Good Source is a Calif.-based business specializing in the sale of foodservice closeout and specialized products to special application markets, including the corrections industry, educational institutions and non-profit organizations. Recently the company sold a majority stake to Evergreen Pacific Partners, Washington state’s largest private equity fund. Food Manufacturing spoke with representatives from Good Source about the sale and how it will affect company in the future.
Q: How does Good Source find its products?
A: Since we were founded in 1990, we have developed relationships with more than 500 food manufacturer partners. We source products in every foodservice category from Protein to Bakery and Beverages to Vegetables. We market and sell three product lines:
- Line Items — Made to Order
- Wise Buy regular irregulars — Ongoing
- Wise Buy Specials — Hot Buys
Q: Who purchases the products you obtain?
A: Our products are sold to buyers at the thousands of budget constrained institutions we service, including correctional facilities, schools, food banks and even end consumers through our Treasure Box outreach to families.
Q: How do customers find you, or do you seek out customers?
A: Having been in business for more than 20 years, we have developed a good reputation among customers in our target audiences across the U.S. We are proud of our strong retention rate. Many customers have been with us for more than a decade. Our existing customers often refer new customers. In addition, we also prospect institutions through referrals and trade journals.
Q: How did Good Source develop its business?
A: We first identified supplies of food which couldn’t be marketed to primary customers by manufacturers or distributors. We identified and developed a new market for budget constrained customers seeking wholesome food at a discount. It evolved to where manufacturers would seek us out when they had branded product which they wanted to move into protected non-competing markets like correctional facilities. In learning the markets we distribute to, we were able to develop unique line items as regular solutions for our customers.
Q: How does Good Source purchase the food for distribution?
A: Good Source has the economies of scale and capital resources to make large purchases for the benefit of its budget-constrained customers. Good Source has three different processes for purchasing food, all of which are through our centralized proprietary Information Systems which controls where each product can be sold (to manage the manufacturers’ sales restrictions). Good Source has a product development group that works closely with our sales force to develop new unique proprietary line items to satisfy the unique requirements of our budget constrained customers. In addition, we have contractual relationships with many food manufacturers where we are the exclusive representative for managing their closeouts for sale in non-restricted markets. We call these “ongoing regular irregulars.” Lastly, we procure closeout products which are, in many cases, one time occurrences called Hot Buys. These are typically the best value for our customers if they have flexible procurement practices. Suppliers approach Good Source for help or we seek out these opportunities.
Q: How will the new ownership affect Good Source now and in the future?
A: In the near term, Evergreen’s significant financial resources will complement Good Source’s already strong procurement and sales expertise in its niche markets, enabling faster growth and lower costs for Good Source customers.
We plan to expand geographically as well as along certain product lines, and our goal is to double revenues within the next 5 years. We will be increasing employment across the company to drive and accommodate this growth.
Interview By Lindsey Coblentz, Associate Editor