Description of J And J Snack Foods's Business Segments
Soft Pretzels The Company’s soft pretzels are sold under many brand names; some of which
are: SUPERPRETZEL, PRETZEL FILLERS, PRETZELFILS, GOURMET TWISTS, MR. TWISTER,
SOFT PRETZEL BITES, SOFTSTIX, SOFT PRETZEL BUNS, HOT KNOTS, DUTCH TWIST, TEXAS
TWIST, SANDWICH TWIST, CINNAPRETZEL and SERIOUSLY TWISTED!; and, to a lesser extent,
under private labels. Soft pretzels are sold in the Food Service, Retail Supermarket
and The Restaurant Group segments.
The Company’s soft pretzels qualify under USDA regulations as the nutritional
equivalent of bread for purposes of the USDA school lunch program, thereby enabling
a participating school to obtain partial reimbursement of the cost of the Company’s
soft pretzels from the USDA.
The Company’s soft pretzels are manufactured according to a proprietary
formula. Soft pretzels, ranging in size from one to ten ounces in weight, are
shaped and formed by the Company’s proprietary twister machines. These
soft pretzel tying machines are automated, high-speed machines for twisting
dough into the traditional pretzel shape. Additionally, we make soft pretzels
which are extruded or shaped by hand. Soft pretzels, after processing, are primarily
quick-frozen in either raw or baked form and packaged for delivery.
The Company’s principal marketing program in the Food Service segment
includes supplying ovens, mobile merchandisers, display cases, warmers and similar
merchandising equipment to the retailer to prepare and promote the sale of soft
pretzels. Some of this equipment is proprietary, including combination warmer
and display cases that reconstitute frozen soft pretzels while displaying them,
thus eliminating the need for an oven. The Company retains ownership of the
equipment placed in customer locations, and as a result, customers are not required
to make an investment in equipment.
Frozen Juice Treats and Desserts
The Company’s frozen juice treats and desserts are marketed under the
LUIGI’S, ICEE, BARQ’S, MINUTE MAID, SHAPE UPS, CHILL and MAMA TISH’S
brand names. Frozen juice treats and desserts are sold in the Food Service and
Retail Supermarkets segments. Frozen juice treats and dessert sales were 14%
of the Company’s revenue in fiscal years 2006, 2005 and 2004.
The Company’s SHAPE UPS and MINUTE MAID frozen juice and fruit bars are
manufactured from an apple juice base to which water, sweeteners, coloring (in
some cases) and flavorings are added. The juice bars contain two to three ounces
of apple or pear juice and the minimum daily requirement of vitamin C, and qualify
as reimbursable items under the USDA school lunch program. The juice bars are
produced in various flavors and are packaged in a sealed push-up paper container
referred to as the Milliken M-pak, which the Company believes has certain sanitary
and safety advantages.
LUIGI’S Real Italian Ice, LUIGI’S Sherbet, CHILL, MAMA TISH’S
Italian Ice and Sorbets are manufactured from water, sweeteners and fruit juice
concentrates in various flavors and are packaged in plastic cups and in squeeze-up
tubes.
ICEE Squeeze-Up Tubes are designed to capture the frozen taste of a traditional
ICEE drink. They are packaged in three- and four-ounce squeeze-up tubes.
MINUTE MAID Soft Frozen Lemonade and FRUIT & CREAM SWIRL and BARQ’S
FLOATZ are packaged in squeeze-up tubes and cups.
Churros
The Company’s churros are sold primarily under the TIO PEPE’S brand
name. Churros are sold to the Food Service and Retail Supermarkets segments.
Churro sales were 4% of the Company’s sales in fiscal year 2006 and 3%
in 2005 and 2004 respectively. Churros are Hispanic donuts in stick form which
the Company produces in several sizes according to a proprietary formula. The
churros are deep fried, frozen and packaged. At food service point-of-sale they
are reheated and topped with a cinnamon sugar mixture. The Company also sells
fruit- and crème-filled churros. The Company supplies churro merchandising
equipment similar to that used for its soft pretzels.
Bakery Products
The Company’s bakery products are marketed under the MRS. GOODCOOKIE,
CAMDEN CREEK BAKERY, READI-BAKE, COUNTRY HOME and PRETZEL COOKIE brand names,
and under private labels. Bakery products include primarily cookies, muffins
and donuts. Bakery products are sold to the Food Service segment. Bakery products
sales amounted to 28% of the Company’s sales in fiscal years 2006 and
2005 and 27% in 2004.
Frozen Beverages
The Company markets frozen beverages primarily under the names ICEE, SLUSH PUPPIE
and ARCTIC BLAST in the United States, Mexico and Canada. Additional frozen
beverages are ICEE PEAK, JAVA FREEZE and CALIFORNIA NATURAL. Frozen beverages
are sold in the Food Service, The Restaurant Group and Frozen Beverages segments.
Frozen beverage sales amounted to 19% of revenue in fiscal 2006, 20% in fiscal
2005 and 22% in fiscal 2004.
Under the Company’s principal marketing program for frozen carbonated
beverages, it installs frozen beverage dispensers for its ICEE and ARCTIC BLAST
brands at customer locations and thereafter services the machines, arranges
to supply customers with ingredients required for production of the frozen beverages,
and supports customer retail sales efforts with in-store promotions and point-of-sale
materials. In most cases, the Company retains ownership of its dispensers, and
as a result, customers are not required to make an investment in equipment or
arrange for the ingredients and supplies necessary to produce and market the
frozen beverages. In fiscal 1999, the Company began providing installation and
maintenance service only to a large, quick-service restaurant and others, which
resulted in the increase of customer-owned beverage dispensers beginning in
1999. The Company also provides managed service and sells equipment in its Frozen
Beverages segment, revenue from which amounted to 9% and 8% of the Company’s
sales in fiscal years 2006 and 2005, respectively. In fiscal 2006, through an
acquisition, the Company began to sell frozen uncarbonated beverages under the
SLUSH PUPPIE brand through a distributor network.
Each new frozen carbonated customer location requires a frozen beverage dispenser
supplied by the Company or by the customer. Company-supplied frozen carbonated
dispensers are purchased from outside vendors, built new or rebuilt by the Company.
The Company provides managed service and/or products to approximately 72,000
Company-owned and customer-owned dispensers.
The Company has the rights to market and distribute frozen beverages under
the name ICEE to all the continental United States (except for portions of eleven
states) as well as internationally.
Other Products
Other products sold by the Company include soft drinks, funnel cakes sold under
the FUNNEL CAKE FACTORY brand name, popcorn sold under the AIRPOPT brand name
and smaller amounts of various other food products. These products are sold
in the Food Service, The Restaurant Group and Frozen Beverages segments.
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