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Overhill Farms and Bellisio Foods sign sales, production and distribution agreement

Overhill Farms, Inc. announced today that it has entered into a sales, distribution, and co-manufacturing agreement with Bellisio Foods, Inc., in conjunction with the national launch by Overhill Farms of the Boston Market frozen food line.

 

Under direction of Overhill Farms, Bellisio will provide sales management services for the Boston Market line. These will include customer sales, promotion management, broker management, customer invoicing and customer administration. Bellisio, based in Minneapolis, MN, and with production facilities in Jackson, OH, will also manufacture approximately 50 percent of the Boston Market products.

 

In discussing the agreement with Bellisio, James Rudis, chairman, president and CEO of Overhill Farms, said, "We have known Bellisio for several years as an efficient, well-managed food company with which we do not directly compete. When Overhill Farms acquired the license to the Boston Market retail food line, we saw an opportunity for our companies to work together. Bellisio has an experienced sales and marketing organization with longstanding relationships with virtually all major retailers, mass merchandisers, club stores, convenience stores and the military. They also efficiently distribute products to these major retailers and other outlets, which include all Boston Market customers. Utilizing these capabilities enables Overhill Farms to implement a smooth and cost-effective transition from the previous supplier of Boston Market frozen meals."

 

Mr. Rudis noted that, with the assistance of Bellisio's sales team, the company has been able to retain virtually all of the retailer accounts that had previously carried the Boston Market product.

 

Mr. Rudis said that the Bellisio agreement should result in lower costs to manufacture and distribute the Boston Market Products. The Boston Market products can be combined with Bellisio products in full-truck shipments to the Boston Market customer base, which presently is heavily represented in the Eastern and Midwestern portions of the country.

 

The agreement also enables Overhill Farms to avoid the cost and time needed to develop an equivalent sales and distribution system internally, he noted.

 

All Boston Market products, including those manufactured by Overhill Farms, will be warehoused and distributed by Bellisio through their facilities centrally located in Jackson, OH. Overhill Farms will be responsible for overall product quality, and for development of new items for the Boston Market line.

 

The agreement calls for manufacturing, sales, warehousing and distribution to be provided by Bellisio at fixed costs, with Bellisio to receive a pre-determined portion of profits resulting from these sales. The term of the agreement is 24 months.

"We carefully reviewed the cost-effectiveness of this collaborative arrangement with Bellisio compared to Overhill Farms proceeding on a stand-alone basis," Mr. Rudis said. "Under this arrangement, the overall profitability of the Boston Market line should be significantly improved, which is in the best interests of the Company, our customers and our shareholders."

 

Mr. Rudis said Overhill Farms and Bellisio Foods will explore similar potential opportunities that can be to the companies' mutual advantage.

 

Overhill Farms Inc. is a leading value-added supplier of custom high quality prepared frozen foods for branded retail, private label, foodservice and airline customers. Its product line includes entrées, plated meals, bulk-packed meal components, pastas, soups, sauces, poultry, meat and fish specialties, as well as organic and vegetarian offerings. The Company's capabilities give its customers a one-stop solution for new product development, precise replication of existing recipes, product manufacturing and packaging. Its customers include prominent nationally recognized names such as Jenny Craig Inc., Safeway Inc., Panda Restaurant Group Inc., Pinnacle Foods Group LLC and American Airlines, Inc.

 

Bellisio Foods, headquartered in Minneapolis, MM, has production facilities in Lakeview, MN and Jackson, OH. The privately-held company is the third-largest producer of frozen entrees in the US. Its brands include Michelina's, Authentico, Zap'ems Gourmet, Anytime Snackers, Joy of Cooking Foods and others, and it serves the foodservice industry through the Arden Culinary line.

 

Boston Market Corp., headquartered in Golden, CO, has 486 locations from coast to coast. It offers fresh, home-style meals with taste, convenience and value, including its fresh chicken prepared in signature rotisserie ovens and its extensive selection of high-quality side dishes. Boston Market at-home frozen meals are produced by Overhill Farms under an exclusive license from Boston Market Corp.

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