Sysco Acquiring Newport Meat
Newport Meat Co., which supplies meat to some of the Southland’s toniest hotels and restaurants, is being purchased by food service giant Sysco Corp., the companies said Friday.
Newport executives said the deal, which is expected to close by the end of the month, will allow the Irvine company to expand its operations locally and elsewhere in the West. Financial terms were not disclosed.
Newport generates annual revenue of about $100 million supplying meat, poultry and seafood to 1,000 restaurants, luxury hotels and resorts, private clubs and gourmet food stores.
Its restaurant clients include the Ritz in Newport Beach, Five Crowns in Corona del Mar and Spago in Beverly Hills. Other clients include Peninsula Beverly Hotel in Beverly Hills and Hotel Laguna and Surf and Sand Hotel in Laguna Beach.
The company, which has about 100 employees, said it is exploring a number of options to accommodate the expansion. Executives have already looked over architectural drawings for a larger plant, which most likely would be built in Irvine, executives said.
Newport will become a subsidiary of Sysco, but it will be autonomous and its management will remain intact, Sysco said. No layoffs are expected.
The deal will help Sysco, the nation’s largest food service distributor, move into the high-end, custom-cut meat distribution business. Publicly held Sysco is also planning to buy Buckhead Beef Co. in Atlanta, another meat distribution company, with operations in 11 Southeastern states.
Sysco was attracted to Newport Meat partly because of its expertise in cutting steaks to the customer’s specifications, something the Houston company doesn’t do, spokeswoman Toni R. Spigelmyer said.
“They will teach our people to sell those types of products to customers,” she said. “They have a very fine product reputation, great customer service and the ability to have their people give us their knowledge and expertise to spread among our sales force.”
Newport founder Richard A. Nicholas became involved in the meat business about 26 years ago when he took a job with a friend’s father, who owned Hereford Packing Co. in Santa Ana.
When that company went out of business, Nicholas struck out on his own, “cold calling” customers to ask if he could supply their meat, said Denise Van Voorhis, who began working for Nicholas in 1976 and is now Newport’s chief financial officer. Nicholas declined to be interviewed Friday.
“He basically just knocked on their doors and asked if they wanted to buy beef from him,” she said.
One of his first customers was Wolfgang Puck, then the chef at the high-profile Ma Maison restaurant in Beverly Hills. Soon, Nicholas had compiled a roster of recognizable names to drop when lining up additional business, Van Voorhis said.
“The more we were able to acquire name accounts, the more we kept on growing,” she said.
Initially, Nicholas worked from his rented home in Corona del Mar, storing the meat in a rented cooler in Long Beach, Van Voorhis said.
He selected the name Newport Meat because “Corona del Mar was too big a mouthful for the name of the company,” said President Timothy K. Hussman.
Nicholas’ timing was good. Southern California’s restaurant industry was growing quickly in the late 1970s and Orange County was developing at a breakneck pace, creating additional demand. Red meat became increasingly popular with diners in the 1990s, further bolstering Newport’s business.
Nicholas leased his first plant in Long Beach in 1978 but quickly outgrew it. In 1981, he built a larger distribution warehouse in Huntington Beach. In 1989, he bought a building at Jamboree Road and Alton Parkway and transformed it into Newport’s current 50,000-square-foot headquarters.
About 80% of Newport’s business is derived from meat sales. The company gets most of its meat from packing plants in the Midwest. The meat is aged, cut and packaged at the Irvine site.
Newport’s business is concentrated in Southern California, but it has also moved into Arizona, Nevada, Utah and Hawaii. The company wants to expand in those states and beyond, Hussman said.
“To do that, we need a larger plant, we need more trucks and we need more people,” he said.
Sysco approached Newport about a possible purchase a couple of months ago, Newport executives said. The company is solely owned by Nicholas.
Sysco, which was formed in 1969, has about 35,000 employees and operates 75 distribution centers in the United States and Canada. The company, which generates annual revenue of about $17 billion, sells a broad array of food and related products to restaurants, schools, hospitals and businesses.
Sysco’s board approved the deal Friday. The company’s stock closed at $30.50, up 6 cents a share, on the New York Stock Exchange.
