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SONS KEEP ORVAL KENT IN THE GREEN

The Kent brothers liked their company so much they bought it back.

Richard and J. Vincent Kent, sons of the late Orval Kent, founder of the salad company bearing his name, had sold Orval Kent Food Co. Inc. to Kane-Miller Corp. in 1980. But through a $20 million leveraged buyout last year, they got it back, along with its largest competitor, Delsaco Foods Corp., of East Rutherford, N.J.

Last year, Orval Kent sales were $100 million. With the acquisition of Delsaco, the Kents became the largest fresh salad supplier in the country, with an estimated 25 percent share of the $400 million market. The Kents say sales will hit $130 million next year.

The firm had risen quickly from its simple beginnings in 1952, when family members would help Orval Kent haul goods by huge hand-drawn elevators at the plant at Damen Avenue and Iowa Street.

The brothers joined the company after college in the sixties and brought a discipline with them the operation had lacked, building the business from $500,000 in sales in 1968 to an $11-million-a-year firm by 1980.

”We didn`t pay the vendors promptly. So they would charge us more, and we would have to charge customers more. Richard (Kent) established payment terms with the vendors. With a chemical engineering background in school, he brought that discipline with him to run the inside,” said Vincent Kent, 43, the firm`s vice president of sales and marketing.

The firm prospered through the seventies, until it became too big for its Chicago operations. In 1980, the Kents built a modern plant at 120 W. Palatine Rd. in Wheeling, but the financing and construction costs of such a plant, with the special equipment needed to process salads, proved to be

indigestible.

The Kents` success had led to the debt that led to the sale to Kane-Miller.

”Because it cost twice as much (as another food plant would have), and because of the expensive financing, it became prudent to sell,” Richard Kent said.

”A number of companies were after us, but we sold to Kane-Miller,” he said. ”It`s a fine company, and they let us run this operation with a free hand.” The brothers stayed in their positions after the sale. For the next three years, the company grew by leaps and bounds, helped by an infusion of capital by Kane-Miller, the Tarrytown, N.Y.-based conglomerate. Sales jumped to $50 million.

However, in February, 1984, Kane-Miller`s management put together a leveraged buyout for that firm. Shortly thereafter, the Kent brothers did the same, buying back the company bearing their father`s name. At the same time, they bought Delsaco, the largest salad processing company in the country.

”They (Delsaco) had marginal products and brand names. They (Kane-Miller) didn`t have the ability to develop Delsaco, and Orval Kent did. We convinced them it would be best for all,” said Richard Kent.

Kane-Miller didn`t sell Orval Kent because it didn`t like the company. In fact, Kane-Miller retained an interest in Kent, according to Harold Oelbaum, Kane-Miller executive vice president.

”We sold with a great deal of reluctance. With the realization that Richard is far and away the key to the salad operation, the only way to get him to agree to stay was to sell it and continue to have an interest in it. We wanted Richard to take over the entire salad operation,” Oelbaum said.

With the Delsaco acquisition, Kent doubled its sales and added East Coast distribution. Distribution is a key to Kent`s success. Besides its Wheeling and New Jersey plants, Kent has a distribution center in Los Angeles.

The brothers estimate that 75 percent of American supermarkets carry some line of Kent products. Consumers gobble up Kent salads all over the country

–from supermarkets and in restaurants and hotels–but few know that those salads are not being prepared in the kitchen by a silver-haired woman in a hairnet.

”The restaurants don`t advertise that their products are made elsewhere,” Richard Kent said.

In recent years, ”upscale” consumers have been buying the firm`s Signature Salads at the delicatessen counter. They, too, probably assume that the salads are prepared in the supermarkets` kitchens.

Part of Kent`s recent success can be traced to Signature Salads, according to Buck Jones, a veteran of 20 years in specialty foods at several supermarket chains and owner of Jonesco, a Cedar Knolls, N.J.-based specialty foods consulting firm.

”They developed the attractive porcelain crocks, special spoons and signing–very classy. They were the first to realize it had to look good besides being good. A customer looks at the traditional stainless steel trays (in a supermarket deli) and then at the attractive Signature Salads, with their upscale image,” Jones said.

Besides Signature Salads, the Kents have introduced Orval Kent brand salads in packages containing two 3 1/2-ounce portions. Supermarkets now sell the ham, chicken, crabmeat, tuna and pimento spread salads that the Kents say are ideal for spreading on a bagel, croissant or even something as mundane as bread.

”Retail is not our expertise, and this consumes a lot of money with TV advertising. But no one else has single portions. We`re going to create our own niche. People are tired of eating bologna for lunch,” Vincent Kent said. Last year, the Kents launched a national advertising campaign in trade magazines to boost Signature Salads.

”We plan to triple or quadruple our advertising in 1986. Without mentioning Orval Kent, we will position Signature Salads as a standard of excellence. In effect, we will create a brand name, which nobody else has been able to do,” Vincent Kent said.

Signature Salads can be found in 5,000 of the 15,000 delis across the country.

”Our penetration gives us a tremendous opportunity. As we invent products, we have the marketplace to plug them right in,” Richard Kent said. Another recent innovation from the Kents is a Salad `N Sandwich program for the deli sections, using primarily Signature Salads.

”Every deli makes some kind of sandwich. We`d like to take away some of the business from McDonald`s and Burger King. We have a complete book on how to get into the sandwich business. No one else is doing this . . . the potential is multibillion dollar,” Richard Kent predicted.

As the business has prospered and grown, so has the likelihood of the firm going public, Richard Kent says.

”It could be as early as next year. We`ve explored the issue, but no decision has been reached.” He added that he would not rule out a merger, provided Kent wound up controlling the merged firm.