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Private label boasts both quantity, quality

Exec: Flavors, trends ‘forever changing’

From staff reports

The plan was simple – introduce a line of canned tomatoes under the name “Iris,” with packaging to emphasize the high-quality contents.

But in doing so, Haas, Baruch & Co. – a predecessor of Commerce, Californiabased Smart & Final – created what is likely one of the earliest, if not the earliest, private label brands in the U.S. Sales of the retailer reached $2 million by 1895 – a huge sum at the time.

This occurred 24 years after the founding of the company, which in 2021 is celebrating its 150th anniversary. Following a merger in 1953, Iris would soon become synonymous with what has evolved into today’s Smart & Final. In fact, the company still uses the brand name.

As recently as the 1990s, most of the chain’s private label items were still under the legacy Iris brand. Today, however, Iris is found on only select household items like paper products and health and beauty care items. Yet, it still holds a special place in the Smart & Final history.

“We believe we introduced what is actually the first private label brand in the U.S.,” said Smart & Final CEO Dave Hirz.

Shoppers today can find other varieties of Smart & Final’s private label under the names of First Street, Sun Harvest and Simply Value. Let’s take a look at each.

First Street

Smart & Final’s current flagship brand, First Street includes a wide selection of products that range from

grocery, frozen and dairy to packaging and cleaning items. The products, which come in both traditional and club-sized offerings, aim to meet the needs of families and businesses. Michelle Narain, Vice President - Private Label, estimates that nearly 90 percent of the company’s entire private label sales come from First Street.

Sun Harvest

Sun Harvest offers a wide selection of natural, organic and earth-friendly products for environmental- and health-conscious customers.

The items are free of artificial colors, flavors, preservatives, added hormones or antibiotics, high fructose corn syrup, and hydrogenated oils.

Sun Harvest Organic products are certified organic and meet USDA standards. They also are made without chemicals harmful to the environment.

They can be found in grocery, produce, meat, dairy, paper, cleaning products and packaging.

Simply Value

The Simply Value label aims to deliver savings with a variety of trustworthy products at budget-minded prices.

The name can be found on canned goods, cleaning Please see page 38

From page 36 supplies and paper products, as well as frozen and deli selections. Customers can fill their pantries with Simply Value without emptying their wallets.

Today, for every dollar a business customer spends with Smart & Final, over 40 cents of it are spent on private label. “Which is really, really high,” Hirz said. “Customers love our private label. It’s been an important part of our assortment and an important part of the success of the company.”

According to Michelle Narain, who helped bolster the private label sector when she came on board in 2018, the company focuses a lot on quality. “We’ve expanded our quality assurance team to ensure that before we take on any supplier, we are testing the product and verifying that it’s up to our specifications and that it’s exactly what we want,” she said.

Smart & Final also has invested in a “specification system,” where it can house all of the private label quality guidelines for suppliers to meet.

This allows for constant communication with vendors and suppliers. “Our team is constantly going to the shelf, pulling items off and opening them to make sure they’re meeting our expectations,” Narain said. “We take every single customer complaint seriously.”

Hirz said the private label offerings have really resonated with consumers, in particular since Narain came on board. In fact, he regularly sees the products while out in the community at places such as county fairs, chili cookoffs, Little League snack shacks, and they make regular appearances on TV shows, as many studios shop the two Burbank stores.

“Across the markets in which we operate you’ll see our private label everywhere,” Hirz said. “From tattoo parlors to office buildings and everything in between, Smart & Final is there to supply them.”

Narain noted that “it’s an exciting time for private label as the possibilities seem endless.”

“I think anyone you speak to in the industry would say that when it comes to private label, there is no ceiling,” she said. “There are so many great items that we could bring to our customers… flavors and trends are forever changing.”

Goal has always been ‘giving back to the communities we serve’

Foundation fond of nonprofits that don’t always get support from other sources

From staff reports

Smart & Final has established a reputation as a reliable grocer for businesses and households. However, for decades the Commerce, California-based company also has strived to make a community impact far beyond the checkout lines.

In 2001, The Smart & Final Disaster Relief Fund was established to give back, improve the quality of life and nourish the communities Smart & Final serves throughout California, Nevada and Arizona. Years later, the fund was renamed the Smart & Final Charitable Foundation to better reflect its broader areas of focus. In addition to disaster relief, the Foundation supports four other pillars of focus: health and wellness, education, hunger relief and team sports and youth development. In 2020, the Charitable Foundation raised almost $2 million to support nearly 1,500 causes. “Our goal is to give back to the communities we serve,” said Tinamarie Squieri who manages the Charitable Foundation. “We want to work with nonprofits that don’t always get funding from other sources.”

Some of the organizations they support include recreational sports leagues, schools, and Boys & Girls clubs in addition to local food banks and homeless and at-risk youth projects such as Olive Crest. Smart & Final holds multiple annual fundraisers in stores for its community partners with varying community service missions.

As an example, Squieri shared how the Smart & Final Charitable Foundation assisted a Little League after its snack shack had been broken into and vandalized.

“The Charitable Foundation provided cash funding, as well as products for the snack shack to get back open and running,” Squieri said. “We worked with our vendors to even replace some of the machines for free.”

Customers can always find a donation canister at any Smart & Final store. “Many of our generous associates contribute to the foundation through a volunteer payroll deduction,” Squieri added.

Please see page 44

From page 42

The company also holds an annual golf tournament to solicit vendor support of the Foundation. Other fundraising efforts include candy sales with products from leading manufacturers.

Smart & Final’s community partners include:

￭ Feeding America – Supports hunger relief efforts throughout communities with edible but unsold food that is donated to one of the 15 Feeding America member food banks. ￭ City of Hope – A leading research and treatment center for cancer, diabetes and other life-threatening diseases. Smart & Final hosts the annual Kids 4 Hope in-store fundraising campaign. ￭ Caterina’s Club – Fights food insecurity and homelessness in Southern California.

Smart & Final associates assist in collecting and packaging product, as well as transporting it to the organization.

Please see page 46

From page 44 ￭ Olive Crest – Works to meet the individual needs of kids in crisis by providing safe homes, counseling, and education for both youth and parents.

Among the foundation’s recent accomplishments:

￭ A partnership with Olive Crest, through which in 2020 Smart & Final was able to raise more than $577,000 over a two-week period. ￭ A $500,000 donation to City of Hope. ￭ Three million pounds of food donated to Feeding America in 2020. ￭ $151,000 raised during the KFI PastaThon to benefit Caterina’s Club. ￭ $10,000 donated to Dress for Success, a nonprofit that works to enable women to successfully transition into the workforce, build thriving careers and succeed professionally and personally.

￭ In response to the

COVID-19 pandemic,

Smart & Final donated about $300,000 in food and monetary donations and gift cards, as well as 260,000 bags of food for food pantries to distribute in communities. across

California, Nevada and Arizona .￭ Supporting local fire and police stations and veteran organizations.

150 years of quality, value and convenience within grocery industry

Known as Smart & Final today, L.A. area company began in 1871

Smart & Final’s story covers an eventful 150 years. Predating what has become the standard of grocery retailing today, the popular West Coast chain evolved through acquisitions, innovations and other significant business changes over a century and a half of meeting the expectations of household and business shoppers.

The story begins in Los Angeles in 1871 with Herman Hellman, Jacob Haas and Bernard Cohn opening Hellman-Haas Grocery Co., which sold daily necessities like flour, brown sugar, salt, patent medicines, rope, sheepherding supplies, chewing tobacco and gunpowder.

By the turn of the century, the sole owners of Hellman-Haas were Abraham Haas (brother of Jacob Haas) and Jacob Baruch, who bought

Herman Hellman Abraham Haas Please see page 50

From page 48 out Herman Hellman, Jacob Haas and Bernard Cohn. The company name was changed to Haas, Baruch & Co. in 1889.

By 1900, Haas, Baruch & Co. was a flourishing, wholesale grocer. Over the next two decades, a chain of events – including construction of the Los Angeles Aqueduct, the discovery of oil in nearby Long Beach and the opening of the Panama Canal – pushed the area’s population to nearly 1 million.

Haas, Baruch & Co. proved its vitality after recording sales of $2 million in 1895 and began to establish itself as Los Angeles’ preeminent wholesale grocer. They also introduced its high-quality private label brand known as Iris.

Hellman Haas Associates 1890s J.S. “Jim” Smart and H.D. “Hildane” Final

Meanwhile, J.S. “Jim” Smart, a banker from Saginaw, Michigan, purchased the Santa Ana Wholesale Grocery Co., which supplied feed and grain to local farmers. Smart partnered with H.D. “Hildane” Final, and the company was renamed Smart & Final Wholesale Grocers. The business Please see page 52

From page 50 relocated near the docks in San Pedro, and by 1919 its annual sales had surged to $10 million.

The grocery industry was changing. As retail grocers gained strength, many were negotiating discounts directly with manufacturers, avoiding wholesalers altogether. Competition turned brutal. Of the city’s 16 wholesale grocers in 1920, just seven remained a decade later.

Smart & Final survived by introducing the concept of “cash and carry,” today’s way of self-serve shopping. Before that, grocery stores required a clerk to collect goods for the customers.

Smart & Final’s novel cash and carry store debuted in Long Beach in 1923, as the company had determined that opening grocery locations near customers’ businesses would spare them the time and trouble trekking to a remote warehouse.

In 1953, Smart & Final Wholesale Grocers merged with Haas, Baruch & Co. The combined company kept the name Smart & Final and relocated to Vernon, Calif., which at the time was the preferred distribution location for several wholesale and retail companies.

The Thriftimart supermarket chain bought Smart & Final in 1955, under which the private label Iris brand expanded to include hundreds of frozen food products, paper, and canned goods, as well as janitorial supplies.

In the early 1980s, Thriftimart Inc. changed its name to Smart & Final Iris Corp. and in 1988 was acquired by Casino USA, the American subsidiary of Casino Groupe. Shortly thereafter, the Thriftimart stores were liquidated to shift the company’s resources to modernizing the chain, expanding store sizes and customer convenience, and offering a product assortment adapted to market needs. Please see page 54

William and Gertrude Final, H.D. Final’s children. From page 52

During this decade, Smart & Final was expanding into Arizona and Nevada, and continued to increase its presence in California, growing to 140 stores in 20 counties by 1995.

The company made its first venture outside of the U.S. in 1993, opening stores in Mexico through a joint partnership. Five years later, Smart & Final acquired United Grocers’ Cash & Carry chain in 1998, expanding its West Coast operations from Northern

Mexico to the Canadian border.

That same year, Smart & Final acquired some of the assets of United Grocers Inc., an Oregon-based company. This included their cash and carry store chain (later called Smart Foodservice Warehouse Stores). In 2020, Smart Foodservice Warehouse Stores was sold to US Foods.

In May 2007, Smart & Final was acquired by funds managed by affiliates of Apollo Management, which led to the company entering a new niche of food retailing. It purchased 27 Southern California Henry’s Farmers Market stores and eight Texas Sun Harvest stores.

The following year, Smart & Final debuted the Smart & Final Extra! format, with larger store footprints and an expanded merchandise selection.

After opening eight Smart & Final Extra! stores in 2008, 10 years of significant growth followed. This was facilitated by the acquisition of a dedicated perishables warehouse and Please see page 56

From page 54 further supported by continued investments in distribution capabilities and in-store merchandising.

In early 2011, Smart & Final sold the Henry’s Farmers Market and Sun Harvest stores to Sprouts Farmers Markets. Smart & Final was then acquired by Ares Management LP, a private equity firm, in 2012.

Two years later, Smart & Final marked another historic moment with an initial public offering of 13,450,000 shares. That same year, the company celebrated its 200th store in Long Beach, Calif., the city where it had opened its first location under the Smart & Final name.

In 2016, Smart & Final Extra! store expansion continued with the acquisition of 33 former Haggen store leases in California, which reopened as Smart & Final Extra! stores.

In 2018, the company celebrated the opening of its 200th Extra! format store, again located in Long Beach, where the original banner store was opened.

The following year Smart & Final Stores Inc. was privatized through an acquisition by funds managed by affiliates of Apollo Global Management LLC, a leading global alternative investment manager.

Today, Smart & Final continues to accelerate its growth by introducing pick-up and delivery options and opening new stores to provide customers quality, value and convenience..