S.E. Rykoff

Last updated
S.E. Rykoff & Co.
Company type Public company
Founded1911, 1950
Fate Merged with JP Foodservice 1997 to form US Foodservice. Operates today as US Foods.
HeadquartersRosemont IL
ProductsFood service, restaurant equipment & kitchen design

S.E. Rykoff & Co., also known as SERCO, was a broad line national wholesale grocer that serviced the restaurant, hotel and institutional trade from regional warehouses, sale forces and truck fleets located primarily on the west coast of the United States. S.E. Rykoff & Co. eventually became US Foods in 1997 by merging with JP Foodservice. The company traces its roots to a small family grocery store opened by Harry and Ida Rykoff in Los Angeles, California in 1911.

Contents

Early history

The Harry and Ida Rykoff Family moved from Sioux City, Iowa, to Los Angeles in 1910. The family opened a small grocery store near Union Station in downtown Los Angeles. They had nine children. In 1919, their son Saul returned from military service in World War I and rejoined his parents’ grocery store. Saul realized that selling food by the wagon load to large users was better business than selling to individuals. Saul proposed that the family focus on wholesaling. The company, S.E. Rykoff & Co., is named after Saul. Its slogan was "Home of the Gallon Goods", which referred to the foodservice industry #10 can size. Saul focused on distributing to restaurants and other institutional customers of canned goods and dry groceries in and around Los Angeles. S.E. Rykoff & Co. was incorporated in 1950. Saul E. Rykoff died April 26, 1967, and was survived by his wife Saragrace and three children Thomas, Stephen and Ruth Coleman. [1]

S.E. Rykoff & Co. New 1967 GMC Truck Fleet at the main Rykoff distribution center located on Terminal Street Los Angeles, California. Rykoff GMC Trucks 1963.jpg
S.E. Rykoff & Co. New 1967 GMC Truck Fleet at the main Rykoff distribution center located on Terminal Street Los Angeles, California.

S.E. Rykoff & Co. expansion

On June 15, 1967, Saul's son-in-law Roger Coleman was elected president and chief executive officer of S.E. Rykoff & Co. Coleman had been a board member of the company since 1960. [2] In 1969, Rykoff was generating about $900k in profits on sales of $54 million. Coleman believed that expanding Rykoff's distribution network, sales force and product offerings were the best way to increase value of the company. Rather than relying solely on internal expansion, Coleman initiated the strategy of acquiring small regional wholesale distributors in markets that Rykoff wanted to enter. Roger Coleman viewed it far easier to buy an establish wholesale grocery company in a new territory rather than build a sale force and distribution network from scratch. In 1969, Rykoff purchased S&W Fine Foods of San Francisco (later acquired by Del Monte Foods). [3] S&W had a strong distribution network in Northern California. [4]

To fund the acquisition and internal growth strategy and to satisfy the Rykoff family members looking for liquidity, S.E. Rykoff & Co. became a public company. In October 1972, S.E. Rykoff & Co. issued 400,000 shares at $25 par value in the over the counter market (NASDAQ). S.E. Rykoff & Co. was generating $1.9 million in profits with revenue of $75.9 million. [5] 200,000 shares were used to repay short-term debt and to augment working capital. The remaining 200,000 shares were sold by family members. [6]

With the new access to capital and less of the Rykoff Family involvement, S.E. Rykoff & Co. purchased Louis Enders a Brooklyn, New York based food product supplier that distributed in New York, New Jersey and Connecticut. In the Enders deal structure, S.E. Rykoff & Co. exchanged 130,000 share of company stock for ownership of Louis Enders business and operating assets. Louis Enders management was kept in place and S.E. Rykoff & Co. products were added. [7] In March 1973, S.E. Rykoff & Co. purchased the assets of Schuss Wholesale Grocery Company of Portland, Oregon. [8] In addition, S.E. Rykoff & Co. purchased the southern California and Arizona coffee distribution business of General Foods for an undisclosed amount. In 1974, S.E. Rykoff & Co. purchased Reliable Glassware & Equipment Co. of Los Angeles ($1.5 million in sales) for an undisclosed amount of cash. That same year, S.E. Rykoff & Co. purchased C.L. Chaban Co. ($2 million in sales) a San Francisco distributor of restaurant supplies and equipment.

Even though S.E. Rykoff & Co. was busy integrating these acquired companies into SERCO, Roger Coleman was focused on internal growth by expanding product lines and increasing the commission based Rykoff sales force. Between 1972 and 1974, S.E. Rykoff & Co. expanded the sales force from 250 to 300 salesmen. In 1974, S.E. Rykoff & Co. obtained the bulk of its sales (78%) from food items. It did not distribute meat, produce or dairy. Rykoff produced a very limited amount of its own products chiefly pancake syrups, barbecue sauces and mayonnaise at its downtown Los Angeles warehouse. The majority of its food products were canned and dried goods packed by other food companies. Rykoff distributed a very limited amount of frozen foods. About 14% of Rykoff's sales came from paper goods and chemicals. The remainder was from glassware and restaurant equipment. [9]

By 1975, S.E. Rykoff & Co. was generating $163 million in sales with $5.1 million in profits, had 1,220 employees with 930 in California. Rykoff distributed in California, Alaska, Hawaii, Nevada, Oregon and through the Louis Ender division on the east coast. [10] Under Roger W. Coleman, CEO leadership, S.E. Rykoff & Co. had tripled its revenue and increased profits by 500% in less than 10 years.

In April 1976, S.E. Rykoff & Co. announced plans to build a new 250,000-square-foot (23,000 m2) distribution center in the Bay Area of San Francisco with delivery in October 1977. The new distribution center replaced the 70,000-square-foot (6,500 m2) center that was acquired with the purchase of C.L. Chaban Co. in 1973. The new distribution center would provide much better service to Rykoff’s customers in the Bay Area, northern and central California. [11]

In September 1977, S.E. Rykoff & Co. purchased the business and assets of Food Service and Design Corp. of Boston for an undisclosed sum. Roger W. Coleman’s vision was to expand Rykoff’s foodservice equipment sales on the east coast by providing kitchen and restaurant design. Foodservice equipment such as dish washers, ranges, ovens, mixers etc. have much higher margins than wholesale groceries. In addition, Rykoff’s equipment customers tended to purchase their groceries for Rykoff. [12]

In 1979, S.E. Rykoff & Co. decided to close the metropolitan New York Division. Rykoff originally expanded into the New York market by purchasing the Louis Ender food company. The distance between Los Angeles and New York proved too much from a management stand point. The division had lost money between 1976 and 1978. A strike in early 1979 by the Teamsters would result in continued losses, the result was S.E. Rykoff & Co. decided to close the operations. [13]

By 1981, the entire US foodservice industry was $51 billion and the largest foodservice distributor only had 3% of the market. S.E. Rykoff & Co. was the largest foodservice distributor on the west coast. The company was generating $315 million in sales and had over 500 salesmen working on 40% commission. 65% of Rykoff’s sales were from house brands and 35% from nonfood items like glassware, cooking equipment and restaurant supplies. At this time, Roger W. Coleman, CEO was on recorded saying that he believed that the wholesale food industry would not consolidate and no company would dominate nationally, largely because of great regional differences. [14]

S.E. Rykoff & Co. purchase John Sexton & Co.

New combined Rykoff-Sexton company logo 1983. Rykoff sexton logo small.jpg
New combined Rykoff-Sexton company logo 1983.

Roger W. Coleman approached Beatrice Foods with an offer to purchase John Sexton & Co. in 1982. Beatrice had purchase Sexton in 1968 for $37.5 million and had operated it as an independent company. In 1982, Sexton had revenue of $380 million with net income of $12 million compared to Rykoff's $346 million with net income of $4.5 million. Coleman saw an opportunity to gain an outstanding brand name, extensive product line, national distribution network, manufacturing division and a highly regarded sales force at a very attractive price. S.E. Rykoff & Co. bought John Sexton & Co. in 1983 $84 million from Beatrice Foods. At the time, it was the largest food service acquisition. Coleman realized that the S.E. Rykoff & Co. Brand was only known on the west coast where the Sexton Brand was known nationwide by institutional food customers. John Sexton & Co. had been distributing nationwide since 1897 and was well known as providing quality foods, reliable service and privately manufactured food items. Coleman convinced the S.E. Rykoff & Co. board of directors to rename the company Rykoff-Sexton. By 1986, Rykoff-Sexton took fourth place among foodservice distributors with $800 million in sales. [15] [16]

CEO Roger W. Coleman retires

Roger W. Coleman, Rykoff-Sexton Inc. CEO 1989 Roger W. Coleman 1989.jpg
Roger W. Coleman, Rykoff-Sexton Inc. CEO 1989

In December 1992, Roger W. Coleman retired after 42 years with S.E. Rykoff & Co., 25 years as CEO. Coleman led S.E. Rykoff & Co. from a family-owned west coast regional wholesaler grocer to a national wholesale grocer with over $1 billion in annual revenue. Coleman's vision of buying regional wholesale grocers and integrating them under one banner would be repeated in the mid-1990s by other wholesale grocery executives. Rykoff-Sexton board member and executive vice president, Mark Van Stekelenburg, 41 years old, succeeded the 63-year-old Mr. Coleman. Mr. Van Stekelenburg joined Rykoff-Sexton in March 1990, and previously headed a unit of Royal Ahold NV, a food service distributor in the Netherlands. [17] The company headquarters was moved to Lisle, IL.

Rykoff-Sexton pursues acquisitions

In 1996, under the leadership of Mark Van Stekelenburg, Rykoff-Sexton Inc. bought Continental Foods of Baltimore, MD, H&O Foods of Las Vegas, NV, and US Foodservice of Wilkes-Barre, PA . Rykoff-Sexton Inc. was now operating a national foodservice distribution division (d.b.a. "US Foodservice" with the businesses and assets of Sexton Foods, S.E. Rykoff & Co. and US Foodservice), a private label manufacturing division (Sexton Foods ), a foodservice contract and design division (Finegolds), and a foodservice equipment and supply division (S.E. Rykoff & Co.).

In 1997, Rykoff-Sexton (RYK) was generating $3.2 billion in annual sales and was in the process of re-branding all products to the US Foodservice brand by dropping the Rykoff-Sexton, S.E. Rykoff & Co. and John Sexton & Co. brands. It was determined that a standardized and easily recognizable brand would reflect a nationwide presence and distribution capabilities to better compete in the rapidly consolidating foodservice market. Ryoff-Sexton realized that it had to grow revenue and distribution presence or be squeezed out by Sysco the largest foodservice distributor in the United States with $14.45 billion in sales for fiscal 1997. During this time, the company headquarters were moved to Wilkes-Barre, PA from Lisle, IL.

Rykoff-Sexton Merges with JP Foodservice

In July 1997, JP Foodservice ($1.7 billion in revenue) and Rykoff-Sexton ($3.2 billion in revenue) reached an agreement to merge in order to create a larger single brand to better compete in a rapidly consolidating industry. JP Foodservice (JPF) exchanged $680 million in company JPF stock for all outstanding Rykoff-Sexton shares and the assumption of $700 million in Rykoff-Sexton debt (total deal value of $1.38 billion) . All individual brands were dropped in favor of the US Foodservice brand. The merger created a larger national foodservice company with $5 billion annual sales (1997).

The Rykoff-Sexton brand remains the lead brand for a number of US Foods product lines, notably their coffee catalog. The brand usually appears without a hyphen. [18]

US Foodservice purchased by Ahold

In 2000, US Foodservice was bought by Ahold for $3.6 billion in cash.

Ahold sells US Foodservice to KKR

In 2007, Ahold sells all US Foodservice assets to private equity firm KKR.

KKR operates US Foodservice as one its profolio companies with the most likely eventual plan to "cash out" US Foodservice by issuing shares on the New York Stock Exchange and paying off the acquisition debt.

Related Research Articles

<span class="mw-page-title-main">Save-A-Lot</span> American retail and grocery company

Save A Lot Food Stores Ltd. is an American discount supermarket chain store headquartered in St. Ann, Missouri, in Greater St. Louis. It has about 900 independently owned and operated stores across 32 states in the United States with over $4 billion in annual sales.

BWG Foods UC is an Irish wholesaler and retail grocery franchise operator.

SuperValu, Inc., was an American wholesaler and retailer of grocery products. The company, formerly headquartered in the Minneapolis suburb of Eden Prairie, Minnesota, had been in business since 1926. It is a wholly owned subsidiary of United Natural Foods (UNFI).

The Nash Finch Company was a Fortune 500 company based in Edina, Minnesota, United States. The company was involved in food distribution to private companies, primarily independent supermarkets, and military commissaries; and the operation of retail stores.

Beatrice Foods Company was a major American food conglomerate founded in 1894. One of the best-known food processing companies in the U.S., Beatrice owned many well-known brands such as Tropicana, Krispy Kreme, Jolly Rancher, Orville Redenbacher's, Swiss Miss, Peter Pan, Avis, Milk Duds, Samsonite, Playtex, La Choy and Dannon.

<span class="mw-page-title-main">Sysco</span> American distribution company

Sysco Corporation is an American multinational corporation involved in marketing and distributing food products, smallwares, kitchen equipment and tabletop items to restaurants, healthcare and educational facilities, hospitality businesses like hotels and inns, and wholesale to other companies that provide foodservice. The company is headquartered in the Energy Corridor district of Houston, Texas. Sysco is the world's largest broadline food distributor; it has more than 600,000 clients in a wide array of fields. Management consulting is also an integral part of their services. The company operates approximately 330 distribution facilities worldwide; providing service to over 90 countries.

A food service distributor is a company that provides food and non-food products to restaurants, cafeterias, industrial caterers, hospitals, schools/colleges/universities, nursing homes, and anywhere food is served away from the home.

<span class="mw-page-title-main">Kraft Foods Inc.</span> Defunct American food and beverage company

Kraft Foods Inc. was a multinational confectionery, food and beverage conglomerate. It marketed many brands in more than 170 countries. Twelve of its brands annually earned more than $1 billion worldwide: Cadbury, Jacobs, Kraft, LU, Maxwell House, Milka, Nabisco, Oreo, Oscar Mayer, Philadelphia, Trident, and Tang. Forty of its brands were at least a century old.

<span class="mw-page-title-main">Essendant</span> American office supply distributor

Essendant, formerly known as United Stationers, is a national wholesale distributor of office supplies, with consolidated net sales of $5.3 billion. Essendant stocks over 160,000 items, including traditional office products, office furniture, janitorial and break room supplies, and technology products. Essendant is headquartered in Deerfield, Illinois, and also has operations in Dubai, United Arab Emirates (UAE).

<span class="mw-page-title-main">McLane Company</span> American wholesale supply chain services company

McLane is an American wholesale supply chain services company that distributes products to convenience stores, discount retailers, wholesale clubs, drug stores, military bases, fast-food restaurants, and casual dining restaurants throughout the United States. It is also a wholesale distributor of distilled beverages in some parts of the country.

<span class="mw-page-title-main">Bob's Red Mill</span> Brand of whole-grain foods

Bob's Red Mill is an American brand of whole-grain food marketed by employee-owned American company Bob's Red Mill Natural Foods of Milwaukie, Oregon. The company was established in 1978 by Bob and Charlee Moore.

<span class="mw-page-title-main">Smart & Final</span> Chain of warehouse-style food and supply stores

Smart & Final is a chain of warehouse-style food and supply stores based in Commerce, California, which developed through a series of mergers and expansions. The oldest of the combined companies, Hellman-Haas Grocery, was founded in 1871 in Los Angeles. The company operates over 250 stores in the Western United States and 15 in northwestern Mexico.

<span class="mw-page-title-main">Sexton Foods</span> Former wholesale grocer

John Sexton & Company, also known as Sexton Quality Foods, was a broad line national wholesale grocer that serviced the restaurant, hotel and institutional trade from regional warehouses and truck fleets located in major metropolitan areas of the United States. Sexton Quality Foods eventually became US Foodservice in 1997. The company was established in Chicago in 1883 by John Sexton.

Alex Lee, Inc. is an American holding company headquartered in Hickory, North Carolina, United States. Alex Lee is ranked 139 on the list of largest privately held companies in the United States, as listed by Forbes. Alex Lee owns the Lowes Foods supermarket chain as well as Merchants Distributors, Inc., which supplies more than 600 stores located in nine states, mostly in the Southeast.

<span class="mw-page-title-main">Fred's Frozen Foods</span>

Fred's Frozen Foods and Fred's for Starters are frozen food brands that trace their origin to Fred Luker who first started manufacturing frozen meat and vegetable products in Noblesville, Indiana in 1947. As of 2002, both brands are operated by Windsor Quality Food Company, LTD, which is ultimately owned by the Hojel and Meinig families through their holding company HM International based in Tulsa, Oklahoma.

<span class="mw-page-title-main">CFS Continental</span> Wholesale food distributor

CFS Continental, Inc. was a wholesale food distributor started in 1915 by Jacob Cohn in Chicago as the Continental Coffee Company. It is now part of Sysco.

<span class="mw-page-title-main">US Foods</span> American foodservice distributor

US Foods Holding Corp. is an American food service distributor founded in 1989. With approximately $24 billion in annual revenue, US Foods was the 10th largest private company in the US up until its IPO. Many of the entities that make up US Foods were founded in the 19th century, including one that sold provisions to travelers heading west during the 1850s gold rush. US Foods offers more than 350,000 national brand products and its own "exclusive brand" items, ranging from fresh meats and produce to prepackaged and frozen foods. The company employs approximately 25,200 people in more than 60 locations nationwide and provides food and related products to more than 250,000 customers, including independent and multi-unit restaurants, healthcare and hospitality entities, government and educational institutions. The company is headquartered in Rosemont, Illinois, and is a publicly traded company trading under the ticker symbol USFD on the New York Stock Exchange.

<span class="mw-page-title-main">Red and White Brand</span> First store brand for grocery merchandise

Red & White was the first store brand for grocery merchandise, food products, beverages and household supplies. The brand was first launched on cans of coffee in 1908 by Smith Michael (S.M.) Flickinger in Buffalo, New York to compete with A&P and its popular private brand coffee and was named after the color on the store shelves.

Labatt Food Service is a third generation family owned food service distributor involved in marketing and distributing food products to regional chain restaurants, independent operators, schools, quick service chains, healthcare facilities and military bases. Labatt delivers to Food away from home customers in five states in the southern United States. The company is headquartered in San Antonio, Texas.

<span class="mw-page-title-main">Durkee (food brand)</span> Spices and seasonings brand

Durkee is an American brand of spices, marinades, and powdered sauce mixes owned by B&G Foods. Durkee Famous Foods was established by Eugene R. Durkee in 1851.

References

  1. ↑ Obituary 4 -- No Title The Los Angeles Times, Apr 26, 1967. Retrieved 28 August 2010.
  2. ↑ Business & People pg. C15 The Los Angeles Times, June 15, 1967. Retrieved 28 August 2010.
  3. ↑ "History - S & W".
  4. ↑ Food Division Sale pg. d19The Los Angeles Times, Jan 30, 1969. Retrieved 28 August 2010.
  5. ↑ S.E. Rykoff & Co. Display Ad The Los Angeles Times, Oct 6, 1972. Retrieved 28 August 2010.
  6. ↑ Rykoff Registers Common pg 17 "Wall Street Journal", Jul 17, 1972;Retrieved 28 August 2010.
  7. ↑ S.E. Rykoff Shares Are Sold pg 21 "Wall Street Journal", Oct 6, 1972; Retrieved 28 August 2010.
  8. ↑ S.E. Rykoff & Co. The Los Angeles Times, Mar 7, 1973. Retrieved 28 August 2010.
  9. ↑ Acquisitions, Expanding Lines Enhance Outlook for S.E. Rykoff MITCHELL GORDON Barron's National Business and Financial Weekly Jul 1, 1974; 54, 26; Retrieved 28 August 2010.
  10. ↑ The Times Roster of California's 100 Top Industrials Pg. H2 The Los Angeles Times, May 16, 1976. Retrieved 28 August 2010.
  11. ↑ Rykoff Gets New Bay Area Center The Los Angeles Times, Apr 11, 1976. Retrieved 28 August 2010.
  12. ↑ Industry Notes pg. G9 The Los Angeles Times, Sep 4, 1977. Retrieved 28 August 2010.
  13. ↑ Rykoff closed its money-losing metropolitan New York division. The Los Angeles Times, Mar 5, 1979. Retrieved 28 August 2010.
  14. ↑ Family Company, Family Industry Harris, William. Forbes. New York: Sep 28, 1981. Vol. 128, Iss. 7; pg. 72, 1 pgs Retrieved 28 August 2010.
  15. ↑ S. E. Rykoff Agrees to Purchase Beatrice Unit NANCY YOSHIHARA Los Angeles Times: Sep 28, 1983 pg. E1 Retrieved 28 August 2010.
  16. ↑ "Beatrice to Sell John Sexton Unit", The New York Times, September 28, 1983. Retrieved 16 December 2008.
  17. ↑ Rykoff-Sexton's Chief Retires Wall Street Journal. (Eastern edition). New York, N.Y.: Dec 8, 1992. pg. B8 Retrieved 28 August 2010.
  18. ↑ https://coffeeroast.com/roaster/rykoff-sexton
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.