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Maya Angelou said that, “Stepping into a brand new path is difficult, but not more difficult than remaining in a situation.”
The history of Nor-Cal Beverage Company certainly attests to this. Over the course of its 78 year history, this California family-owned company evolved from a small soft-drink bottler to the largest independent beverage contractor west of the Mississippi. Their customers represent most of the major brands in the industry. They have also made some tough decisions about the direction of their business, many of which required starting down a new path.
The most recent case in point was the decision to sell its exclusive Anheuser Busch distributorship. “It was a very good partnership for us, dating back to 1967, and we had grown that segment of our business,” explains president and CEO Shannon Deary-Bell. “But we wanted to concentrate on further developing our production and contract manufacturing capabilities (a business it first entered in the 1980s), and we had to make some hard choices about how we wanted to allocate our resources. Therefore we decided to sell the distributorship to a local beverage distribution company. They hired most of our sales, delivery and administration staff and the transfer closed last December.”
A change of an even greater magnitude is a $25 million retooling of its Anaheim facility. Situated on 20 acres this facility was originally built to process concentrated orange juice and was once owned by Bing Crosby and the Coca-Cola Company. Deary-Bell says that the investment stemmed from our customers’ needs to develop new SKU’s and, in particular, their need to package tunnel pasteurized products.
This manufacturing upgrade expands the Anaheim facilities’ capabilities for hot-fill, cold or ambient fill and tunnel pasteurized products in a variety of can sizes. These new capabilities are in addition to their current production lines, which include chilled paper, chilled plastic, aseptic, glass, PET, can and several tea brewing processes.
Currently, the two contract manufacturing facilities produce over 50 million cases of quality beverages annually.
“We invested some $50 million in upgrading our plant in West Sacramento back in 2007 to meet our customer’s needs.”
Similarly, at our Anaheim facility we are implementing the latest technologies to improve the efficiency and productivity of our processing, filling, packaging and labeling capabilities. We have also invested heavily in our infrastructure to accommodate this line and future lines. This includes a new dual-pass RO water treatment system, energy saving equipment and a complete recycling center. In August 2015 we produced our first saleable product on our new can line.
In addition, Nor-Cal has restructured its warehouse/distribution network. “We have a 250,000 sqf. distribution center in Fullerton and a 500,000 sqf. distribution center in West Sacramento. Both distribution centers offer re-pack capabilities for our customers. We provide our own transportation service, rather than rely on third-party logistics suppliers. This enables us to provide a truly end-to-end solution for our customers, a unique capability that distinguishes us from our competition.”
She adds, “Nor-Cal is not typically your low cost provider. But we offer a range of capabilities that achieve the highest technical qualities, backed by the most extensive expertise of any co-packer. In fact, we are the only ISO-certified co-packer in our territory, which is of significant value to our customers and sets us apart from other co-packers. Our FSSC 22000:2010 certification as well as thorough quality management systems and processes ensure we meet or exceed FDA standards for quality and food safety, Hazard Analysis and Critical Control Points (HACCP). Product traceability and recall programs are also in place. Our rigorous practices enable us to meet the standards for packaging organic, all natural, and kosher products. This demonstrates our commitment to ensure we deliver the highest quality service and products that our customers can get.”
As a deeply rooted 78 year old California based company, Nor-Cal understands the importance to protect and preserve the climate and environment. We work closely with local and state government to conserve natural resources and minimize our impact on the environment.” Deary-Bell says.
Another example of Nor-Cal’s sense of social responsibility, as well as an example of another path that has branched in unexpected directions, is its Go Girl line of sugar-free energy drinks. The brand was created in 2005 for calorie- and fitness-conscious women, with a portion of profits donated to breast and ovarian cancer research and related causes and foundations. While the original intent was to eventually take the brand nationwide, it remains distributed for now within Nor-Cal’s western territories. “It’s been an interesting experience for us as a manufacturing company to extend ourselves as a marketing and branding company,” Deary-Bell says. “And we definitely have had a few stumbles along the way. We learned there’s a big difference between knowing how to make something and knowing how to sell it. However, we remain committed to the brand and we look forward to continuing its mission to raise awareness and funds for cancer prevention and treatment.”
Nor-Cal also provides equipment and maintenance solutions to the food service, retail industries, healthcare, biotech and institutional industries. This includes sales and service of beverage refrigeration equipment and supplies, ice-making machines, freezers, coolers, fountain systems, draught and glycol systems. “It remains a good, dependable business for us,” Deary-Bell says. “It will continue to be an important part of our portfolio.”
Contract-packaging, however, is the largest business unit in our company. “Our customers are constantly inventing new SKUs and they need a co-packer that can quickly and effectively supply their needs,” Deary-Bell says. “These are interesting times for the beverage industry. Millennials in particular are not as brand loyal as people in older generations. It used to be you drank one brand of cola and you were pretty much loyal to that brand. However, Millennials are always looking for something new and different, and they want immediate satisfaction from it. That presents a big challenge to the industry to figure out how they can best satisfy ever-changing tastes and the desire for something different from yesterday’s trend.”
Health consciousness is another factor driving product development. “The trend right now is flavored water” Deary-Bell notes. “There is tremendous potential to fill numerous niches in the beverage market, and we are more than capable to help our customers fulfill their customer demands. We live up to our motto—Nor-Cal delivers the right product at the right cost at the right time.”