By Eric Peterson | Nov 01, 2021
Co-packing and product development for the food industry
Viar started working for Fresca Foods in 2012 as the company's first financial analyst. Within a month or so, he started meeting with longtime CEO Todd Dutkin every workday at 9 a.m.
"He and I just hit it off and did some really good work together," says Viar. "Next thing you know, he was asking me to formally take on some areas of the business and build out a business analytics function, formally onboard Lean manufacturing and continuous improvement into the company. It really just kept growing from there."
After stints as both chief financial officer and chief commercial officer, Viar assumed co-CEO duties when Dutkin transitioned to chairman in early 2020. And now, as of October 2021, Viar is Fresca Foods' one and only CEO. "I've been so blessed and fortunate to have a pretty awesome career and get a lot of opportunities at Fresca Foods," he says.
Fresca Foods started as Pasta Fresca in Boulder, a retail-facing brand with a catalog of pasta, sauces, and soups. When Dutkin joined the company in 2003, the business model shifted entirely to contract manufacturing and partnering with promising food brands.
Many customers have quickly gone from local to national after partnering with Fresca. LÄRABAR was the company's first partner brand in the early 2000s; it sold to General Mills in 2008. Justin's Nut Butter is another partner that was acquired; Hormel bought the brand for $286 million in 2016. 34 Degrees Crisps is a longtime partner brand; Fresca is also an investor.
The case studies are compelling. Fresca Foods was able to take a product from concept to shelf in less than six months for one unnamed CPG customer, then scale production 1,900 percent in a year -- without ever missing an order. Another client wanted to reinvigorate a legacy CGP brand; Fresca developed the recipes, packaging, manufacturing processes, and the go-to-market strategy. The end result? The product was in 500 stores within six months and for less than $350,000.
After launching a few company-owned brands in the 2010s, Fresca Foods has retrenched as an "innovation partner," says Viar. "It's a credit to Todd and his entrepreneurial spirit and focus on innovation. Over the last 10 years, our innovation capabilities have become much more formalized, and desired and recognized in the industry."
The company has two distinct types of customers: "high-growth, entrepreneurial brands" that turn manufacturing and logistics over to Fresca, and multinational consumer packaged goods (CPG) brands.
As some brands were sold to larger companies, contract manufacturing for leading global CPG companies has driven growth for Fresca in recent years. "Once you start building a reputation with one or two of those folks, the word spreads," says Viar.
The company's headquarters and two manufacturing facilities are in Boulder County and the company maintains a warehouse and logistics center in Aurora. The facilities add up to 350,000 square feet. Of its 400 employees, about 320 work in manufacturing or distribution.
Fresca Foods is known for cold-form extrusion -- "making bars and bites and things like that," says Viar -- and "value-added baking."
The capabilities expand based on customer demand. The company installed a nut-butter line in September 2021, and has plans for a new hot-fill line in 2022. "When we bring on a new line or expand a current line, we like to see that it's a category that has a lot of growth potential, and also where we can find a good starting partner/customer to start to fill the line time," says Viar of the capital investment strategy.
Health and wellness benefits remain a big driver of innovation demand. "Immune is particularly big," he says of the former. "We're seeing a lot of emphasis on functionality and foods or ingredients that serve some kind of health purpose."
An up-and-coming trend, upcycling ingredients -- "basically taking perfectly good food that today is part of the waste stream and bringing that into products," says Viar -- is also part of multiple partners' recipes. "That's pretty new to the food world, and really pushes -- especially from a manufacturing and supply chain standpoint -- the boundaries a little bit. It's a really fun, fulfilling area to play in."
He cites a Fresca Foods project on upcycling the fruit from the cacao tree, which is usually thrown out after the seeds within are harvested to make chocolate. "It's packed with vitamins and minerals and antioxidants -- it's literally a superfood and right now it's just tossed."
The company had an average annual growth rate of about 30 percent before COVID-19 hit. While cereal and granola sales have been up since the onset of the pandemic, the dearth of product launches in the second half of 2020 and early 2021 was the biggest factor. "That part of our business went really quiet," says Viar. "It was a really challenging 20 months, but our business came out much stronger and better positioned."
Viar says the second half of 2021 has brought an "insatiable hunger" for new product launches from Fresca Foods' customers. "We're in a really strong spot to take the company forward for the next few years," he says.
Challenges: "Supply chain issues -- they are as real as can be," says Viar. "Availability, inflationary pricing of inputs, transportation, equipment lead times. I wish I knew when it was going to get back to normal or how to fix it, but it's across the board. We're an agile company, so we're probably a step or two ahead of others in our market. Given how much innovation we do and the speed at which we move, we're a little more comfortable with uncertainty and being able to flex and change and have backup plans, but it's way more challenging when costs just continue to rise and lead times lengthen."
Opportunities: "It's innovation and providing innovative services," says Viar. "Then it's just continuing to grow our existing categories."
Case in point: New equipment means a new opportunity in nut butters. "We have a good amount of capacity," says Viar. "Moving into 2022, that's a big focus area for us to find the right strategic partners to continue to utilize that platform."
The upcoming hot-fill line will likewise expand Fresca Foods' capabilities, he adds. "There's just so much unfulfilled demand and needed capacity and needed partnership on bringing innovation to life," says Viar.
Needs: "Good people," says Viar. "We're super lucky. We've got a core group of folks who have been with us for a while and are super talented, and we can service our business and service our customers, but as we look at this insatiable demand for both innovation and capacity, there's a finite amount of people out there now."
Fresca Foods will also need more space in the near term. Viar says the company is exploring options and might expand in Colorado or another state. "We're pretty open to where that geographically may be," he says. "There are some strategic reasons to stay in Colorado and some strategic reasons to expand elsewhere, but if we're able to do what we say we can do over the next 18 months or so, there could be some big expansions for us coming soon."