King Nut last week was awarded a 35 percent, five-year Job Creation Tax Credit from the Ohio Tax Credit Authority for creating the 25 new jobs.
SOLON, Ohio -- Marty Kanan, president and chief executive of King Nut Co., surveys the honey-roasted peanuts tumbling off the conveyer belt in his family's Solon factory.
The warm nuts are roasted and drizzled by hand with real honey, sugar and sea salt before being cooled.
They are then fed into other machines that weigh and package them into single-serve helpings for retail outlets and airline passengers around the world.
A growing appetite for King Nut's snacks, as well as its recent expansions in equipment and workforce, are poised to give King Nut its biggest year in 2013.
The company will open a new 35,000-square-foot distribution center in Solon next week.
It also brought in $1 million worth of high-tech roasting equipment and hired 25 more employees, expanding both its productivity and its capacity. The company's 225 workers manufacture its products over three shifts, five to six days a week.
King Nut last week was awarded a 35 percent, five-year Job Creation Tax Credit from the Ohio Tax Credit Authority for creating the 25 new jobs, which are expected to generate $700,000 in annual payroll.
That should help the company take advantage of Americans' love of snacking, which has remained strong despite the recession and diminished spending power.
The Snack Food Association in Arlington, Va., reports that consumers spent 3.8 percent more on snacks in 2011, with 43 percent of those polled eating three to four snacks a day.
The U.S. snack market was $2.04 billion in 2011, up 7.9 percent from the previous year.
The snack nuts, seeds and corn nuts category is projected to grow to $3.2 billion in 2015, according to the trade group.
That's smaller than potato or tortilla chips, cookies and crackers, but still more than pretzels, fruit snacks and dried meat snacks.
The 75-year-old King Nut, which churns out more than 1 million bags of peanuts, pretzels and snack mixes a day, is the largest supplier to the airline industry, including AirTran, American, Alaska, Delta, JetBlue, Southwest, United and US Airways.
King Nut provides both the single-serve bags handed out with beverages as well as the mixed nuts inside some carriers' buy-on-board snacks.
Kanan, who runs the company with his younger brother, Matthew, won't divulge specifics regarding sales or profits, but he is clearly excited about the possibilities after some well-publicized struggles in the past.
King Nut survived being linked to a 2009 salmonella outbreak that was found in some tainted peanut butter from one of its former suppliers, as well as a steep decline in orders for its airline snacks after 9/11 that forced it to temporarily lay off up to 50 workers.
Edna and Earl Balliette founded King Nut Co. in 1937, going door-to-door selling bagged nuts to vending machine companies, taverns, gas stations and airlines, as well as private label nuts to supermarkets.
When Michael Kanan, Marty's father, bought King Nut from Edna Balliette in 1989, the small nut and dried fruit company had 25 employees and about $5 million in sales.
Marty Kanan joined the company in 1991, expanding the airline business by going after the major carriers.
By 1996, King Nut was supplying snacks to five airlines, including Continental and Northwest, and sales had soared to $14 million.
The snack food industry is still dominated by national players like Planters, Blue Diamond and Emerald, but King Nut has steadily expanded its branded and private-label business.
In 2003, the company bought rival Peterson Nut and Fairmount Snacks, which sold its products to grocery and convenience store and at the former Jacob's Field , for an undisclosed sum. A replica of Peterson's peanuts, baseballs and basketballs mural is painted inside the company's employee break room.
King Nut now employs more than 10 times the number of workers and generates more than 20 times the revenue it did when the Kanan family bought it, Marty Kanan said. The company's total output now surpasses 20 million pounds of snacks a year.
The Peterson Nut Co.'s Holiday Gift Catalog, which also includes an e-commerce site, is also growing, "but not as fast as the rest of our business," Kanan said.
From cocoa-covered nuts to wasabi-coated California almonds, the flavors have adapted to appeal to new tastes. And the demand continues to soar.
During the summer of 2011, scorching weather in key peanut-growing states like Georgia and Texas shriveled supplies and sent prices for peanuts, peanut butter and other products soaring. King Nut raised its prices to cover wholesale prices that more than doubled.
Although peanuts have come down from last year's high, that decline has been more than offset by rising prices for cashews, almonds and pistachios, Kanan said.
"Cashews are projected to continue to climb, almonds are already up over 30 percent and pistachios are up 20 to 30 percent," he said.
As more people around the world get a taste for nuts, "foreign countries are coming in and buying up all of our supplies and American consumers are paying more."
All those peanuts and almonds just steps away from Kanan's office often leaves his suits smelling like freshly roasted nuts.
Not that he minds.
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