Baskin-Robbins to Abandon Vernon Plant

Baskin-Robbins USA Co. will close or sell one of its primary ice cream manufacturing plants in Vernon as part of its plan to shift some production to outside vendors.

The plant’s 110 employees received notice last week of the Glendale company’s intention to close the plant by Sept. 1 and transfer production to its other two plants in Kentucky and Texas. However, that letter mentioned there were several parties interested in purchasing the operation that might be able to provide jobs for at least some of its workers.

A newly formed company called Cornerstone Dairy, led by Kevin Copeland, the former chief executive of Copeland Beverage Group in South Los Angeles, has signed a letter of intent to acquire the plant’s assets for $1.3 million.

Tony Bledsoe, a member of Cornerstone’s board, says the group also has signed a tentative agreement with Baskin-Robbins to manufacture and pack 7 million gallons of ice cream for the company over the next three years.

He expects the asset sale and supply deals to be finalized by the end of this month.

Baskin-Robbins executives said they were “negotiating with prospective dairy manufacturers” to take over the plant, which has been in operation since 1991, but they declined to be more specific.

Cornerstone executives say Baskin-Robbins is selling its plants in Kentucky and Texas. It closed a plant in Southbury, Conn., in November.

Although executives from Allied Domecq, Baskin-Robbin’s British parent, acknowledge that their plants have not been at full capacity and that they have been shifting production to outside vendors, they deny it is getting out of the manufacturing business entirely. They say the company is looking for ways to improve its “supply chain structure” and is evaluating the future of its other two plants on a “case-by-case basis.”

Baskin-Robbins, which has about 2,700 stores worldwide, has been struggling to regain market share lost in recent years to more polished store operators such as Haagen-Dazs and Vermont-based Ben & Jerry’s. With sales of its traditional flavors stagnant, the chain has been pushing franchisees to adopt a sleek, Starbucks-style remodel that includes pastel paint, halogen lighting, booths and coffee specialty drinks and smoothies. Only a fraction of its franchisees have made the changes.

As of last fall, the Vernon plant made about 8 million gallons of ice cream annually, about 40% of the company’s total production, according to union officials. The deal with Cornerstone would only keep part of that production in the Vernon plant, and, as a result, Cornerstone would not hire all of the plant’s employees, Bledsoe said.

Copeland operated a South-Central Los Angeles dairy until he was removed by its board in August. The floundering company has been the subject of much controversy, receiving loans from the Los Angeles Community Development Bank totaling more than $18 million, or about one-fifth of the federally funded bank’s portfolio.

Cornerstone officials say this deal is being financed with money from a “syndicate of individuals and companies.”