November 17, 2024
Business

Troubled baking firm reducing deliveries

JONESPORT – Local residents who make a habit of buying J.J. Nissen hot dog buns or Hostess snacks at the neighborhood IGA supermarket now have to travel farther to buy the same products.

Interstate Bakeries Corp., the financially troubled national company that makes these and other brands, no longer delivers to the store.

“It happened just about a week ago,” Millard Alley, manager of Jonesport IGA Supermarket, said Tuesday. “They just told me they wouldn’t be coming anymore. I think it’s just a matter of time before they haul out of the whole state.”

This development in Jonesport, and concerns about IBC’s viability in Maine, come on the heels of a company announcement in early June that it was cutting 150 of the 660 jobs at its J.J. Nissen plant in Biddeford. In May, the bankrupt company had announced it was slashing 1,400 jobs by closing its bakery in New Bedford, Mass., and by consolidating operations in the Northeast.

Alley said he has compensated for the lack of IBC goods at his store by buying more bread and snack cakes from Country Kitchen and Freihofer’s Bakery. His shelves may be full, he said, but it is not the same as having more recognizable brands such as Twinkies, Wonder Bread, Drake’s snack cakes and other IBC goods to sell to his customers.

“You can’t replace the Hostess [products] because it’s a well-known name,” he said. “People have been eating it all their lives down here.”

Mike McFadden, manager of McFadden’s Variety Store in Lubec, said Tuesday that IBC has not delivered to that area for a year. He said that for months after the company stopped coming to town, he had customers coming in the store looking for IBC products, especially Table Top pies.

“I sold a lot of them,” he said. “[The customers] were disappointed.”

McFadden said his customers have become accustomed to not seeing Hostess and Nissen products on his shelves, where now there is a greater variety of Little Debbie snack cakes and other brands. Because IBC appeared to be cutting back its service, he said, he was not surprised when they stopped delivering to Lubec.

“They said profits were down,” McFadden said.

IBC, based in Kansas City, Mo., lost $24 million during the four weeks ending April 30, the largest loss for the company since it filed for Chapter 11 bankruptcy protection last September. The prior low point was $14.5 million in December.

Maya Pogoda, a Los Angeles-based spokeswoman for IBC’s restructuring efforts, was contacted Tuesday but did not comment on IBC’s delivery policies.

The shrinking delivery area in Washington County has prompted independent store owners in other parts of eastern and northern Maine to worry that they too might not be able to get IBC goods. Store owners contacted in Aroostook, Hancock, Penobscot and western Washington counties said they still were getting IBC deliveries, but several of them said they were concerned about how much longer the deliveries would continue.

Bruce Mathews, owner of C.H. Mathews Store in Cherryfield, said Tuesday he was running low on Hostess products. He said he knew of no plans for IBC to stop delivering to his store. He said he expects a shipment this week.

“It’s sad,” Mathews said. “Right now, I’m looking at a pretty empty rack.”

Mathews said that besides IBC goods, his Associated Grocers store also sells bread and snacks made by Lepage Bakeries, which includes Country Kitchen and Barowsky’s products.

“This business climate is really hurting in this state,” he said. “We have room for a second baker here in the worst way.”

David Marcus, vice president of procurement for Associated Grocers of Maine, said Tuesday he knows of no plans by IBC that would affect delivery of IBC goods to AG member stores. He said IBC told his organization that in August it would update AG of Maine about any possible changes to its delivery policies.

“They told us they would let us know,” Marcus said.

In the mid-1990s, Nissen invested $35 million in building a new plant in Biddeford, according to Biddeford Economic Development Director Robert Dodge. When IBC bought Nissen a couple of years later, it invested another $30 million in the plant so it could add other product lines to the facility’s output, Dodge said Tuesday.

Maine philanthropist Elizabeth Noyce, who died in 1996, had purchased J.J. Nissen in 1995 in order to keep it from being bought by a non-Maine firm and moved out of state. The decision to build in Biddeford resulted in Nissen closing its longtime plant on Munjoy Hill in Portland.

According to Dodge, Biddeford has granted two tax breaks to the plant’s owners, one to Nissen and another to IBC. All told, the facility has benefited from $1.5 million in municipal tax breaks and stands to save more over the next seven years, provided IBC does not close the plant or reduce the number of people who work there to 330 or fewer, he said.

“There’s always been some cautious optimism here that [because] the plant is so efficient that it would survive some restructuring,” Dodge said. “We would hope there would not be any more [job cuts], but there is continued apprehension considering the financial state of the company.”

The Associated Press contributed to this report.


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