Archway Cookies
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Archway Cookies
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| Former type | Corporation |
|---|---|
| Industry | Food |
| Fate | Operating |
| Founded | 1936 |
| Founder(s) | Harold and Ruth Swanson |
| Defunct | Yes |
| Headquarters | Charlotte, North Carolina, United States |
| Products | Cookies |
| Parent | Lance Inc. |
| Website | archwaycookies.com |
Archway Cookies was an American cookie manufacturer, founded in 1936 in Battle Creek, Michigan. Since December 2008, it has been a subsidiary of Lance Inc., a snack-food company. Archway is best known for its variations of oatmeal cookies.
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Contents
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History
Swanson Home Style Cookies
In 1936, Harold and Ruth Swanson began baking soft oatmeal cookies and doughnuts out of their home's garage in Battle Creek. By the late 1940s, they had discontinued baking donuts and just concentrated on cookies. They had fifteen different varieties of cookies by 1949. In the 1950s they licensed their cookie recipes and begin selling baking franchises in Indiana, Wisconsin, and Canada.
Change of name to Archway Cookies and expansion
To avoid conflict with Swanson, a maker of frozen dinners, the Swansons changed the name of their bakery company to Archway Cookies. Throughout the 1950s Archway continued to grow and sell more franchises. It also built cookie-manufacturing plants in Ohio and Iowa.
Change of ownership (1962 and 1983)
In 1962, Archway was sold to George Markham who bought back a majority of the franchises over the next two years.
In 1983, Markham sold Archway to Thomas Olin and Eugene McKay.
Removal of saturated fat and sales growth
By this time Archway had begun to manufacture a more-health-conscious cookie by removing saturated fat. The company reached near the top of the ranking of 250 cookie brands[citation needed]. By 1994, Archway sales had grown 138 percent with the introduction of its fat-free cookie line.
Change of ownership (1998 and 2000)
In 1998, Specialty Foods Corporation purchased Archway for US$100 million. Because Specialty Foods also owned Mother's Cookies, it made Specialty the third-largest cookie manufacturer in the U.S.
In 2000, Specialty sold the Mother's and Archway brands to Parmalat Finanziaria, a division of Parmalat, for a reported US$250 million. In 2005, Parmalat (plagued by scandals unrelated to Archway) sold — for an undisclosed amount — what was by then called Archway & Mother's Cookie Co. to Catterton Partners,[1] a private-equity firm specializing in leveraged buyouts, recapitalizations and growth capital investments in middle-market companies.
Fraud discovered
Catterton, in turn, hired Insight Holdings to manage the company, but three Catterton executives were appointed to Archway's board of directors. Former Archway employees[weasel words] claim that Insight largely managed the company through telephone and videoconference calls. Archway had a bank line of credit from Wachovia, a financial-services company, that was dependent on certain financial targets being met. In order to meet these targets and to obtain cash from Wachovia, Archway engaged in an alleged fraud.[2] Specifically, it allegedly began to report bogus sales numbers by booking "virtual sales" which were, in fact, non-existent. Throughout the year[clarification needed] cookie sales began to drop with sales falling to US$152 million. Archway's outside auditors, Ernst & Young threatened to issue a going-concern qualification on Archway's financial statements. In 2008, Specialty Foods filed for reorganization under Chapter 11 bankruptcy protection.
A series of lawsuits have since been filed against Catterton, Insight Holdings, Archway, and various executives and former executives of each of these companies. In one of the lawsuits, Catterton is accused by a group of creditors that the alleged accounting fraud continued for as long as it did because of the "control, participation and acquiescence" of Catterton.[3]
Bankruptcy auction (December 2008)
In December 2008, Lance won the bankruptcy auction for Archway Cookies. Lance reopened the plant in Ashland, Ohio, and Archway is once again producing cookies.
Products
Following its acquisition of Archway, Lance has trimmed Archway's product line from nearly 100 to 21. Archway still manufactures its popular varieties of oatmeal cookies, and several of the popular products that were exclusive to Mother's Cookies prior to their merger, including frosted Animal crackers.
References
- ^ Abate, Tom (2006-04-04). "Mother's Cookies Crumbling — Oakland Bakery Abandoning Area Where It Was Born" San Francisco Chronicle. Accessed 2009-09-28.
- ^ http://www.nytimes.com/2009/05/31/business/31archway.html?ref=business. Article access requires website registration.
- ^ http://www.nytimes.com/2009/05/31/business/31archway.html?ref=business Article access requires website registration.
External links
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