Good Stuff Food Co., Interstate Agree to Swap Bakery Divisions

Good Stuff Food Co. of Los Angeles said Monday that it is swapping its Langendorf cake and cookie business for Interstate Bakeries Corp.’s institutional and restaurant bakery business in Southern California.

The transaction will make Good Stuff the dominant supplier of baked goods to restaurants and institutions in Southern California.

The deal gives Interstate, the maker of Dolly Madison cakes, a substantial share of the California snack cake and cookie market.

“It’s a win-win deal,” said Westin Johnson, chairman of privately held Good Stuff, a natural-food products company that had sales of $130 million last year. “We are getting a lot stronger in an area that makes sense to us, and they are getting stronger in the snack cake business.”

Good Stuff is acquiring Four-S, Interstate’s Southern California institutional and restaurant bakery business with sales of $26 million in fiscal 1986.

Langendorf, which employs 550 people and has plants in Berkeley and Oakland, had sales of $50 million in fiscal 1986. It was purchased by Good Stuff two years ago from American Bakeries for an undisclosed amount, and Johnson declined to say why Good Stuff decided to sell Langendorf so quickly.

The transaction effectively settles a February, 1985, lawsuit filed by Interstate against Good Stuff, which had agreed to buy Interstate’s Western operations in October, 1984, for $55.1 million. Interstate, the maker of Mill Brook and Weber bread, alleged that Good Stuff broke the sale agreement because it couldn’t raise enough money to pay for the Western businesses.

Interstate had asked for $15 million in damages, and Good Stuff had asked for undisclosed damages in a countersuit.

Terms of Monday’s transaction weren’t disclosed. Ellen Hoffman, a spokeswoman for Interstate in Kansas City, Mo., said that the transaction was primarily a swap, although Interstate agreed to pay Good Stuff a “small amount of cash.”

Interstate, the nation’s third-largest wholesale baking company behind ITT Continental and Campbell-Taggart, reported earnings of $15.3 million on sales of $704 million for the year ended May 31, 1986. Its Dolly Madison unit reported sales of $290 million for the same period.