Polar Acquisition gives beverage manufacturer a base in the South
By Priyanka Dayal TELEGRAM & GAZETTE STAFF
Christopher J. Crowley, executive vice president and treasurer of Polar Beverages, shows off one of the company's products at Polar's bottling plant on Southbridge Street. (T&G Staff/JIM COLLINS)
Trucks and excavators are parked near the new Polar Beverages warehouse on Southbridge Street in Worcester. (T&G Staff/TOM RETTIG)
WORCESTER — Perhaps it's no surprise residents of the Sunshine State like their Orange Dry.
The fizzy drink, manufactured by Worcester-based Polar Beverages, does include some Florida orange juice.
Whatever the reason, the family that owns and runs Polar is hoping southerners keep drinking the company's trademark orange soda — and the dozens of other sodas and seltzers Polar manufactures here in Worcester.
To cut shipping costs and boost business in the Southeast, Polar recently bought a bottling facility in Fitzgerald, Ga., from supermarket chain Winn-Dixie Stores Inc.
The Georgia facility gives Polar easy access to the Southern market. Polar will use the facility to make Chek beverages, Winn-Dixie's private label.
And eventually, Polar will start manufacturing Polar brand products in Georgia, which means it won't have to send truckloads of beverages from Worcester to the Deep South.
“Our hope is to grow dramatically down there,” said Ralph D. Crowley Jr., Polar's president and chief executive officer.
Mr. Crowley called the Winn-Dixie acquisition, Polar's 35th since 1992, a natural progression.
“Polar has been first a Worcester brand, then a New England brand, then a Northeast brand, and now the snow birds down south are very familiar with Polar,” he said.
Polar tested its products in southern grocery stores before investing in the Georgia facility. The terms of the transaction were not disclosed.
Winn-Dixie, which is based in Jacksonville, Fla., said the deal with Polar follows its strategy to focus on its core business: operating grocery stores.
Mr. Crowley said Polar plans to add 75 jobs to the Georgia facility over the next three years. The facility currently has 135 employees.
Polar didn't receive any tax breaks from local or state officials in Georgia, but Mr. Crowley described the overall climate as “business-friendly.”
Longtime Fitzgerald Mayor Gerald H. Thompson said Polar's presence will be good for his community, which lost more than 1,000 jobs in the last few years.
“Our people need the jobs,” he said. “This economic recession that we have been in for several years has been tough for our community because a number of manufacturing facilities have failed. Right now, we're trying to build back.”
Though Mr. Crowley is excited about Polar's growth in the South, he said Polar is also pouring money into its local facilities in Worcester and Auburn, which will be the hub for the company's growth in the Northeast.
Polar is spending $6 million on a roof project that will include solar panels for two vast warehouse buildings at the Southbridge Street headquarters. Just over the Worcester line in Auburn, the company has a 225,000-square foot storage and distribution facility, which opened last year. Already, Polar is expanding the facility by 125,000 square feet.
Polar has about 1,400 employees, 1,100 of them in Worcester. It also owns and operates the Adirondack Beverages facility in Scotia, N.Y.
The fourth-generation, family-owned company has roots back to 1882. Whiskey used to be the company's top seller. Prohibition in the 1920s forced Polar out of the alcoholic beverages market, and the company began to focus on soft drinks and water.
Today Polar makes a slew of flavored sodas, seltzers and mixers. Ralph Crowley, and his brother, Christopher J. Crowley, Polar's executive vice president and treasurer, have lost count.
Polar also distributes many well-known national brands, including 7UP, Nantucket Nectars, Snapple and Sunkist.
After its latest acquisition, Polar's revenues are projected to be $400 million this year. Polar has grown to become the country's largest independent bottler of soft drinks.
It is small compared to industry giants, like PepsiCo Inc. and the Coca-Cola Co., but that doesn't mean it hasn't clashed with the giants.
Polar took PepsiCo to federal court this year when PepsiCo started selling a beverage that looked like it was made by Polar. A judge sided with Polar in April, ordering PepsiCo to stop selling its Polar Shock drinks in New England. The case was later dismissed.
Despite Polar's growth, the Crowley brothers like to think of their company as a small regional operation.
Polar's relationships with supermarkets and customers have allowed it to expand, Ralph Crowley said.
“We're more of a destination brand than an impulse brand,” he said, “and our competitors tend to be more of an impulse brand.”
Polar has catered to the growing segment of soda drinkers who choose diet, or low-sugar drinks. The company's newest venture in low-calorie drinks is Fruit A Peel, a fruit-flavored spritzer meant to serve as an alternative to juice.
Seltzers, which don't have any calories, are among Polar's top-selling products.
“The consumer is making up their mind and moving to healthier products, and we're benefiting from that,” Ralph Crowley said.
Nationally, diet sodas accounted for nearly 30 percent of the soft drink business last year, said John Sicher, editor and publisher of Beverage Digest. That's up from 24.7 percent in 2000.
Total U.S. carbonated soft drink sales were $74.2 billion last year, up from $73.9 billion the year before, Mr. Sicher said. For the Crowley brothers, managing Polar means tasting bubbly liquids every day. Sometimes they taste to check the quality of a product. Sometimes they experiment with new flavors.
Even for big sellers like Orange Dry, the Crowleys tried oranges from different places to find the best tasting blend. They decided to combine juices from California and Florida oranges.
Orange Dry contains orange oil and orange juice, not concentrate, which makes it expensive to produce, compared with other orange sodas. “It's the real deal,” Chris Crowley said.
Ralph Crowley gulps two cans of Diet Orange Dry every day, and one can of seltzer. Chris Crowley's daily routine includes two cans of seltzer and one ginger ale.
Mr. Sicher predicted Polar will continue to grow. “They're one of the better bottlers in the country,” he said. “The management is considered to be very savvy.”