30 Years at the Helm of Stater Bros.

ELLIOT ZWIEBACH

AS STATER BROS. MARKETS CELEBRATES its 75th anniversary, it's hard to separate the chain's history from the life and career of Jack Brown.

The original Stater brothers, founders Cleo and Leo Stater, grew the chain to about 35 stores before selling it to a California energy company. The chain expanded more rapidly after that, and now operates 167 locations.

Brown, 73, joined Stater in 1981 as president and chief executive officer, but he was already very familiar with the chain, having grown up in San Bernardino, Calif., and having competed with it for seven years in the early 1960s when he was working in the area for Sage's Complete Markets — a seven-store group of combination stores of 120,000 square feet each.

“Stater had about 30 stores at the time, and they were a terrific competitor,” Brown recalled. “And I've always respected them for how hard they worked and how young their managers were.

“In the 1950s and 1960s you had to be 50 years old before most chains would promote you to store manager, but Stater had some managers in their late 20s and early 30s, based on their ability to work really hard.

“Stater was also one of the first companies to pay a bonus to managers if they met their goals — one-third of their base salary, which was quite a big deal. But if they didn't meet the standards for three years in a row, they were out.

“So Stater was a very respected competitor.”

Stater was founded in 1936 by twin brothers Leo and Cleo Stater, who were later joined by younger brother Lavoy Stater. After growing the chain to 35 stores, the brothers sold the company in 1968 to Petrolane, a Long Beach, Calif.-based energy company.

Over the next 13 years Stater Bros. opened 44 stores, so by the time Brown joined the company as president and CEO in 1981, the company had 79 stores with sales of $475 million.

Petrolane sold the Stater chain in 1983 to Hampshire Industries, which took a 51% stake, and La Cadena Investments — a company headed by Brown — which took a 49% stake. The chain went public the following year, but after La Cadena won a proxy fight in 1986, Brown became chairman and took the company private.

“Over the years Jack Brown has become the face of Stater Bros.,” Bryan Hunt, managing director at Wells Fargo Securities, Charlotte, told SN.

“He's in the company's ads and he's an active force in the communities Stater serves, and he's one of its strongest assets.”

Asked if he is considering retirement, Brown laughed. “Why should I retire? I have a really good parking space,” he quipped.

Stater entered the dairy business in 1987 in a partnership with Hughes Markets.

The two companies formed Santee Dairies after Knudsen, a major dairy distributor in Southern California, filed for bankruptcy.

“Hughes was Knudsen's largest dairy customer and we were their largest milk customer, so we joined together to buy the operation,” Brown explained.

“When Hughes was acquired by Ralphs in 1997, Ralphs became our partner, but when Kroger acquired Ralphs in 2004, Kroger determined that every Knudsen product they bought helped us so they offered to sell us their interest in Santee.

“By that time volume was beginning to decrease because Santee's chain customers were reducing space rather than buy from a competitor. But we still had 300 employees there, and they were our primary concern.

“So when we were approached in 2009 by Dean Foods, the largest producer of milk products in the U.S., we sold Santee to them, and we continue to buy from them.”