Back in 1971, Gerald Shreiber purchased the J&J Pretzel Co. for $72,100 at a bankruptcy auction. Today, the New Jersey-based company is known as J&J Snack Foods and its products are sold under such brand names as SuperPretzel, ICEE, and Minute Maid. It rakes in sales of more than $800 million annually.
In the past five years, the $1.46 billion company’s stock price has been steadily increasing. During the past year, the share price skyrocketed over 40 percent, far exceeding the S&P 500 Index’s increase of just below 30 percent.
At age 71, Chairman and CEO Shreiber is still active in the company. He still goes to work every day, accompanied by man’s best friend.
“He is really an animal rights person,” said Tom Weber, senior vice president of operations, in an interview. “He brings his dog to work every day. My job is to keep the dog out of the plants, which so far in 13 years, I’ve been successful at.”
Shreiber developed his work ethic at an early age helping out his father, who was a produce merchant. When Shreiber was 18, his girlfriend got pregnant, and they married. He had to drop out of school to make ends meet. He started working as a machine-shop apprentice, and by his mid-20s, he had saved up enough money to run his own machine shop with some partners. In 1968, he started a business making specialty machine parts but sold the company in 1970. A year later, he snapped up the assets of J&J at auction and went into the food business.
That flexibility helped him build J&J, company executives say. “I’ve seen him in business meetings where we have talked to prospective acquisitions,” said Weber. “He can size them up in almost no time.”
And that’s how Shreiber, who owns 20 percent of J&J, built the company–through a series of small acquisitions.
“I think we’re very successful at that old school kind of acquisition – things that are broken and in need of a little TLC, energy and entrepreneurship,” Senior Vice President Gerard Law told Baking and Snack magazine in February.
Unlike traditional executives, Shreiber does not have just one business model. Rather, the company prefers to look at things from a birds-eye view and assess opportunities as they arise, determining how well a particular acquisition would fit into the company.
“The company’s growth is the result of a strategy that emphasizes active development of new and innovative products, penetration into existing market channels and expansion of established products into new markets,” according to the company’s 2012 annual report.
This unusual strategy gives the company the freedom to enter new markets and find distinctive niche products. While the approach means the company’s product portfolio is constantly evolving, it has helped J&J Snack Foods become the market leader in product categories with significant barriers to entry.
For example, the company is now the largest player in the U.S. soft pretzel market, largely due to a purchase it made back in 1982. J&J Snack Foods acquired AMF Pretzel Twister and with that deal, acquired the technology to mass produce the soft pretzel. Today, J&J Snack Foods owns the majority of the machines used for soft-pretzel production.
“Shreiber has done quite a job for himself and for us, too,” Weber said.
Shreiber, the father of three children and several grandchildren, also has made a name for himself s a prominent businessman in his New Jersey community. In October 2012, Shreiber received the first ever William G. Rohrer Business Leader of the Year Award. Rowan University Board of Trustees Chairman Linda Rohrer says, “It was a natural choice for him to receive it.”
Rohrer has also been surprised by Shreiber’s low-key demeanor in the several times she has seen him.
“It’s not like he is in a jacket and tie and has this big flamboyant office,” she said in an interview. “If anything it’s to the contrary. He is very gracious and very humble considering the magnitude of the business that he has.”
Shreiber has been able to grow his business so successfully during the past four decades because of his passion. But sometimes, that passion can be accompanied with a temper.
“The fiery temper thing has gotten me in trouble I don’t know how many times, and when he does that he says some of the funniest damn things, although they were not funny at the time,” said Weber.
Weber recalled a story about a day Shreiber decided to check out the plant, and although it rarely happens, one of the lines happened to be down for a few minutes.
“He told the engineer and I – remember, the engineer and I both have masters degrees – he told us he didn’t think we could pass a ‘stupid test.’ It was so hard not to laugh when he said that.” Ironically, the team happened to be in a stress release class at the time.
However, despite an occasional outburst, Shreiber is known for his kindness and sense of humor. During conference calls, Shreiber has been known to get creative, according to Weber.
There is a children’s toy that has several animals arranged in a circle and when an arrow is pointed at an animal it plays whatever sound that creature makes.
“As he is going through some of these calls, sometimes what he will do is he will say, ‘That is one horse of an idea’ and then point the arrow at the horse,” Weber recounted. “All of a sudden he will say something like, ‘well we may be bullish, but we certainly aren’t piggish’ and then in the background you will hear oink, oink, oink.”
But, when it comes to company strategy, Shreiber is all business. In the past decade or so, Shreiber has kept to the company’s tactic of entering new markets. Five years ago, the company acquired Missouri-based Daddy Ray’s, a small fig and fruit bar manufacturer. Since then, Daddy Ray’s revenue has tripled.
With similar acquisitions, J&J Snack Foods has been able to appeal to both food service and retail consumers and develop a more diversified portfolio, including becoming a major player in more mainstream baking categories such as cookies, sweet goods and biscuits.
The company is also involved in co-branding and licensing ventures. For example, one of the company’s most profitable licenses has been Minute Maid, giving the company exclusive rights to produce or sell any frozen Minute Maid product. However, in a 2012 conference call, Shreiber said those kinds of licensing and co-branding opportunities are not arising as frequently as they did in the past.
“We have not dismissed co-branding and licensing, and we’re going to continue to evaluate and press for new opportunities there,” he said. “But sometimes they just – it’s just not like they automatically come up and get thrown into our ear.”
Nonetheless, after the company’s 41st year in a row with record sales and increased profits, Shreiber doesn’t plan on doing much tweaking to the company’s strategy.
“Our company continues to operate with conservative fiscal discipline,” Shreiber wrote in his annual letter to shareholders. “”We plan on continued growth both organically and through acquisitions.”
However, given Shreiber’s age, succession planning is an issue. In fact, the company’s annual report lists it as an investor risk: “His retirement, disability or death may have a significant impact on our future operations.”
In 2009 Shreiber told Snack Foods & Wholesale Bakery magazine that he definitely wanted the company to remain independent in the future, and part of that meant building a good team.
“It is my wish to have the company continue and not survive, but continue and thrive,” he said. “So it’s up to me to surround myself with the team of horses – not that they’re interchangeable – but the speed of the leader is the speed of the pack and that’s what my focus has been for the last few years.”
“He has really done an amazing thing,” said Weber. “Without him, this company would not be what it is. He is certainly the driver – the heart and soul.”