Uncle Ray's LLC

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Uncle Ray's LLC

14245 Birwood Street
Detroit, Michigan 48238
U.S.A.
Telephone: (313) 834-0800
Toll Free: (800) 800-3286
Fax: (313) 834-0443
Web site: http://www.unclerays.com

Private Company
Incorporated: 1965 as Cabana Foods
Employees: 130 (2007)
Sales: $34.1 million (2007 est.)
NAIC: 311919 Other Snack Food Manufacturing

Uncle Ray's LLC is a Michigan-based producer of potato chips and other snacks such as corn puffs and pork rinds. Many of the firm's chip flavors were created by founder "Uncle" Ray Jenkins, and its product packages feature his photo and one of 30-plus chapters in the ongoing "Life and Times of Uncle Ray" saga. About half of the company's output bears its own brand name, with the remainder produced for the private labels of such clients as Winn-Dixie supermarkets. Uncle Ray's chips are sold at Michigan convenience stores and independent groceries as well as in such national chains as Walgreens, CVS, and Big Lots.

EARLY YEARS

Uncle Ray's dates its founding to 1965, when Ray Jenkins began making food products in the kitchen of his small Detroit-area apartment. Jenkins had started life poor and lived in a housing project before serving as a cook in the U.S. Navy. Though he had only a high school education he was determined to succeed in business and used his cooking skills to start his own small company. Its first products included popcorn, chip dips, and shrimp cocktail sauce, which he made early in the morning and then delivered to bars and stores from the back seat of his 1961 Dodge Dart.

As business grew, Jenkins' firm, which had taken the name Cabana Foods, moved production into a 15,000-square-foot facility in Dearborn, Michigan. In 1983 Cabana bought the former Superior Potato Chip factory on Detroit's west side, and over the next decade the 75,000-square-foot plant was used to produce up to 15 different flavors of potato chips, numerous corn-based snacks, and other items such as fried pork rinds. The company also added a product line that was packed in cardboard containers, and began to distribute food around the United States and to some overseas accounts. By this time, many of Cabana's products were sold under the private labels of other firms such as supermarket chains.

As the company expanded its debt began to mount, and in 1993 Ray Jenkins decided to retire and sell the firm. He found his new life boring, however, and two years later bought the business back when its owner offered to sell. Seeking a way to boost sales, he decided to create a new brand name with more personality than Cabana. After considering Jenkins Family Potato Chips, he settled on Uncle Ray's as a tribute to the many nieces and nephews who called him that. The new brand was introduced in 1998, and included standard flavors like barbecue and sour cream & onion along with more unusual ones Jenkins had developed, such as ketchup and Coney. The company, which was now known as Jenkins Foods LLC, also continued to derive a substantial portion of its revenues from making chips for other firms under their labels.

"THE LIFE AND TIMES OF UNCLE RAY" DEBUTS IN 2000

One night in 1999 Jenkins was awakened by a desire to write about his life, and went to his kitchen table where he soon completed the first three chapters of his autobiography. Wanting to share the stories, he began to print them on the back of the firm's chip bags in June 2000 along with his photo. Over the next several years more than three dozen chapters would appear, many of which recounted stories from his childhood or days in the Navy. Each offered a moral lesson and many included Bible verses. The reason he added the stories, according to Jenkins, was that "Everyone has bad days and I want to be there with a message."

"The Life and Times of Uncle Ray" was soon discovered by chip buyers, and the firm began to get letters from people who enjoyed them or wanted to receive a complete set. Jenkins declined requests to print them in book form, however, reasoning that the stories' presence on bags helped inspire repeat purchases. Some customers also wrote to ask where they could find more of the chips, which were sometimes hard to locate. Unlike many of its competitors, the small firm did not have its own fleet of delivery trucks and relied on wholesalers to supply retail outlets, which sometimes caused inconsistent availability.

By 2001 Jenkins Foods' sales had grown to approximately $18 million, and it employed more than 100 at two facilities. Demand was increasing, and during the year the company added a second shift to keep up with orders. Because most grocery store chains charged high "slotting fees" for products to be placed on their shelves, the firm's chips were largely found in convenience and party stores, gas stations, regional megastores such as Meijer, independent groceries like Hiller's and Busch's, and ACO Hardware outlets. The company's distribution costs were low and its advertising expenses were negligible, and thus Jenkins Foods was able to price its chips well below those of national brands, which gave them appeal for many consumers. At this time about half of the firm's revenues were from Uncle Ray's chips and half from production of snacks under the private labels of such clients as Winn-Dixie supermarkets.

In 2001 the firm voluntarily recalled several Uncle Ray's and Cabana brand corn puffs and rings because they had not been labeled properly for a coloring ingredient. The recall was completed successfully and the company received no sanctions from the Food and Drug Administration.

SALES TO WALGREENS BEGIN IN 2002

In the late summer of 2002 Jenkins Foods' chips began appearing in many of the 3,800 Walgreens drugstores around the United States. Its products subsequently also won space in CVS pharmacies and Big Lots stores. The firm offered about a dozen varieties of chips and ten other types of snacks, and continued to develop new flavors, adding roasted garlic potato chips during the year. The company employed 135 and was producing 5,000 pounds of chips an hour.

Jenkins Foods' products were continuing to appear in new retail outlets, and by 2004 its distribution had grown to 75 markets around the United States, from 40 just over two years earlier. According to Chain Store Review, Uncle Ray's chips accounted for 1 percent of the sales of chips in drug stores nationally, a respectable showing given the fact that over half the U.S. chip market was controlled by a single firm, Frito-Lay. This percentage was especially high at home in Detroit, which led the country in chip consumption per capita. Sales were briefly impacted during the year when the Atkins and South Beach diet crazes held sway, and though its national competitors created versions of their snacks that adhered to the diets' low carbohydrate guidelines, the firm stuck with its standard line until the fad blew over.

COMPANY PERSPECTIVES

Quality, Service, and Price is our commitment to our customers. We are in business to make a product that satisfies the consumer and to give a testament of faith to our Lord Jesus Christ. "The things which are impossible with men are possible with God." Luke 18:27

The company was now one of two remaining Detroit potato chip makers, which had numbered ten times that figure a half-century earlier. Though it had a smaller share of the local market than 75-year-old competitor Better Made Snack Foods, both had devoted fans who went out of their way to support the familyowned firms over nationally marketed brands such as Lay's, Ruffles, and Pringles. The company's chips were also a welcome sight to expatriate Detroiters who found them at their local Walgreens or CVS store in different parts of the United States. They were distributed to Canada as well, where the ketchup-flavored variety was especially popular. The firm's potato chips were marketed north of the border under the Cabana brand name.

In early 2005 a film called The Upside of Anger was released in which a large display of Uncle Ray's potato chips was visible on the screen in a grocery store scene. The film, which starred Kevin Costner and Joan Allen, was set in Detroit and directed by an ex-Detroiter, who insisted on authentic hometown touches despite the fact that most production took place in London, England. The firm was given short notice to supply 100 cases of chips, which it express-shipped to England at a cost of $3,800. Ironically they appeared in a re-creation of a Farmer Jack supermarket, which did not actually carry Uncle Ray's chips because the firm did not pay the slotting fees required for placement.

At this time a few years past retirement age, Ray Jenkins continued to run the company with help from his three children. Jennifer served as vice-president for sales, Sandra as chief financial officer, and Ray, Jr., as a senior sales manager, with several other family members also working for the firm. Jenkins Foods offered more than a dozen flavors of chips, with plain, barbecue, and kosher dill the top sellers, and continued to produce about the same number of other snack items that included Cabana brand corn chips and pork rinds. While the Uncle Ray's brand was gradually winning recognition nationally, a significant portion of the firm's output continued to be for the private labels of other companies.

In April 2006 the firm was sold to a large corporation in a private transaction. Jenkins Foods was subsequently dissolved and the company's name officially became Uncle Ray's LLC.

KEY DATES

1965:: Ray Jenkins founds a small food company in Detroit.
1983:: Firm buys former Superior potato chip plant.
1993:: Jenkins sells company and retires.
1995:: Bored with retirement, Jenkins buys firm back.
1998:: Uncle Ray's potato chip brand introduced.
2000:: Firm begins putting Jenkins' photo and autobiographical stories on chip bags.
2002:: Uncle Ray's chips begin appearing in Walgreens stores nationally.
2004:: Firm wins 1 percent of U.S. drugstore chip market.
2006:: Company sold; name is changed to Uncle Ray's LLC.

More than 40 years after "Uncle" Ray Jenkins began making food products in his apartment kitchen, Uncle Ray's, LLC, had grown into a successful Michigan-based potato chip and snack food maker. The firm had expanded the number of markets its chips appeared in through relationships with national chains such as Walgreens, CVS, and Big Lots, and its appealing flavors, attractive pricing, and unique, inspirational stories had won it a loyal following that continued to grow.

Frank Uhle

PRINCIPAL COMPETITORS

Frito-Lay, Inc.; The Procter & Gamble Co.; Lance, Inc.; Jays Foods, Inc.; Better Made Snack Foods, Inc.; Kettle Foods, Inc.; Mike-Sell's Potato Chip Co., Inc.