Granny Goose Parent Thinks Chips Go Well With Sunshine Biscuits

L.A. Times Archives

Feb. 10, 1988 12 AM PT

From Staff and Wire Reports

Granny Goose Foods, a small regional producer of potato chips and other salty snacks, has developed a taste for Sunshine Biscuits, the nation’s third-largest cookie and cracker maker.

In fact, Oakland-based G. F. Industries, parent of Granny Goose Foods, plans to swallow the larger company whole. Under a merger agreement announced Monday, G. F. Industries would acquire Sunshine Biscuits, an American Brands subsidiary with nationwide sales of about $500 million, and combine it with Granny Goose, a $50-million-a-year business. The price of the proposed purchase was not disclosed.

Reorganization Likely

Jim Clizbe, senior vice president of marketing sales for privately held G. F. Industries, said no layoffs are planned at Sunshine’s 11 factories across the country or at Granny Goose’s factories in Oakland and Honolulu. Sunshine employs more than 4,800 workers, while Granny employs about 500.

Granny Goose’s products are sold in California, Hawaii and certain other isolated markets. Sunshine Biscuits has a 7% share of the national market for cookies and crackers, according to Snack Food magazine.

Clizbe said the companies probably will be reorganized into two divisions: Granny Goose, which will produce Granny Goose and Blue Bell brand potato chips, corn chips, tortilla chips and popcorn; and Sunshine Biscuits, which will continue to manufacture its many brands of cookies and crackers.

Unusual Development

The merged chip operation will expand into Oregon, Washington and Southern California, he said.

The purchase of such a large company by such a small firm is far from the norm in the industry, said Gordon Davidson, editor of Milling & Baking News, a weekly magazine.

“It’s happened maybe once or twice before, but it is unusual,” Davidson said.

American Brands of Old Greenwich, Conn., first announced plans to sell Sunshine in October as part of an effort to focus on its primary businesses of tobacco, distilled spirits, financial services and office products.

The sale of Sunshine and other businesses, including the Pinkerton’s security firm, will also help the company pay off debt from its planned purchase of E-II Holdings for $1.1 billion, said Charles Morris, Midwest editor of Food Engineering magazine.

Analysts have estimated that the divestitures could bring more than $800 million.

American Brands Chairman and Chief Executive William J. Alley said the company also is selling the Andrew Jergens Co. and some smaller units.

“These are fine companies with excellent management, but they do not fit our long-range business strategy,” Alley said. American Brands recorded 1987 profits of $523 million on sales of $9.2 billion.

Granny Goose was founded in the 1940s in Oakland and at one time was a subsidiary of Del Monte, said Clizbe, who did not know the origin of the company name. G. F. Industries also owns California Pretzel and a property management firm. The company is controlled by Northern California businessman Wilfred Uytengsu.

WHO CONTROLS THE MARKET RJR Nabisco

37% Keebler

17% Sunshine

Biscuits

7% Others

39% General Biscuit Brands, Lance, Interbake, Archway, Pepperidge Farms, others

Source: Snack Food magazine

SUNSHINE’S MAJOR PRODUCTS: Sunshine Krispy Saltines

Cheez-It crackers

HiHo crackers

Honey Graham crackers

Sunshine American Heritage snack crackers