Beer Nuts, Inc.

views updated

Beer Nuts, Inc.

103 North Robinson Street
Bloomington, Illinois 61701
U.S.A.
Telephone: (309) 827-8580
Toll Free: (800) 233-7688
Fax: (309) 827-0914
Web site: http://www.beernuts.com

Private Company
Incorporated: 1955 as Shirk Products, Inc.
Employees: 80
Sales: $30 million (2005 est.)
NAIC: 311911 Roasted Nuts and Peanut Butter Manufacturing

Beer Nuts, Inc., manufactures the nationally distributed brand of slightly sweet and salty glazed peanuts that bear the company name. The firm also produces cashews, almonds, and other nuts with its original glaze; Spicy & Hot Peanuts; CrunchNuts, with a baked-on flavored coating; and Beer Nuts Bar Mix, which includes pretzels, roasted corn, and sesame sticks. The firm is owned and run by members of the founding Shirk family and produces all of its products in Bloomington, Illinois.

BEGINNINGS

The origins of Beer Nuts, Inc., date to the mid-1930s and a Bloomington, Illinois, candy store called the

Caramel Crisp Shoppe. Though its most popular offerings were candy and popcorn balls, the store also sold redskin peanuts that had been roasted and glazed, which were sometimes given away to encourage sales of orange soda. In 1937 a young man named Arlo Shirk and his father Edward G. Shirk bought the shop, and Arlo became its manager. When Arlo died unexpectedly three years later, his brother Russell transferred from the University of Southern California to Bloomington-based Illinois Wesleyan University and took over management of the store.

Russell Shirk had a flair for business and was also a stickler for quality, both in the ingredients he used and in the shop’s service to its customers, and it blossomed under his hand. The shop was located across the street from the Irving Theater in downtown Bloomington, and to attract the attention of moviegoers he sometimes set up fans to blow the scent of fresh snacks across the street.

During World War II Shirk served in the U.S. Coast Guard, and afterward he returned to Bloomington to continue running the shop. By this time, the roasted Virginia or Southeastern Jumbo Runner peanuts, glazed in a mixture of corn syrup, oil, and salt, had become one of its most popular items. No beer was used, despite later rumors to this effect.

In 1950 the shop began to package its peanuts for sale at area liquor stores under the name Shirk’s Glazed Peanuts, and two years later Blue Star Potato Chip distributor Eldredge C. Brewster began to carry them. Seeking a wider audience, in 1953 the product’s name was changed to Beer Nuts, and the Shirks closed the Caramel Crisp Shoppe to devote their full energy to production. In 1954 they moved to a larger building in Bloomington, and the next year Russell Shirk incorporated the business as Shirk Products, Inc.

At this time most taverns did not serve food of any kind, and the crisp, salty redskin peanuts with the easy-to-remember name proved a hit with drinkers as well as bar owners, who saw their sales go up as customers bought more beer to slake thirst generated by the nuts (which were sometimes offered for free). With the assistance of Eldredge Brewster’s sales team, Beer Nuts were soon available in Chicago, Indianapolis, Milwaukee, and St. Louis. National expansion quickly followed, and by 1960 there were distributors in each U.S. state. Sales in the eastern United States were controlled by an entity called Beer Nuts, Inc., which was partly owned by Russell Shirk, and in 11 western states by Shirk Brothers, co-owned by Russell and his brother Edward.

By 1970 the company was producing 10 million pounds of Beer Nuts per year, and distribution had grown to include Canada and Europe. The firm’s success inspired a number of copycat products, but it vigorously protected the trademark to quash the use of soundalike names such as “Brew Nuts.”

BEER NUTS CASHEWS DEBUTS IN 1972

In 1972 the company began coating roasted cashews with its peanut glaze and marketing them as Beer Nuts Cashews. A year later the firm moved production of its “Slightly Sweet, Lightly Salted” nuts into a new 100,000-square-foot facility.

During the 1970s and 1980s the number of neighborhood bars began to decline as more Americans turned toward home-based activities, and excessive drinking came under fire from groups like MADD. Many of the bars that survived began to offer food of their own, while the communal bowl of Beer Nuts was discontinued because of hygiene concerns. In 1985 Beer Nuts’ production peaked at 15 million pounds, but then began to fall as the firm’s traditional customer base shrank. The company was also hurt by stiff competition from nationally marketed competitors such as Planter’s and Eagle Snacks, whose honey-roasted nuts had become highly popular.

Changing with the times, the firm updated its packaging to reduce emphasis on the Beer Nuts logo and began to tout the fact that its nuts were all natural, low in sodium, and high in protein. New sizes were introduced and prices were given more prominence on the bags, which started at three for a dollar. Instead of being marketed toward bars and beer drinkers, Beer Nuts were pushed as an impulse purchase at convenience and grocery stores.

In 1988 the company introduced Beer Nuts Almonds, which also used the original peanut glaze. Shirk Products, Inc., had changed its name to Beer Nuts, Inc., and Russell Shirk’s son James, a University of Illinois law school graduate, had been named its president, though the elder Shirk continued to serve as board chairman. The year 1988 also saw the firm purchase two abandoned properties in Bloomington that would be rehabilitated for use as warehouse space and for lease to other businesses.

The success of Beer Nuts, Inc., enabled the Shirk family to found the Russell and Betty Shirk Foundation. In 1992 the Shirks pledged $5 million to help build a new athletics and recreation center at Russell Shirk’s alma mater, Illinois Wesleyan University. Shirk, who had played on the school’s tennis team, was subsequently awarded an honorary law degree, and two years later the $15 million Shirk Center opened with a 2,500-seat arena, a large indoor track, and other sports facilities.

COMPANY PERSPECTIVES

Today, Beer Nuts, Inc., continues to use the same unique formula for its special niche of products as they did back in 1937. All Beer Nuts products are produced at a single 100,000 square foot manufacturing facility in Bloomington, Illinois, under the direction of James A. Shirk and his family, the next generation of Shirks. With the same family commitment to freshness and quality some 47 years later, the family takes pride in the fact that the Beer Nuts trademark brings smiles and instant recognition in all 50 states and several countries around the world.

Though sales were stagnant, studies by the company found that 90 percent of Americans recognized the Beer Nuts brand. While it did not have a budget for significant national advertising, the firm sponsored motorcycle races and a professional bass fisherman, as well as baseball teams in the areas of its local distributors. The company was also helped by media exposure on television programs like The Late Show with David Letterman, Murphy Brown, and Cheers, which was set in a bar and once called the denizens of the title establishment “Beer Nuts” in a marketing campaign of its own.

In 1993 Beer Nuts celebrated its 40th anniversary. A promotion during the year gave out two logo-imprinted fishing lures with seven proofs of purchase from larger size packages, while a special anniversary nut tin and chocolate-coated nuts were offered for the holidays. The products were also featured at the company’s two outlet stores in Bloomington, which sold such items as caps, mugs, and T-shirts with the Beer Nuts logo.

CRUNCHNUTS INTRODUCED IN 1996

In early 1996 the company launched CrunchNuts, peanuts with a baked-on dough coating. Available in Honey Mustard, Cajun Devil, and Sesame Seed flavors, they were touted as a healthy alternative to standard Beer Nuts as they had only half the fat per serving and were not cooked in oil. The company also began using a new composite can for its peanuts, which improved their shelf life and helped preserve the skins, which sometimes were lost in handling. Though Beer Nuts had expanded its product line, the original redskin peanuts accounted for more than 80 percent of sales.

In 1998 the company introduced Old Fashioned Peanuts, extra large Virginia peanuts that were roasted and salted, as well as barbeque flavored CrunchNuts. Beer Nuts also launched a Web site that offered information on the products and helped facilitate ordering for its customers.

In 1999, company founder Russell Shirk died. James Shirk would continue to run the firm, which now employed other family members including his daughter Cindy, the director of marketing.

In 2002 Beer Nuts launched a new brand awareness campaign, for which its outdated Web site was redesigned from the ground up. A secure sales site was also added that improved the process of ordering and shipping for both wholesale and individual customers. The company’s logo was updated as well, though it continued to feature a red oval and letters on a white background. These efforts were intended to increase visibility of the brand among younger consumers, but while Beer Nuts sought to broaden its audience beyond beer drinkers, market surveys had found that even when people liked the nuts’ taste, they were unwilling to purchase them to serve at a ladies’ bridge game, for example, because of the name.

In June 2004 the company unveiled a new packaging variation that resembled a beer can, and in 2006 it introduced two new products, Spicy & Hot Peanuts and Bar Mix. The peanuts featured a blend of Bloody Mary and chipotle flavoring, while Bar Mix incorporated peanuts, plain and honey mustard pretzels, sesame sticks, and roasted corn. Beer Nuts was marketing other variations of its original product that included macadamia nuts and pecans, and had renamed its Old Fashioned nuts Kettle-Cooked Peanuts. A new marketing deal with Miller Lite also gave its products increased visibility in many stores, where the nuts were displayed next to beer, rather than only in the snack aisle.

More than 50 years after Russell Shirk first began distributing his candy shop’s popular glazed peanuts, Beer Nuts, Inc., continued to produce them along with a range of other nut and snack foods. Sales had fallen from their mid-1980s peak, but the family-owned firm’s products were still a staple of convenience and grocery stores around the United States and in a few international markets.

Frank Uhle

KEY DATES

1937:: The Shirk family buys the Caramel Crisp Shoppe in Bloomington, Illinois.
1950:: Russell Shirk begins packaging the shop’s popular peanuts for sale at liquor stores.
1953:: Marketed as Beer Nuts, the peanuts are distributed through E. C. Brewster chip company.
1955:: Shirk Products, Inc., is formed.
1960:: Distribution reaches all 50 U.S. states.
1970:: Production tops 10 million pounds per year; Beer Nuts are sold in Canada and Europe.
1972:: Beer Nuts Cashews are introduced.
1973:: Company moves to a new 100,000 square-foot plant in Bloomington.
1985:: Production reaches peak of 15 million pounds.
1988:: Beer Nuts Almonds are introduced.
1996:: Debut of flavored, lower-fat CrunchNuts.
1999:: Company patriarch Russell Shirk dies.
2002:: Logo is updated, and a new Web site is launched.
2006:: Spicy & Hot Peanuts and the Beer Nuts Bar Mix are introduced.

PRINCIPAL COMPETITORS

Kraft Foods, Inc.; The Procter & Gamble Co.; Diamond Foods, Inc.; The Hershey Company; John B. Sanfilippo & Son Inc.; Kar Nut Products Company; King Nut Company.