Beef companies set to merge in Detroit
EW Grobbel Sons, one of the largest corned beef processors in the US, is acquiring Detroit-based corned beef company United Meat and Deli for an undisclosed sum, in a deal set to create a company with $110m in annual revenue.
United, conversely, has sold primarily into the deli, restaurant and food service markets. Locally, customers include Zingerman's, Mudgie's, Bread Basket, Russell Street Deli and Stage Deli, and some retail customers like Kroger, Busch's and Holiday Market. Nationally, its customers include Sysco, U.S. Foods and smaller distributors supplying delis and restaurants.

Last year its sales were $40 million, with distribution of products sourced from other companies accounting for about a quarter of that.

"That's one of the reasons why we're so excited about this merger," Ginsberg, 72, said. "Our strength is their weakness and vice versa, so this is going to be a real good blend."

It had become apparent over the last four or five years that it was time to sell the company because United had run out of space at its 28,000-square-foot southwest Detroit operation. As a result, it had been forced to outsource parts of its operations, turning to Alexander & Hornung in St. Clair Shores and another company in Ohio to help cook meats and Chicago Meat Authority in Illinois for help in trimming meat.

That had been frustrating, Ginsberg said, because United didn't like to cede control of any part of its processing operation.

Several large companies from other states had approached United with offers, and they all looked good on paper, Ginsberg said. But selling to them would have meant production would be moved to another state.

"We never wanted to do that. ... We're hometown people," he said, with some employees who have been with the company for 25 or more years.

lt's been thrilling to see some of United's Hispanic employees become U.S. citizens, raise families and send their kids on to college, he said. "To uproot that whole situation was not anything we ever wanted to do, even though we were locked in on space for a while."

United has also maintained a culture of being very involved in its customers' businesses, Ginsberg said, noting that Zingerman's Founder Paul Saginaw often introduces him as the first person to ever make a Zingerman's sandwich. United has been Zingerman's only meat processor since the day it opened its doors, he said.

All employees will remain with the merged company.

The heads of the two companies had met previously, but it wasn't until a mutual friend suggested it last fall that the two began talking about combining their operations.

Grobbel said he's always admired Ginsberg and Mendelsohn. "I've tried to model myself after them … in terms of the ethical way they do business, the humility."

Birmingham-based Williams, Williams, Ratner & Plunkett P.C. and Carabell, Leslie and Co. P.C. in Mt. Clemens advised Grobbel.

United's attorneys at Maddin, Hauser, Roth & Heller P.C. in Southfield advised it in the deal.

Grobbel plans to gradually move United's production to its newly expanded campus in Eastern Market. It invested $5 million in new processing systems and expanded its footprint into an adjacent building last fall, giving it a total of 55,000 square feet.

United's southwest Detroit building will continue to operate as a distribution site.

(Ginsberg is father of Crain's Special Projects Editor Amy Elliott Bragg, who was not involved in reporting or editing this story.)