SONOMA -- MPK Sonoma Corp. for more than two dozen years has been co-packing the Soy Vay brand of Asian-style sauces and marinades, and now the 28-year-old food-processing company says it has just a few months to line up replacement business for that 4.5 million-bottle-a-year contract else lose nearly all revenue.
Preparing and mixing ingredients for and filling Soy Vay retail bottles and foodservice jugs makes up 95 percent of revenue for 14-employee MPK Sonoma (707-996-3931, mpksonoma.com), according to President Charles Boles, 65. He said Oakland-based brand owner Clorox Corp., which purchased it from Felton-based Soy Vay Enterprises nearly a year ago, informed MPK Sonoma on Nov. 1 that it will take brand production in-house in March of next year.
"It was kind of a surprise," Mr. Boles said. "We were expecting we'd continue for three to five years with Clorox."
A Clorox spokeswoman said the company recently decided its plans for the Soy Vay brand called for a change.
"We appreciate the partnership we have had with MPK Sonoma Corporation," said Aileen Zerrudo, director of corporate communications. "As part of a recent strategic assessment of our manufacturing needs, we have decided to make a change to help support the long-term growth objectives and competitiveness of our business."
Mr. Boles said he showed Clorox officials first visiting the plant in early January how the MPK Sonoma could turn out three times as much Soy Vay with the existing facility and permits. In 2007-2008, MPK Sonoma spent $5 million doubling the size of the plant in a move to 48,500 square feet at 21684 Eighth St. E. and tripling production capacity by adding a $750,000 Sidel Hema automated 150-bottle-a-minute filling machine and two 5,000-gallon soy sauce tanks. The facility has 19,000 square feet of production floor, 28,000 square feet of warehouse and a 1,500-square-foot office.
That infrastructure allows each 10-hour shift to produce up to 54,000 bottles of Soy Vay. Mr. Boles said the company has turned out 56 million bottles of the brand since it started co-packing the brand in 1988. Heidi Chien and Eddie Scher created the line of certified-kosher sauces three decades ago while employees at Humboldt State University.
Yet investments in and operating costs of MPK Sonoma's production capacity -- including $1 million in annual payroll, employee benefits such as Kaiser Permanente health plans, health savings and retirement accounts, and $414,000 in taxes last fiscal year -- require one or more large-scale contracts keep the business in the black and creditors whole, according to Mr. Boles. The operation has a book value of nearly $5 million, including $1.7 million in leasehold improvements and the balance in equipment.
If enough new business doesn't materialize, MPK Sonoma would shut down and sell its assets, but he'd rather have another food processor buy the admittedly highly specialized facility to keep the employees working.
"We tried to do everything right, but it has come to this," Mr. Boles wrote on the company's website.
Winning the Soy Vay contract also led to other MPK Sonoma's business: grated frozen certified-organic ginger packaged for industrial use by other food processors and grocery stores, which use it in ready-to-eat dishes. The co-packer had to come up with sourcing and preparation processes -- washing, peeling and finely chopping -- for 230 pounds of the tasty tuber per batch and now amounts to many of tons at a time.