history of soy yogurt, soy acidophilus milk and other ... - SoyInfo Center

team there. But it was too big a market for the company to
bite off too quickly. They were not yet solid enough in New
England. Richard feels the company should have built a solid
base with honey-sweetened Jofu in the natural foods market
and then expanded from there into the supermarkets with
sugar-sweetened Jofu. The only competition was Soygurt.
Many natural food consumers were looking for a product
like Jofu and Tomsun was not getting it to them. The main
thing that typical consumers don’t like about dairy yogurt is
its sour taste. Jofu tried to go “beyond yogurt” with a sweet
product; some felt it was too sweet. The management was
extremely optimistic about the product’s future and pursued
rapid growth. Metzger’s past success and the success of the
public stock offerings fueled this optimism. People liked
the product and there were repeat orders. But as Richard
had learned in business school, “nothing fails like success.”
Too rapid growth can destroy a company. You’ve got to
remember where you were and what got you there.
The second cause of the downfall was the stock market
crash of October 1988, just when the management was
planning to go after the additional funds needed to support
the rapid expansion. Without the unexpected crash, the game
plan would probably have continued successfully on course.
The third cause was the loss of the steady income which tofu
sales used to generate. Even with the crash, this income, had
it continued, could have kept the company afl oat. Within a
period of about 2 years, Nasoya was able to take away about
60% of Tomsun’s tofu sales, and about 80% by the time of
the crash.
After the crash, Tomsun had big cash fl ow problems.
The bills and coupons poured in. The company looked
for new ways to raise funds and cut expenses. Many
top managers stopped getting paid and others took pay
cuts. Tomsun offered to sell Nasoya something related to
Tomsun’s tofu line. David Kirsch, Juan Metzger, and Tom
Timmins met at a house in Greenfi eld about 3 days a week
to manage Tomsun. Finally, just as Tomsun was about
to secure a bank loan using the tofu plant as collateral,
two creditors put a lien on the plant. That triggered the
company’s declaration of Chapter 11 bankruptcy on 8 April
1988. They trimmed way down and ran for a while under
Chapter 11. In June 1988 the Tomsun plant in Greenfi eld
was closed. Jofu began to be co-packed by a small company
named Lavida Foods in Hardwick, Vermont. At this time,
fresh soymilk, formerly made by Tomsun, as discontinued
as the product’s main ingredient; Soy Supreme, a spraydried
tofu made by St. Peter Creamery in Minnesota, was
used in its place. Tomsun’s regular tofu was made for a very
short time by Henry Creces of Panda Foods in New York,
but his quality and supply was inadequate. So there were
consistent shortages; local ordinances prevented Lavida from
expanding. There were also problems with control over the
long distance, and high transportation costs.
In Aug. 1988 David Allen Kirsch resigned as president
HISTORY OF SOY YOGURT & CULTURED SOYMILK 331
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of Tomsun Foods and stopped his active work with the
company, but kept his stock. Timmins left shortly thereafter;
he felt it was time for a change now that the company was
in good hands. Timmins is now working on a number of
projects that look quite promising.
Finally in late 1988 Metzger contacted his friend,
William Holmes, who had made a huge success out of the
Pollio Corporation, a large string cheese company which
he had recently sold to Kraft. Holmes was looking to do
something new, so Metzger invited him to buy Tomsun out
of Chapter 11. In Feb. 1989, Holmes bought 80% Tomsun’s
stock, injecting badly needed new capital, and took Tomsun
out of Chapter 11. Metzger, Kirsch, and Timmins kept
their ownership of most of the rest of the company’s stock.
Holmes became the CEO, Metzger the head of marketing,
and Timmins the president.
The two big needs were to fi nd a co-packer that could
provide reliable, consistent quality and volume. In April 1989
West Lynn Creamery, a large manufacturer of dairy products
located in West Lynn, Massachusetts, outside of Boston,
began to co-pack Jofu as a result of lack of anticipated
capacity at Lavida Foods, as well as closer proximity to the
market. (About 6 months later, Lavida Foods went bankrupt.)
But Tomsun was small peanuts for West Lynn, and the latter
was not willing to meet Tomsun’s special and often urgent
needs. And there were serious quality problems. In June
1989 the company headquarters was moved from Greenfi eld,
Massachusetts, to Port Washington, New York, where
Holmes lived.
In late 1989 Holmes relaunched Jofu with radio and
newspaper ads in Boston and New York. In Jan. 1990
Richard left Tomsun Foods International. In Feb. 1990
Tomsun dropped West Lynn Creamery due to perceived
quality problems and had Friendship Dairies in Friendship,
New York, co-pack Jofu. That arrangement was working well
in June 1990 when Richard summarized the current situation:
The company is now very lean, with little overhead. They
are focusing more the health food market, while keeping
stable in supermarkets. Product quality is now good. He feels
that Jofu is the best soy yogurt on the East Coast. Stir Fruity
(made by Azumaya in California) has been on the East Coast
market for several years, in the produce section of Stop
& Shop and Purity Supreme, but its use of preservatives,
gelatin, and sugar is a problem for some consumers. The
only other brand is made by Ambrosia. The future looks like
a slow, steady growth scenario. Holmes, who manages the
company from day to day, is in his mid-50s. He is a fi ghter,
with good experience, enough capital, and a good product.
Metzger is still involved in a limited way. Jofu is now a good
product, with all natural ingredients, no preservatives, and
high tech pasteurization in the cup giving a 90-day shelf life.
But there are some inconsistencies in quality and bringing
back customers who were lost because of poor product
quality or short supplies will take time. In retrospect, the