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‘Growing Business, Outgrown Current Space,’ Says Poore Brothers

By JIM BARBIERI
“Our business is growing. We’ve outgrown current space,’’ declared Brian Foster, plant manager for Poore Brothers in Bluffton recently.
Foster explained the Poore Brothers action for 100,000 square feet of warehouse space in the large new facility on which developer Robert Troxel launched construction just west of Bluffton.
That facility is to be annexed to Bluffton under the plans.
Foster said the project was aimed to get space “close to us,’’ amplifying that additional space is needed for warehousing and shipping the products to be produced here under the multi-year pact with Warner Bros. Consumer Products to develop and market an innovative new brand of salted snacks featuring a variety of Looney Tunes characters such as Bugs Bunny, Tweety and more.
But the space need also is for other products already being produced at the Bluffton plant.
Foster said the Poore Brothers warehouse in the structure Troxel has launched will be a central shipping plant for all the company’s products made here -- a modern and computerized shipping operation as aimed in the company’s nationwide marketing.
Current Poore Brothers plant information indicates the company has the manufacturing capabilities here to keep growing.
Since 1998, the year the Bluffton plant, an ex-Keebler facility, was closed briefly and the reopened as Wabash Foods or Wabash Snacks (which subsequently was acquired by Poore Brothers of Arizona), Poore Brothers has been on a climb.
Revenues have grown at a compounded annual growth rate of 49 percent and gross profits at a compounded annual growth rate of 50 percent through the five years from the start of 1998 through the end of 2002.
The Bluffton plant, which makes snack food products for different snack fields from those served by the Arizona plant, has been a big factor in the growth.
A cited strong point in the Poore Brothers success has been expertise in launching innovative national brands.
Particularly cited, as has been related in past major News-Banner accounts, is the company’s highly successful introduction of T.G.I. Friday’s brand snacks late in the year 2000. That October, Poore Brothers launched the T.G.I. Friday’s brand salted snacks under a 14-year license from T.G.I. Friday’s Inc.
These are produced at the Bluffton plant and highlight Poore Brothers’ ability to combine nationally recognized licensed brands with the company and Bluffton plant’s abundant and unique manufacturing and marketing capabilities to create what Poore Brothers hails as “high impact niche snack food brands.”
Although launched barely 2 1/2 years ago in late 2000, the T.G.I. Friday’s brand snacks now represent more than 60 percent of Poore Brothers’ net revenues, it has been disclosed.
Openly cited is the aim of Poore Brothers to replicate the T.G.I. Friday’s brand snacks success in more such strategic licensings or acquisitions -- and the Looney Tunes stride on the new “Crunch Toons” appears to fit and exemplify the strategy.
Poore Brothers Inc., in fact, refers to marketing and manufacturing “Intensely Different” (a trade name) salted snack foods under a variety of owned or licensed brand names including T.G.I. Friday’s, Poore Brothers, Bob’s Texas Style, Boulder Potato Company and Tato Skins.
By 2001 figures, as the company points out on its web site at Poore Brothers.com the domestic market for salted snack foods is a $22 billion annual sales industry.
Poore Brothers primarily is in the potato-based product segment which is about half the industry.
The Poore Brothers plant in Arizona produces a lot of potato chips -- a different direction from products here. The balance of the industry consists of corn snacks, popcorn, pretzels, nuts. meat snacks and more.
Emphasized is a strategy of seeking to complement rather than compete head-on with a giant like Frito-Lay.
The Poore Bothers niche is for success with product innovation or branding.
Poore Brothers products are sold directly to major retailers nationwide, with customers including SAM’s Club, Wal-Mart, Target, Costco, Kroger, Safeway, Albertson's and more, as well as selling through a select group of independent distributors.
The Poore Brothers Bluffton plant was originally an 80,000-square-foot facility built by Bachman Foods after the big 1969 fire that destroyed the former pretzel plant on West Washington Street.
Bachman sold to other interests in the 1970s before the acquisition by Keebler in 1979.
Keebler completed a large $15 million expansion to add 60,000 feet in 1985 to make the total facility 140,000 square feet.
Poore Brothers refers to having 200,000 square feet at its Indiana and Arizona production facilities and having the manufacturing capacity, depending on mix, capable of achieving up to $150 million in annual revenues.
In other words, the Poore Brothers manufacturing facilities here, including modern packaging equipment added in recent years, are ample for much more continuing growth, but the growth that already has taken place is overcrowding the distribution and warehousing spaces.
The Ind. 116 plant tract, nestled alongside the Norfolk Southern main rail line and nudging toward residential areas in the other direction, totals only 7.64 acres.
By contrast, the new Troxel-developed warehouse facility -- now to be a 200,000-square-foot building with 100,000 square feet for Poore Brothers -- is on an 80-acre tract, adjoining state highway connections to I-69 and I-469 and other routes and quickly reached on low-traffic routes from the Poore Brothers manufacturing plant here.
Company-reported statistics that are prior, of course, to the forthcoming volume for Looney Tunes products here, indicated the Poore Brothers Bluffton plant as running at 35 percent of its capacity and the Arizona plant at 60 percent of its capacity.
Poore Brothers probably would not have expected to get a plant with the large capacity of the one here when the opportunity came a few years ago to do so at a low cost.
By following its strategy of finding profitable niches, the company has potentials to be competitive and to boost profits by increasing utilization of already existing capacity.
Poore Brothers at Bluffton obviously is in position to seek still more private label customers near its facilities and wanting superior quality products at reasonable prices.
This is in addition to the potentials for developing, acquiring or licensing brands with special opportunities -- as in the case with T.G.I. Friday’s and Warner Bros.
In Arizona, Poore Brothers has joined in marketing relationship with the Arizona Diamondbacks baseball team (the 2001 world champions).
He said Poore Brothers -- actually its contracted operator for the shipping center -- Customized Distribution Services Inc. -- will occupy the new warehouse-shipping facility as soon as it is ready but he left forecasts on that to Troxel, who projected completion in the November-Decemeber period of this year.
Indicated was that Troxel is moving rapidly to meet the Poore Brothers needs as quickly as possible in face of the added Poore Brothers needs in launching the Looney Tunes products this year.
The city of Bluffton already is rolling on its key steps for the utilities and expected annexation.
The county, the city of Bluffton and the Northern Wells School Corporation will get ultimate property tax benefits from the project, although not immediately because of tax abatement.
Foster said Poore Brothers is pleased to be part of this community and appreciates good support and cooperation here along with the opportunity to be a help to others also.
The $3.5 million facility cost as estimated in the Troxel filings before governmental units here was based on a 150,000-square-foot building. The figure is bound to be higher with the current 200,000 square feet plans.
Troxel obtained development plan approval for a 200,000-square-foot facility. Poore Brothers is indicated as as employing over130 here. In Troxel filings on the project the indicated added employment for the Poore Brothers distribiution center needs were 23 jobs with an $855,000 annual payroll.