Seneca Foods has a can-do attitude. The company is one of the world's largest manufacturers and suppliers of canned vegetables. Its canned (as well as frozen and bottled) produce lineup is sold under numerous private labels, and national and regional brands, such as Aunt Nellie's Farm Kitchen, Libby's, Seneca, and Stokely, that the company owns or licenses. Customers are primarily big grocery chains and some export markets, and foodservice operators and food processors, including General Mills (GMOL). Seneca also supplies frozen fruit and vegetables to primarily private-label retail and foodservice customers, and GMOL. A short list of fruit and snack chip products are sold to retailers and food processors.
Seneca's operations rely on contracts with independent growers to supply its fruits and vegetables. Expediently, its facilities -- some 20 processing plants, two can manufacturing plants, two seed processing operations, and a small farm -- are located in major vegetable and fruit producing states: California, Idaho, Illinois, Minnesota, New York, Washington, and Wisconsin.
In 2012 approximately 9% of Seneca's sales derived from national brands sold to retail customers. By contrast, 55% of sales were packed under the retailer's private label and about 23% of sales were packed for institutional food distributors. The remainder was generated through packing Green Giant, Le Sueur, and other brands of canned vegetables, and Green Giant frozen vegetables for GMOL.
Geographically, Seneca products are sold across the US, which accounts for about 90% of all sales. The company also exports to customers in 80 countries, representing less than 10% of sales.
In 2012 the company's earnings declined more than 35% from the prior year, following more than a 60% year-over-year tumble in 2011. Seneca cited the impact of higher operating expenses coupled with using the last-in, first-out (LIFO) method of inventory valuation as reducing operating and net earnings. (The LIFO method is believed to better match current costs with current revenues.) Sales increased by a rough 5% over 2011, but remained less than 2010. The rise was due to higher selling prices and a favorable sales mix of canned vegetables and fruit, which drove 59% and 17% of sales, respectively. Momentum was offset by lower sales volumes and a 13% decline in GMOL sales.
During Seneca's 63 years of operations, it has made more than 50 strategic acquisitions. The additions are principally anticipated to expand the company's dominance in the processed vegetable and fruit industry and leverage distribution capacity. Recent acquisitions include the 2010 purchase of Lebanon Valley Cold Storage and the assets of Unilink for $20.3 million plus certain liabilities from Pennsylvania Food Group. Unilink is a maker of packaged frozen fruits and vegetables for the private-label and foodservice markets.
Seneca's strategy for growth has included a ramp up in production efficiency as it balances supply with demand. During the second quarter of fiscal 2011, the company cut its workforce at plants in Buhl, Idaho, and Mayville, Wisconsin, and other locations. A restructuring charge of $1.4 million dented its bottom line.
Founder and chairman Arthur Wolcott and president and CEO Kraig Kayser and their families control approximately one-third of the company. – less
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