Sale benefits salsa maker.

Byline: SHERRI BURI McDONALD The Register-Guard

CORRECTION (ran 8/28/02): Mel Bankoff founded Emerald Valley Kitchen, an organic foods producer, in 1983. He has been self-employed since 1971. A story in Tuesday's business section about Emerald Valley had incorrect dates.

After 32 years of running his own company, Mel Bankoff, the founder of Eugene-based Emerald Valley Kitchen, is back to being an employee.

Bankoff sold his company, which makes organic salsas, hummus and dips, to Italian foods producer Monterey Pasta Co., based in Salinas, Calif. In a deal that closed Monday, publicly traded Monterey paid $5.5 million in cash for Emerald Valley's assets and inventory. Monterey also pledged to make additional payments of an undisclosed amount if Emerald Valley's profits exceed certain targets over the next five years.

Emerald Valley will continue to operate its 18-employee facility near the Eugene airport as a subsidiary of Monterey Pasta. And on Monday, the 51-year-old Bankoff started his new job as Monterey's director of organic product development.

The sale gives Emerald Valley access to its larger partner's financial and marketing resources. It also gives Monterey a quick entry into the rapidly growing organic foods market.

Organic products, long offered by specialty health and natural foods stores, are steadily making their way into the neighborhood Safeway and Albertsons.

On Oct. 21, the U.S. Department of Agriculture will introduce a seal to appear on products that are certified as organic.

Anticipating burgeoning demand by mass-market grocery stores wanting to stock these products, Bankoff began looking for a strategic partner.

Monterey contacted a broker Bankoff had been working with, and the match came together in the past three months.

Bankoff said he wanted the security of an experienced partner before Emerald Valley embarked on a major growth push.

"Success breeds vulnerability and risk," he said. "I wasn't willing to ratchet it up to the next level and take on that risk. I thought if I could find a partner that respects ... and values our expertise in organics, then it would be advantageous."

For Monterey, which doesn't have an extensive line of organic products, the acquisition enables it to enter the fast-growing organic foods market. The organic slice of the grocery market has posted double-digit annual growth rates in the past few years, compared with the less than 4 percent annual growth rate of the overall retail grocery market.

Lance Hewitt, Monterey's president and CEO, said the marriage will work well. "We can work jointly with Emerald Valley in extending their successful product line," Hewitt said.

Bankoff said he recently signed a five-year lease for the Eugene facility, and he believes Monterey will stay in Eugene "for the long-haul."

Emerald Valley's business has grown at an annual rate of 15 percent to 18 percent over the history of the company, Bankoff said. Its annual growth rate has been about 8 percent to 9 percent in the past few years, he said. Under Monterey's ownership, Emerald Valley is projected to grow at about 20 percent a year. Emerald Valley could accommodate that growth rate at its current facility for three more years, Bankoff said. Then, he said, the business could expand on five acres Bankoff owns east of Emerald Valley's current plant.

Emerald Valley's employees will continue to receive a compensation package (salary and benefits) that averages $21 to $22 an hour for employees with more than three years of tenure, Bankoff said.

"I rigorously negotiated (with Monterey) for my employees because I felt that was important," he said. "Our benefit package pretty much stays intact and is embellished a bit," with the addition of a 401(k) retirement plan.

Lorin Haines, team captain of the hot pack kitchen, said the change of ownership brings uncertainty but also opportunity. He said his job at Emerald Valley is worth much more to him than just a paycheck. After nine years at the company, he has bonded with co-workers. "They're family," he said. "It will be interesting how we incorporate (Monterey) in the circle and how they incorporate us."

EMERALD VALLEY KITCHEN

Established: 1983

Founder, president: Mel

Bankoff

Facility: 19,000-square-foot plant at 90472 Woodruff St., Eugene.

Employees: 18

Annual sales: More than $4

million

MONTEREY PASTA CO.

Established: 1989

Headquarters: Salinas, Calif.

Employees: More than 350

Financial results: Profit of $4.43 million on sales of $59.22 million in 2001.

- The companies and Bloomberg News

CAPTION(S):

Amy Joyce, employee of Emerald Valley Kitchen, pours salsa from a mixing barrel into a vat for storage.