BRISTOL, VA. -- A bit of Americana -- the 500 or so local potato chip makers catering to local markets -- is in danger of being crunched as giant corporate snack makers take aim at the little chippers.
Moore's Snack Foods, Virginia's largest chipper, is just the kind of company in which the big boys -- Frito-Lay Inc. and Borden Inc. -- are interested.
Fragile chips are hard to ship, and national companies need a network of regional plants to produce and distribute their wares.
The big companies have a number of advantages, including multimillion-dollar advertising budgets, the efficiencies of large-scale production and clout when it comes to getting supplies cheaper.
The giants also have scads of money -- enough to take on small companies in price wars and promotional campaigns that steadily erode profits.
The brothers who run Moore's, Joe and Jack Arnold, are familiar with the stiff competition and the buyout offers.
Jack Arnold said his company has been approached frequently but has always said no. "The company is in its 63rd year," he said.
"We don't want to work for someone else. There's a certain amount of pride in what's been accomplished by two generations before us. It's very difficult to give up that sort of independence.
"We're optimistic sorts, but at the same time we're very realistic," he added.
"I don't want anything written here that would lead anybody to believe that we're going to fold our tent and sell it off."
They are not alone in their concerns, said John Cady of the Potato Chip-Snack Food Association in Alexandria.
"It's a very competitive industry and its getting more so," Cady said.
But Cady noted that while mergers, buyouts and closings have caused a slight drop in the association's membership, more companies are starting up every day -- including many catering to upscale or gourmet consumers.
"It comes down to niche marketing," Cady said.
"Mergers have had adverse effects on some companies, but those that can compete are. The heart of the industry is still the small-to-medium companies."
The niche Moore's aims to fill is the same as always -- quality, freshness and service.
During this spring's potato shortage -- "the worst I've seen in my 31 years here," Jack Arnold said -- complaint letters were answered with free chips and personal notes on why one cannot make big chips out of spuds the size of marbles.
The chip conglomerates had it easier during the shortage, and the Arnolds concede they heard rumors the giants "were trying to corner the market."
Steve Finch, an independent trucker from Laurel, Del., who serves only small chip companies, put it more bluntly.
The big companies "would run everybody out of business if they could," Finch said, adding they want to control the industry so they can dictate everything: retail prices, freight rates and potato prices.
Finch rattled off a list of closed chip companies while his truck was unloaded at the Bristol plant and added, "I'm doing everything I can to stop it. I don't think it's right. The day I have to haul for Frito-Lay is the day I get out of it."
While little chippers look with dismay at Frito-Lay's pricing practices, Borden has led in takeovers.
The New York-based conglomerate began by buying Wise Chips in 1964, and followed with Buckeye and Guy's brands in 1979.
In 1980, Borden acquired Morton's, Dickey and Dentler's brands and replaced them with Wise chips.
In subsequent acquisitions -- Seyfert Foods of Fort Wayne, Ind., Geiser's of Milwaukee, Clover Club of Kaysville Utah, Jay's of Chicago -- Borden retained the brand names, said spokeswoman Chris Tilton. More acquisitions are pending.
"The acquisitions we've made have been strong brand names with strong customer loyalty," Tilton said. "There's no reason to change them."
Borden is now in 43 states and the company slogan -- "the national snack food company with a regional flavor" -- underlies its expansion strategy.
As Tilton said, "The acquisitions are our primary means of increasing our distribution network."
That makes companies like Moore's nervous. Moore's chips are distributed as far as 400 miles away from its plant -- double the range of the average regional company.
Moore's expanded "because people like our products," Jack Arnold said.
"We've known nothing better than to try and do things better and in doing things better we got bigger. We've drawn more attention, obviously, from the giants. The competition has really heated up."
The principal battles are fought on price and on the size of the cut for the retailer.
Joe Arnold said Frito-Lay offered retailers in one sales division a buy-one-get-one-free promotion.
"You never heard of that a few years ago," he said. "You would think they are the new boys on the block coming in. We've seen their $1.39 line priced at 69, 79 cents. Just ungodly. It's overkill, and it creates all kinds of problems for us."
The company has countered with novel flavorings -- a dill-flavored chip is doing well -- but new lines are expensive, Jack Arnold said. "It costs $15,000 to $20,000 to try a new line, primarily because of packaging costs."
The brothers commiserate with other chippers in the same circumstances during trade shows and other gatherings.
"Sometimes, and this is sort of a joke with regional companies, we like to say Frito-Lay and Borden ought to have their conventions and then the other regional companies our size ought to have ours," Joe Arnold said.
"It's major league and minor. I know a lot of regional companies have bit the dust. Used to be the conventions were made up of people who started out just like we did."
Jack Arnold put it simply:
"We'd like to think we can continue to do business as an independent company.
"Joe and I, it's been our life here. We've been here from the beginning. We have a lot of good people that work for us. We'd like to continue to keep our company.'