Seneca Foods Corporation History

Company Perspectives:

Seneca is committed to remaining an independent, publicly traded company and to meet the quality, service, and cost expectations of our customers across America and around the world. With modern plants and a strong balance sheet, Seneca is well positioned to pursue strategic business opportunities and to continue our tradition of surviving and succeeding in a rapidly consolidating industry.

Key Dates:

1949:

Art Wolcott establishes the Seneca Grape Juice Company.

1970:

The company acquires the Marion Canning Company and the Rochester Group Inc.

1973:

S.S. Pierce Company is purchased.

1977:

Seneca changes its name to S.S. Pierce Company.

1986:

The firm resurrects the Seneca name.

1993:

Seneca sells off the last of its Rochester Group holdings.

1995:

The company forms an alliance with Pillsbury to be the primary supplier for "Green Giant" canned and frozen vegetables.

1999:

Seneca divests its juice and applesauce business to focus on core operations.

2003:

Chiquita Processed Foods L.L.C. is acquired.

Company History:

A familiar name to consumers throughout the United States, Seneca Foods Corporation processes vegetables and fruits, marketing its canned, frozen, and packaged products under the "Seneca" brand name, as well as under several other brands, including "Libby's," "Blue Boy," "Lohmann," and "Aunt Nellie's Farm Kitchen." Seneca also operates a small non-foods division which oversees an air charter service. During the early years of the new century, Seneca operated out of 29 manufacturing plants and warehouses, stretching from the eastern United States to the northwestern part of the country, where vegetables and fruits were processed and packaged and then sold to wholesale and retail grocery companies. A large portion of the company's sales stems from its alliance with Pillsbury to supply products under the "Green Giant" label.

Origins

Seneca Foods Corporation got its start when Cornell University business student Art Wolcott attended the bankruptcy auction of Dundee Grape Juice Company in 1949. Wolcott had set his sights on a typewriter; however, he believed that the failed company still held promise. Acting on this conviction, Wolcott acquired the firm and renamed it Seneca Grape Juice Company. During the following decade, Seneca grew steadily through strategic acquisitions and product development. The company also forged key partnerships such as its venture with Minute Maid to package the first frozen grape juice sold in the United States.

The firm changed its name to Seneca Foods Corporations during the 1960s. In order to facilitate growth, it added new plant facilities and continued to launch new products, including the first Vitamin C enriched apple juice. As Seneca entered the 1970s, much of what constituted the company had recently been added to its operations. Though Seneca had been established in 1949, it would be two decades before the company began to take on the look of a diversified food processor, with many of the characteristics that described the company from the 1970s forward being adopted after the 20th anniversary year of the Seneca business. Beginning in the 1970s, Seneca added significantly to its business scope through a series of acquisitions that bolstered its revenue and paved the way for the growth to come during the ensuing decades.

At the outset of the 1970s, The company's largest business unit was its Seneca division, which represented the original part of the company founded during the late 1940s. Producing more than three million cases of consumer products and generating more than $10 million in sales each year by the beginning of the decade, the Seneca division comprised two manufacturing plants--one in Dundee, New York, and another in Westfield, New York--and two warehousing operations, one in Penn Yan, New York, and another in Geneva, New York. At the Dundee manufacturing plant, the company formulated, packaged, and distributed an extensive line of frozen concentrated fruit juices and fruit drinks, bottled and canned juices, and a frozen non-dairy coffee creamer. All of the bulk grape juice and grape concentrates that were formulated into finished products at the Dundee plant were produced at Westfield, where Seneca operated a grape processing plant. Also included within the range of operations at Westfield was another use for the grapes processed by the company, a relatively new business area for Seneca, yet one that was expected to increase in importance as the decade unfolded. At Westfield, Seneca had entered the wine business, marketing a line of dry, high-quality table wines sold under the Boordy Vineyards label.

The second-largest business unit after the Seneca division was the company's Marion division, one of the new additions to the company as the 1970s began. A contributor of nearly $10 million in annual sales to Seneca's revenue volume, the Marion division was the result of an acquisition completed in May 1970, when the company purchased the Marion Canning Company. With the acquisition of Marion Canning, Seneca gained two manufacturing plants, both of which were located in the company's home state of New York. Together, the plants in Marion and Williamson processed two million bushels of apples and 5,000 tons of string beans, as well as lesser quantities of rhubarb, plums, seckel pears, and crab apples. Among this roster of various fruits and vegetables, apples were by far the most important product in the Marion division's business, specifically apples that were used to make apple sauce. Through the Marion division, Seneca ranked as the third-largest producer of apple sauce in the United States, all of which was packed under the "Seneca" label, selling enough of the fruit compote to control 8 percent of the national market. Though the division represented a new facet to Seneca's operations at the beginning of the decade, considerable resources were devoted to its development immediately following the acquisition of Marion Canning, when an expansion program was initiated that was expected to increase the division's volume 50 percent by 1973.

The third and smallest food processing division operating under the Seneca corporate umbrella was the Prosser division, which produced most of the same consumer products packed by the Seneca and Marion divisions but, unlike the two larger divisions, was located across the country in Prosser, Washington. The Prosser plant, which produced 13,000 tons of grapes and 500,000 bushels of apples annually, had been constructed in 1964, then expanded in 1968 and 1970. The division drew its strength from its location in the heart of the Yakima Valley, the epicenter of grape and apple production in the United States. On average, Concord grape and apple yields per acre were three times greater per acre than those recorded in other major producing areas in the country. Despite its prime location, the Prosser division had recorded several years of serious financial losses following the establishment of its processing plant in 1964. However, by 1968 the division had begun to prove successful, demonstrating consistent profitability in the early 1970s, when it collected more than $4 million in sales annually.

Combined, Seneca's three food processing divisions--Seneca, Marion, and Prosser--generated $24 million in annual sales at the beginning of the 1970s, $10 million of which was derived from the sale of products marketed under the "Seneca" label. Of the $24 million in total volume, more than half--$13 million--was collected from sales to retail consumers, while the balance was derived from sales to institutional and industrial customers. This aspect of Seneca's business told only part of the story, however, because the company relied on another important business segment to fuel its growth: Seneca's non-food companies.

1970 Acquisition of Rochester Group, Inc.

Of Seneca's non-food businesses, the smallest was the company's transportation division, a captive trucking firm that operated 15 tractor-trailer combinations to service Seneca's food divisions on the East Coast. Seneca's transportation division was its lone non-food business--an enterprise that allowed the company "to get another squeal out of the pig," as one Seneca executive noted--until the company completed another acquisition six months after purchasing Marion Canning Company. In November 1970, Seneca acquired Rochester Group, Inc., giving the company its first genuine non-food processing businesses, since the company's trucking fleet was directly involved with the production of fruit and vegetable consumer products.

With the acquisition of Rochester Group, Inc., Seneca greatly increased its presence outside the food industry, gaining control of Tapetex Products and Lehman Brothers Corporation. The larger of the two new companies, Tapetex Products operated as a textile converting company specializing in the production and sale of materials used as linings in men's apparel and used as exterior fabrics for men's and women's outerwear garments. Each year, the company handled between 30 and 35 million yards of material, enough to generate between $12 and $15 million annually and eclipse the revenue volume of Seneca's largest food processing division.

The other company obtained through the acquisition of Rochester Group, Inc. was Lehman Brothers Corporation, which generated $4 million in sales annually--a total roughly equal with the sales collected by the Prosser division--but earned a higher percentage of profit than any other Seneca division. From its manufacturing plant in Jersey City, New Jersey, Lehman Brothers Corporation produced a full line of interior and exterior paints, enamels, and varnishes, selling its products to more than 500 independent wholesale and retail outlets primarily under the Ox-Line label.

Such was the composition of Seneca's operations as the 1970s began, its scope expanded and diversified significantly through the May 1970 acquisition of Marion Canning Company, which spawned its second-largest business unit, the Marion division, and the November 1970 acquisition of Rochester Group, Inc., which marked the arrival of Tapetex Products, Lehman Brothers Corporation, and nearly $20 million in annual sales into the company fold. Though sweeping and definitive changes had occurred during a six-month period in 1970, no respite from the comprehensive additions executed during the first year of the decade was taken by Seneca's management. In 1971, Seneca entered into a joint venture project known as Snake River Vineyards, investing enough money to become a one-third participant in the wine production venture. Under the terms of the deal, 1,700 acres of grapes, projected to start producing in 1973, were all under contract to Seneca, complementing the 200,000 gallon winery constructed in 1971 at Penn Yan, where the bottling and distribution of Boordy Vineyards wine were being conducted.

1973 Acquisition of S.S. Pierce

On the heels of this joint venture agreement, Seneca completed an acquisition that at least equaled the importance of its Marion Canning and Rochester Group acquisitions. In March 1973, Seneca acquired Boston, Massachusetts-based S.S. Pierce Company, a food and beverage producer with $50 million in annual sales. The acquisition immediately doubled Seneca's revenue volume, increasing the company's sales to $110 million, and gave it ownership over several sizeable and profitable companies. Included within the S.S. Pierce acquisition was the company's Institutional Food Service division, which by itself generated $20 million in annual sales from the production of a broad line of dry grocery and frozen food products for restaurants, schools, hospitals, and caterers in New England. Another $10 million in annual sales were added to Seneca's volume through another S.S. Pierce business unit--its Wine and Spirits division--which bottled and distributed a complete line of hard liquors and low-priced domestic wines under the "S.S. Pierce" label.

Rounding out the collection of companies gained by Seneca through its acquisition of S.S. Pierce were State Line Potato Chip Company, Kennett Canning Company, and Lincoln Food, Inc. The smallest of these three companies was Kennett Canning Company, a $4.5 million-in-sales firm that grew and canned more than five million pounds of mushrooms annually under the "S.S. Pierce" label. Second-largest was S.S. Pierce's State Line Chip Company, which manufactured and sold retail size packages of potato chips, popcorn, corn chips, and other snack products. This company added another $5 million in annual sales to Seneca's revenue volume, contributing half of the $10 million generated by Lincoln Foods, Inc., a processor and distributor of a full line of "hot packed" bottled and canned fruit juices and fruit drinks sold under the "Lincoln" and "Bessey" labels.

The acquisition of S.S. Pierce marked a singular achievement in Seneca's history, enabling the company to broaden and entrench its market presence with the swipe of a pen. The significance of the acquisition had a pervasive effect on the then 24-year-old company, making its arrival known on all levels of Seneca's operations, including the name under which it operated. Four years after the acquisition, Seneca adopted the corporate title of its most integral acquisition, changing its name from Seneca Foods Corporation to S.S. Pierce Company, Inc. in December 1977.

Three days after the name change, the company sold its 33.3 percent interest in Snake River Vineyards, letting go of its involvement in the joint venture on the first day of 1978. Another important divestiture was completed in 1983, when S.S. Pierce sold Lehman Brothers Corporation, the paint business acquired in the 1970 acquisition of Rochester Group. The company continued to operate as S.S. Pierce until resurrecting its original name of Seneca in November 1986, when S.S. Pierce Company, Inc. once again conducted business as Seneca Foods Corporation.

The 1990s and Beyond

During the 1990s, Seneca continued to add to its juice processing capabilities through acquisitions, but the early years of the decade were also notable for the departure of one of the company's long-held, non-food businesses. In August 1993, ten years after Lehman Brothers Corporation had been sold, Seneca divested the other company obtained through the purchase of Rochester Group, Inc. in 1970, Tapetex Products. A contributor of 13 percent of Seneca's $257 million in total sales during its last year with the company, the Tapetex division was sold for $8.4 million, which facilitated a series of acquisitions that were completed during the ensuing months. In November 1993, the company purchased the Wapato, Washington, juice processing business belonging to Sanofi Bio-Industries for $3.3 million. Then, in December 1993, Seneca acquired certain assets, including manufacturing facilities located in Eau Claire, Wisconsin, owned by ERLY Juice, Inc. and WorldMark, Inc., producers of products marketed under the "TreeSweet" brand.

Less than a year after obtaining the trademarks, inventory, and accounts receivable belonging to ERLY Juice and WorldMark, Seneca completed another acquisition, purchasing M.C. Snack, Inc., a snack food maker of apple chips, based in Yakima, Washington. Four months later, in February 1995, Seneca made a pivotal move that represented the highlight of the year for the company and ranked as perhaps its single most important development during the first half of the 1990s. On February 10th, the company formed an alliance with Pillsbury and, for $86.1 million, obtained six vegetable processing plants and a 20-year agreement that named Seneca as the primary supplier of "Green Giant" canned and frozen vegetables. Under the terms of the agreement, Pillsbury would continue to be responsible for the sales, marketing, and customer services functions associated with the "Green Giant" brand, but Seneca would take over the vegetable processing and canning operations previously conducted by Pillsbury.

In a year that saw Seneca widen its lead as the number one marketer of frozen concentrated apple juice, the alliance with Pillsbury represented a definitive move, elevating the importance of vegetable processing in Seneca's business. In the years ahead, vegetables would play a substantial role in the company's future, providing a promising area of growth to complement Seneca's strong position in the fruit processing industry. The company moved toward the late 1990s and its 50th anniversary year as a leading market competitor, strengthened by the integral acquisitions it had completed during its first four decades of existence.

As the decade came to a close, Seneca made another significant change in its operations when it sold its applesauce and juice holdings in order to focus on what was now its core business--vegetables. The firm broadened its brand portfolio as well, acquiring the marketing rights to the "Libby" brand of canned vegetables, fruits, pastas, and baked bean products. Seneca also remained actively involved in its smaller, non-foods division, which included a flight operations unit. The company landed a position as a fixed based operator at Yates County Airport, added new aircraft to its fleet, and constructed a state-of-the-art hanger facility. By the time Seneca entered the new century, it was poised as a financially solid major produce processing concern.

With 50 years of history under its belt, Seneca was confident that it was on the path for continued success in the years to come. The company bolstered its holdings in 2000 with the purchase of Agrilink Foods' Midwest private label canned vegetable business, which included a plant in Minnesota. In 2003, Seneca acquired competitor Chiquita Processed Foods L.L.C. in a deal that secured Seneca's position as the largest supplier of private label canned vegetables to the retail, export, and food service markets in the United States.

Seneca had indeed come a long way from its roots as a grape juice processor. In 2003, 98 percent of the company's sales stemmed from its food processing operations. Its canned vegetables unit secured nearly 85 percent of company sales, while frozen vegetables accounted for 12 percent. Fruit products shored up the remaining 3 percent. Its lucrative deal with Pillsbury remained a cornerstone in its operating structure and was responsible for over 40 percent of Seneca's product sales. As the company looked to the future, its customer pledge remained constant--"We are committed to delivering high-quality products that you can trust and depend on."

Principal Subsidiaries: SSP Seneca Foods, L.L.C.; Marion Foods, Inc.; Seneca Foods International, Ltd.; Seneca Snack Company.

Principal Competitors: Chiquita Brands International Inc.; Del Monte Foods Company; Pro-fac Cooperative Inc.

Further Reading:

• "Chiquita Taking Major Step to Trim Operations," The Food Institute Report, March 10, 2003, p. 1.
• Halversen, Kirsten, "Seneca Joins Chiquita Frupac in Marketing Branded Apples," Supermarket News, September 13, 1993, p. 40.
• "Northland Cranberries Inc. to Purchase Juice Division of Seneca Foods Corp.," The Food Institute Report, August 24, 1998.
• Potts, Mary Lou, "Seneca Foods Plant Gets Busy, Boosts Buhl, Idaho-Area Economy," Times-News, June 3, 2003.
• ------, "New Leaders at Frozen-Vegetables Plant in Buhl, Idaho, Discuss Industry Changes," Times-News, June 15, 2003.
• "Seneca Foods Corporation," Wall Street Transcript, April 5, 1971, pp. 23, 730.
• "Seneca Foods Corporation," Wall Street Transcript, June 18, 1973, pp. 33, 448.
• "Seneca Foods to Purchase Agrilink Foods' Midwest Private Label Canned Vegetable Business," PR Newswire, September 16, 1999.

Source: International Directory of Company Histories, Vol.60. St. James Press, 2004.