LOS ANGELES -- Certified Grocers of California here has functioned as a self-described "behind-the-scenes" company throughout its 75-year history.
1974 message to Certified's members by the cooperative's president at the time, Randolph Price.
"We are now doing what the chains are doing, and this is our philosophy in all of our actions -- what the chains do, we must do," Price said.
"What they are good at, we must be better at. When marketing imbalance is a 'way of life,' Certified cannot stand idly by and accept this. We must make the moves to correct these injustices in marketing with the sole aim of enabling you [retail members] to be as competitive with the national chains as possible."
It was that desire that resulted in Certified's creation in 1922, when 15 independent grocers got together to figure out how to compete with a growing phenomenon, the chain store. The 15 men each paid a $50 membership fee for the right to make purchases as a group, and their first purchase was a carload of soap. Because the newly formed Certified Grocers did not have any distribution facilities, the members divided their purchase up in a rail yard.
In 1923, Certified opened its first distribution center, which it called a wareroom. By the end of the year, its volume was $250,000. In 1925, the company hired Clayton Whiteman, the man generally considered to be the father of Certified, and a year later he was named general manager -- similar to the contemporary title of president -- a title he held until 1945. Whiteman led Certified into a merger with Co-Operative Grocers in 1928, which helped boost volume to $1 million; with the addition of Walker Brothers Grocery Co. a year later, volume in 1929 more than doubled to $2.7 million.
Despite the Depression, Certified continued to grow, moving into a 62,000-square-foot warehouse in 1932 that was enlarged to 150,000 square feet in 1938. By the end of the decade, volume exceeded $20 million and the membership stood at 586 retailers operating 750 stores.
When Whiteman was named president in 1945, he was succeeded as general manager by Campbell Stewart, who oversaw Certified for the next 16 years. During Stewart's, watch the company moved to its present location in the City of Commerce, opening a 277,000-square-foot facility there late in 1947.
That same year, Certified introduced the Springfield controlled-label line, which rang up $223,000 in sales during its first year.
In 1948, Certified diversified its dry grocery offerings by establishing a frozen-food division, followed in 1951 by a general merchandise division. Certified also got into the transportation business in 1951 with the purchase of Gross Systems, a trucking company that had been making its deliveries since 1927.
Certified became the first retailer-owned company to introduce a full delicatessen line when it launched its deli division in 1956, which racked up more than $7 million in sales during its first year.
The company also installed its first electronic data processing order system in 1956.
A year later Certifed acquired Spartan Grocers, which served 1,000 smaller retailers, and opened its first branch warehouse in a 340,000-square-foot facility in the San Fernando Valley.
By 1960, Certified had 1,600 member stores and a volume in excess of $300 million.
The following year, J. Murray Yunker, Certified's executive vice president, succeeded Campbell Stewart with the title of president and chief executive officer.
In 1963, Certified opened an ice cream plant and established Grocers Equipment Co. to help members acquire equipment and information on layout, planning and merchandising. A year later, it acquired Grocers and Merchants Insurance Service to give members a comprehensive package of insurance and related services at competitive prices.
Certified established its meat division in 1966 with a 76,000-square-foot distribution center, which helped boost overall volume to nearly $400 million.
At the time of Certified's 50th anniversary in 1972, volume had grown to $700 million, with 867 members.
When Yunker retired as president in 1973, he was named corporate chairman; his successor was Price.
During Price's presidency, Certified introduced a retail operations assistance program to provide members with a thorough analysis of their operations. The company said members who used the program reported sales increases of 12% to 67% during the first year.
In 1974, Certified acquired Gordon Bread Co. and Golden Pride Creamery to expand its offerings in bakery and dairy. It also began expanding operations into northern California. In 1977, Certified achieved sales exceeding $1 billion. Price retired that year and was succeeded by William O. Christy, who had previously been treasurer, senior vice president of finance and executive vice president.
Christy led Certified in the introduction of engineered standards -- an employee incentive program that offered extra pay and/or time off for production output that exceeded standards. The company said the program resulted in a 20% increase in warehouse productivity in the first few months after its introduction.
In late 1980, Certified opened a mechanized warehouse for dry groceries. "We expected it to demonstrate improved efficiency and economy, but not as quickly and dramatically as it has," Christy wrote in 1981.
"In 1980, warehouse costs+amounted to 2.64% of dry grocery sales; in the 15 months since, we began switching to the mech warehouse and those costs have dropped to 1.96% of sales -- a 26% improvement in economic efficiency in only 15 months."
The following year, Certified established Grocers Specialty Co. to provide a convenient source of products for small-order buyers and to establish a reliable source of ethnic, health and gourmet specialty foods. By 1984, GSC was posting sales of nearly $110 million. In 1984, Certified began expanding its presence in northern California, with more than 200 truckloads moving weekly to more than 70 stores in the San Francisco/Sacramento, Calif., area, producing annual volume approaching $200 million. By the time Certified opened a northern California distribution center in 1987, volume in that part of the state represented about 21% of total sales, including all export distribution.
A warehouse addition in 1990 enabled Certified to ship 1 million cases a week to customers in northern California and overseas. When Christy retired in 1991, he was named corporate chairman. Succeeding him was Everett Dingwell, a veteran of more than 35 years with Certified who headed the co-op's northern California division before taking over as president.
Sales passed the $2 billion level in 1989, rising to $2.3 billion that year, $2.7 billion in 1990 and $2.8 billion in 1991, after which, the loss of some large members (who opened their own facilities) and a weakening economy resulted in a volume decline for a couple of years.
Dingwell retired in 1994 and was succeeded by Alfred A. Plamann, Certified's former chief financial officer. Plamann's goal -- to simplify the company's business structure while improving profit opportunities for customers -- was reflected in the new strategic plan Certified introduced in 1995: Certified's Commitment to Customers, which pledged that Certified would be "the most cost-effective, quality-driven company that provides world-class services and complete product selection by creating a partnership with retailers and strategic alliances with suppliers."
