UTZ QUALITY FOODS, INC.

Quitting your full-time job to perfect the potato chip may sound like a bad business plan, but it worked for Bill Utz in 1921, when he founded Pennsylvania's Utz Quality Foods. A leader in the snack foods market, Utz each week produces more than 1 million pounds of potato chips and 850,000 pounds of pretzels. It also makes cheese curls, onion rings, popcorn, and pork rinds, as well as sunflower, tortilla, and corn chips. Thanks to its 850-plus company-owned delivery routes, Utz's snack items are sold across the US by national chains, including BJ's Wholesale, Costco, and Wal-Mart. The company added the Zapp's, Dirty, and California chip brands in 2011. Utz is run by third-generation family members.

Geographic Reach

From its headquarters in Hanover, Pennsylvania, Utz caters to customers nationwide. The company distributes its Utz-brand snack foods throughout the East Coast, specifically across Boston and Connecticut. It also serves the South, Northeast, and Midwest with its Zapp's brand and the East and West coasts with its Dirty and California natural chips.

Operations

As part of its business, Utz maintains a handful of US manufacturing facilities to produce its potato chips, baked chips, tortilla chips, flavored pretzels, rice crisps, cheese curls, popcorn, and pork rinds.

Its distribution centers are located in Connecticut, Delaware, Massachusetts, Maryland, Maine, North Carolina, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, Vermont, West Virginia, and Washington, DC.

Financial Performance

While privately owned, Utz has reported that its 2012 revenue reached $540 million, a 31% rise since 2010.

Mergers and Acquisitions

In the heated and growing snack foods industry, Utz has grown through strategic acquisitions. Buying Zappe Endeavors in 2011 gave Utz a larger distribution footprint. Zapp's chips, which have Cajun seasonings and names like Spicy Cajun Crawtator, are kettle-cooked in peanut oil and sold throughout the South, the Northeast, and the Midwest. Zappe's Dirty and California natural chip brands are more lightly seasoned and are a hit on the East and West coasts. The Zappe purchase gave Utz plants in Louisiana, California, and Pennsylvania. Utz plans to expand Zappe's existing 88,000-sq.-ft. Gramercy, Louisiana, plant by 30,000 sq. ft. by 2016. Utz anticipates that with broader distribution and stronger operations (including more employees), it will be able to boost earnings generated by Zappe's brands. Zappe Endeavors continues to operate as a division of Utz. Its fate was spurred along after the death of founder Ron Zappe; he had intended to sell the company he established in 1985.

In late 2012 Utz also bought certain assets and brands of snack maker Bachman Company, giving Utz the Bachman, Jax, Thin'n Right, and Chipitos brands, as well as a plant in Ephrata and Hyde Park. As part of the agreement, Bachman changed its name to Savor Street Foods.

Strategy

To streamline its operations after multiple acquisitions in recent years, Utz has focused on upgrading its communications infrastructure at its factories, warehouses, and offices nationwide. To this end, it enlisted the help of Comcast Corporation and Morefield Communications to upgrade its Internet connections to Comcast's larger-capacity Ethernet solutions using fiber optics.

Sales and Marketing

Utz is the leading regional chip brand in the Boston and Connecticut markets. It also ranks highly among other regions with its Zapp's, Dirty, California, and Bachman brands. The company's products are typically sold through large national chains and warehouse stores the likes of Wal-Mart, Costco, and BJ's Wholesale.

The snack foods maker regularly pumps out new products. Utz rolled out a new range of pretzels under the Utz Specials name that includes flavor varieties unsalted sourdough, extra dark, sourdough, and multigrain. The company has also extended other lines, such as its dip cups with a new Salsa version.

Company Background

Looking for some leverage among the growing snack foods market, Utz agreed in late 2009 to be taken over by Snyder's of Hanover. However, the deal was called off less than two weeks after the announcement was made, with both companies stating that since the takeover had not been cleared by the Federal Trade Commission (FTC), they decided to cancel the deal because getting FTC approval would likely have been a protracted approval process. Both companies also said they preferred to get on with their businesses and not partake in time-consuming negotiations with the government, which, they added, would be detrimental to their companies. By late 2010, however, Snyder's of Hanover had merged with Lance to create Snyder's-Lance and a then $1.6 billion company.

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UTZ QUALITY FOODS, INC.


900 High St
Hanover, PA 17331-1639
Phone: 1 (717) 637-6644
Fax: 1 (717) 6371058
www.utzsnacks.com

STATS


  • Employer Type: Private
  • CEO and Vice Chairman: Dylan Lissette
  • President: Michael Rice
  • EVP and CFO: Todd Staub

Major Office Locations

  • Hanover, PA
  • Hanover, PA

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