Behind every food and beverage on the market today is a major corporation that takes the time and effort to provide quality products to customers.
And behind many of those corporations are minority-owned businesses that take the time and effort to supply quality goods and services. As a result of their commitment to excellence, these minority business enterprises have succeeded as vendors to the consumable goods industry.
Although they supply different products and services, these minority companies shared one thing in common in getting to the top: a lot of patience and perseverance.
"It didn't happen for us overnight, but it did happen," said George H. Hill, whose company, Adhesive Systems Inc., supplies 90 percent of the hot-melt adhesive packaging for Procter & Gamble. Hill made initial contact with P&G in 1983 at a trade fair and began working with them on small contracts in 1986.
Most of the MBEs made contact with corporate food and beverage manufacturers much like Hill did — through trade fairs and conferences. For John Aguilar, chairman and CEO of the trucking company John Aguilar & Co. Inc., the entrée into the industry took a somewhat different path. A client referred Pepsi-Cola to Aguilar, and the company contacted him in 1988 — with a "once-in-a-lifetime call," as he put it — to haul liquid fructose to Pepsi-Cola bottling plants.
"Pepsi buys a lot of sugar from different sources," Aguilar explained. "There were maybe three to four different suppliers providing plants with different sweeteners, meaning different trucking companies. They wanted to add some continuity and quality control over the whole operation."
These days, Aguilar handles nine bottling plants in California with his fleet of 25 trucks.
Chief Adhesives also supplies Pepsi-Cola plants; Chief is one of two suppliers of packaging glue to Pepsi nationwide. Unlike Aguilar, Chief Adhesives met a Pepsi contact at a trade fair. According to company President Leonard Goode, the foot-in-the-door break came when Pepsi-Cola gave Chief Adhesives a small bottling line in Mesquite, Texas to handle.
"They watched us for a year," said Goode. "Then we received additional opportunities within regional bottling units, then moved onto the national level."
Wolf Packaging also initiated contact with their fast-food client, Wendy's, at a trade fair. According to Robert Ontiveros, Wolf's chairman, it took a couple of years of frequent calls and visits before Wendy's offered the MBE a small contract. Today Wolf is the exclusive supplier of paper wrappers to Wendy's. "After we proved ourselves, they expanded on the contract," Ontiveros said.
Although these MBEs met their clients in different ways, they all found that success with one food and beverage company has opened more doors.
"Pepsi-Cola gave us legitimacy," Aguilar said. "It showed we could do business for the big guys, meet their requirements and do everything they want."
"Pepsi is known for their quality." Goode said in agreement. "Once you tell prospects you're one of two suppliers for the company, you've achieved a quality commitment level other people are interested in. People recognize that if we're supplying Pepsi, we have to be doing something right."
And if you do a good job for one corporation, added Hill, "they're unafraid to source you," he said.
Although the food and beverage industry has provided success for these MBEs, all acknowledge it's an extremely difficult area to crack.
Two problems Ontiveros noted are volume and competition. "The volumes required are so high and tend to be the property of big companies like Reynolds Wrap and James River," he said. "There's not a lot of room for smaller minority-owned businesses."
Another challenge is that the industry is very high-profile, meaning a mistake can be costly. "If you're selling something to [the industry] that doesn't work," Goode said, "the potential backlash could be devastating. A recall is the last thing any of these companies wants to have."
And, Hill added, a supplier had better be prepared to go above and beyond in the area of quality. "If we don't provide [P&G] the right product at the right place and the right time, and support their manufacturing process the way we should, things don't go well for either side," he said.
As a result, these successful MBEs recommend that minority business owners aspiring to do business with food and beverage manufacturers should attempt to break in through second-tier procurement systems and other minority firms.
Hill added that he'd like to see more minority firms partnering with major corporations, rather than trying to succeed alone against billion-dollar behemoths that have been servicing the industry for years. If a billion-dollar company sponsors an MBE, he said, "that company doesn't have to develop its own technology, manufacturing process or have access to a line of products. It's all there. There's clearly a value for minority companies to compete through partnerships."
Goode suggested that if an MBE is determined to work through the main company, the owner should find an MBE coordinator who is willing to listen and provide opportunities to show what the company can do.
Above all, say the experts, be patient. It can take years for success to happen in this industry.
Although the food and beverage industry requires diligence, appropriate financial backing and exceptionally high quality products and services, the minority-owned businesses who have found their niches within the corporations have done quite well.
"Being [with Wendy's] has helped us in so many ways, Ontiveros said. "It's helped our volume grow [and] given us the ability to buy more equipment and to expand our business.
