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Food Industry corporate executives throughout Long Island brainstormed and shared ideas after an extremely successful
CEO Best Practices Panel and Discussion hosted by Biscotti, Toback & Co. and Fleet Bank.
Nestled among tech companies near Uniondale, Hain Celestial Group almost seemed out of synch with progress in the late 1990s.
People even urged CEO Irwin Simon to transform his foods company into more of a tech enterprise.
But that chorus has fallen silent now that it's clear Simon made the right choice staying focused on veggie chips over computer chips,
soy over silicon.
Hain Celestial has far outdistanced most tech companies in recent years, gobbling up brands and signing major distribution deals
on the way to $600 million in annual sales.
"I had a lot of people tell me if I don't become a tech company, I'd be out of business," said Simon, Hain's CEO and 17 percent owner.
"What I say is we are the technology in food of the 21st century."
The company, which last year moved into a sleek new Reckson building that has also housed OSI Pharmaceuticals and Salomon Smith Barney,
recently began manufacturing soy burgers for McDonald's California units.
It will also sell products in thousands of 7-Eleven stores nationwide.
While Hain's rise has been remarkable, it is far from the only major player in the foods industry based on Long Island.
Many have been highly successful despite an anemic economy, but they often get little attention because most are private and
tight-lipped.
Several of these success stories grew out of storefronts, founded by immigrants or second-generation Americans in the region.
Hicksville-based Kozy Shack, which expanded out of Mineola deli to mass produce rice puddng, has grown to more than $100 million in
annual sales and expanded into Europe and South America, while Port Washington-based juice maker Apple & Eve is nudging toward
the same magic number.
Robert's American Gourmet Food Inc. in Seacliff recently signed its own deal to bring its snacks into nearly 6,000 7-Eleven
stores.
And Deer Park-based Wenner Bread Products' 400 employees churn out a dizzying 500 varieties of breads and rolls sold to more than
20,000 stores and bakeries. Bill Sr. and Mary Jane Wenner started the firm in a neighborhood pastry store in Roosevelt,
Queens with $2,000 in 1956.
"Long Island has a bigger food industry than most people realize," said Jeremiah Schnee, managing partner at Biscotti, Toback & Co.,
a business advisory firm that recently held a conference on the Lond Island food industry. The conference, the first of its kind,
brought together food professionals from all over Long Island.
"Food may not be sexy the way high-tech is, but it's a stable industry," Schnee said. "Everybody has to eat.
It's much more stable and consistent (than tech), while being unsung."
Louis Biscotti, CEO at Rockville Centre-based accounting firm Biscotti, Toback & Co. and a partner in the advisory firm,
said Long Island is home to many of the companies, not only because of its large population and strong demand, but because
"the principals live here."
"A lot of them like the fact that they live here and house their company here, even though there are higher wages and some logistical
problems."
Long Island firms have had to grapple with the perception that health foods are primarily a West Coast phenomenon.
"Twenty-five years ago, all the natural food companies were in California. That's where trends started," said Robert's
American CEO Robert Ehrlich. "Being from Long Island when we started, it was like they didn't take us seriously."
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Companies like Kozy Shack have developed their own special ammunition for the food market fight, churning out private label products,
for instance.
"We grow in double digit fashion every year," Vincent Gruppuso, chairman of Kozy Shack, said at the recent conference.
"It's only the past three or four years that we've gone to a private label program."
While some Long Island food companies still manufacture, many have kept slim overhead by outsourcing most or all production.
Hain Celestial employs only about 140 people on Long Island and 1,700 worldwide, outsourcing 60 percent of manufacturing.
Robert's and Apple & Eve built brands with several dozen employees by outsourcing all production.
"It certainly has been part of the ingredients of success for Apple & Eve," said Jeff Damiano, director of marketing for Apple & Eve.
"Because we don't have the overhead and liability of plants and operations, it gives us flexibility."
Outsourcing, observers noted, can allow for quick growth, but also can create a situation where factories are only lossely connected
to the brands they produce.
"The industry is such that you don't know who's producing what for whom anymore," said Lin Sakai, a principal at Manhattan-based
Li Design that produced packaging for Kozy Shack and Integrated Brands.
"The only way anyone can survive is by forming these partnerships. One company controls a brand.
They have to have it produced or packages by another company."
Going global may be the biggest challenge for many of the firms. Kozy Shack recently built a factory in Ireland to supply the European
market and Hain has been aggressively growing its European business.
"Our growth has come from various places," said Simon, noting he hopes to double Hain's $50 million in sales to Europe.
Smaller Long Island food firms also have been catering to niche markets. Lily Popcorn, based in Bethpage, distributes bags of popcorn,
while Uncle Wally's (founded by Wally Amos and Louis Avignone) makes muffins.
And Gold's Pure Foods, a horseradish company, moved from Brooklyn to Hempstead in the late 1990s, lured by incentives.
While firms like Hain moved up the food chain, many Long Island firms have been gobbled up by bigger fish.
Bay Shore-based Entenmann's, started in a family-run Brooklyn bakery by William Entenmann more than a century ago,
was first acquired by Bestfoods, then sold again about a year ago to George Weston Bakeries Inc. in Canada.
And Integrated Brands, which makes a wide range of yogurts such as Yoplait, was absorbed by Coolbrands International,
also based in Canada.
Snapple was absorbed by Quaker and then sold again at a significant discount.
The biggest question for Island food firms may be whether to be swallowed up by competitors or giants on the prowl or to keep
growing their portfolio of brands.
"There's a growing popularity for a brand that's not corporately owned. A lot of people want to acquire us," said Ehrlich,
of Robert's American. "We're a niche player in a growing natural food category. This is what I do.
I don't want to do anything else."
Biscotti, Toback & Co. will continue to host more seminars in the future for food company executives.
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