In 1926, only four short years after the founding of Certified Grocers of

California, Ltd. (now Unified Western Grocers), a bakery manufacturing facility was built on Santa Barbara Avenue just southwest of downtown Los Angeles. A couple of miles away, the Union Ice Company was operating a manufacturing plant that supplied ice to Los Angeles restaurants and railroads. Owned and operated separately, both businesses were successful and prosperous for many years.

In 1974, both of these businesses were purchased by Certified Grocers of California (although the ice company had since been converted into a dairy). These two business

Post World War I Los Angeles was a boomtown with the real estate and the oil industries leading the

charge. The success of these and other industries (such as filmmaking) attracted job seekers from across the U.S. and caused the local population to swell at a rapid pace. An influx of new residents led to the need for more manufacturing facilities throughout the metropolitan area and, thus, a wave of factories and warehouses began to dot the Southern California landscape.

When the Union Ice Company opened a manufacturing facility in 1917 on 11th Avenue in Los Angeles, it was one of several such plants that the company owned in the metropolitan area. In addition to manufacturing ice, the facility had plenty of cold storage space that it often leased-out to various companies that needed to keep food and other products “on ice” until they were ready for market.

The Marantz EraNot long after the end of World War II, two entrepreneurial

brothers, Leo and Jack Marantz, expressed interest in the cold storage space at Union’s 11th Avenue plant. The Marantzes’ plan was to establish a dairy that would serve retail grocery stores throughout the Los Angeles area — stores that had a difficult time competing with such rapidly growing retailers as Ralph’s Grocery Company, which had recently built its

own dairy.There were a host of other dairies in the late 1940s in

Los Angeles, as well, making it one of the most competitive milk products markets in the country. Among them, Adohr Farms, Golden State Dairy, Arden Farms, Jersey Maid Farms, Challenge Dairy, and many others. Such a competitive local environment only added more risk to the Marantz brothers’ prospective venture at the Union Ice plant.

Realizing they would need an “edge” for the enterprise to succeed, the Marantz brothers decided on a gimmick to get their dairy products noticed by local retailers. Traveling from store to store throughout Southern C a l i f o r n i a , t h e y g a v e away free milk and dairy products to retailers. When they returned for a second visit to see if the product had sold, a second order for products generally was taken, followed by a third, fourth, and so on. This is how the Marantz brothers’ Golden

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30 Years of Manufacturing Excellencetransactions not only turned the local food industry upside-down, they were events that would change the future of Certified Grocers by enhancing its ability to provide its Southern California retail grocery members with the “right perishable food products at the right time.”

This is the story of our company’s successful entry into the food manufacturing business and the high quality products and services that we have delivered to retailers throughout Southern California for the past 30 years. This is the story of Unified Western Grocers’ Manufacturing Division.

Alfred A. PlamannPresident and CEO

Unified Western Grocers, Inc.

The early days — pouring ingre-dients in by hand.

Dairy Division

Plamann

Crème Farms dairy (later to become known as Golden Pride Creamery) began to establish a foothold in the competitive Los Angeles dairy market.

For the next two decades, the dairy continued to grow with r e l a t i v e l y

steady annual increases in volume. Like other independent dairies, however, Golden Pride would occasionally suffer the loss of a retailer’s business when it (the retailer) was acquired by another supermarket company and the dairy manufacturing business was consolidated into a different production facility. Over the years, some of Golden Pride’s retail customers who were acquired by others included ABC Markets, Food Giant, and later Smith’s Food King.

In spite of the occasional loss of a retailer’s business, Golden Pride entered the 1970s as a successful, well-established independent dairy that produced an array of regular-, flavored- and low-fat milk products, fruit p u n c h , w h i p p i n g cream, half and half and a variety of other products . I t a l so kept pace with other innovations that swept through the dairy industry at the time, such as using plastic gallon jugs for milk instead of the traditional wax paper cartons that consumers had grown familiar with over the years. Initially, Golden Pride purchased the jugs from an outside supplier.

A Change in OwnershipKeeping pace with the fast growing

industry, however, proved to be a difficult ongoing proposition for the Golden Pride Creamery. As other dairies increased their production volume, they lowered their prices — meaning the Marantz brothers would need to do the same if their enterprise would survive. Without a larger base of customers, Golden Pride’s prices would no longer be competitive.

In 1974, the Board of Directors at Certified Grocers of California, the largest wholesale grocery cooperative in the western U.S., arrived at essentially the same business decision — but from a different point of view. The Board decided that in order to truly provide its independent retail members and customers with the products and services they needed to remain competitive with other retailers in the marketplace, the company would have to enter the food manufacturing business. A decision was made and in September 1974, Certified purchased the Golden Pride Creamery from the Marantz brothers.

From the very start, Golden Pride and Certified were natural partners. In fact, many of Certified’s largest retail customers

already were steady customers of Golden Pr ide and some, such as Certified B o a r d m e m b e r s Ben Schwartz and Arthur Reicher, had been instrumental in helping the Marantz brothers get their v e n t u re o f f t h e ground nearly 30

years earlier. The business, everyone believed, was primed for success.

Though successful as a wholesale distributor of groceries, Certified was inexperienced at milk processing. To counter this, Certified installed John “Andy” Andikian, one of its best

Dairy Memories...

Leonard LeumPresident

Pioneer Markets

George MashyPlant ManagerCertified Dairy

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“Before they hired me, they brought me to the dairy to look around, see what I thought. I told them that I would take the job, but only if the company made a commitment to do things right. The first step, I told them, was to get rid of all of this obsolete equipment.”

“These two guys, Jack and Leo Marantz, came by our store one day and were giving out milk. No one had ever heard of their company before and we were shocked that they were giving away their product.”

Stocking milk at a retail store, circa 1980.

Increased demand for milk forced the dairy to stop making its own juice products in the early 1980s.

marketing and sales employees, as the general manager of the new dairy. It w a s n ’ t l o n g , however, before A n d i k i a n re a l i z e d t h a t r u n n i n g a dairy was a bit more complex than he — and Certified — had a n t i c i p a t e d .

With the blessing of Randy Price, Certified’s president, Andikian hired George Mashy, an experienced dairyman who had spent 21 years at Borden and, later, Knudsen Farms (Borden’s successor company in California). At Borden, Mashy had risen through the ranks to become vice president of research and engineering.

Under Andikian’s and Mashy’s direction, a program to overhaul much of the equipment and design of the dairy — the bulk of which had been in place for more than 30 years — was initiated. The overhaul included new filling equipment, processing equipment, automated cleaning equipment and a redesign of the loading dock for greater efficiency and improved productivity. By the end of 1974, the dairy was producing approximately 120,000 gallons of

product per week and the new equipment had helped extend the shelf life of milk products to 17 days.

Another key hire by Andikian also came in 1974 when John Bedrosian began working at the dairy as a lab technician (quality assurance). Before joining the company, Bedrosian had spent five years in a similar position at Challenge Dairy, a California-based dairy products manufacturer.

Keeping Pace With Consumer TrendsGradual public acceptance of plastic dairy

containers prompted Certif ied to purchase i ts own blow molding equipment in 1978 so it could manu-facture i ts own containers and eliminate the mark-up on jugs that it w a s p a y i n g t o outside suppliers. Although the com-pany was still using wax paper cartons for approximately 50 percent of i ts milk production, t h e n e w b l o w molding equipment s u b s t a n t i a l l y r e d u c e d t h e c o m p a n y ’ s container costs — to approximately 6 cents per unit. The success of this equipment led to the installation of a second blow molding unit at the plant three years later.

By 1980, production volume at the dairy had increased three-fold — to 375,000 gallons per week. The primary reason behind this growth was an increase in the overall size and success of Certified Grocers, which continued to add new retail members to the cooperative throughout the 1970s and ’80s. With increased demand for its products and a growing customer base, Certified’s dairy continued to set the pace for competitive pricing throughout the Southern California market throughout the reminder of the decade.

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One thing hasn’t changed — milk cases are just as heavy to move today as they were 30 years ago.

4.61%

Automation has helped increase production volume at the dairy over the years.

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Continued Growth and SuccessBecause of seemingly endless increases

in consumer demand for milk and milk products throughout the 1980s, management discontinued making ice cream at the dairy in 1989 and converted the area into additional warehouse space and a truck load-out facility. This allowed the dairy to concentrate more of its efforts on the profitable milk business while improving the efficiency of its overall distribution system. At year end, the dairy was producing approximately 600,000 gallons of product per week.

The ever-increasing Hispanic population in Southern California was one of the reasons why Certified’s dairy became the first company in the U.S. to obtain a license to process and bottle Tampico, a juice-like product that is targeted to Hispanic consumers. In 1991, its first full year of production, Certified’s dairy produced 500,000 gallons of Tampico. (In 2004, the dairy produced

approximately 10 million gallons of Tampico.)

As the 1990s began, the grocery industry was entering into a period of consolidation — a time when many retailers decided to

merge with or acquire other retailers in order to increase their economies

of scale. As the retail chains grew, so did their dairy orders. This, in turn, sparked a period of consolidation among many of the dairies that served the Los Angeles area, creating a new breed of larger, more formidable competitors.

But Certified’s dairy continued to grow as well. By 1995, the facility’s production volume had grown to 700,000 gallons per week. Additionally, the company had kept pace with the ever-changing tastes and preferences of consumers by introducing new low-fat products, and also milk for those who were lactose intolerant.

Always an efficient and well-run facility, Certified’s dairy was also a major contributor to the company’s financial success during the

Units Per Week

Dairy Product Volume

Dairy Memories...

Floyd SmithChief EngineerUWG Dairy

late 1990s, a trend that continues to this very day. In addition to its annual contributions to the success of Certified, the dairy was an excellent investment for its retail owners who benefited both as dairy customers (re-selling milk products to their customers) and as dairy owners (receiving regular patronage dividends from the facility).

A New Corporate ParentIn September 1999, Certified Grocers

merged with United Grocers, Inc., Portland, Oregon, and emerged as Unified Western Grocers. The dairy, however, was virtually unaffected by the merger and continued to operate as it had since 1996 — at or near its capacity (meaning 1.2 million gallons of product produced per week) and serving a wide variety of retailers throughout Southern California.

It was the Southern California dairy’s long history of service to retailers and profitability that prompted the company to initiate an all-new dairy program in its newly-formed Pacific Northwest Division — which provided dairy products to the cooperative’s newest retail

“There was an event one night, before Certified owned us, where something had broken and water got into the processing machines, pipes, ammonia — everything. We couldn’t pump it out, so we drained everything down to the floor, cleaned it, dried it all out (manually) and actually got the place running again by 6 p.m. After that, a decision was made to keep a mechanic here 24 hours a day.”

“Do I remember any products that didn’t work out? Sure. We tried iced tea, but we just couldn’t get it right. We also made a watermelon sherbet when we were still in the ice cream business. We couldn’t give that stuff away.”

John BedrosianVice President, ManufacturingUnified Western

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“One day I’ll always remember was in 1976 when we achieved our goal of 50,000 units in a single day. Our competition said we’d never do it because we didn’t know a thing about dairies. That day showed everyone that we were for real in the dairy business.”

Unified’s dairy as it looks today.

120,000

375,000

600,000700,000

1,200,000

In the 1950s, the Gordon Bread Company was a busy, well-established, Los Angeles-based bakery company with

a 1920s-era manufacturing facility on Santa Barbara Avenue (known today as Martin Luther King, Jr. Boulevard), just southwest of downtown.

The company had carved out a successful niche in Los Angeles as a manufacturer of high quality bakery products, particularly its namesake product — Gordon Bread —

which was sold widely throughout the city and surrounding areas. Over the

years, many Los Angeles residents came to know Gordon Bread as

the company that gave away all kinds of “freebies” with

i t s bread. Among the successful promotions

the company developed were a collector’s series

of trading cards that featured pictures of

animals, cars and planes, as well as a

sponsorship tie-in with “Flash Gordon” comic books.As Los Angeles grew during the 1950s, many of the

established supermarket chains began to supply their stores with their own bakery manufacturing facilities. Independent bakeries, like Gordon, were numerous in 1950s Los Angeles, and many competed heavily with one another for business from local restaurants, bakery retailers and independent retail grocery stores.

Selling to independent grocers, however, was not a lucrative business. Because many independents were located in economically disadvantaged areas of the city, the bread they sold to their customers had to be cheap — often in the 18-20 cents-per-loaf range — and this price left little

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A Certified dairy truck from the early 1980s.

Golden CrémeHomogenizedAcidophilus2 % Reduced FatFat Free1 % Low Fat

TampicoCitrus PunchTropical PunchMango PunchIsland PunchPeachWild Berry

Dairy Products Manufactured TodaySpringfieldHomogenized2 % Reduced FatFat Free1 % Low FatDrinking Water

SpringfreshHomogenized2 % Reduced FatFat Free

members in Oregon and Washington. The success of the Southern California dairy also was the inspiration behind company efforts to launch a new dairy program in its Northern California Division.

There have been many changes in the dairy business since the early days of the Golden Pride Creamery — new manufacturing procedures, new equipment, new companies, new consumer preferences and, of course, new products. In the past 30 years, however, there has been only one constant in the Southern California dairy business — Golden Crème milk and dairy products — available at

The Gordon Bread Company as it looked in the 1930s.

independent retailers and enjoyed by millions of Southern California consumers annually.

The Dairy Division at Unified is proud to celebrate its 30th anniversary of manufacturing quality products and is looking forward to continued success with our retail partners and their customers for many years to come.

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room for profit for the supplier. Also, because independent grocers of that era tended to be one- or two-store operations, most bakery accounts were small, leaving little opportunity for the manufacturer to grow production volume and, ultimately, economies of scale.

On top of pricing and volume issues, independent bakery manufacturers often lost business when independent grocers were acquired by larger supermarket chains. As the chains increased their production volume and lowered their costs, independents like Gordon were forced to scramble to replace the business.

A New EraBy 1974, the owners of the Gordon Bread

Company were ready to sell their business and the officers and directors of Certified Grocers of California, the largest wholesale grocery cooperative in the western United States, were

eager to purchase a local bakery. Gordon officials had grown tired of the constant battle for business; Certified had a huge base of independent retail grocery store members who were ready to consolidate their business into a single facility for greater production volume. In June, a deal between the two companies was struck and Certified officially entered the Southern California bakery business.

For the first six years of Certified’s ownership, the bakery operated much as it did under the Gordon regime. Most of the equipment was in good shape and usable, so it was not replaced. Design and layout seemed to work well, so it was not altered. And although the customer base had widened to include many of Certified’s retail members in Southern California, the bakery still continued to serve other customers that weren’t in the grocery business, including local Arby’s and Jack in the Box fast food restaurants. Shelf life for all products was three days.

By 1980, the bakery’s business had grown to a production volume of 400,000 units per week and employed about 120 workers. The plant was manufacturing 15 to 20 different products, all of which fell into one of three categories — breads, buns or rolls. Growing demand for baked goods from member retailers helped convince Certified’s management to convert the bakery into a “members-only” business. As result, all non-retail business was curtailed.

Increased production, however, also increased the strain on the plant’s equipment,

Bakery Memories...

“I’ll never forget that first job I had at the bakery. We were supposed to put the lids on the sandwich pans before they went into the oven. Not only were those lids heavy — about eight pounds each — no one told us that those lids were still hot from the oven. Having burned myself several times on my first night, I’ll admit I had second thoughts about continuing to work at this place.”

“In those days (prior to owning a bakery), independents were buying bread from all over, there was no one dominant player. And because the drivers got a commission for all the bread they sold, the loyalty was more to the driver than the manufacturer. That’s when we (Certified) decided we had to get into the bread business.”

Jim TeaguePlant Manager, BakeryUnified Western

Quality assurance at the Gordon Bread Company.

For many years, baking was a manual business.

Ben SchwartzBoard of Directors Certified Grocers of California

“Andy” Andikian, general manager; Randy Price, president; and Charlie Sapp, vice president, manu-facturing, with the first loaves of bread out of the bakery in June, 1974.

Bakery Memories...

much of which had survived since the early days of Gordon Bread. In 1990, Certified’s Board of Directors decided to invest $10 million to automate the bakery’s production process, an investment that would pay great dividends in terms of increased productivity and greater overall efficiency of the operation. Included in the renovation was equipment that loaded pans into the ovens, removed pans from the ovens and stacked them for wash and reuse. New equipment that enabled baking ingredients to be added to the process in liquefied form also was installed, eliminating the need to manually lift and dump bags of ingredients into hoppers.

One part of the process that was not automated, however, was the old fashioned sponge and dough system — a big brewery-like hopper in which wheat is allowed to ferment with yeast for three hours before sugar is added. This process brings out the best flavor in the wheat and is done specifically to enhance the overall quality of the baked product.The Bakery in the ’90s

In 1991, Jim Teague, a 13-year employee who had performed nearly every job in the plant, was named plant manager of the facility. Teague was a logical choice, his father was an employee at Gordon Bread Company when it was purchased by Certified.

Later that year, the bakery lost its largest customer when Boys Market — an account responsible for nearly 35 percent of the facility’s business — was sold to another retail chain. Because this loss of volume could not be filled by additional business from independents, a decision was made to open the bakery’s customer base to include schools (Los Angeles Unified School District), caterers, restaurants and non-member customers.

The bakery also began to look at creative ways to add value to its products. In 1995, bakery personnel used flour starch enhancers and new ingredients to extend the shelf life of products to seven days — an achievement that allowed retailers more time to sell the product and reduced the amount of stale returns to the bakery. It also allowed the facility to extend its sales territory to northern Ventura County on the northwest, Indio and other desert areas on the east and Calexico and other border towns

Units Per Year (Millions of Units)

“A dairy man my whole life, my first interaction with the bakery came in 1989 when I was put in charge of production. I didn’t know that much about the process but figured that, well, manufacturing is manufacturing — how d i f f i c u l t c a n i t b e ? Fortunately, Certified was smarter than that — they sent me to the American Institute of Baking where I learned what I needed to know.”

John BedrosianVice President, ManufacturingUnified Western Grocers

Bakery Product Volume

7

Mill

ions

of U

nits

19.7

22.6

26.0

17.2

24.726.1

30

25

20

15

10

OlympicMeal Round Top BreadMeal Sandwich

Golden CrémeWhite Round TopWheat Round TopWhite SandwichJumbo Wheat Round TopGiant White Round TopGiant Wheat Round TopGiant White SandwichJumbo White Round TopPremium White Round TopPremium Wheat Round TopPremium White SandwichSplit Top WhiteSplit Top WheatHamburger BunsHot Dog BunsSesame Seed Hamburger Buns

Cottage HearthDeli RyeHoneyWheatberryBran N’Honey9 GrainCanadian OatCalifornia Thick ToastButter Top WhiteButter Top Wheat16 Pack Hot Dog BunsBig Bite Hot Dog Buns

Bakery Products Manufactured Today

on the south. The company also introduced its full service program in 1995, featuring direct delivery to retail stores by company trucks.

In 1996, the bakery entered into a partnership with the Earthgrains Company (now part of the Sara Lee Corp.) that combined that company’s national brands with Certified’s private label bakery products (Golden Crème, Cottage Hearth, Springfield) to offer independent retailers a complete bread shelf for their stores. The program, which continues to this day, was an instant success.

Over the years, the bakery manufacturing facility also used its research and development department to develop new products that met the specific taste or nutritional requirements of various consumer groups. For example, the facility received a patent from the U.S. government for a Hawaiian bread product — Diamond Head Bread — which is sold exclusively in Hawaiian supermarkets.

The bakery has been at the forefront of other trends, as well. In the past year, Unified’s bakery took advantage of the “low carb” trend, developing what it calls a “smart carb” product — bread that is low in carbohydrates but still nutritious and good tasting. Another product, bread with low sugar content, has been developed for those with diabetes. This product is in high demand among Hispanic consumers, who have a much higher incidence of diabetes than other groups of consumers.

Today, Unified’s bakery operates at about 88 percent capacity with three shifts keeping the plant operating 24 hours a day, producing approximately 580,000 baked units per week. More than 250 retailers are purchasing bakery products from the facility, 200 of which are on the “full service” program.

Future prospects for Unified’s bakery are bright as demand for convenient, high quality bread products continues to explode throughout the Southern California marketplace. As it has for 30 years, Unified’s bakery stands ready to serve, ready to provide the high quality products that consumers have enjoyed for decades.

SpringfieldWhite Round TopWheat Round TopHamburger BunsHot Dog BunsPremium Wheat Sandwich

RainboOld Fashioned WhiteWheat Round TopLarge White Round TopPremium White SandwichIron Kids Round TopHamburger BunsHot Dogs BunsSesame Hamburger Buns

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