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Spice Processing, Packaging Industry Sprouting in America's Heartland : Foods: A century of innovations and changing tastes have made Tone Brothers a major player with more than $100 million in yearly sales.

March 10, 1994|STEVEN P. ROSENFELD | ASSOCIATED PRESS

ANKENY, Iowa — Tons of paprika, cinnamon and oregano are transforming a stretch of central Iowa farmland that once grew plain corn and soybeans into a leading purveyor of palate stimulators.

The bales, bags and drums of piquant spices, in all about 700 raw ingredients, are shipped from abroad to a new $20-million plant built by Tone Brothers Inc., one of the fastest-growing companies in the food business.

The plant in Ankeny is the second spice-processing facility Tone has built in the Des Moines area in the past eight years.

You wouldn't necessarily see the Tone brand name in supermarkets outside the Midwest. But chances are you would see it if you shop at one of the discount warehouse clubs sprouting up around the country.

It's likely that Tone processed the cinnamon in your Sara Lee coffee cake. Its oversized cans of pepper and cumin powder adorn kitchen shelves of restaurants nationwide.

The spice business is hot.

"People seem to want a blast with every bite," says John McMillin, a food industry analyst at Prudential Securities in New York. McMillin projects the spice industry is growing at an annual rate of 5% or better.

Tone's goals, provided in a wallet-sized plastic card to each employee and framed on the wall of its chief executive, F. Christopher Cruger, seek more than 20% annual growth.

The company once was a pipsqueak in global spice trade. In 1980, when it mostly was a supplier to regional supermarket chains, sales totaled a modest $6 million.

But Tone has prospered by parlaying more than a century of innovations into an international operation and more than $100 million in sales. How much more Cruger won't say.

He expresses reluctance to disclose anything that might help a competitor. In a recent interview with the Associated Press at his office, he demanded identification to ensure the visit wasn't an industrial spy's ploy.

The company has good reason to be sensitive about its discoveries.

Tone introduced individual packaging of spices in the 1880s, ready-roasted unground coffee in the 1890s, tin cans for spices in the 1910s.

It invented pressure-packed cans for ground coffee in the 1940s and clear containers for spices in the 1980s, when it also developed a way to process spices at temperatures as low as 150 degrees below zero to retain volatile oils and preserve freshness.

Now, Cruger says Tone runs in the same exalted circles as such spice industry leaders as McCormick & Co. of Maryland; Burns, Philp & Co. of Australia; Fuchs, Gewuerze of Germany and Ducros of France.

Cruger, whose soft-spoken ways belie his 6-foot-6 frame, is credited with leading the surge.

He came to Tone in 1985 after a career selling soap, dog food and cake at such giants as Procter & Gamble, Quaker Oats and Sara Lee. He remained at the helm even after the 1989 purchase of Tone by Rykoff-Sexton Inc., a Los Angeles manufacturer and distributor of food products.

His style encourages teamwork.

Employees can question the company's every move at quarterly meetings. There are employee problem-solving teams. There is rare, genuine goodwill with the Teamsters union, which represents most of Tone's 430 workers.

"Chris has always been a gentleman," says Ron McClain, the vice president and business agent for Teamsters Local 147.

The union helped the company turn its fortunes around in the 1980s, when Tone had a problem filling orders and making timely deliveries. With the rebound, workers have been enjoying profit sharing that has swelled from $880,000 to almost $1.5 million in the past three years.

The workers voted on what they wanted in the new plant in Ankeny, rejecting a day-care center but approving a cafeteria, which includes a patio and outside ornamental pond with fountain, and a fitness center with the latest in aerobic and muscle-conditioning gear.

"What we really are trying to achieve here is to provide a working environment where everybody feels that they're a contributor," Cruger says. The company's strength has been as a supplier to the restaurant and food service trade and in sales to the discount club warehouses that buy in enormous quantities.

Now it is focusing on the real sales leaders in the $2-billion to $3-billion U.S. spice market--grocery chains and bulk deliveries to food companies. It also has developed markets outside the United States.

Founded in Des Moines in 1873 by Irish immigrant brothers Jehiel and I.E. Tone, Tone bases success partly on its unlikely Midwest base, about as far as possible from the ocean ports where Tone's raw materials arrive.

With 60% coming through New York and 40% from California, the goods meet in the nation's midsection. The spices are processed and packaged, then shipped directly to customers at home and abroad. There are no costly warehouse operations.

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