Off The Shelf: What's At Stake For Brownwood Farms

A legal dispute at local food producer Brownwood Farms is spilling over, forcing former employees to find new jobs, customers to find new favorite products, distributors and retailers to fill valuable shelf space and lost dollars, and other food companies whose products were manufactured by Brownwood to find new producers.

Founder Jeff Hughes and the Vittert family are locked in competing lawsuits; Hughes claims he has been “frozen out of” his own company since June and wants to be paid for his remaining 25 percent share of Brownwood ownership. The Vitterts, who became majority investors in the company over time, allege long-term mishandling of Brownwood funds by Hughes, and also cite his role in what eventually resulted in a massive product recall of most Brownwood products from hundreds of retail shelves.

The result has been a ripple effect among many in the northern Michigan food community:

The employees: The Vitterts announced on November 8 that Brownwood would cease production and distribution, a move that displaced five employees. Attorney Scott Howard, representing the Vittert family interests, says “the company hopes to resume production and distribution as quickly as possible, but will only do so when it can ensure that the highest quality and safety standards are met. There is no concrete timeline…”

The distributor: Each week for the past several years, Mike Groothuis of Great House Foods handled distribution of Brownwood products to more than 100 Spartan and specialty food retailers from Kalamazoo to Mackinaw City.

“Brownwood was one of my largest brands,” says Groothuis. “They’re probably fifteen percent of my entire business, so it’s been a hassle,” he adds, noting he’s been handling returns as part of the recall and questions from store owners unsure of Brownwood’s future. “New management at Brownwood has been working with us,” he says, “but it’s created a lot of headaches.”

The retailer: Brad Anderson of Anderson’s Market in Glen Arbor represents one of more than 1,000 stores that sell Brownwood mustards, preserves and sauces. Anderson will soon have to replace Brownwood’s twelve products on his shelves and the revenue from what he says “has always been a leader in our Michigan-Made section and will be difficult to replace,” noting he hopes it’s a short-term problem and eventually the company can “keep producing such great products.”

The “co-packers”: Several northern Michigan specialty food companies have relied on Brownwood to produce their products and are now scrambling for answers – and in some cases find themselves without the recipes to their own products. These private label or “co-pack” customers represented a sizeable share of Brownwood’s business over the years, as they used the company's equipment, skills and staff to produce everything from local jams to, at one point, Ditka’s barbecue sauce.

Though he was aware of some changes at Brownwood, Darric Newman of Folgarelli’s says was unaware the company had stopped production. “It creates a void for other co-packers in town. Some are in the middle of trying to figure that out, I’m sure,” he says, adding that his staff will now make their own red sauce in the deli instead of relying on Brownwood or some other partner.

Many Brownwood co-pack partners are reluctant to speak about who’s producing their products; some do not own or even possess the recipes to make their own products. Attorney Howard says “proprietary recipes cannot be shared outside the company, but we are working diligently to ensure that our co-packers are provided with products that meet the highest safety and quality standards as quickly as possible.”

The potential winner: The disruption caused by the changes at Brownwood might turn out to be good news for longtime northern Michigan specialty foods producer Food For Thought. Founder and President Timothy Young calls the situation “unfortunate” and says he has “offered our support to them in the event we can be of service to their recovery.” Conceivably Food For Thought could step in to produce some of the foods previously co-packed at Brownwood. 

And that shelf space where Brownwood’s products previously sat? Says Young, “While we’ve seen an increase in sales, it’s hard to tell this early how much is attributable to our overall growth, the normal holiday season uptick or other factors. Certainly product recalls will mean they [Brownwood] are losing shelf space. Given that we offer many similar products, we would expect that we’ll pick up some of the shelf space that can’t fill.”