Litehouse shines eastward- Sandpoint, ID firm looks to double sales

Salad-dressing manufacturer anticipates doubling sales, new plant within five years

By Addy Hatch Spokane Journal of Business

SANDPOINT, Idaho—Litehouse Foods Inc. hopes to nearly double its sales volume in the next five years, to almost $180 million, by making its line of refrigerated salad dressings, dips, and sauces as popular on the East Coast as they are in the Northwest.

If that growth materializes, Litehouse would need to move to a larger facility in Sandpoint and add to its work force of about 440 full-time-equivalent positions, says Edward Hawkins, who owns Litehouse with his brother, Doug. About 350 of those positions are based at the company’s manufacturing-and-office facility here, and the rest are at Litehouse’s plant in Lowell, Mich., which the company acquired in 1997.

There’s no reason to believe Litehouse can’t perpetuate its “exponential” growth of the last decade, Hawkins says. The company’s revenue now is just under $90 million a year, up from about $23 million in 1993, he says.

Most of that growth is a result of Litehouse expanding its distribution eastward, and there’s still plenty of room for further market expansion, he says.

“In 1993 the majority of our business was strictly in the West—strong in the Northwest with fledgling business in the Southwest,” he says. Since then, “We’ve added a significant amount of business in the eastern part of the U.S., and that’s where our biggest opportunities for growth still are.”

It’s not uncommon, for example, for a grocery store in Spokane to sell 20 to 30 cases of Litehouse products a week, whereas a new retail account on the East Coast might sell only one or two cases a week, Hawkins says. The brothers believe that in time, they can bring those Eastern accounts in line with sales here.

The market for salad dressings that are sold in stores’ refrigerated produce departments—versus those that are sold on grocery-store shelves—is “generally speaking, better developed in the West, and we feel we’re a large part of that,” Doug Hawkins says.

Edward Hawkins says grocery stores ring up about $1.9 billion in sales of non-refrigerated salad dressings each year, while refrigerated salad dressings account for $300 million in sales.

“We see opportunities to grow our business because so many customers haven’t tried us yet,” he says.

What’s more, Litehouse products are sold in just about half of the stores where they are capable of being sold, he says, so, “We have lots of opportunities to grow geographically.”

Staying put in Sandpoint

Don’t look for Litehouse to move its operations elsewhere to fuel that growth.

“Our family has lived here since 1881,” Edward says. “One of the reasons we’re in business is to create good, solid jobs in this community. It’s one of our core values.”

For that reason, too, Litehouse isn’t for sale and never will be, the brothers assert—even though they get several calls a month inquiring about a potential acquisition.

“If we sold the company or if we go broke, the impact on our employees is the same,” Edward says.

Litehouse likely will need to move to larger facilities in the next three to five years, he says, although a site hasn’t been identified yet.

The company occupies about 154,000 square feet of space in the Sandpoint area, most of it in a 90,000-square-foot office-and-manufacturing plant at 1109 N. Ella, just northwest of downtown.

Litehouse’s bustling industrial operation stands in stark contrast to its modest beginning as a family-owned restaurant in Hope, Idaho, located about 20 miles east, also on the shores of Lake Pend Oreille.

While working as a chef in Spokane, the Hawkins’ father, Edward Hawkins Sr., developed what at the time was a unique creamy blue cheese salad dressing. In 1958, Hawkins Sr. and his wife, Lorena Hawkins, opened their restaurant, The Litehouse, where he served his trademark dressing.

“It wasn’t long before patrons started bringing empty jars so they could take home some of the delicious dressing,” says a history of the company that’s posted on its Web site.

The Hawkins family started selling the dressing to a local grocer in Sandpoint, and the business grew. It moved into its current plant in the late 1970s.

Currently, Litehouse sells more than 1,200 items, including different products and different sizes or containers of the same product, Edward says.

From its blue-cheese origins, the company has expanded into a full line of salad dressings, fruit and vegetable dips, marinades, sauces, freeze-dried herbs, and organic salad dressings. Litehouse sells about 76 percent of its products through retail outlets, and the rest to food-service customers, such as hotels and restaurants.

The brothers say a fast-growing part of the business has been supplying dressings for packaged salad “kits,” which have skyrocketed in popularity in recent years.

A year ago, Litehouse also added blue-cheese crumbles to its lineup. The addition came about by necessity, Edward says.

Litehouse uses 800,000 pounds of kosher blue cheese each year, but the company’s supplier didn’t want to make kosher cheese in the batch sizes that Litehouse required, he says. After looking around for another supplier, the Hawkinses discovered a small cheese factory in their back yard—Sandpoint—and bought the business in late 2001. Now, Litehouse manufactures its own blue cheese in Sandpoint and, because of zoning requirements, operates a retail shop there, too, which has become something of a tourist attraction.

Over the long journey from family restaurant to national presence, Edward says he’s most proud of the fact that he and his brother are “still a part of this. It hasn’t passed us by. We’re still able to contribute in a positive way.”

It hasn’t been decided whether or not the next generation of Hawkins family members someday will take the helm at Litehouse, but it really doesn’t matter, he adds.

“We built it to last beyond Doug and myself in this community.”

http://spokanejournal.com/spokane_id=article&sub=1732