Shearer's Foods, Inc.

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Shearer's Foods, Inc.

692 Wabash Avenue North
Brewster, Ohio 44613
U.S.A.
Telephone: (330) 767-3426
Toll Free: (888) GREAT-CHIPS
Fax: (330) 767-3393
Web site: http://www.shearers.com

Private Company
Incorporated: 1974
Employees: 482
Sales: $60 million (2005 est.)
NAIC: 311919 Other Snack Food Manufacturing

Shearer's Foods, Inc., is northeast Ohio's leading maker of potato chips and tortilla chips. Other major markets include Columbus, Cincinnati, and Pittsburgh, and the company produces a significant amount of snacks on a private-label or co-pack basis. Shearer's makes 130,000 pounds a day of more than 20 different kinds of potato chips. It also prepares 30,000 pounds of tortilla chips daily. Cheese curls, popcorn, pretzels, and pork rinds are also on the menu, each with the promise of "Perfection in Every Bag." The company has extended its expertise with its legendary kettle chips into a regional snack food empire. It has grown steadily and tends to weather recessions well due to the perennial appeal of its snacks. Shearer's has addressed healthy eating concerns by making most of its products without trans fats and by encouraging customers to choose its high quality snacks when they do indulge.

Origins

The origins of Shearer's Foods, Inc. date back to the early 20th century, when William Shearer opened Shearer's Market on the corner of 9th and Dartmouth in Canton, Ohio. It was operated by his sons, Nelson and Howard, after his retirement.

Nelson's son Jack and his wife Rosemary took over the business in the 1950s and eventually acquired ownership of it. They later sold the store after beginning their snack food venture.

The pair acquired a small snack distributor in 1974 and renamed it Brookside Distributing. Five years later, convinced they could produce a superior product themselves, the Shearers began making their own potato chips, by hand, under the "Kettle-Cook'd" brand. The original facility was just 3,000 square feet in size, Rosemary Shearer later told Snack Food & Wholesale Bakery.

The kettle chips were successful and in 1982 prompted a move to a 20,000-square-foot plant in rural Brewster, Ohio. The company then had about 30 employees. Roasted peanuts were added to the lineup. The next year saw the introduction of the Grandma Shearer's logo. The name referred to Rosemary Shearer, who developed the potato chip recipe. By this time, the company was going through nearly two tons of potatoes every day. Annual sales were about $4 million, according to one source.

The production line was upgraded with a continuous fryer in 1986, allowing the plant to produce one ton of potato chips every two hours. The company also began making popcorn. A second continuous fryer was added in 1988, when the facility was expanded to 52,000 square feet. After a two-month, industry-wide potato shortage in 1987, Shearer's began contracting farmers for potatoes from six months to a year in advance. Other agricultural disruptions included flooding in Florida in 1997 and a drought in 1999.

Sizzling in the 1990s

Demand prompted Shearer's to continue to upgrade its facilities in the 1990s. Two unique hand-kettle fryers with automated stirring systems were added in 1990, along with a garage for maintaining the company's vehicles.

The company opened a factory outlet at the plant in 1996. There was another major expansion in the late 1990s, when nearly 80,000 square feet were added for production, storage, and offices. The project cost about $14 million. Among the new technology was an optical chip sorter ("Opti-Sort") for detecting defective chips.

Around this time, Shearer's began making tortilla chips and cheese curls. The company also sold dozens of other products, including salsa and pretzels. Chips accounted for 60 percent of sales, according to the Akron Beacon Journal.

About 15 to 30 percent of revenues came from private label sales. Private label chips were fried in cottonseed oil, noted Snack Food & Wholesale Bakery, while peanut oil was used for the kettle chips and soybean oil for others. Private label customers included Buehler's, Giant Eagle, and Super Kmart, reported Inside Business.

Shearer's was primarily a regional producer, though distribution extended into New England in early 1997. Major markets included Akron, Cleveland, Cincinnati, Columbus, Toledo, and Pittsburgh. Shearer's snacks were also distributed in parts of Kentucky, Tennessee, Michigan, and Canada.

Annual revenues were estimated at $28 million in 1998, when Shearer's began sponsoring the Cleveland Indians baseball team, and were growing more than 20 percent a year. In addition to sponsoring the Cleveland Indians, the company also supported arts groups.

Still Growing in the 2000s

Employment at Shearer's grew to about 280 people in 1999. In 2001, the company began raffling off a Caribbean cruise to reward employees with perfect attendance. Weekly cash giveaways also helped discourage absenteeism. Shearer's had about 400 employees at the time. "Happy people produce happy results," CEO Bob Shearer told Snack Food & Wholesale Bakery.

Shearer's continued to grow, installing still more new equipment in a 2001 expansion that added six hand-kettle fryers and a new potato peeling system. The plant had eight production lines in all. The company also boosted its customer service staff with new hires and new technology.

The growth seemed to be fueled by quality. Shearer's was picking up industry awards for both taste and manufacturing processes. The company was picked as Snack Food and Wholesale Bakery 's "Snack Manufacturer of the Year" for 2002.

In 2003, Shearer's joined a few other snack manufacturers to produce the world's largest bag of potato chips. Created to help celebrate the potato chip's 150th anniversary, the sack weighed 1,082.5 pounds.

Part of the company's warehousing was moved off site in 2003. The factory outlet was upgraded in 2004.

The Associated Press chronicled Shearer's strategy to thrive in the face of low-carb and low-fat dietary trends. Though it had developed baked and low-carb variations of corn and potato chips before, Shearer's took to highlighting the quality their snacks offered. "If you're going to indulge, you want it to be the best," said CEO Robert Shearer. The company added slogans to its packaging recommending moderate portions and exercise.

Gourmet chips made up one of the few growth segments of the otherwise flat, $23 billion potato chip industry. A number of strong regional competitors fought for market share with national giants, particularly Frito-Lay, Inc.

Shearer's was introducing new flavors, such as Margarita Lime Tortilla Chips and Butter Corn Puffs, as well as some organic products. Most of the chips were being cooked with trans fat free oils.

Sales for the privately owned company were reported in the press as being between $38 million and $65 million. A company source told the Associated Press that revenues had quadrupled since 2000.

The company restyled its packaging in early 2004 in order to stay competitive on the shelves. The "Grandma Shearer" icon was removed from the logo, while product photos were added to the bags. "Snack foods are a high impulse item, so it's important for us to offer high quality packages and display pieces," a company official told the Dayton Business Journal.

Shearer's was also making changes in its manufacturing processes. The company began extracting potato chip waste from wastewater for use as cattle feed. Forty tons of the material was extracted from 12,000 gallons of water every day, according to Inside Business. A half-dozen more hand kettles and new packaging machines were added to the plant in 2004.

Company Perspectives:

Shearer's Foods Mission Statement: To provide only the best in high quality, competitively priced snack food products, which meet the ever-changing needs of our customers, thereby building consumer loyalty to all Shearer's and private label snack food lines.

Key Dates:

1974:: Jack and Rosemary Shearer acquire a small snack food distributor.
1979:: The Shearers begin making their own potato chips.
1982:: The company moves from Canton, Ohio, to a new plant in Brewster.
1983:: Grandma Shearer's logo debuts; sales are about $4 million a year.
1986:: The first continuous fryer is installed.
1998:: Production capacity is doubled after a $14 million expansion.
2002:: Shearer's is named "Snack Food Manufacturer of the Year."
2004:: "Grandma" and "Grandpa" brands dropped in packaging redesign.

By 2005, Shearer's had phased out the truck maintenance garage it had opened in 1990s. Instead, the company turned to Penske for leased equipment. In 2005, its fleet numbered 65 vans, ten semis, and 35 trailers, according to Light & Medium Truck Magazine. Some of the older trucks were company owned. Shearer's was getting rid of these in favor of newer, more fuel efficient models.