J. Patrick Hunt
General Partner, Handi-Kup Company, a subsidiary of Fiber-Plastics
What’s the background to the business? During our last year of college, my brother, Peter, and I spent a lot of time talking about forming our own company. The research we did led us to the plastics industry, with a primary interest in manufacturing. After graduating from San Jose State, I joined Westinghouse Electric in the Sales & Engineering Department. I was only there a year when I came across a small fabricating company in the heart of San Francisco’s Skid Row. The company fabricated Styrofoam into store window display items for retailers such as Macy’s, Emporium (now defunct), etc. We were excited that, by acquiring this small company, it could be the starting point for building a large company. Through a combination of personal savings and loans from our parents, Peter and I purchased the company for $5,000. The year was 1957.
When I told my boss that I intended to leave Westinghouse to run this small plastic company, he took me aside and urged me to reconsider. He advised me that it was very risky to start a new company and, furthermore, he said that I had a wonderful opportunity to go far with Westinghouse. At the time, I felt he was possibly right, but my desire to build a company was ingrained in me and if I didn’t try it, I would likely regret it for the rest of my life.
In addition to fabricating foam window display products, we soon began making a variety of other products, such as packaging for the electronics industry and pipe covering for the refrigeration industry. Our first big break came when we were asked if we could develop a foam marker buoy for the crab fishing fleet in San Francisco. It was to replace cork buoys that were in critical short supply due to a serious disease that ravished the cork trees in Portugal. It quickly became our primary product and our business started to grow. We were able to exploit this storage by expanding our reach from San Francisco up the coast of California, into Oregon and the state of Washington and eventually to British Columbia. With the strong demand for product, we relocated operations from San Francisco to Gate Five Road in Sausalito, where we were able to triple our manufacturing space.
In the early 1960s we became intrigued with the development of a new insulated foam polystyrene cup, which would compete with the traditional paper cup used for hot beverages, primarily coffee. At that time, the molding technology was very primitive. There were no established equipment manufacturers and each molder had no other choice but to develop their own molding processes, as well as to build their own homemade molding machines. We saw this as a great opportunity for our company and placed our primary efforts on developing a superior foam cup. Product quality was essential to achieving customer acceptance.
Over the next two decades, we built a strong engineering department and machinery building capability. At the beginning, cup manufacturing was essentially a very manual process. Over the next 20 years we developed a completely automated process of manufacturing, starting from the time the raw (resin) entered the factory, through automated molding machines, 100% quality inspection, automated in-line printing, packaging and shipping. Our process was designed for 100% in-line inspection, as opposed to our competition that would only do random inspections.
Between 1961 and 1968 Handi-Kup grew very rapidly. Our primary market was California and Handi-Kup was gaining strong recognition as a reliable supplier. Our Sausalito facility was bulging at the seams. By the end of 1968, cup sales reached $1,000,000. That same year, to accommodate our expanding business, we purchased five acres of land located in Corte Madera and built a 40,000 foot state of the art manufacturing facility.
All during the ’60s and ’70s the disposable market flourished. It provided companies such as ours an opportunity to capitalize on this demand. It was also during this period that the fast food industry was experiencing explosive growth. The fast food industry used foam cups, and plenty of them. With the advent of national chains, it became evident that, over the long term, we would be vulnerable if we limited ourselves only to the California market.
We were able to acquire a company in Ohio and another one in Illinois at an extremely low price. The West Chicago facilities were an ideal location for manufacturing, as well as a central location for shipping throughout the Midwest.
In the late 1970s we acquired Mars Cup Company. It had two manufacturing locations: the main one on Long Island, New York and the second in Jacksonville, Florida. Both operations were floundering, but it had a very strong customer base both in the Northeast as well as the Southeast. We now had a national presence.
At about that same time, McDonald’s, who previously had not used foam cups in their operation, invited the 3 major cup manufacturers to design a new cup exclusively for them, which would be superior to any product that was currently on the market. After a nine-month development effort, we made our presentation to McDonald’s and we were fortunate to win. As a result, our company was awarded 80 percent of their North American needs for a hot coffee cup. This was a tremendous win for our company as McDonald’s was the gold standard at that time. We now had the prestige of being the primary suppliers to McDonald’s, and they also turned out to be our most profitable account.
Over the years, our product line continued to expand to a full range of cups, containers and accompanying lids.
During the early ’80s, we were solicited by numerous firms wanting to acquire our company. After long deliberations, we decided to sell. In June of 1986 Handi-Kup was sold to the James River Paper Company, a major paper producer with headquarters in Richmond, Virginia.
When we sold Handi-Kup in 1986, there were some interesting comparisons:
1960 sales $10,000 / 1986 nearly $100,000,000
1960 1 employee (me) / 1986 over 900 employees
1960 one small shop / 1986 four major plants
1960 2,500 ft. shop / 1986 over 700,000 Ft. of manufacturing and warehousing space.
After selling the business, I was asked to join a number of boards, such as the Boards of American Cancer Society, Marin General Hospital and Sunny Hills Services. I remained active on those Boards for many years.
In late 1989, a friend, Bill Murray, an outstanding community banker, was forming a new community bank to be known as the Bank of Marin. Bill asked me to join as both as an Organizer and a Director, once the Bank received its charter. I accepted both roles and remained very active on the Board over the next twenty years, chairing numerous committees, the last of which was as Chairman of the Board. I retired from the Board in 2010. The Bank had opened its doors in January 1990 with an initial capitalization of $8,000,000. 26 years later that Bank’s capitalization is over $215,000,000. The Bank has offices throughout Marin, Sonoma, Napa, San Francisco, and the East Bay. Total assets of the Bank as of December 2015 were $2,000,000,000.
Shortly after the sale of Handi-Kup, my brother Peter and I formally established the Hunt Investment Company. The primary focus of the company was the acquisition of commercial real estate. Later on, more emphasis was placed on multi-family units. It was great working with my brother as our roles were almost interchangeable. Peter passed away in 2010. We were partners for over 50 years and the business continues to this day.