Dairy Family Guards Its Bread And Butter

Posted: April 06, 1992

The company chairman, Harry Goldberg, is 87. His son, Raymond, the president and chief executive, is 62.

Then there's Ray's son Rick, the executive vice president. And Ray's daughter, Robin Goldberg Batoff, who's director of marketing.

If you've surmised that this is a family business of some duration, you are correct.

And what a business this Penn Maid is.

In contrast to the many regional dairy companies that have long since folded to giants like Sealtest and Kraft, Penn Maid Foods Inc. still flies proudly the independent family colors of the smiling cow, Queenie. Queenie is family, too; that was the nickname of Harry's late wife, Blanche.

From their sprawling operation in the Northeast, at Red Lion Road just east of Roosevelt Boulevard, the Goldbergs and Penn Maid post numbers that even the conglomerates might envy.

According to a recent survey from the Nielsen marketing firm, Penn Maid rules the $13.2 million business of cottage cheese in the Philadelphia area, with a 27 percent market share. The national brand, Light 'n Lively, trails at 25.6 percent.

Penn Maid's grip on sour cream is even tighter. Nielsen shows Penn Maid with a 35.5 percent share of the $10.7 million local market. Nationally distributed Breakstone is a distant second at 23.1 percent.

Penn Maid can claim market leadership in dairy-based dips as well. Even in yogurt, a business that Penn Maid entered late, it trails only the Dannon, Light 'n Lively and Breyers brands in area sales. And its market share is on the rise - from 7.7 percent in 1989 to 10 percent last year.

The secret?

"We are not a small company," said Ray Goldberg, referring to company sales that have increased tenfold, to $200 million, during the last decade. ''But we are run like a small company."

Which means Penn Maid can be more nimble than its larger competitors. As Rick Goldberg pointed out during a recent interview, Penn Maid can go from the idea stage to a new product on the supermarket shelf far more quickly than a larger firm.

During the last five years, for instance, the company has introduced new products like salsa dip, "lite" versions of its yogurt, sour creams and cottage cheese and - Robin's current project - a new line of Kid's Yogurt in flavors like cotton candy, apple pie and bubble gum.

Penn Maid also remains close to its customers, which include all of the area's major supermarket chains and other food stores.

"We're at all our stores two or three times a week," said Rick Goldberg. ''We have complete control over rotation and display."

Lest you suspect that the younger generation has all the ideas, there was also Ray Goldberg's revelation in the early '80s.

Ray realized that Penn Maid wasn't simply a dairy-products maker. With its refrigerated warehouses and large delivery fleet - now 24 tractors and 76 trailers strong - Penn Maid could be viewed in the larger context of a specialist in perishable products.

That shift in thinking led Penn Maid to profitable new businesses in storing and shipping such products as Chilean grapes and Thanksgiving turkeys.

"We diversified," said Ray Goldberg. "We spread the risk."

Yet Penn Maid, despite the recent innovations, has never strayed far from the legacy of Harry Goldberg.

True, Penn Maid trucks are now routed by computer, not Harry's clipboard. And Robin's marketing education came from Wharton; Harry was a sixth-grade dropout. But the company foundations are as always: quality and family continuity.

"Yes, we're a family company," said Ray Goldberg. "But that's a blessing and a curse. Yes, you can work here. But you've got to make a significant contribution. You've got to carry the banner."

Harry hoisted that banner in the 1920s. He would pick up raw milk from farmers in the Northeast and Bucks County, pack it in ice and haul it by horse cart to South Philadelphia. There he ladled it out to the customers.

Unfortunately, scores of other merchants were doing the same thing. "My wife said, 'Harry, you aren't getting anywhere. Try something else.' "

Hence the shift into milk byproducts, sour cream and cottage cheese. The business went well and was registered as Penn Maid in 1927. Three years later, Harry bought two rowhouses on Marshall Street and set up shop.

Ray Goldberg joined his father in 1953. For 20 years, the father-son team made sour cream, cottage cheese and butter and eventually took over most of the block. In the early 1970s, however, it became clear that the company, located in a residential neighborhood, could no longer obtain variances for expansion, Ray Goldberg recalled.

Just as the Goldbergs had resolved to move to New Jersey, then-Mayor Frank Rizzo helped to engineer a package of tax-exempt financing that kept the company in the city, at the present Red Lion Road location.

Said Ray Goldberg, "That was the springboard that allowed us to stay here and grow dramatically."

Expansions to the plant were made in 1979, 1984, 1985 and 1986. In the meantime, Penn Maid also fended off its share of buyout offers as the food industry began dramatic consolidation. For example, the Kraft and Sealtest dairy lines are now the property of Philip Morris Cos. Inc., the New York tobacco conglomerate.

Today the battles with the conglomerate are fought on market share. In the hotly contested yogurt business, Penn Maid has been the first in the Philadelphia market to introduce nonfat yogurt, yogurt with NutraSweet and the children's yogurt brands.

"We got into yogurt late, in the 1970s," said Batoff, the marketing director. "But we're catching up."

Increasingly, such success has led Ray Goldberg to leave much of the company's operations to his children. (Two other children do not work at Penn Maid.)

"This year, I spent 100 days in Florida," said Raymond. "I have full confidence they can run the business, but I wanted to see them run it when I'm not around."

The Goldbergs work hard, Ray said, at remaining a family business. Mindful of other family enterprises that have splintered and vanished, Ray, Rick and Robin attend seminars on family ownership and the problems that arise.

Ray Goldberg has eschewed written agreements that divide the business among his children.

"There is no mechanism that will prevent fighting (in such situations) if there isn't mutual respect and a common ground," he said. "You don't do it by agreement, but by education. And you have to work at it."

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