The History of Smart & Final
The year was 1871, and Los Angeles was a small, dusty, ranching town. Streets were unpaved, buildings were modestly built with wood or adobe and the enclave's 6,000 residents were outnumbered by local sheep and cattle, in a city that mainly produced hides, wool and tallow.
Los Angeles' rural ambiance didn't deter partners Herman Hellman (who later became the head of Farmers & Merchants Bank), Jacob Haas (who later became Mayor of Los Angeles) and Bernard Cohn from launching a new grocery business. Housed in a two-story brick building on Los Angeles Street, Hellman-Haas Grocery Co. sold necessities of the day including flour, brown sugar, salt, patent medicines, rope, sheepherding supplies, chewing tobacco and gunpowder.
Packaged goods were unknown. Hellman-Haas Grocery Co. food staples arrived in bulk and typically were sold by weight. There were prunes in huge casks, barrels of currants from Greece and rice. So vital was the store that Hellman, Haas was one of seven names in the first Los Angeles phone directory.
By the turn of the century, the sole owners of Hellman-Haas were Abraham Haas (brother of Jacob Haas) and Jacob Baruch, who bought out Herman Hellman, Jacob Haas & Bernard Cohn. The company name was changed to Haas, Baruch & Co. in 1889.
Creating what might be one of the earliest private label brands in the United States, Haas, Baruch & Co. introduced a line of canned tomatoes under the name of “Iris,” with packaging to emphasize the cans' high-quality contents. The grocer's sales reached $2 million by 1895 – a huge sum at the time.
By 1900, Haas, Baruch & Co. was the burgeoning city's preeminent wholesale grocer. Over the next two decades, a chain of events – including construction of the L.A. Aqueduct, the discovery of oil in Long Beach and the opening of the Panama Canal – pushed the local population to nearly 1 million.
Abraham Haas left Southern California and moved to San Francisco to found Haas Wholesale Grocers, which became the leading wholesaler in the Bay Area.
Fun Fact: The Haas mansion in San Francisco, the original home of Abraham Haas, is now open to private tours as a San Francisco Historical Home. The family’s legacy extended through Abraham Haas’ son, Walter, who worked with his father in the food business, but left to serve as president of the clothing manufacturer Levi Straus for three decades. Walter Hass was a graduate and lifelong supporter of the University of California, Berkeley business school, and it was renamed the Berkeley Haas School of Business in 1989.
Meanwhile, another grocery store, the Santa Ana Wholesale Grocery Company, which was founded in 1912 to supply feed and grain to local farmers, was sold in 1914 to J.S. "Jim" Smart, a banker from Saginaw, Michigan. Jim was then joined by partner H.D. "Hildane" Final, and the company name changed to Smart & Final Wholesale Grocers. The business relocated near the docks in San Pedro, and by 1919, sales had surged to $10 million.
The grocery industry was changing. As retail grocers gained strength, many were negotiating discounts directly with manufacturers, avoiding wholesalers altogether. Competition turned brutal: Of the city's 16 wholesale grocers in 1920, only seven were left a decade later. Smart & Final survived by offering better service and by pioneering the "cash and carry" concept in Los Angeles.
Fun Fact: Before Smart & Final introduced the concept of “cash and carry,” today’s way of self-serve shopping, grocery stores required a clerk to collect goods for the customers.
Smart & Final’s novel cash and carry store debuted in Long Beach in 1923, as the company had determined that opening grocery locations near customers' businesses would spare them the time and trek to a remote warehouse.
In 1953, Smart & Final merged with Haas, Baruch & Co., keeping the Smart & Final name. The company shifted its headquarters to Vernon, California, which was quickly becoming the preferred distribution location for a number of wholesale and retail companies. Shortly thereafter, the company was acquired by a leading supermarket chain, Thriftimart, and grew to 83 units.
In 1984, Thriftimart, Inc. changed its name to Smart & Final Iris Corporation.
Casino USA, the American subsidiary of Casino Groupe, acquired the company in 1988, liquidating the underperforming Thriftimart stores and shifting the company's resources to an aggressive Smart & Final store modernization and expansion program. As a result, within six years, the company doubled its sales to more than $558 million.
The company ventured outside of the United States in 1993, opening stores in Mexico through a joint partnership, and five years later, acquired United Grocers’ Cash & Carry chain in 1998, expanding its west coast operations from Northern Mexico to the Canadian border.
In May 2007, Smart & Final was acquired by funds managed by affiliates of Apollo Management, L.P., which led to the company entering a new niche of food retailing when it purchased 27 Southern California Henry’s Farmers Market Fresh stores and eight Texas Sun Harvest stores. The following year, Smart & Final debuted Smart & Final Extra! format stores, with larger store footprints and an expanded merchandise selection, opening eight of these stores by year-end.
Smart & Final later sold the Henry’s and Sun Harvest stores to Sprouts Farmers Markets in early 2011. The Company was acquired by Ares Management, a private equity firm, in 2012.
In 2014, Smart & Final marked another historic moment with an initial public offering (NYSE: SFS) of 13,450,000 shares. That same year, Smart & Final celebrated the opening of its 200th store in Long Beach, California, the city where it opened its first store under the Smart & Final name.
The year 2015 brought incredible growth, as Smart & Final celebrated the opening of its 100th Extra! banner store and then acquired 33 former Haggen store leases in California in 2016, which it reopened as Smart & Final Extra! stores.
In June 2019, Smart & Final Stores Inc. was privatized through an acquisition by funds managed by affiliates of Apollo Global Management, LLC, a leading global alternative investment manager, who had previously acquired the brand twelve years earlier. In April 2020, Smart Foodservice Warehouse Stores was sold to US Foods.
Smart & Final continues its growth plans, rolling out pick-up and delivery options and opening new stores to provide customers quality, value and convenience.