Editor’s note: Angel Flores of Wise Foods will be a speaker in Global Atlanta’s upcoming Latin American Crossroads event on Mexico to be held Sept. 25.
Jolie Weber knows life under private equity, and thankfully, it’s behind her. The chief executive of the nearly century-old snack brand Wise Foods has been in the C-suite of the company since 2012, when Arca Continental purchased it for around $400 million.
Before taking on the CEO role two years ago, she served as chief financial officer in the throes of a rapid-fire acquisition that would land the company’s headquarters permanently in Atlanta.
Navigating financial challenges to shore up the business was personally fulfilling, but the company’s strategic direction wasn’t always clear.
After the family of founder Earl Wise sold it off in 1964, the company had been passed around, finally ending up in the hands of Palladium Equity Partners, which held the company for a longer-than-expected 12 years after its 2000 acquisition from KKR.
“It’s a business for the moment with private equity,” Ms. Weber said in an interview with Global Atlanta. “You don’t spend a lot of time planning for the future. You don’t do big five-year plans. You don’t really think about a lot of development programs.”
Wise, which makes a signature “Golden Original” potato chip, Cheez Doodles, popcorn and a variety of other salty snacks, is a traditionally minded company founded in Berwick, Pa., in 1921. Its main factory is still there.
But the strategic partner that will guide its next phase came from south of the border.
Mexico’s Arca Continental was fresh off its own consolidation, formed out of the merger between two key Coca-Cola bottlers in the country. Arca was based in the city of Monterrey and served northern Mexico, Ecuador and parts of northern Argentina. Grupo Continental served seven Mexican states covering about 15 percent of the country. Their merger created the second largest bottler in Latin America.
The newly combined firm, now a $8.6 billion company, began looking at ways to capitalize on its expertise in manufacturing and distribution.
“We started asking, what do we do with all this knowhow? Of course, with something that does not conflict with Coca-Cola,” said Angel Flores, a Wise senior vice president who came over from Arca in the acquisition.
The answer? Getting into the snack business, and then expanding both drinks and snacks across borders into the U.S. and South America. In the latter region, the company already had bottling territory.
Arca Continental had already bought Bokados, a major player in the snack food market in Mexico. It also controlled the Topochico mineral water brand, which accounted for about 90 percent of the Hispanic market share in its segment within the U.S.
“We had to go after the mainstream market. In parallel, that’s why we started talking about Wise,” Mr. Flores said.
Wise was founded by a grocer and entrepreneur who (company lore has it) fried up extra potatoes in his mother’s kitchen, bagged them and sold them out of the store. He then expanded to a factory four years later.
By 2012, it had the history and brand presence Arca was looking for. It was strongest in the Northeast, but it had made inroads along the east coast, down to Florida and even into Puerto Rico, where it maintains a strong distributor relationship.
In September 2012, merger talks began. Arca, meanwhile, was also in discussion with Inalecsa, an Ecuadorian company that makes plantain chips under the Tortolines brand. Arca made bold move to try and close both deals at the same time — just a few months later in December.
After the rush to successfully close the deal, the new Wise Foods naturally needed a headquarters. Many functions were already run out of Atlanta, but a closer look at the city revealed some intangibles that other places didn’t have: executives wanted to live here, and it was easy for Wise’s Mexican colleagues to travel up for meetings.
“Atlanta was just so attractive — reasonable real estate, top talent from all the universities in the area, a good airport,” Ms. Weber said. “It doesn’t hurt that there are three direct flights a day to Monterrey.”
Ms. Weber also happened to be based in Atlanta since she returned from a stint working in Paraguay for Coca-Cola, then heading up North American marketing for Suntory, the Japanese parent company of Crystal Springs bottled water.
The city also had good business-aviation airports and office space that was affordable enough to establish an innovation center, where Wise has churned out new ideas including food-truck flavors like Korean barbecue and cheeseburgers. Some of those have ended up at snack stands at the Atlanta Braves’ new SunTrust Park in Cobb County, which is a stone’s throw away from the Wise/Arca offices.
Ms. Weber said the savvy moves quickly showed the “vision and planning” that Arca has brought to Wise’s day-to-day operations.
“Not only did they want to diversify in other categories, but they wanted to get experience in the U.S. operating in a significant way, and Wise was really that platform,” she said.
Working Together, NAFTA Concerns
Ultimately, the synergies have been strong. The combined companies have hit their stride, learning how to capitalize on their complementary strengths and the open borders afforded by the North American Free Trade Agreement, which recently has been in the crosshairs of U.S. President Donald Trump.
In 2016, an Arca-controlled joint venture won the Southwest U.S. bottling territory including Texas and parts of Oklahoma as Coca-Cola divested most of its U.S. manufacturing and distribution capacity.
“That whole strategy really came to fruition for them, in terms of getting a foothold in the U.S. and then using that as a launching platform for something even bigger,” Ms. Weber said.
Arca’s new reach has made it easier for Wise to move westward in the U.S. It’s also smoothed the road for Arca to boost U.S. sales of “Mexican Coke,” coveted by some Coca-Cola purists for its glass bottle and real sugar (rather than corn syrup used in the U.S.)
Wise is taking Arca’s Si Señor brand of assorted spicy snacks to the Mexican consumer in the U.S. Some of Wise’s peanut-based products are made at Mexican facilities from peanuts largely sourced from Georgia and Oklahoma. (Total crop exports from Georgia to Mexico totaled more than $81 million last year.)
Because of all this, threats about dismantling NAFTA are unsettling to Ms. Weber.
“We certainly watch (talk of renegotiation) closely, and it would certainly have impact on our business,” Ms. Weber said. “We’re able to utilize one another’s assets in a very effective way.”