Company Report: Energy Club Corporation
Smart snack alternative With clients throughout North America, this manufacturer/packager provides visible products and industry-leading service

Stroll through the snack aisle at a Rite Aid, Kroger's or Staples and the Energy Club brand is sure to catch your eye. With bright blue, red and purple packaging and sunburst yellow logo and signage, the in-store displays visually grab your attention.

Within the packages Energy Club features a wide range of high-quality snacks, from nuts, candy and trail mix to products marketed toward the Hispanic population with spicy seasonings and Spanish-language labeling. The company additionally sells small toys and novelty items.

The snack manufacturer/packager was founded by Arnold Zane and Miron Aviv, two industry veterans who met when Aviv sold Mr. Nature products to Zane's former distribution company in California's Bay Area. They teamed up to start the Energy Club Corporation in 1984 in Pacoima, CA, and developed their own snack line. The packaging was outsourced until 1990 when they bought equipment for the facility - a building that today measures 65,000 square feet.

"We originally had hanging packages, but we've gradually phased into other types, including jars and stand-up bags," says Zane, President of Operations.
Aviv, company President of Sales, says Energy Club's packaging has evolved from extensive research and data from focus groups.

"It gives us a brand new appearance and way of looking at what the market wants," he explains. "You put this product against major branded names and it stands out. That's important when there are so many snacks out there."

INDUSTRY-LEADING SERVICE
Energy Club has branched out from independent stores into more chain and wholesale types of business to carry its products. It caters to hospitals and the military as well. More than 300 companies are on the company's client list throughout the US and Guam, as well as parts of Canada and Mexico.

A majority of snacks in the overall industry are sold in supermarkets, which is one sector the company shied away from for years because of space fees.

"Basically you're buying real estate without any guarantee of a return on your investment, whereas for 'up-and-down-the-street' businesses like convenience stores there are no extra charges for a spot," Aviv explains. "We include the supermarket fees in the total cost, and work with it."

Though the company now has supermarkets and other large-scale clients, it remains acutely aware of its role in helping the small business sector it began with. Its new packaging through a strategic growth plan has yielded tremendous financial gains for clients.

"We find alternative ways for us to make a living and for them to get a lot more sales per store than they used to - and to give them the tool for their own negotiation with other suppliers," Aviv says.

Energy Club is also capable of shipping client's orders within 24 hours - often the same day when orders arrive before 11 a.m.

"Service is imperative, especially to smaller distributors. When they call, they need it yesterday," says Zane. "We believe we give the fastest service for our sector of the industry, which is really key for a lot of these clients."

GROWTH AND DEMAND
Energy Club has grown an average 30 percent each year in the last decade. Zane says it's felt a slight impact from the current economy, but unlike those who've taken a 50 percent hit, the snack company has only seen a 5-10 percent drop.

Demand for snack foods has remained high the last couple of years, particularly for healthy alternatives like trail mixes. The company creates this and most of its other products on site, with limited items coming from other manufacturers. Several freight companies are used to move the goods from Energy Club's shipping department.

"We work with different companies in different parts of the country - mostly trucks on land. We usually have a long-term relationship with those guys, but we always interview others to keep them very honest in a competitive field," Aviv says. "Some of these companies we've been with for 15-16 years."

Energy Club also has long-term employees who've been crucial to helping the business evolve to where it is today. The company likes to promote from within when possible and many of the new hires come via word of mouth and referrals. There are also training sessions for equipment operators and support for continued education and outside workshops. The top management additionally participates in monthly Vistage meetings, where CEOs meet to discuss current issues and to share ideas with each other.

DEVELOPING TECHNOLOGY
Technology-wise, Energy Club uses a sophisticated intranet system that allows people to see on-time information in their departments.

"It automatically synchronizes the data after the last shipment and in the morning everyone knows inventory, sales numbers and costs. It provides up-to-date info daily," Aviv says.

Energy Club is exploring a possible investment in printing technology that will increase its capabilities, and automated equipment that will handle a new type of packaging. Also, the company is developing a more advanced warehouse management system than the one they have.

LOOKING AHEAD
As the company continues to grow, it's now delving into the possibility of private label sales.

"It's becoming more popular in our industry and we're talking to some of the larger chains and wholesalers about it. One of the ways to develop in that direction is to come up with new concepts," Zane says.

The company also hopes to expand the sectors it's currently involved in and to grow through acquisitions - "looking at different prospects to see who would be a good fit."

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