A plan with some bite

In 1972, Jack and Rosemary Shearer decided to deviate from the local grocery store business that had been in their family for three generations and found a snack food distributor. Little did they know that company would become one of the nation’s top 10 snack food producers.

Today, a second generation of Shearers is maintaining the family’s aggressive growth philosophy, as Shearer’s Foods completes a two-phase, $20 million expansion, positioning it to meet its goal to double business within the next five years. It is the company’s fourth expansion.

Jack and Rosemary’s son, Bob Shearer, has worked for the company since 1974, and serves as its president and chief operating officer. His brother, Tom, is executive vice president, and Bob’s wife, Melissa, is head of the marketing department.

To many, the company’s sales goal may seem pie-in-the-sky. But to Bob Shearer, it’s quite realistic. Over the last four years alone, sales have more than doubled, he says, bringing Shearer’s’ total annual sales revenue to more than $60 million.

The recent expansion, the last phase of which was completed late last year, allows the company to produce a complete line of snack foods, including potato, corn and tortilla chips, cheese curls and popcorn. Prior to phase one of the expansion, completed in November 1998, it could only produce potato chips, and was a distributor for the other lines.

The product line expansion was both in response to customer demand and a way to control the quality of the products the company sold, Shearer says.

“We wanted to be a one-shop stop for everyone, so we could produce everyone’s requirements,” he says.

The last phase of the expansion, completed last November, included adding equipment such as a potato peeler system, conveyors, a seasoning system and new batch kettles. Eight more hand kettles, used to produce the company’s core product, Grandma Shearer’s kettle-cooked potato chips, were purchased, adding 9 million pounds to the plant’s output, for 40 million pounds of product annually, says Steve Surmay, Shearer’s vice president of manufacturing.

But there’s still room for growth, since the expansion allows for a total capacity is about 50 million pounds of product annually, he says.

Increased capacity has allowed the company to aggressively grow the private label side of its business. Five years ago, that side amounted to 2 percent of total sales. Today, sales in that division make up 40 percent of total revenue.

While Shearer won’t divulge the names of the company’s private label customers, he will say they include major grocery store chains, as well as a very large snack food producer.

Coleman Caldwell, Shearer’s vice president of sales, says there’s a large market out there just waiting to be tapped.

“Someone once said, ’90 percent of life is showing up,'” he says. “The most success we’ve had is from just getting outside of our two- or three-state distribution area and calling on customers who have heard of us before. Our best sales tool has been our product, and then it’s just making sure that we’re priced competitively and that we can deliver that quality on a consistent basis.”

He says now that the company’s capacity and product line have increased so significantly, there’s a long list of potential customers to call on.

“I have a list today of 70 prospects who we don’t do business with,” he says. “I’m sure 20 or so of them have a supplier they’re satisfied with, but 40 or 50 of them are potentially good customers for us. I’m just not sure which half is which.”

The company is also continuing to look for new products to make. But the development process for a new snack food product can be lengthy, says Shearer.

“We can look at 20 (prospective products) and maybe not get one, so we’re real selective. We want to have an item that has good potential and a lot of appeal, because it’s expensive to introduce a new item,” he says.

He says with the costs of printing and inventory for new bags added to the price of ingredients, it can cost from $20,000 to $30,000 to introduce an item.

“So we have to be real selective,” he says.

But the company still introduces a new item every year or so. Shearer says that ability has significantly contributed to the company’s growth. This month, it will unveil a new white corn tortilla strip, which took about a year to produce from concept to market.

Last year, it introduced Baked Pretzel Butter Twists, which, Shearer says, has been a big hit.

He says every employee is encouraged to contribute to product development. Once an idea for a product is suggested, “everybody gets a little involved,” he says. “If we feel strongly enough (about an idea), we’re going to go with it.”

Surprisingly, there is no outside testing of new products.

“We do it more or less by if it feels right,” Shearer says. “We do in-house testing, and then we go to market.”

Currently, the company is looking at developing a more health-conscious line for distribution to specialty food stores. How to reach: Shearer’s Foods, (330) 767-3426; www.shearers.com

Shearer’s Foods Inc.

Headquarters: Brewster, Ohio

Annual production: 40 millionpounds

Annual sales: More than $60 million

Employees: 400