Bagels

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A Van Nuys-based bagel maker is looking to go where no bagel maker has ever gone before.

Western Bagel Baking Corp. already exports about 2 percent of the 7 million bagels it produces each week to Japan and Australia. Now the company is looking at Taiwan, Mexico, the Philippines, the Netherlands and other foreign lands where bagels are essentially unknown.

While overseas customers accounted for only about $800,000 of Western’s $40 million in sales for the year ended Feb. 28, company officials hope to increase that amount.

“(Exporting) is a small part of our business but we see it as a growth area,” said Lance Parrish, Western’s sales director. “We see a lot of potential for bagels in other countries.”

Japan actually does some of its own bagel making, but not enough to meet demand, so the Japanese turned to Western. Osaka-based foods distributor Hokushin PLC, Western’s first foreign customer, began importing bagels in 1996 and now buys a container of 102,240 about every three weeks.

Bagels go for about $2 apiece in supermarkets and at shopping-mall concession stands operated by a Hokushin subsidiary. Western also sells to Nippon Flour Mills in Osaka. All told, the company sells about 180,000 bagels to Japan each month.

In Australia, Western sells to a single customer, Coles/Meyer Corp., a 527-store supermarket chain that buys about 250,000 bagels a month. They are shipped frozen via ocean freight, taking 18 days to reach Japan and 29 days to reach Australia.

Western is also negotiating with a distributor in the Netherlands to expand into that country, where American-style supermarkets are replacing neighborhood markets that carry fresh meats, vegetables and breads. The company is also looking at Mexico where, Parrish said, the preference is for fruit bagels like blueberry and banana nut.

Other markets might be harder to crack. “Our biggest challenge is to get the consumer to know what a bagel is and how to use it,” Parrish said.

Western is working on deals under which the company would help pay for in-store booths to demonstrate how bagels can be prepared and let consumers sample them while shopping. In some ways, it’s a similar marketing dilemma to that faced when Western was first started by Dave Ustin in 1947.

“For a while, (my father) gave away more bagels than he sold, just to get people familiar with what they are,” said Dave Ustin’s son, Steve, who is now president and chief executive.

Western Bagel has two factories that can together produce 60,000 bagels an hour. About 55 percent of Western’s bagels are sold at its 13 outlet stores (all of which are in the San Fernando Valley except for one in Tustin) or at L.A.-area restaurants. The rest are frozen and shipped throughout the country and overseas.

“I could go public or sell the company now and live happily ever after with the money, but I like the challenge of being the family company that does well against the big guys,” Ustin said.

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