Inside Golden State

Mark Wetterau sports a gold watch and gold cuff links. For fun, he takes his boat out for 160 mph spins on the ocean.

The flash ends there. It’s the Golden Rule Wetterau lives by.

That comes through at Irvine-based Golden State Foods, one of Orange County’s largest private companies where Wetterau is chairman and chief executive.

Everywhere you look at Golden State’s headquarters are photos and other displays touting the company’s “values” and “creed.” They’re even printed on the back of business cards.

“The Golden Rule is a very significant part of any business culture, and it should be,” Wetterau said. “It’s all about taking care of each other.”

It’s not just Wetterau.

“If you don’t believe it, you probably won’t sign up for the company,” said Bob Jorge, a senior vice president and president of Golden State’s distribution group.

Wetterau sets the tone at Golden State, a supplier of patties, sauces, buns and other products primarily to McDonald’s Corp. The company has yearly sales of nearly $3 billion.

The executive, who two years ago bought out Golden State partner Ron Burkle, has raised his kids in religious schools, attends church regularly and made philanthropy a priority.

Golden State’s values take words from the Bible’s Golden Rule, which in this case urges employees to “treat others like you want to be treated.”

The company’s creed starts off: “We believe in God and the dignity of all people.”

Wetterau, who through a family company owns an estimated 67% of Golden State, has his father to thank for his religious bearings.

The elder Wetterau studied at a Chicago seminary before getting into the food business in the Midwest. Mark Wetterau and brother Conrad followed their father into the food business.

Today, Golden State supplies more than 130 products to McDonald’s, making it the company’s dominant customer at about 70% of the business.

That’s changing slightly, as Golden State carves out a budding relationship with Starbucks Corp. and develops deeper ties with KFC, Arby’s and others, all with the blessing of McDonald’s.

Golden State founder Bill Moore, who died in the 1970s, got the McDonald’s business on a 1960s handshake with Ray Kroc.

Things aren’t done much differently these days. Golden State isn’t big on rigid corporate formality.

Moore founded Golden State in 1947 as a beef supplier to Los Angeles restaurants and hotels. It had its headquarters at various times in Pasadena, City of Industry and elsewhere in the region before coming to Irvine in 1992.

These days, Wetterau defines the corporate culture for the company’s 2,500 employees nationwide, with 40 of them in Irvine and about 725 in City of Industry.

The Laguna Niguel resident is a crisp dresser who wears shirts with his initials “MSW” on the cuffs. Suits are the norm around the headquarters,a standard set years ago by the company’s second chief executive, Jim Williams, who led a 1980 buyout after Moore’s death.

No casual Fridays here.

But Wetterau does encourage openness, according to Golden State executives. They all talk about how they’re encouraged to address, not hide, problems. Disclosing them sooner is better, they said.

“We work on no surprises,” said Mike Waitukaitis, Golden State’s executive vice president and chief financial officer.

Wetterau keeps a telescope in his corner office overlooking John Wayne Airport.

He jokingly tells of buying the telescope after coming to Golden State in the late 1990s to see if former financial chief Gene Olsen was talking with successor Waitukaitis in a nearby office.

The first year he arrived, Wetterau said he spent a lot of time getting to know Olsen, who was considered the corporate historian.

Olsen since has died. That’s partly why Richard Moretti was promoted in 2003 to the company’s leadership team of six executives. Moretti is vice president and chief accounting officer. He’s now seen as the company historian.

Wetterau started his career in 1980 with St. Louis-based Wetterau Inc., a food maker and distributor founded by his great-grandfather. That’s where his father worked.

Mark Wetterau rose through the ranks of the publicly traded company to become president in 1990. Two years later, he oversaw the sale of Wetterau Inc. to Minneapolis-based SuperValu Stores Inc.

He and brother Conrad went on to form Wetterau Associates LLC to buy and manage businesses.

Their two biggest investments: The largest independent Anheuser-Busch Cos. distributor in Massachusetts and Golden State Foods, which Wetterau Associates first invested in with Burkle’s Yucaipa Cos. in 1998.

Conrad Wetterau runs the beer distributorship, which recently made a major expansion.

The brothers are “dead-equal” partners in the beer distributorship and Golden State, Mark Wetterau said.

Financial chief Waitukaitis, who was close with the Wetteraus’ father and helped do more than 25 buyouts for Wetterau Inc., also is a principal of the investment firm.

Wetterau Associates owns roughly two-thirds of Golden State, with the remaining third held by the top 50 divisional managers and an additional 30 employees holding options to buy shares.

There are no plans to go public or sell, Wetterau said.

Golden State is an “S” corporation, one of the largest in the U.S. “S” corporations are created for tax purposes,they pass along income and deductions to shareholders.

Golden State’s executives meet on Mondays.

Every other week, at 7:30 a.m., the company’s six-member executive team gathers to talk about recent events, things coming up, legal and accounting issues, succession and compensation.

Under the six-member team is a larger group of roughly a dozen people referred to as the executive committee. They meet with the leadership team every other week.

Wetterau usually is the first one in.

Golden State is broken into five business units, including the company’s service industry, international, meats, liquids and distribution units.

Golden State Service Industry represents the company’s effort to diversify.

The service industry group handles leasing, buying and reselling equipment and managing freight. It also oversees a produce partnership: Golden State became a third owner of Salinas-based Taylor Fresh Foods Inc. when its Florida unit absorbed Golden State’s North American Produce operations in 1999.

Bill Sanderson, the service industry unit’s president, was recruited in 2002 to run the operation.

The unit has grown in the past four years and serves more than 50 food service and restaurant customers. Sanderson,a vegetarian,reports to Wetterau.

Golden State’s corporate structure is part of a strategy adopted more than six years ago.

When Wetterau arrived in 1998, business lines were broken down differently,by distribution, liquids, beef, produce and bakery goods.

Former boss Williams had focused on the five business lines, the most important ones to McDonald’s.

Six months after Wetterau arrived, Williams looked at the five segments in a bid to come up with a five-year growth plan.

By summer of 1999, Golden State’s new business model was in place. That’s when Wetterau took over and Williams retired.

The shift coincided with changes at McDonald’s, which had turned to boosting sales at existing restaurants rather than opening more.

Golden State’s changes also had other customers in mind.

“We wanted to continue to grow with McDonald’s and work closely with them to allow us to diversify to other food chains we could supply,” Wetterau said. “We opened a dialogue to get permission to develop other strategies. So we built a structure to achieve that strategy.”

Wetterau doesn’t have a president or chief operating officer under him. The closest thing to a No. 2 is longtime colleague Waitukaitis.

“It’s my style,” Wetterau said. “I’m very hands on. I carry, if anything, the title of chief operating officer as well as CEO. My personality is such that it just doesn’t lend itself toward a president’s job, especially in the buildings stages of an organization.”

Does Wetterau plan to groom a clear No. 2?

“No, not at this stage,” he said.

A key executive on the leadership team is Frank Listi, senior executive vice president and a 32-year veteran of food processing.

Listi is the science guy. He holds degrees in microbiology and pays attention to food health and safety issues.

He joined Golden State in 1995 to oversee the liquid products group. He added responsibility for the meat group in 2001. He jets around the world roughly twice a year to check in on global operations. The international business also is in his corner.

Last month, he visited China to look at possible expansion, distribution ventures and check out competitors. He later paid a visit to operations in Malaysia.

Golden State also has plants in Australia and Egypt.

Distribution boss Jorge is an expert in logistics, having joined Golden State six years ago from PepsiCo Inc.

While Jorge’s principal job is to support McDonald’s, he also works on diversification.

This summer he got the added title of senior vice president of Golden State Foods.

Waitukaitis, Moretti and Steve Becker, vice president of human resources, round out the six-person leadership team.

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THE TEAM

Frank Listi: 60, senior executive vice president. Joined Golden State in 1995 to oversee liquid products group. Took on responsibility of meat group in 2001. Oversees international operations.

Bob Jorge: 57, senior vice president, president of distribution group. Joined in 2000 from PepsiCo. Hired to pursue diversification push beyond McDonald’s.

Richard Moretti: 53, vice president, chief accounting officer, served in a variety of Golden State posts in past 25 years. Considered company historian.

Steve Becker: 54, vice president of human resources. Held senior HR posts at paper company Unisource Worldwide. Works on succession planning, mapped out key positions at Golden State.

Bill Sanderson: 52, president, Golden State Service Industries, supply chain services group. Responsible for four operating companies handling freight, sourcing, leasing, restaurant liquid services. Reports to Chief Executive Mark Wetterau.

John Pooley: 45, president, liquid products group. Oversees liquid products operations in Georgia, City of Industry and abroad. Recently named corporate vice president. Reports to Listi.

Philip Crane: 51, vice president, international. Oversees operations in Egypt, Malaysia, Australia. Works closely with country managing directors on growth plans, quality. Reports to Listi.

Wayne Morgan: 39, vice president, meat group. Promoted in March, replacing retiree Dave Gilbert. Oversees facilities in city of Industry, Conyers, Ga. Buys 200 million pounds of meat a year. Joined Golden State in 1998. Reports to Listi.

Scott Thomas: 55, group vice president distribution, West. Oversees distribution centers in Sumner, Wash., Portland, Ore., Phoenix, Hawaii and City of Industry. Centers serve more than 1,800 restaurants in 10 states. Reports to Jorge.

Tim Heskett: 59, group vice president distribution, East. Oversees distribution centers in Greensboro, N.C., Columbia, S.C., Rochester, N.Y., and Suffolk, Va. Centers serve 1,110 restaurants. Set to oversee two Midwest centers being acquired. Reports to Jorge.

Larry McGill: 50, vice president worldwide sales, marketing. Senior officer in the Georgia facility. Also oversees research and development department, human resources, customer service in Georgia. Reports to Listi.

Pandora Ovanessian: 53, chief information officer. Previously worked at NASA’s Jet Propulsion Laboratory, Alpha Therapeutic in Los Angeles. Reports to Chief Financial Officer Mike Waitukaitis.

John Page: 40, general counsel. Recently promoted, given corporate vice president title. Previously counseled Avaya, Cendant, Matsushita’s U.S. arm. Reports to Waitukaitis.