When Peter Margie started Saratoga Potato Chips Inc. 22 years ago, he envisioned a small private-label company of five to 10 people near his hometown of Toronto.
Today, the 46-year-old businessman finds himself at the helm of Saratoga in Canada, Olde York Potato Chips in Fort Wayne and the recently announced Saratoga Potato Chips LLC in Allen County, which is expected to bring 175 new jobs by 2013 and an investment of $4.9 million.
Margie said he is president and CEO of all three companies, which together will eventually employ about 365 workers. He said he owns Saratoga in Canada with his parents, owns the holding company that owns Olde York at 918 W. Cook Road and owns Saratoga Potato Chips in Allen County.
The expansion of Saratoga to Allen County, he said, was precipitated by a brisk recession-related business climate for private-label potato chips. He said expansion to at least one other United States city is possible, although Allen County will remain the U.S. headquarters.
“In the last two years, probably due to the recessionary trend in the marketplace, consumers have decided to purchase more private-label potato chips to save money and are discovering that the quality of those private-label brands are equal to the national brands,” Margie said. “And they can save themselves, in most cases, $1 a bag.”
Legally, he said, his three current businesses are separate entities, and they are sometimes competitors. But he acknowledged they could be considered sister companies.
He said there are no plans to merge the businesses, largely because other investors aren’t interested in such a move.
Margie declined to reveal income figures for Olde York in Fort Wayne and Saratoga in Canada, but a source said the latter company has about $40 million in annual sales.
Margie would say only that Saratoga in Canada, which produces traditional potato chips, kettle chips and popcorn, is the largest producer of private-label potato chips in Canada.
Saratoga in Canada supplies products to retailers in Canada and the United States, and when the new plant in Allen County begins operations this year in a 138,000-square-foot facility at 6923 Lincoln Parkway, the U.S. production will be moved there.
Margie would not disclose which United States retailers Olde York and Saratoga work with, but he said most of them are in the Midwest. He said the companies’ products, sold under retailers’ labels, are available in northeast Indiana.
Margie is a big fan of the Midwest, where his companies get most of their raw products, and of the Fort Wayne area in particular.
“The Midwest,” he said, “has a reputation for being friendly, and it’s true. Definitely true in Fort Wayne. When people walk down the street and see somebody they know, they say hello.”
The cost of living, business environment and various governmental incentives also help, he said. Saratoga Potato Chips in Allen County stands to gain almost $1.3 million in tax abatements, training services and recruitment assistance.
The Fort Wayne area, though, likely wasn’t on Margie’s radar after graduating from Brown University in Providence, R.I., where he studied organizational behavior, management and economics.
It was in Providence, he said, where he discovered crunchy kettle chips, and he decided to bring the fare to Toronto by forming a small company.
“I did not want to be part of a big corporate culture because it didn’t feel comfortable to me,” he said. “So I decided to start my own business, and I chose kettle-style potato chips because they were not widely available in my hometown.
“I didn’t envision the size of (Saratoga) at this point in time, but in order to stay competitive we’ve had to grow.”
And that growth, he said, is expected to continue, fueled by changing customer buying habits that he believes will remain after the recession loosens its grip.
“By then,” he said, “we believe consumers will be accustomed to buying those store brands that we supply and we’ll be able to hold onto the volume gains.
“The penetration of store brands in the overall marketplace in the United States is well below the level of other countries, namely Canada and England. Which is to say, we believe that the trend will be for greater penetration over time.”
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