Jordano’s makes $10.6M real estate buy
Jordano’s is launching its centennial year with a statement about its plans for the next century.
The company, founded as a single grocery store in Santa Barbara by the Jordano brothers in 1915, has evolved into a wholesale and distribution powerhouse in the food and beverage business.
The company told the Business Times on Jan. 16 that its Pacific Beverage division has closed on the purchase of seven acres at the Cabrillo Business Park in Goleta at a price of $10.6 million.
On the drawing board is a new 102,000-square-foot regional distribution center on the property. The seller was Sares Regis Group, which owns and developed the business park and has lured high-profile tenants such as the global headquarters of Deckers Outdoor Corp.
Pacific Beverage plans to break ground on the facility in 2016. When complete, the entire division will move to the Cabrillo Business Park from its current Santa Barbara locations, freeing up space for Jordano’s fast-growing food distribution operations.
While the company is pursuing the new building to specifically handle its growing beer business, the main driver behind the plan is the distributor’s ballooning food business, which is “bursting at the seams,” Pacific Beverage President Jeff Jordano said.
Growth of the company’s food business is projected in the double digits, and there is a real sense of urgency to free up more space for those operations, he said.
“Part of it is the economy getting better, with people eating out more and so on. But a lot of it has been due the competitive dynamics in the marketplace,” Jordano said.
His father, Peter, runs the overall Jordano’s enterprise and has been the architect of its evolution out of retail and into wholesale distribution.
In the aftermath of the recession, many of Jordano’s regional competitors went out of business. Cardinal Food Service in Oxnard, Souza Food Service in Santa Maria and AMK Food Service in San Luis Obispo all folded, allowing Jordano’s to pick up much of their business.
The company has been renting trailers and additional freezer storage space in the region to accommodate the overflow. The growth is likely to translate into additional jobs in sales, warehousing, delivery and administration, Jordano said.
Though the food business is driving the expansion, the Jordano’s beverage division has grown steadily over the last 10 years, mostly thanks to the craft beer boom.
Prior to the arrival of the craft revolution, the company built its franchise on steady sales of Anheuser-Busch products such as Budweiser and Bud Lite. But Firestone Walker’s hot-selling 805 and IPA brands, along with other beers brewed in the region, are changing the product mix.
The beer business is a mature industry, Jordano said, but because of the rise of craft brewers, the number of stock keeping units, or SKUs, the company handles has more than tripled over the last decade.
“Ten years ago we had about 300 SKUs; this year we have 1,100 and we need to be able to handle that expansion in items,” he said.
The new building is designed by St. Louis, Missouri-based HDA Architects, which specializes in beer facilities. Jordano said he approached the firm after visiting a wholesaler in Houston whose building was designed by HDA.
The building will primarily be warehouse space, accounting for about 85,000 square feet, including cold storage, and about 20,000 square feet of office space.
When the project is complete, Jordano’s will move the entire beverage business to the new facility and turn the spaces the division currently occupies at 550 South Patterson and 5305 Ekwill Street over to the food division.
The new Pacific Beverage facility will be the company’s fourth distribution center. The others are in Oxnard, Santa Maria and Santa Margarita.
Jordano’s has project clearance from the city of Goleta and is currently working on the interior layout of the building. The company hopes to submit plans for permitting by the end of the year and be ready to break ground in spring of next year.
The company’s new neighbors will include Deckers Brands, FLIR Systems, Texas Instruments and Hewlett Packard. UC Santa Barbara and the U.S. Department of Agriculture also have acquired land or have space in the business park.
Pacific Beverage was represented in the transaction by Mark Mattingly of Pacifica Commercial Realty.