Incorporated: 1918
NAIC: 311612 Meat Processed from Carcasses; 311919 Other Snack Food Manufacturing
SIC: 2013 Sausages & Other Prepared Meats; 2096 Potato Chips & Similar Snacks
Oberto Sausage Company, Inc., makes more than 400 varieties of dried meat products, such as beef, pork, and turkey jerky, and sausage sticks, smoked dinner sausages, dry salami, kippered beef, and pickled sausages. Natural jerky accounts for more than 50 percent of the product line produced at its plants in Seattle, Washington, and Albany, Oregon. The company sells its products under the brand names Lowrey's Meat Snacks, Oh Boy! Oberto Beef Jerky and Classics, Pacific Gold Beef Jerky, and Smoke Craft. Oberto's products are distributed throughout the United States to supermarkets and club and convenience stores through a distribution alliance with Frito-Lay. The private company is owned by six adult members of the Oberto family.
A Struggling Family Business Overcomes the Odds
Constantino Oberto moved to the United States from Italy in 1918 and settled in Oakland, California, where he learned the art of making salamis. Within a year, he had relocated to Seattle, Washington, an area called "Garlic Gulch" after the Italian immigrants who lived there. He and an uncle set up the Oberto Sausage Company in a small shop there on South King Street. The men peddled the Italian sausages and salamis they made to the ethnic food stores that served Seattle's Italian community. Their business grew steadily, and they later relocated to a larger, 3,000-square-foot facility on South Dearborn Street and hired two employees.
Constantino was a good sausage maker and businessman; however, he had a tendency to gamble, and on more than one occasion gambled away his company's earnings. When he died unexpectedly in 1943, owing the business $10,000, leadership of the Oberto Sausage Company passed to Constantino's wife, Antoinette, and his 16-year-old son, Art. Friends urged the struggling family to sell the business, especially in light of the wartime scarcity of supplies. However, Art, who soon proved his talent as a natural-born salesman and entrepreneur, told his mother, "Don't worry; we can run it," as he recalled more than 50 years later in a 1998 Oregonian article.
While still a student at West Seattle High School, Art started up production at the family sausage factory each day before attending class, and then Antoinette ran the business during the day with two employees. When he first began to work at Oberto, Art was too young to drive; later, he would load up the company's delivery truck after school to peddle Oberto salami, Italian sausage, cooked salami, and coppacola to customers. As demand for Oberto's products grew, the company hired more workers; by 1952, the Oberto Sausage Company had eight employees.
The Obertos spent almost nothing, putting all of their earnings back into the business. In 1953, after the shop on Dearborn was condemned, they began construction on a small, new factory on Rainier Avenue South. However, when the new building was only half-complete, they ran out of funds. Fortunately, they were able to borrow the money they needed to finish construction.
Art Oberto married Dorothy Vennetti in 1954. The couple moved into the basement apartment underneath Antoinette Oberto's house, which was adjacent to the sausage factory. In 1957, husband and wife became business partners by purchasing Antoinette's interest in the Oberto Sausage Company. For a while, Dorothy Oberto kept the company's books by hand and invited her kids' friends to the house on Sundays to help mix the spices that flavored the sausages. After growing to 20 employees, the Obertos purchased Baum's German Sausage Company in 1960, and extended their product offerings to include Polish and German sausages. Oberto specialty meats and sausages, including coppacola, pastrami, salami, linguica, and rulle pulsa (a Scandinavian lamb sausage), were by then distributed statewide to small delis and grocery stores. In the early 1960s, Oberto also began producing natural beef jerky, after being approached by Totem Foods, a tavern distributor, as a potential supplier, and added another 20 employees.
Becoming the Leader in the Natural Beef Jerky Market
A huge opportunity to expand production and distribution also came about indirectly in the 1960s. When a new government mandate required a federal inspection of the plant, the expenses involved almost put the company out of business; however, the process in the end paved the way to shipping products out of state. In 1967, Safeway became Oberto's first national supermarket chain customer. From the late 1960s through the early 1970s, the company grew larger each year, until product demand, an expanding product line, and a workforce of 80 employees contributed to its outgrowing the Rainier Avenue plant. In 1974, the Oberto Sausage Company purchased the Jilg's Sausage Plant and moved its operations to south Seattle.
In 1978, having once again almost doubled its workforce to 150 employees, the company opened a third production, packaging, and distribution facility in Kent, Washington. Within five years, sales were in excess of $20 million, the company employed 250 workers at its three production facilities, and the Oberto Sausage Company had emerged as a market leader in the natural beef jerky category.
By the early 1980s, Art and Dorothy were looking toward the future and their retirement, and, so, in 1983, they carefully selected a board of directors; Art Oberto resigned as company president at age 55 and became chairman of the board, although he remained actively involved in company publicity, continuing to dress in a white, red, and green suit and driving around in his "jerky mobile." Under the new company president, the Oberto Sausage Company expanded distribution of its products to the East Coast and to foreign markets such as Japan, where Oberto soon became a best-selling brand. As the company continued to grow, it expanded its Kent facility in 1989 to accommodate the need for increased production space.
The Obertos had four adult children by this time, but only one of them, Laura, had the desire to enter the family business. Laura's first job at the company began when she was five and she delivered the mail. At 14, she oversaw spice formulation, and at 16, began attending sales and marketing meetings. At 17, she began conducting Oberto interviews in place of her father. She then worked at the plant while earning a degree in finance at Seattle University. In 1991, after serving in a number of different capacities at Oberto, she became president of the company, working alongside her father. Laura took an aggressive approach toward company growth. "We've always grown at a double-digit rate, and, excepting one year, have always been profitable," she said in a 1995 Snack Food article. "But we've never been very aggressive. We had to become more aggressive in how we did things. We had to expect more." In 1994, Laura Oberto led the purchase of Curtice Burns Meat Snacks' Denver-based meat snacks business. Oberto also leased Curtice Burns' Albany, Oregon, manufacturing facility and equipment to Oberto until February 1995, at which time it purchased these assets as well. In all, Oberto acquired a production facility, a distribution center, and 225 employees.
The Curtice Burns acquisition brought with it ownership of the Smokecraft, Denver Dan's, and Lowrey's meat snack brands and the addition of chopped and formed beef jerky products as well as microwaveable pork rinds. It doubled Oberto Sausage Company's capabilities by adding a fourth production facility. Following the purchase, Oberto's sales also doubled, and the company controlled 23.6 percent of the domestic meat snack market. Oberto Sausage Company became the nation's largest jerky manufacturer, and the second largest national meat snack company.
Increased Competition Leads to Increased Diversification of Product and Distribution
The acquisition occurred just as meat snacks were enjoying increased acceptance by the public as a healthful, protein-rich, low-fat snack, a desirable alternative to other snack foods. Along with other meat snack manufacturers, Oberto's began to experiment with new flavors and seasonings and to direct its advertising beyond its traditional male market to both women and children. Oberto chose to pitch its products to the exercise-minded and to mothers, for their nutritional content, their long shelf life, and their portability. As part of its more "healthful" approach, the company began producing turkey jerky and removing MSG from its items.
The company also began to look to broaden its distribution. Up until this time, 80 percent of all meat snack purchases had been impulse buys, and meat snacks were sold largely at places frequented mostly by men: bars, gas stations, auto parts stores, and sporting goods stores. In the mid-1990s, however, more and more companies began to distribute their dried meat products to supermarkets and drug chains. By 1995, 16 percent of meat snacks were sold in supermarkets and more than 30 percent of sales took place at vending machines, mass merchandisers, and other nontraditional outlets combined. Oberto's supermarket sales jumped 46 percent in 1995 while its overall market share went from 24 to 27 percent, and the company enjoyed revenues of $100 million. In 1998, it started shipping product to some General Nutrition Centers.
Laura Oberto also led the company in exploring foreign markets for its products, focusing primarily on Canada, Mexico, Japan, and Norway. By the mid-1990s, Oberto's exports were growing at a double-digit rate, according to company data. At the same time, the company's share of the domestic meat snack market increased to about 29 percent in 1997 with $25.1 million in meat snack sales. Total company sales reached $108 million. As a result, the company once again moved to larger facilities in 1998. Oberto's new, 100,000-square-foot headquarters and distribution facility went up adjacent to its Kent manufacturing plant. In 1998, with $118 million in overall revenue, Oberto had 800 workers and was the second largest producer of meat snacks in the country.
In 1998, Laura Oberto moved from president to Oberto board member as Tom Campanile transitioned from vice-president of operations to president. Campanile had many years of experience in the meat snack industry, and five years overseeing Oberto's manufacturing operation. Under his direction, Oberto launched efforts to ensure its ongoing leadership in a market grown increasingly competitive as the popularity of meat snacks increased. The company aligned with an international supplier of top quality beef to ensure its future meat supply and thus its ability to grow.
As part of its strategy to ensure solid growth and success, in 1999 Oberto launched its Snack Attack marketing campaign. This campaign focused on the healthful aspects of its products, which at the time commanded 21 percent of the meat snack market or $34 million annually. In 2000, it introduced "Grandma Oberto," who went on a series of wild outdoor adventures in its advertising. After Oberto partnered in 2000 with Frito-Lay, which became the company's distributor of its natural-style jerky products in both the United States and Canada, it began a $7 million radio campaign aimed at younger outdoor athletes. Sales for the year 2000 reached more than $125 million.
During the next several years, competition for control of the meat snacks market continued to be intense as the high-protein diet craze of the new century further fueled growth in the meat snack category, introducing a new group of consumers to portable, dried meat products. Meat snacks became America's fastest-growing salty snack food with stores dedicating sections, inline sets, and endcaps to the products that grew in sales more than double that of any other salty snack. Oberto again introduced new flavors and added new forms of meat snacks, including a softer jerky and bite-sized items, in a bid to gain consumers' attention. The company also acquired Pacific Sun, Inc., in 2002, a company that produced jerky products for Costco in California and other Southwest markets under the brand name Pacific Gold. Oberto also continued to focus on health to drive its meat snack sales as the American population continued to age.
For the next several years, Oberto's share of the meat snacks markets vacillated slightly as sales for meat snacks decreased slightly in the wake of the high-protein diet craze. In 2004, Oberto's meat snacks sales reached $70 million; in 2006, that number was down to about $66 million. Still, as the second largest producer of meat snacks and the manufacturer with the greatest supermarket sales, the company was committed to ensuring that Oberto remained a leading meat snacks company nationally and internationally. The goal was likely to be a challenging one, but one to which Oberto had already proved equal. As Art Oberto himself said in a 1998 Oregonian article, summing up his company's success, "Every move we made, we stuck our neck out. We were too stubborn to quit. We've never been happy with things being easy."
Principal Competitors
Bridgford Foods Corporation; Clemens Family Corporation; ConAgra Foods, Inc.; Goodmark Foods, Inc.; Lance Snacks; Jack Link's Snack Foods; Double B Foods, Inc.; Mitchell's Gourmet Foods, Inc.; Opa's Smoked Meats; Pioneer Snacks, Inc.; Weaver Meats.
Further Reading
"Hooking More Consumers: Meat Snacks," Professional Candy Buyer, November 1998, p. 50.
Kugiya, Hugo, "The Self-Made Man: Corporate America Does Not Have Much Room for Types Like Art Oberto, Candid in a Way That Frightens Most Managers," Seattle Times, January 11, 1998, p. 12.
Littman, Margaret, "A Meaty Issue," Snack Food, February 1995, p. 20.
Pacyniak, Bernard, "The Fire Behind the Smoke," Snack Food, March 1995, p. 22.
Parlin, Sandy, "Snacking on the Run: Hand-Held Meat Snacks Are Evolving to Meet New Taste Demands--and Satisfy an Ever-Expanding Consumer Taste," National Provisioner, November 2004, p. 40.
Ponder, Stephanie E., "A Work of Art," Costco Connection, February 2005, p. 4.
— Carrie Rothburd
