(Shelf) Life of Reily: Food firm quietly marks 100 years of pantry presence

By Ronette King, business writer for the Times-Picayune.

This is the time of year the folks at Reily Foods Co. start planning their summer assault on heat and thirst.

Reily´s marketing push this time of year helps secure Luzianne´s place as one of the best-selling iced tea mixes in the country.

Reily Foods is also the maker of what some consider the mother of all coffee and chicory blends, CDM, plus other coffee blends roasted for sale under private store labels.

But to dismiss Reily Foods as solely an iced tea and coffee maker is to overlook the pantry of goods the company makes. In the past century, the quiet New Orleans company has amassed as many products as it has years in the food business.

Among them: Abita Springs bottled water, Wick Fowler´s chili mixes, Blue Plate mayonnaise, Luzianne tea flavorings, La Martinique salad dressings and Swans Down cake flour for people who still bake from scratch.

While many of Reily Food´s products are well-known, the family-owned company is decidedly low-profile. And the family likes it that way, declining requests for media coverage of its various brands until this, its 100th anniversary.

Reily has survived for a century by changing the way it does business to suit the modern demands of grocery distribution and selling. To keep up with today´s challenges, Reily is navigating an industry that has shifted from regional mom-and-pop stores to national supermarket chains that demand fees just to let items take up precious shelf space among the 32,000 items an average supermarket carries.

A smaller manufacturer such as Reily Foods can remain viable if it´s able to meet consumers´ desires, said Stuart Armstrong, vice president at Euro RSCG Meridian, a marketing consulting firm in Westport, Conn. The company can play up its authentic New Orleans heritage and tastes to connect with consumers.

"Regional brands understand things other than the specific product," Armstrong said.

´Clear as a bell´

Reily was founded in December 1902 by William B. Reily, a wholesale grocer from Monroe, pictured on the company´s 100th anniversary pamphlet in dapper summer attire of straw hat, white jacket and white mustache.

Today the company is led by his grandson, Boatner Reily III. Boatner Reily´s son, Bo Reily, heads the Abita Springs Water division and, like his father, wears a gold ring bearing the family crest.

Jim McCarthy, no relation to the Reilys, is company president. They share a quiet confidence in their products, many of which are regional favorites that may be unheard of outside their market areas.

One product that is available almost universally is Luzianne iced tea, whose name was derived from "Louisiana." It was made famous 25 years ago by spokesman Burl Ives´ intoning of the pitch: "Clear as a bell all day. The right tea for iced tea."

The competition tried to sell their product for hot or iced tea, Boatner Reily said, but Luzianne is just for iced tea.

"Mr. Lipton makes a great glass of hot tea," he said, adding, "But if you want iced tea ..." He then rapped his knuckles on a table in the company´s Magazine Street headquarters as if to say "this is where you come."

Reily Foods´ business breaks into three broad categories: roasted coffee sold under the company´s brands or private labels of grocery stores, Standard Office Coffee Service Co., and various food products including tea and bottled water.

Standard Coffee, another family business, began as a home delivery coffee division. In 1967, it shifted to delivering coffee to offices and businesses and has grown to become the largest such service in the country.

Quiet success

Figuring out how big Reily Foods is can be difficult, and executives at the privately held company like to keep a low profile. In 2001, the most recent year for which figures are available, Reily had sales of .7 million, according to published reports.

"I´m not going to say a thing about sales," McCarthy said when asked to confirm that figure.

Likewise, Reily declined to share the number of locations where his company´s products are sold, describing it only as "over 50 and under 100,000."

"There isn´t a grocery store in the U.S. that doesn´t have one of our products," he said.

Reily Foods is concentrating on expanding product lines, figuring the key is to grow revenues without eating into sales of existing products. "It´s a challenge. How do we continue to grow, not only in coffee but in tea?" McCarthy said.

In the tea area, that means selling tea flavorings alongside the regular and decaffeinated tea mix in stores.

A year ago, Reily introduced the company´s latest product, Luzianne Smoothie Blends, a dry mix packaged in a plastic canister. Luzianne smoothie mix is available in Louisiana, Florida, Texas, Colorado, Arizona and California, places where there are lots of smoothie shops and high recognition of the drinks, McCarthy said.

This year the smoothie mix is being sold in new envelopes placed in supermarket produce sections, conveniently near the bananas, strawberries and other fruit that can be added to make a blender full of smoothies.

That´s the sort of cross-marketing grocery retailers are looking for these days and what helps Reily keep its products on the shelf.

Thinking regionally

Throughout the 1990s, the rate of consolidation and failure among grocery chains in the U.S. was staggering. The number of grocery distributors has been winnowed down as well, leaving just three major national distributors. One of them, Crossmark, represents Reily products.

Distributors are key to food manufacturers because they get products on grocery aisles.

Think of grocery shelves as limited real estate that everyone wants a piece of but where only so many people, or in this case food manufacturers, can fit. Ultimately, McCarthy said, consolidation has simplified things for his company.

"Consolidation has been good for the whole industry because it´s simpler to deal with one instead of 50 brokers," he said.

But it makes for tough going for small and mid-sized manufacturers, said John Kramer, who heads a marketing firm in Stanford, Conn., that works with grocery retailers and manufacturers.

"The problem is if you´re a regional brand, (the major food distributors) are focused on the large brands," Kramer said. "So you´ve got to offer your distributors as well as retail customers a reason to merchandise and support your brands versus competitors."

Smaller manufacturers can offer grocers an edge as they compete locally. While big manufacturers have to market their brands nationally, Kramer said, "Reily just needs to understand the consumer or customer proposition at the local level."

Reily Foods "has strong regional brands at a time when grocery stores are trying to differentiate themselves in any way possible," Kramer said. The way for grocery retailers to compete is by appealing to local tastes.

Reily sells some of its products regionally; Blue Plate mayonnaise is sold in five Southern states, for example. But Luzianne tea is sold nationally.

Branching out

Another expansion of Reily Foods came in 1996 when the company acquired a majority interest in Abita Springs Water Co. Reily has acquired other small firms since the 1960s, when the company decided to diversify beyond coffee and beyond New Orleans.

In 1965 Reily Foods bought JFG Coffee Co., based in Knoxville, Tenn., increasing coffee production capacity and adding mayonnaise and salad dressing to the company´s pantry.

In 1974 Reily acquired Blue Plate, a best seller in the South. McCarthy had been president of that company before the acquisition.

In 1990 the company bought Caliente Chili from Procter & Gamble, maker of Wick Fowler´s 2 Alarm chili seasoning mix. The following year, Reily bought Carroll Shelby´s Original Texas Style Chili from Kraft Foods.

Reily´s future will come from increasing market share of existing brands and pursuing acquisitions limited to "items related to what we´re in now," McCarthy said. So the company wouldn´t get into, say, refrigerated products but would look for other dry goods.

Is Reily an acquisition candidate? "We´re hoping to acquire other people rather than being acquired," McCarthy said. "We´re going to continue to grow. If we don´t grow, we could be vulnerable."

As a corporation, Reily Foods gives a high-profile assist to the Crescent City Farmer´s Market, allowing the market to use the parking lot at company headquarters on Magazine Street on Saturday mornings, rain or shine.

Otherwise, Boatner Reily said he likes the low-key approach to running his family´s business. Until its 100th anniversary, the company was reluctant to even discuss all the company´s products as part of one newspaper story.

After a cordial interview about the family business in which he declined to offer sales figures or size of distribution network, Reily said, "We promise we´ll talk to you in another hundred years."