Valley helps government keep going
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- Valley Foods is out to replace an American tradition -- Military Ready-to-Eat meals served to soldiers in the field -- with a fresher, Youngstown-made alternative.
The company's downtown distribution center already ships thousands of its fresh-packed submarine sandwich lunches to National Guard bases all through Ohio, Pennsylvania, New Jersey and Virginia. Officials are in talks with Army and National Guard officials in other states as well.
Founder and president John Valley Sr. said federal contracts make up a major chunk of Valley Foods' revenue, about half its $6 million in annual sales.
And that number could more than triple if the company lands an eight-year $8 million defense contract to provide packaged group meals for military field kitchens in the United States and overseas.
"It's the biggest contract we've ever tried for, and if we get it, it would change the company completely," Valley said, grinning. "We'd have to expand like you wouldn't believe."
World's biggest consumer
Valley Foods is one of many local companies selling goods and services to the world's biggest buyer of consumer goods, the United States government.
Another is Aluminum Fence & amp; Manufacturing in Struthers, a small aluminum fabricator with six employees that does business with the government all over the world.
Ed Joseph founded the company 16 years ago and found a niche producing fencing for military bases and other government facilities in ocean locales, where aluminum's rust-free properties are needed.
The company's biggest federal project recently was an order for decorative aluminum mesh for an officers' quarters facade at a U.S. Navy base in Guam. The plant also produced machine gun turrets as a subcontractor for a local company working with the military.
Government work brings in about 30 percent of the company's sales, Joseph said, but he avoids the paperwork by going through brokers.
"That way they buy it, they sell it, and they take care of all the problems," he said. "Government contracts are tough, and I'd rather let somebody else make 30 percent instead of going direct."
The company has annual revenue between $700,000 and $800,000.
Joseph said he keeps prices competitive by making dies in house instead of having them made. "That keeps us cheaper than anybody else."
Small company
Bilstro Industrial Supplies in Canfield is about as small as a company can get -- owner Bill Cramer and his wife, Vilma, run the business out of their Canfield home, with occasional part-time help -- yet the company sells products to many federal agencies and almost every military base on the East Coast.
Cramer started Bilstro in the early 1980s, when the closing of General Fireproofing Co. forced him to retire after 35 years. He recently closed his Youngstown office and moved the business into his home, but that was easy because he has no local inventory, no trucks and no warehouse.
A middleman
He works as a middleman between government agencies and about 25 suppliers, all in Ohio and Pennsylvania. Cramer said 95 percent of his business is with the federal government.
"Every day it's something new," he said. "We're like Home Depot. The agencies send me the list of things they need, and there are very few items I don't quote," he said.
Cramer used to travel to Washington, D.C., every month, meeting in person with purchasing agents at government agencies all over the nation's capital. Now, he does most of his work by phone, relying on relationships he has built over the years.
"I've supplied nuts and bolts for the Navy, drinking glasses for Air Force One, and everything else in between," he said. "The federal government has the same needs you have in your house."
He's had so much experience with government paperwork that Cramer doesn't consider that a drawback.
But starting up a business like his would be tougher today, he said, because rising shipping costs are making it hard to keep prices competitive. The government is also outsourcing some maintenance and other work to private contractors, which reduces the number of products it has to buy.
"The best advice I could give somebody who wants to do what I do: Move to Washington," he said. "There are so many government agencies down there that need people and suppliers, and it's so competitive. They're always looking for new suppliers."
Shipping costs have been a factor for Valley Foods as well, its president said. Officials decided to save on transportation costs by opening plants in Pennsylvania and Virginia to take its products closer to their destinations.
Another issue
Distance may also become an issue as the company strives to kept its products fresh.
Valley's Military Meal packs generally feature a submarine sandwich, a fruit cup, brand name cookies, candy, salty snacks, juice or soda. They are designed to stay fresh for several days.
As business expands to include more distant military bases, he said, the company has equipment for treating the meals with a nitrogen gas compound that will keep them fresh-tasting for 21 days.
Valley also offers a shelf-stable lunch pack which includes individual sized canned foods, such as beans and franks and tuna salad with crackers, instead of a sandwich. Both packs have proved popular with soldiers, Valley said.
"What we do is rather unique," he said. "We don't have a lot of competition on this."
The company started out as a catering business in 1959 and evolved to focus on prepackaged meals for schools and the elderly. It landed its first government contract in 1973 and got its first food contract with the military in 1996.
Since then, Valley said, the military side of the business has been growing steadily. The company employs 65 locally and 10 more workers divided between its Pennsylvania and Virginia plants.
Valley said the government's use of precooked, ready-to-eat meals for solders in combat and training situations will likely continue indefinitely, but he's hoping Valley Foods meals can fill the military's need for variety.
"I'd be extremely happy to get 50 percent of the meals for every soldier," he said. "That would work out just fine."
vinarsky@vindy.com