Operations at SoCal HPP Juice Co-Packer Said to be Unaffected by Bankruptcy

Southern California-based Calpack Foods and HPP Food Services (HPPFS), which handle co-packing and high pressure processing for several cold-pressed juice brands on the West Coast, are said to be operating normally despite a recent bankruptcy filing by parent company State Fish Co.

An ongoing family feud and a sharp decline in the abundance of wet (fresh) fish in Southern California are reported to be the primary reasons behind troubles at State Fish, which filed for Chapter 11 bankruptcy on Jan. 26. The filing followed the en masse resignation of all company executive officers and directors, including CEO Vanessa DeLuca, on Jan. 23 and precipitated an attempt to restructure business operations at State Fish. The company has since retained George Blanco, a managing director at Avant Advisory Group, LLC, as its Chief Restructuring Officer.

In a statement e-mailed to BevNET, State Fish wrote that while Calpack and HPPFS are both profitable and cash-flow positive, sustained litigation among members of the DeLuca family, which has owned and operated the company since 1932, and consistently weaker hauls of seafood, particularly squid, have placed “significant financial pressure” on the subsidiaries.

Calpack

“The bankruptcy filing will provide the businesses with a chance to remove the cost and distraction of the ongoing litigation and to provide State Fish with a breathing spell to consider restructuring opportunities, conserve cash, and preserve the businesses as going concerns,” the company said in the statement.

Acquired in 2012, Calpack has quickly become an important source of revenue and income growth for State Fish. Calpack offers a range of in-house manufacturing services for food and beverage companies and in recent years has seen a surge in demand for production and co-packing of cold-pressed juices. In an interview with Undercurrent News, a trade publication covering the seafood industry, Blanco stated that Calpack represents 25 percent of overall business for State Fish.

Susan Ricci, who continues to manage operations at Calpack and HPPFS through the bankruptcy proceedings, told BevNET that it’s “business as usual” for the two companies, noting that they are running two shifts per day, five days a week. She said that both Calpack and HPPFS continue to attract new cold-pressed juice brands seeking co-packing and HPP services for their products. Ricci noted that unlike a Chapter 7 filing, in which a company’s assets are liquidated to pay debts, the bankruptcy for State Fish is intended to reorganize the company, optimize areas of growth and protect the development of its subsidiaries.

Vital Juice 150Ricci said that Calpack works with more than 10 cold-pressed juice clients, one of which is Vital Juice. The New York-based company recently transitioned away from an operational model predicated on building a national network of small, urban-centric production facilities in favor of partnering with regional co-packers that also provided high pressure processing services. Vital currently produces and processes all of its products at Calpack and HPPFS, and while CEO Edward Balassanian told BevNET that the bankruptcy “was something we found out about after we made the switch,” he said that there has been no disruption in the business, nor does he foresee a problem arising in the near term.

JC Hanley, the co-founder of Forager, which has worked with Calpack to co-pack its line of cold-pressed juices and nut milks, also said that the bankruptcy has not affected production. While Forager recently completed the construction of its own manufacturing facility in Indio, Calif. and is now transitioning away from its relationship with Calpack, Hanley stressed that the shift has been months in planning and has nothing to do with the reorganization at State Fish. He noted that Forger products will continue to be sent to HPPFS for high pressure processing.