interaction with
the bakery came in 1989
when I was put in charge
of production. I didn’t
know that much about the
process but figured that,
well, manufacturing is
manufacturing — how
difficult can it be?
Fortunately, Certified was
smarter than that — they
sent me to the American
Institute of Baking where
I learned what I needed to
know.”
Bakery Products
Manufactured Today
on the south. The company also introduced its full service
program in 1995, featuring direct delivery to retail stores by
company trucks.
In 1996, the bakery entered into a partnership with the
Earthgrains Company (now part of the Sara Lee Corp.) that
combined that company’s national brands with Certified’s
private label bakery products (Golden Crème, Cottage Hearth,
Springfield) to offer independent retailers a complete bread shelf
for their stores. The program, which continues to this day, was
an instant success.
Over the years, the bakery manufacturing facility also
used its research and development department to develop new
products that met the specific taste or nutritional requirements
of various consumer groups. For example, the facility received
a patent from the U.S. government for a Hawaiian bread
product — Diamond Head Bread — which is sold exclusively
in Hawaiian supermarkets.
The bakery has been at the forefront of other trends, as
well. In the past year, Unified’s bakery took advantage
of the “low carb” trend, developing what it calls a “smart
carb” product — bread that is low in carbohydrates but
still nutritious and good tasting. Another product, bread
with low sugar content, has been developed for those with
diabetes. This product is in high demand among Hispanic
consumers, who have a much higher incidence of diabetes
than other groups of consumers.
Today, Unified’s bakery operates at about 88 percent
capacity with three shifts keeping the plant operating 24
hours a day, producing approximately 580,000 baked units
per week. More than 250 retailers are purchasing bakery
products from the facility, 200 of which are on the “full
service” program.
Future prospects for Unified’s bakery are bright as
demand for convenient, high quality bread products
continues to explode throughout the Southern California
marketplace. As it has for 30 years, Unified’s bakery stands
ready to serve, ready to provide the high quality products
that consumers have enjoyed for decades.
Olympic
Meal Round Top Bread
White Round Top
Meal Sandwich
Wheat Round Top
Golden Créme
Hot Dog Buns
White Round Top
Wheat Round Top
White Sandwich
Jumbo Wheat Round Top
Giant White Round Top
Giant Wheat Round Top
Giant White Sandwich
Jumbo White Round Top
Premium White Round Top
Premium Wheat Round Top
Premium White Sandwich
Split Top White
Split Top Wheat
Hamburger Buns
Hot Dog Buns
Sesame Seed Hamburger Buns
Cottage Hearth
Deli Rye
Honey
Wheatberry
Bran N’Honey
9 Grain
Canadian Oat
California Thick Toast
Butter Top White
Butter Top Wheat
16 Pack Hot Dog Buns
Big Bite Hot Dog Buns
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Springfield
Hamburger Buns
Premium Wheat Sandwich
Rainbo
Old Fashioned White
Wheat Round Top
Large White Round Top
Premium White Sandwich
Iron Kids Round Top
Hamburger Buns
Hot Dogs Buns
Sesame Hamburger Buns