August 26, 2012 Energized Enterprise: You Go Girl!!

Volume 15 | Issue 3

Nor-Cal Beverage Company has been in business for three-quarters of a century. Longevity comes from pursuing opportunities arising from indu

This year, Nor-Cal Beverage Inc. – a family owned and operated enterprise based in West Sacramento, Calif. – celebrates its 75th anniversary.

A lot has happened since 1937, when Roy Deary started his bottling business with only four employees. Today, the company – now run by third-generation Deary family members – is a complex enterprise that successfully diversified through the years. Once just a small bottler/distributor, Nor-Cal now operates business units that include franchise beer sales and direct store delivery distribution, contract manufacturing, and beverage equipment sales installation and service.

As it evolved, the company established relationships with big-name companies such as Anheuser-Busch/In-Bev, Arizona Beverages, Coca-Cola Refreshments and Monster Energy Company. Inspired by its partners’ success, Nor-Cal also produces its own beverage product: the Go Girl line of energy drinks.

The company narrative – a small soft-drink bottler that grew into the largest independent beverage contract manufacturer west of the Mississippi, and a successful beer distributor, and a highly respected equipment solutions provider – is an “American Dream” success story.

Company history is like an epic novel that includes a launching point and ends at a “port of call,” where – as with Ulysses and Hercules – self-awareness came from challenges overcome. Of course, a bit of good luck comes into play, reminds current President and Chief Executive Office Shannon Deary-Bell. “You make your own good luck.”

All of that is underscored by increased capacity. At first, the company bottled 25,000-plus cases a year. “Today, that number indicates one of our lines daily output,” says Deary-Bell. “Now, it’s pushing out 45 million annual cases.”

Growth is supported by employees (from four, the company now provides jobs for 600). Throughout all of the company’s changes at least two things remains constant – core principles (fairness, honesty, cleanliness and a commitment to quality) and family values. “Many of our employees have been with us for more than 20 years,” says Deary-Bell. “They’re part of the Deary extended family.”

Speaking candidly, she describes why that it is important: “Face it, in today’s work environment, people spend as much time with co-workers as they do with their own families, so we need to foster a friendly environment, where everyone wants to come to work each day, and where everyone is committed toward the same goals.”

Lest anyone suspect that Nor-Cal Beverage exploits individual efforts, Chairman of the Board Don Deary says, “We don’t – and won’t – ask any employee to do anything we haven’t done or wouldn’t be willing to do.”

This family has been “hands on” since “day one.”

BEGINNINGS: BOTTLING ROOT BEER
It all started when Roy Deary (father of Don Deary and grandfather of Deary-Bell) and his four-member crew bottled a case of Hires Root Beer. Indeed, in the aftermath of prohibition (and thefavored hard drink), Americans were attracted to soft drinks – and this represented a business opportunity. During the first year, when Roy Deary’s business was known as the Hires Bottling Company, the company produced 25,000 cases in a 10,000 square-foot building in downtown Sacramento.

In the next quarter century, the company expanded soft-drink bottling activities and handled well-known brands such as Dr. Pepper, Squirt, Canada Dry and Royal Crown Cola, among others.

When Roy Deary passed away in 1963, sons Don and Grant (aged 33 and 29, respectively) took over. Industry observers didn’t expect the enterprise to survive. But the Deary brothers – supported by employees (the roster was growing in number) – confounded expectations. Don, who worked as a department manager, oversaw manufacturing, operations and logistics. Grant, a talented salesperson who helped grow the company’s bottling franchise lines, assumed sales and marketing responsibilities.

ERA OF PROFITABILITY
Their combined expertise helped the company reach a breakeven point in 1969 (it previously suffered a period of debt). A prolonged period of profitability followed, thanks to the addition of franchises and an extension of company business reach. During this period, the company moved into the vending machine business and it took on the Anheuser-Busch beer distribution franchise for the Lake Tahoe and Sierra Foothills region. The move seemed natural, as the company had already distributed the Rainier Beer, Hamm’s, Olympia Beer, Lucky Lager, Peerless Beer brands. Anheuser-Busch’s increasing strength coincided with Nor-Cal’s increasing business musculature. Growth, along with acquisitions of distribution rights for craft brewery Sierra Nevada Brewing Company (in 2004) and the rapidly growing Corona/Crown Imports (in 2006), pushed Nor-Cal’s beer distribution activities into high gear, according to the company.

In the 1970s, the company applied expertise gained via working with retail customers into a service line. Originally called “Food Services,” the division was renamed “Equipment Solutions” in 2009, a name that better reflected focus on helping customers choose and maintain high-quality beverage, ice, and refrigeration equipment.

As business expanded into new areas and took on new bottling franchises, the company decided to move away from the Hires Bottling Co. name. In 1970, it incorporated as Nor-Cal Beverage Company and eventually acquired an old cannery and 43 acres along the deep-water shipping channel in West Sacramento.

THE 1980S: NOR-CAL DIDN’T “JUST SAY ‘NO’”
Development continued in the 1980s. In 1983, Don and Grant were approached by the Sunglo Co-Op about a franchise opportunity. Sunglo offered 100-percent juices. The Deary brothers felt this would be a profitable addition to the soda franchises. But by the 1990s, market circumstances transformed it into a failing brand.

Undaunted, the Dearys continued moving forward. The equipment and experience gained in the Sunglo venture attracted Coca-Cola. In 1993, the company began co-packing box juices for the Coca-Cola’s Minute Maid division. Nor-Cal decided that co-packing proved a good fit for the company’s approach. After all, both the co-packing concept and the Nor-Cal entity placed great emphasis on quality and cleanliness. Coca-Cola agreed and expanded the partnership. In 1999, Nor-Cal purchased its Anaheim facility and performed co-packing for the famous brand. By 2001, Nor-Cal was actively co-packing products in the neighborhood of Disneyland and the California Angels.

DRAMATIC CHANGES
Tragedy hit the Deary family in 1999 when Grant Deary passed away. The misfortune compelled Don Deary to structure a succession strategy to make sure the company remained strong as it moved into the third-generation family ownership.

Also at this time, Nor-Cal realized that America’s tastes were changing, as was the beverage industry. Consumers wanted healthier drinks. As it had done in the past, Nor-Cal watched trends and positioned itself appropriately.

In 2005, in response to consumer demand, the company launched its Go Girl® Sugar-Free Energy Drink line, created for calorie- and fitness-conscious women.

“I love that name,” says Deary-Bell. “It represents the modern woman that’s forced to juggle so many things, most importantly family matters and job considerations. An energy boost is needed, coupled with vitamin enhancement.”

One might suspect that in describing the women who could best benefit from the product, Deary-Bell is describing herself. After all, she’s a married business leader who would like to have a “life.”

But the product also targets women who face far worse situations. “With every can sold, a portion goes to breast and ovarian cancer research,” she says.

More than 2.4 million US women live with breast cancer, and Deary-Bell makes that statistic personal: “Everyone knows someone who is impacted.”

This company is far more than sympathetic; with a woman at the helm, it’s empathetic. Compassion rules profits. A portion of proceeds of each case that goes out the door, the company reports, is donated to a related cause or foundation, and this includes all Go Girl products (Go Girl Sugar Free, Go Girl Pomegranate Star Fruit, Go Girl Peach Tea, Go Girl Pomegranate Blueberry Tea, and Go Girl Lemon Lemon Drop).

The company’s Go Girl Energy Drink division is a familiar presence at cancer awareness events throughout western states. Currently, Go Girl is available in nine western US states (California, Nevada, Oregon, Washington, Colorado, Alaska, Hawaii, Arizona and Utah).

As the product increases health awareness, the company seeks to increase distribution. That’s part of Nor-Cal’s future strategy. “A company goal is to take this product nationwide,” reveals Deary-Bell. “But we need to do it right. We don’t want to stub our toe.”

NO STUMBLING
Not that Nor-Cal has ever really stubbed a toe. Business decisions always proved correct. Consider the ongoing company narrative. In 2007, the company made what can only be considered a dramatic decision: It would leave the traditional soft-drink bottling business.

“It was a matter of profitability,” reveals Deary-Bell. “Shrinking profit margins – related to worker compensation, labor costs, gas, everything involved in running a business in the soft drink industry – drove the decision.”

That year, Nor-Cal’s board sold its Cadbury Schweppes bottling and distribution rights so that the company could retool to increase its contract manufacturing capabilities. The company undertook an ambitious $47 million project, which involved gutting the existing West Sacramento facility and renovating from the ground up. The project added two hot-fill lines and one for hot or cold filling, while also bringing the facility to the leading edge of blending, bottling, and quality control technology.

A risky move, true – but the right move. With its shift from traditional soft drinks, Nor-Cal became the West Coast’s largest independent co-pack bottler of healthier products. Further, it was freed up to enhance its already busy beer distribution activities, and it became a well-respected equipment solutions provider.

A diverse enterprise – with eclectic talents.

CONTINUING FORWARD
Don Deary became Chairman of the Board in 2010, the same year that Deary-Bell became president and chief executive officer.

Despite what company name may imply, Nor-Cal’s production facilities are located in the southern and northern portions of the state (Anaheim and West Sacramento, respectively). Locations are strategic: both are close to large consumer markets and major transportation arteries, the company reports.

Both facilities are state of the art (featuring the latest engineering and technology) and offer optimal flexibility to meet customers’ numerous and complex requirements. Specific capabilities include:

• 13 Total Production lines: One cold-fill & Six hot-fill, (1) for cold fill/carbonated cans (3) for hot-fill cans and (4) for hotfill PET plastic & glass bottles. These are complemented by (2) chilled gable-top carton, (1) chilled PET bottle, and (2) Aseptic drink box production lines;
• Packaging: Tray/pad/shrink wrap, RSC full wrap, fiber multipacks, shrink-wrap bundles, and Hi-Cone (the company also offers re-packing services);
• Labeling: Roll fed, cut and stack, shrink sleeve, pressure sensitive;
• Warehousing and distribution: More than 700,000 square feet of refrigerated and ambient story manage by advanced logistics and inventory control systems.

In addition, facilities are “green,” as they’re equipped with high efficiency systems that conserve energy and water and minimize emissions and waste.

In addition to production plants, Nor-Cal operates its beer distribution division from a Loomis facility. The equipment solutions division operates in Galt, Calif.

Today, Nor-Cal is one of California’s top independent bottlers. Don Deary and the third generation of Deary leadership manage a business that is dedicated to outstanding customer service on a local, state and country-wide basis. The company likes to say that it produces “the right product at the right cost at the right time.”

Company history indicates that this is more than just a marketing tag line. Rather, it’s a succinct description of how the company evolved.

Subscribe to Industry Today