Snack Maker Looks for Bite of Midwest Market

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A local maker of off-brand Doritos is expanding into the Midwest and plans to bring a Chicago staple back to Los Angeles.

Snak King Corp. in City of Industry has announced the acquisition of venerable Chicago snack company C.J. Vitner Co., including the company’s factory in Freeport, Ill., and distribution centers in Chicago, Indiana and Wisconsin. Both companies are privately held and terms of the deal were not disclosed.

Snak King Chief Executive Barry Levin said he has been looking for more than a year to buy a factory in the East or Midwest.

“We’re fortunate enough to have grown and we needed to find capacity somewhere else in the country. We were going to either build or buy something east of California,” he said.

Snak King makes flavored tortilla and pita chips, popcorn and other snacks under its the Whole Earth, El Sabroso, Granny Goose and Jensen’s Orchard brands at its Industry factory. C.J. Vitner makes chips, popcorn, pork rinds, pretzels and cheese puffs, all under the Vitner’s brand.

Snak King’s products are already distributed nationwide, but Levin said having a manufacturing presence in Illinois and California will lower distribution costs substantially. Vitner’s products are sold in 20 states, mostly in the Midwest.

Levin said Snak King will start manufacturing some of its products at the C.J. Vitner factory. Some Vitner’s-branded products, likely the company’s potato chips – a staple in the Chicago area – will eventually be distributed in California.

Talks between Snak King and C.J. Vitner started over the summer, but the two companies have known each other for years. C.J. Vitner was a Snak King distributor.

Levin said C.J. Vitner is about one-quarter Snak King’s size in terms of revenue, but the company has about 425 employees to Snak King’s 500. He added that he intends to keep all of C.J. Vitner’s workers.

Heavy on Sauce

San Gabriel Valley hot sauce maker Huy Fong Foods Inc., famous for its Sriracha chili sauce, has started moving into its massive new Irwindale digs.

At 655,000 square feet, the company’s manufacturing and distribution center on Azusa Canyon Road is nearly three times larger than its existing facilities in Rosemead.

When the company broke ground on the building in 2010, Huy Fong’s family owners said the Rosemead plant was at full capacity, producing about 20 million bottles annually. The company expects demand for its products to increase tenfold by 2016.

The company, founded in 1980, doesn’t advertise its products and used to sell almost exclusively to Asian groceries and restaurants. But it has seen the popularity of its signature sauce – a thick, bright red blend of ripe chilies and garlic – exploded over the past few years, with the condiment popping up on food blogs and TV shows, and in cooking competitions.

Huy Fong has already moved some equipment into the new building and will likely move in the rest over the coming months. It bottles sauce year-round, but production activity peaks over the summer when chilies are harvested.

The $40 million facility was a redevelopment project, with Irwindale providing financing for the land acquisition and construction.

The city estimates Huy Fong, which employs about 70 workers, will ramp up to 180 or so in the new facility.

Huy Fong officials did not return calls for comment.

Bagged in Alabama

After two years and more than $110,000 of lobbying, City of Industry company Exxel Outdoors nailed down an exception to a free-trade program it said endangered its U.S. operations.

Exxel manufacturers inexpensive sleeping bags at a plant in Haleyville, Ala. Chief Executive Harry Kazazian said a program called the Generalized System of Preferences, which cuts tariffs on products imported from poor nations, gave sleeping bags from Bangladesh an unfair advantage over his products.

Kazazian said he imports sleeping bag materials from China and pays a duty of at least 7 percent. But Bangladeshi manufacturers import material duty-free from China and then import the bags duty-free through the GSP program.

From late 2009 through the end of last year, Exxel spent at least $110,000 on lobbying the House, Senate, U.S. trade representative and the International Trade Administration trying to amend program rules.

The U.S. Trade Representative’s Office announced last month that sleeping bags will no longer be eligible for tariff reductions through that program.

Kazazian, who moved his company’s production from Mexico and China to Haleyville, said the program could have forced him to go back offshore.

“Now our plant is going to continue,” he said. “We have good expansion plans. President Obama is talking about companies needing to do more ‘insourcing,’ and our company is one of those companies.”

Paying Up

Publicly traded U.S. Auto Parts Network Inc. in Carson paid a fine of $233,000 to the California Air Resources Board for selling catalytic converters that didn’t meet state standards.

The standards were updated in January 2009 and the agency investigated the company from then until March 2010. In that time, it said U.S. Auto Parts sold 932 converters that were out of date. The board announced the fine this month.

U.S. Auto Parts Network is an online retailer of replacement auto parts. It sells through AutopartsWarehouse.com, PartsTrain.com, JCWhitney.com and StylinTrucks.com. It also runs AutoMD.com, a site for auto-repair advice.

Company officials did not return calls for comment.

Staff reporter James Rufus Koren can be reached at [email protected] or at (323) 549-5225, ext. 225.

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