I've been doing food for about four more weeks to be 34 years.
So like you hear a lot of musicians that have become an overnight success and then you find
out the real story that has been beating the bushes and playing to four or five people
for 10 or 15 years before they became the overnight success.
That's sort of how we've been recognized here recently.
A lot of folks have stumbled the process, but we've been doing it for a long time.
A little history on me before I get into what we're doing as a company and then we'll,
you know, as you have questions, don't be hesitant to raise your hand and ask.
I'm an agricultural product of Alabama.
I grew up in the edge of Barbara County on a peanut farm.
We had a little bit everything, cows, hogs, corn, cotton, but mostly peanuts is what
we depended on back then and of course that has changed over the years.
But as I was encouraged to do, I went on to college and they got my education and the
background that I had was actually in accounting.
So I spent a couple of years with a CPA firm in Montgomery, long enough to get certified
because back then you had to be two years there to get certified, so I got my two years
and then started looking.
Actually interviewed for a different company, but one of the companies that I gave as a
reference was a food company based in Montgomery at the time called Picnic Products and I went
to work with Picnic Products in 1982 and worked there for 18 plus years.
About halfway through my tenure there, a company at the time that was trying to take over the
world in the food business was called Borden and Borden purchased several of our competitors
and we were making mayonnaise dressings and sauces pretty much for the Eastern U.S., predominantly
Southeast but all the way up into Chicago and New York and Pennsylvania.
Borden was taking over a lot of our competitors, so we decided to do something a little bit
scorn-ballish and we just sat down and wrote letters to the top 100 food companies in
the U.S., asking them to entertain the idea of letting us contract and manufacture some
of the products for them and out of these 90-some-odd letters that actually went out,
we got replies from three of them that were actually looking for somebody to do something
for them and two of them, within six months, we signed a contract with.
One of them was a little company called Hershey Chocolate Company and the other one's another
little company called Quaker Oats Company.
What wound up happening is we produced, for Quaker Oats we produced Gatorade and we did
a lot of millions and millions of gallons.
For the most part we were a seasonal packer with some of their traditional packages, but
we packed all the odd things when it first came out.
When they came out with a sport bottle with a twist cap, we were one of the first packers
in the U.S. that was three of us and 100% of it was contract manufacturing at the time
and we were one of the packers that produced everything pretty much for the Southeast on
that bottle.
They also introduced a gallon plastic bottle.
At the time they had been selling, believe it or not, Gatorade and a gallon glass jug
and they had done 250,000 cases the year before across the whole country and they asked us
to consider looking at the southeastern part of that volume which was going to be 100,000
cases.
Well, at the time 100,000 cases were still significant to us so we said yes, we'd entertain
the idea, we moved some equipment around and got set up to do it.
Well, before we packed the first gallon they changed their estimate from 100,000 cases
to 300,000 cases and then to 500,000 cases and then to 600,000 cases because everybody
sort of liked the idea of that gallon jug.
Now, if you ask my mother the reason it was so successful is everybody in the South wanted
that jug to put their tea in.
She still has some of those jugs today, believe it or not, I was at a dinner here last week
and I knew it was my mother's tea because it was in that jug, pretty unreal.
They ran a lot of products and we helped them run a lot of products.
We were there when they were transitioning from glass to plastic so Quaker Oats, big
company that they are, they were still learning how to make that transition because putting
a metal cap on a glass jar is pretty easy compared to putting a plastic cap on a trim
finish of a plastic bottle and most folks that go in the grocery store, you don't ever
think about what it takes to get it there but there's a lot of science and typically
a lot of failures before you get there.
We worked with them, we learned a lot, they learned a lot, we continued to grow in addition
to doing work for Hershey Chocolate Company and Quaker Oats at that company.
We did work for Procter & Gamble, very fine juices out of New England.
We did work for Snapple, Indian Summer Apple Juice out of Michigan.
We worked with a lot of beverage related opportunities obviously.
The Hershey stuff was not beverages though, it was ice cream toppings and syrup that you
would see in the retail grocery store.
We introduced the strawberry syrup they had not had before, we introduced a line of ice
cream toppings in glass jars that they had not had before, we introduced a sundae syrup
which was thicker than the regular chocolate syrup that you put in milk but not as thick
as the ice cream topping.
So through all these learnings that we were going through with them, obviously me and
what wound up being future employees of mine learned a lot of good information I guess
you would say to set us up for another business.
We had the opportunity, the last contract I signed while I was at picnic was with Tropicana
juices.
We put in a line that was going to run, every machine on the line was rated to run 750 bottles
a minute.
We geared the line up and targeted running 650 bottles a minute and the year 2000 that
line qualified at 650 bottles a minute of 100% juice products for Tropicana and we also
ran 20 ounce Gatorade on the same equipment.
Later in the year 2000 there's a lot of information that gets there to say what happened but the
company I was working for, we've been successful and it was put up for, it was available for
sale and somebody came in and offered them a lot of money for it.
In the end the deal didn't happen but through the process the owner of myself flew apart.
So at the end of the year after starting that new line up, the owner basically said we didn't
see eye to eye on how things ought to be run and since he now owned 100% of the company
that they had to retrieve from the rest of his family members, obviously I moved on.
He asked me to sign an on-compete agreement which I did not because obviously a lot of
the time and effort that I put in that company, you know 18 years, that's pretty much a lifetime
in many careers, I decided I wanted to use that experience for myself.
So later in the year I asked seven of my, at the time 43 salary reports to join me in
starting a new company and we started such a classic food group in December informally
and formally in January of 2001.
We were a very top-heavy company, obviously with seven and of course Captain E, hopefully
eight salary employees to get started off with but the good news is I didn't have to
train anybody to do anything.
I had somebody that would handle customer service.
I had an R&D person, I had a projects guy, I had a purchasing guy, I had a production
guy.
Of course that first year when we started up making mayonnaise dressings and sauces again
without all the big names, we started over and we had rented buildings for everything
we were doing.
We had a little, we took over our old Tiggly Wiggly grocery store, gutted it, put up new
fiberglass clad walls, put in stainless steel grates and what used to be the produce and
meat area of the grocery store.
It was a little bit of a strange thing, people driving by and you could still tell it was
a grocery store but by the time we got all the boilers and air compressors up outside
in the parking lot, they didn't really recognize it as what such but we had a building where
we stored the ingredients and spices, we had a building where we ran the stuff, we had
a building where we stored the finished goods, we had a building where we had a small office
and then the airport, the air frontage had been decommissioned a year or so earlier so
we rented all the airport hangers and stored all the equipment that we were actually going
to put in the real plant when we built it.
So for one point in time, we obviously rented the most space in frontage, our little town
down there.
Our little town had a little over 2,000 people so it was an interesting time, of course the
folks where I was no longer working, they tended to drive people by and say that's where
Chuck's at now, you know, a little place over there and of course I know that because now
I employ most of the people who used to work there but we did what we had to do and if
we were running a barbecue sauce that had a wet sea line that went on the neck band,
we'd shut down the office, everybody out in the office in their R&D lab and everybody
would come down and take me on the line that afternoon.
So that's sort of what our first year looked like.
As I've told many people before, I had my accounting background and obviously knowing
that I needed to borrow some money, I had the business plan put together which I would
obviously suggest to anybody that started business because a couple things happened
in that first couple of years.
First thing that happens is not what you expect is going to happen, that's what happens.
But we did have a business plan and it showed that we were going to be losing money for
the first three years and as I typically tell folks we were highly successful at meeting
that business plan, a little too successful sometimes but sure enough by the end of the
fourth year we were making money and we've continued to do so ever since.
Of course we've continued to grow from those humble beginnings of 12 people that first
year to now we employ 200 plus full time people and have another 50 or 60 people that are
working through a contract service and that's pretty much our preview of the almost future
employees because we continue to grow in ad folks.
So again what I would say there is you've got to have a plan but certainly you need to
go to plan B and plan C when the first plans don't work out.
The other part of that what I just said is if you're starting a business it's going to
take some money and it's probably going to take more money than you expect it's going
to take.
So when you put your plan together don't be pine the sky dreaming about it because realistic
as possible about what your plan is going to be because it's one thing that you get
surprised you can probably deal with it pretty quickly but if you're using a bank they don't
like to be surprised so it's better to show them that you're going to lose money rather
than trying to put together a plan that's not going to work.
So and that's been my experience and it's worked well for me.
We continued to grow though with dressings and sauces and mayonnaise those first few
years and as our plan was we decided to build a new building.
We purchased put a binder on land the first year we were in business we started construction
on it in 2002 and the first facility we built was 45,000 square feet.
We used SBA went out and got a loan to do that.
Obviously we had to have some bank financing to go with that and at the same time I went
out and got some investors to raise the capital that we had to have to endure those first
three years of losses and to create the equity that we needed in the building and equipment
that we were acquiring and then lastly what people also don't really realize is you got
to put money in that inventory and those receivables too because you don't just make it today
and the money comes back in tomorrow.
It never happens that way and then so you got to have cash for the equity, you got to
have cash for the losses that you're going to have up front, you got to have cash to
cover part of that inventory of receivables.
Once you're showing some success the bank will loan you money toward those receivables
and inventory you know some line of credit or something but you've got to be prepared
on the front side to deal with it.
I guess the other thing I would say to you is we get and I know there's some other folks
in here that do sauces and so forth but there's literally not a week from this point now through
Labor Day that we won't get a call about somebody that has a sauce or typically a sauce for
their dressing or a sauce that they think they can sell and many of them are fantastic
products and they really taste good and everything else but barbecue sauces which is one of the
big things that we do, we do a good number of them, it changes as you move a little bit,
15 miles somebody else likes something a little different.
Now there are a few chains out there that's obviously been successful in being able to
show that their sauce is a little more universal but a lot of that has to do with typically
the environment or a lure or something else that they're doing in addition to the sauce.
So to get it into a retail market is not just knowing somebody that works at Walmart, it's
going to take dollars and cents to make that happen.
You've got to have the money to go out and do the proper marketing or to be able to give
away the buy one, get one program to get it in a retail market to do those things.
So none of the front end process of this sounds very appealing from a cash flow perspective
but if you're committed to it and you've got the resources to make it happen it is
dual.
Obviously we are an example of somebody starting from a very humble beginning where it's time
to have a lot of experience and as I've told many people before I go with the definition
that I use for experience is knowing a lot of things not to do again and believe me we've
got a lot of experience.
And most folks that I know that have been successful at doing about anything they failed
many times.
One of our favorite customers, Hershey, he failed multiple times before he got it right
and actually became the company that he became but he actually went bankrupt a couple times
in the process.
So you don't always get it right the first time.
So don't take it as the death blow but just be as prepared as you can when you get started
and you'll be more likely to be successful is what I would say.
We continue to grow doing dressings and sauces as I said in 2004 though I had an unexpected
surprise Hershey chocolate basically came back in and said I want you to run products
for us again and they left the company that I've worked with before and came to join us
in November 2004 we started back making their products.
The business that I took over from where I was before was about 9 million pounds a year.
Last year 2015 cumulatively we actually have a second facility now out in Ogden, Utah but
between the two facilities last year we did 65 million pounds of various let's say dessert
related products for Hershey chocolate cumulatively.
All of them have a lot of sugar in them, some of them have a lot of fat in them.
As some of them tasted down there last week the Reese's right off the line, it's still
a little warm, it's pretty good tasting stuff some of them but in addition to being able
to get Hershey though we continue to go out and develop new business and that's how we
continue to balance ourselves you know we get two depending on one customer and every
time we've consciously taken on something from Hershey to add to what we're doing growing
that 65 million pounds we've consciously gone out and got aggressive about trying to find
other business to balance that with and we've been very blessed with good customers to be
able to do that.
Some of the other products that we make that we probably recognize we make 90% of all the
Dale's marinade that's made they have a packer down in South Florida that does the other
10% I guess in case a tornado hits us or a hurricane hits them he wants to have two packers
but it's a very good business and they are very steady and obviously it's a very busy
time of the year right now on that product.
We keep about two weeks supply on the floor which is time of the year is about 35,000
or 40,000 cases so we're running that product every week from now through Labor Day.
We make all of the Bloody Mirror mix for the Tabasco brand which is McElhaney out of Avery
Island Louisiana.
We make a couple of different products for Raleigh foods out of New Orleans under contract
as well.
They have a line of dressings called La Martinique, there's a blue cheese vinaigrette, a balsamic
vinaigrette and a French vinaigrette as well as a malsaphyde poppy seed dressing all four
of them are excellent products.
Then we have a product called Old Ducks Sweet and Sour Make the Them which is a back in
the 70s one of the first fat free dressings of course it's sort of faded because people
aren't as worried about fat as much anymore, they're more worried about other avenues of
adjectives for food I guess you would say.
Then we do some tartar sauce and cocktail sauce for a company out of Baton Rouge called
Louisiana Fish Fry.
They're all across the country and we produce about 50% of all the products that they make
for wet products.
They produce their own dry products in Baton Rouge but we do the wet products.
So that sort of covers our contract guys but we do a number of other products that you
don't think about somebody else making.
Old Charlie's we do 100% of all their retail dressings so if you go in the produce section
of your local grocer and it has Old Charlie's dressings in there it's made in Brunty, Alabama.
We also make the 32 ounce shelf staple products for the Honey Mustard that you see at Wal-Mart
and Sands.
They have the two packs at Sands all the time.
We've been doing that product now for about five years.
We again make a lot of different sauces Asian sauces, barbecue sauces, multitude of tartars
and cocktails and people ask well who's your largest customer or obviously by pounds Hershey's
our largest customer, by product though the largest single formula we sell is steel mayonnaise.
We have one customer in Memphis, Tennessee that we sell over 9 million pounds a year
of mayonnaise and salad dressing and the smallest quantity that they get from us is
3,000 pound totes and they're making chicken salad, potato salad, pimento cheese all those
types of products with it so that's we do industrial, we do retail, we do food service
and then we do the contract manufacturing.
Some of our products wind up over in the Middle East and Kuwait and Saudi Arabia.
We produce a lot of dressings that wind up in the American named chains over there, pizza
and Kentucky fried chicken and some of those so we've I guess been able to get ourselves
around the world a little bit through our customers.
Occasionally we'll have somebody that's overseas that's a friend of ours in fact one of the
Hershey guys was in India a couple of years ago and he goes in this local market and picks
up a bottle of Tabasco that we made in Brundage, Alabama and sent me a picture of it back
to me so I don't get to go to India and go up and down the aisles but I assure you any
grocery store I'm in I must have been down the aisles looking at the products that we've
made and it's not because I'm proud or I am proud that we're making them but I want to
make sure I can stake right out so I'm checking labels and code dates and tamper bands and
everything else and I think that's part of what it takes to be successful is you don't
ever quit just because you've gotten to some level of success you've got to keep pushing
at and you keep pushing those that work with you and around you to do the same thing.
I mean if nothing makes me feel better than your employee come back in and says I was
in the grocery store and these labels and crookets I bought them brought them back you
know of course I immediately reimburse them and then we have a meeting with the line that
ran the crooked labels of course but that's pretty much what winds up happening.
We a couple years ago were working with a fellow industrial manufacturer that was doing pickle
products and we were trying to help them relocate or locate another location here in the south
and of course being where I am obviously I'd like for them to come on in town and help
share in the cost of the utilities and you know keep the rates level or down even so
I tried to help recruit them to Pike County where we are was not successful in that effort
they wound up locating Macon, Georgia but through the process I learned a lot about
pickles, pickling products and it gets back to some of that farm experiences I would tell
people is I grew up on a farm and if you don't know how to do something you better not be
afraid of learning because that's certainly what farming teaches you and I think any
good business person you take that same attitude.
So learn what I could learn and then just coincidentally I had another company come
in and say we're looking at moving our products back to Alabama and we'd like to partner with
you to do that.
We are in the process as we speak of pouring the first concrete on a 66,000 square foot
to do pickle products, packaged pickle products in brandage adjacent to our current facility
but totally separate business and our goal there initially will be all these niche type
pickle products and similar to what we do with the barbecue sauces where we'll make
as little as a 2,500 pound batch of a cooked barbecue sauce as little as 600 pounds on
an uncooked sauce or dressing.
Obviously the price changes as the volume goes up but we're going to take that same
approach with the pickle products and we'll be able to do a lot of the niche things that
the big companies won't even consider and then some of the larger folks that are already
out there and in the marketplace will be able to take them on and hopefully become the base
of our business that we need to continue.
Hopefully not start out with three years of losses in this one is our plan anyway.
But we hope to be producing the first products will be Pickled Oprah starting the first last
week of July, first week of August this year is what our goal is still.
We had about a month and a half ago we had 60 semi-farmers come in to Brindage and we
had a meeting and discussed with them and I think we're going to wind up with about
35 or so of those actually growing over as far as this summer.
We'll be signing contracts with just about all of those first and next week.
And that's the base from which we hope to get farmers to grow a lot of other items
as far as because as we go along we're going to do a lot of other Pickled products of course.
Cucumbers will be one of the big ones but we're blessed here in Alabama that we have
two large, when I say large, three to five thousand acres each growing cucumbers in Southeast
Alabama.
But we don't have much else going in the way of commercial or industrial volumes I guess
would say of onions or peppers or any of those things so we're going to be pursuing
that over the next six months to a year to get everybody lined up to do jalapenos and
some red peppers that we need and some pearl onions that we need and some green beans that
we need.
Of course there's some of that being grown here in the state.
But we're so far behind in Alabama compared to what even Georgia is doing, the produce
that we've got a long way to go.
Pretty much every meeting I've been in the last eight or nine months thrown out the fact
that we rely so heavily on California to grow so much of our produce here in the U.S. and
a lot of that product is moving from the West Coast back to the East Coast to be consumed.
In addition to that movement of freight, the other part of it is California doesn't have
any water.
So at least we still got some water, sometimes we fight about it with Georgia who's going
who's water it is but we do have water here and we have the land, we have the farm background
and knowledge, certainly, we've just gotten used to sitting in tractors and riding combines
and we've got to get a little bit of change there to make it happen because it will take
some manual labor to do these produce items.
But I think we've got some young farmers now that obviously they're disillusioned by peanuts
to some degree and there's a glut of peanuts out there right now and of course there's
other parts of the world that produce peanuts but perishable food products like vegetables
and fruit, the need for that's not going to go away and then of course you have this push
for the being grown local, being grown organic, being grown naturally, all those items are
there and I think we can take advantage of all those and improve the agriculture economy
here in the state.
Of course agriculture is still the number one thing in Alabama for sure, certainly our
poultry science guys would agree with that which is I guess most of the room right now.
But I think we're going to see some changes and it's going to take a few years to make
things happen but we're working with the Commissioner of Agriculture, we're working
with the rural economic development people at USDA in Montgomery and we've had several
different visits and with people from NRCS and obviously the extension service and we're
trying to get everybody working together to make sure that we do improve it.
I guess I've still got a little farmer in me and it's important to me, it's not that
I think I'll ever make any money off of it, it's just important to me.
So we're going to continue to push that direction and I guess as I've tried to always do in
my life is don't tell somebody else to do something I'm not willing to do myself.
So I've gone out last fall, a friend of mine that I grew up with, I partnered up with him
and we have eight high tunnel houses about a quarter acre each and we've started growing
organic produce, initially tomatoes, bell peppers, zucchini, cucumbers and there's something
in there, two different varieties of tomatoes, the grape tomatoes and the beef steaks.
We've got eight of those houses that we're starting to harvest from now.
We planted last week 10 more similar sized plots outside and we're going to build four
more houses this summer to try to continue to push that direction and of course everybody
naturally jumps to the conclusion that I'm doing that to feed into the Magnolia vegetable
processes where we're pickling stuff but as I've told my partner, no no no I can't afford
the organic stuff right now, we're starting a new business.
But eventually we will pack some organics but we'll be buying most of our cucumbers
from my friends down below Dothan, you know that have the 10,000 acres a year of cucumbers.
But it's part of the overall picture and I think the thing that's still left out there
that we've got to accomplish as a group of folks is we've got to get some aggregation
points where farmers that aren't going to be, let's just say they're good at farming
but maybe they haven't mastered the marketing skills or some of those other things that
have to do, we're going to have to help pull those guys together so that we can aggregate
their products and then redistribute them back out to people that really want them.
Food service, distributors, retail grocery markets and then behind that we would still
rely back on some of the USDA farmer markets for example the large one in Atlanta which
is still very much a big part of what Georgia does with their agriculture over there.
So I think what we're trying to do is just get enough people in gear and starting to
move. It's going to take a while to reverse what the last 60 years have done to us as
far as agriculture and the trends we've been pushing on produce relying upon somebody else
to do the hard work while we do the easy work. But we've got to get back to doing some of
the hard work here if we want to be successful as agricultural people in the state and we'll
get smarter and we won't be quite as hard as we go along but we've got to get traction
and get it started right now. And I think what you will hear and see over the next couple
of years is a lot of emphasis on this from obviously people like me but more people involved
at the state level and hopefully some of our congressional people we've had in that meeting
and of course our district out there and I'm not sure what it is up here. Martha Robe is
our representative. Mike Rogers up here. We keep trying to push and make sure they're
tied in what we're doing so that anything that California is able to get for agriculture
Alabama needs to be getting to. I'm not a big proponent of subsidies but if you're going
to play a fair game everybody's got to have the same tools available to them and that's
what we want to make sure is happening with it from our congressional folks and obviously
agriculture is still very important to everybody, all our representatives in Alabama. So that's
sort of how I got to where I am. You've got to get any questions of me. I'm wondering
could you just emphasize the process if somebody came to you with a salad dressing recipe or
something wanted you to do a small run. What would you do? Well the first thing we do is
you get a non-disclosure agreement in place so that your formula is protected. The next
thing that happens I'm going to ask you for some of your product that you've made by formula
as detailed as you can give me. Ideally something that's been weighed out in grams not somebody's
teaspoon or somebody's cup. Of course we deal with a lot of individuals. We deal with restaurant
chains and you'll be surprised how they have the written thing there but it goes from one
time to the next it's not the same. Wrong colors, wrong flavors, a lot of different things.
It's pretty interesting sometimes dealing with restaurant chains that have multi units and
how different their product can be from one store to the next. But once we've got that
formula as detailed as we can the first thing we're going to do is try to duplicate it with
the exact ingredient you said you used. Okay and once we feel like we've conquered that
of course we're testing acid, salts, viscosities, any color of things that standards that we
have to go by depending on the product. There may be some refractive solids we're testing
as well. Some of them have some fat in them. We'll test the fat depending on what the product
is. And then once we've been able to duplicate it with your ingredients what we'll try to
do because the way we were able to justify our services is by saving you money on ingredients
and giving you a standard product every time. So then what we'll try to do is move them
over to the industrial ingredients that we have available. We're not necessarily going
to go out and buy a hind sketch up if you have it in your barbecue sauce. We do have
a few people that insist on it. As some of you saw then last week we buy a lot of hind
sketch up. But that's for a few formulas that we actually use it in. There may be five formulas
that we actually use hind sketch up in. But I guarantee you there's 35 we've converted
from hind sketch up to our tomato paste water and sweeteners. So you wind up saving a good
amount of money and that's how we're able to get it back where it makes sense for people
that have been making it themselves. Because unfortunately most people that make it for
themselves don't count their own labor. That's free. You could be taking that time and doing
something else. Or you could have an employee doing something else. It's certainly our argument
to it. But what we'll do is work it all the way through the process and then we'll create
a nutritional label that matches up with the formula that we've developed. Obviously depending
on the product, whether it has to have preservatives or whether changes have to be made in formula
to get it away from having preservatives, all that work can be done. If it's something
that's pretty straightforward and comes in the door, we don't have any fees associated
with it. We do that as part of our business. If it comes in the door and we know there's
going to be a lot of work to get it to where it's actually commercially viable, we'll have
some sort of R&D fee but still it's normally not associated with it. We have two full-time
people that all they do is R&D and then we have a couple of part-time people that come
in basically just do way-ups of formulas that the R&D people have put together. The thing
that we have to offer obviously at our facility already is we're an FQF certified facility
level two. We have two certified practitioners on site, FQF practitioners, and then we have
about 12 other people that are FQF trained. We still have, from the training a few years
ago, we have the Better Process School training as well. Of course, some products obviously
will require filings with FDA, but most of our products that we make are currently certified
or products that don't necessarily require the filings, but we use acid and salt to protect
most of our things as far as compressing the sauces. But once we got through all that,
now we're giving you a price to make this stuff. And then hopefully while that process
has been going on, you've been trying to sell it somewhere, hopefully.
That was going to be my next question. Well, we don't participate in the sales
effort of it unless the customer you're selling requires an audit and then we facilitate those
audits at our facility. But we can direct you to people that handle products, whatever
your product might be, that like that, but we don't market the products for people because
we have so many customers, I think naturally you'd wind up picking a favorite or something
and if I'm going to pick a favorite, I'm going to try to pick myself and come out on my own
label of something, not your product, not my products. And we will probably be doing
that in the next couple of years ourselves, some retail stuff. Because we finally, after
15 years, have figured out we have enough capital, we can actually promote our own label now.
But it has taken that long.
So when you left your original job and went and opened this, did you start producing your
own product? Do you have your own line? Or did you just run that product?
When we first started out, we thought food service would be the easiest avenue to pursue.
And of course, the reason I thought that was I'd hired the sales manager of food service,
be one of the first seven people that came on board with me. And what was supposed to
happen was several of the brokers that we utilized across the southeast were going to
help, were joining up with us and we did get some of them. But what wound up happening
on a lot of the food service accounts that we've heard previously, they said, well Chuck,
if you make it a year, call me at the end of the year. And many of them at the end of
that year said, well, you make it, I said, we'll make it a year, calling you, if you're
making another year, call me. Well, obviously what we had to do is go out and develop new
business and that's what we did. And some of that was industrial, some of that was food
service. The other than the Hershey stuff, all the contract stuff we did was new business.
So obviously it was those three years of having losses. There was multiple reasons for that
happening. And we changed our plan. And obviously when Hershey called and said, will you kind
of track back for us? Of course, it was exact within 30 days of Tabasco agreeing to let
us back for them and less than two months from when we signed on Raleigh Food. So we
had a lot of stuff happening in the beginning of 2004. There was a different plan than the
plan we started with. We planned to be at $10 million in sales by the end of the third
year exclusively in food service. And that included some export food service, but that
was the plan. That didn't happen. But fortunately other things did. And once we made it two
or three or four years and everybody could see you moved out of the grocery store to
the 45,000 square foot building, made a little different impression too. They trusted me
to a point, but they wanted to see that 45,000 square foot building working with a bunch
of stainless steel in it too. So it's persistence. It's having enough money to get there. And
then obviously you got to have the skills to make it all happen. And if your skill is
to market stuff, that's a big part of it, of course. Today, we have enough people coming
in now just sort of word of mouth or the words gotten out there that we don't spend a lot
of effort on selling stuff anymore. I guess that's really good news. I guess we could
probably be a lot bigger if we were out kind of selling it. And that's what some people
have continued to come in and try to convince me of that. We just haven't done it yet.
Do y'all ever package any of those in a single-serve package? We do some single-serve packets
currently and we're about to switch the machine over to do dressings and sauces. What we've
done to this point, if you've ever seen a General Mills product, either a brownie mix
or a cake mix, it had our little packet of chocolate syrup in it, Hershey chocolate syrup
in particular. For the last eight years, that's all been made in front of Alabama. So we bought
a new machine to switch out on that a couple of years ago and we're about to switch it
over now to start doing two to four ounce pouches of dressings or barbecue sauces. We're
not going to compete with the little guys doing the mayonnaise and ketchup and mustard
because they make them a thousand a minute or whatever we're making them. But we're
going to try to work with our customers, especially the barbecue chains that already have a sauce
and they need a to-go way to make their to-go sauce and that's what we're going to do initially
as some of those in single-serve.
Chuck, what's the process for recalls? How does that work?
Well, the process for recalls is have you work already done before you have the recall.
And that sounds smart to ask, but it's really the truth. You've got to have all your traceability,
all your programs in place to make those things happen when it becomes evident you've got to
do it. As a part of SQF, we do mountain recalls twice a year. We're required to do them once
a year, we do them twice a year. And we have two facilities, so we're doing them at both
places. And when the SQF auditor comes in, we do another one while they're there. But
it's all about documents and records and making sure you can go back to anything. And when
I say anything, you know, the plastic bottles you got in on the 29th of April last year,
somebody finds out there was something wrong with those bottles. Now every product you
put in that bottle is subject to risk. So you've got to be able to trace all those bottles.
Many packages we use across many formulas. There are others that are dedicated to one
product, so it narrows it down. So it can be very involved, but it's obviously it's
when you have the opportunity for recall, which we haven't had any consequence like
that to deal with from a food safety perspective. But when that does happen, certainly it's
imperative that you're able to do it quickly. We are in the process of investing in a good
bit of software to convert some of the manual systems that we have over to electronic systems
for traceability. And obviously then the computer will be responsible for printing out those
reports where everything went. But you got to have the records and they got to be detailed.
And if you're doing anything along that line yourself, you got the same problem I have,
even though we're producing, you know, $80 million of food products now.
Tell them how many labels or how many colors, the number of products that you produce.
2015 we had 718 skews that we produced. Now some of those may be the same formula under
three different skews because of different sizes or whatever, but you still got to have
that traceability. Obviously what we're doing is as we weigh up ingredients and spices,
we have a lot code bar that's being acknowledged on every back sheet that we have for intermediate
spices as we call them. And once it gets to the mix stand, you're tracing that spice bag
that you weighed up at the intermediate point along with any liquid or bulk ingredients
and the lot codes associated with them when you're making it on the mix stand. The packaging
is being tracked at the end of the line. If we have any capping going on in the kitchen,
obviously those caps, lot codes are tracked as well. Every component that's touching that
food product, you have to be able to find it if you need to, which means if you throw
away some, you need to document that too. It's not just the ones you use, it's the ones
you receive that you got to be able to show where they went. We run production schedules,
obviously those production schedules have on the finished products dictate the lot code
that we're going to put on those bottles. Different customers have different lot code
parameters. Most everybody's now is moving to a best buy date though, but there's still
some non-displowed date codes on there. Even if they have a best buy date, they don't want
you to know how long that is. But it doesn't necessarily say that that's produced, but
it creates a lot code that's significant to that product, unique to that product. So you
can withdraw it if you have to, and all those records are maintained for a significant,
we maintain all the records, I don't think we've ever thrown away a record actually,
we've got file cabinets and file cabinets of them, but on our retains of our food products,
we currently retain samples of everything we've made for the shelf life plus 25%. So
if that's a six month shelf life, we're probably keeping it in a year, which is much more than
25%. But it was one of those that has a three year date on it, you know, we're still keeping
it three and a half years or something like that. So it creates an inventory of its own
after a while. Close to what you wanted to see. What's that? Which trends are you seeing
in terms of flavor and components, packaging? Well, obviously, everybody now wants the new
flavor of a quarter or the new flavor of the month. Obviously, the last six months has been
sriracha and ghost peppers and those sorts of things. And but I think what I would say in
general, as a society, we're more interested in something new. And you got to keep throwing
something new out there. We went to a cutting with Cisco Food Service in Houston a couple
of years ago. And the cutting was for mayonnaise and salad dressing. I won't say salad dressing,
I'm talking miracle whip sort of salad dressing, white goods, which is a big category for
them. But one of the big parts of the presentation is shows what you're working on new. And we
had eight or 10 different flavored flavored mayonnaise. I mean, some of you wouldn't even
think of it as a mayonnaise, but a mojito mayonnaise, peppered mayonnaise is and they're
actually very flavorful. And I think that's that's what people would look for something
a little different, something a little flavorful. The peppers and the heat obviously is something
that appeals to a big group of people. And I guess that's one of the reasons that, you
know, we're, as we move into these pickled products, the other part of what that plant's
going to do is salsa. And salsa is now the number one condiment in the US. It's past
ketchup, mayonnaise, and mustard. And of course you consume it in much larger quantities
when you consume it. So it's also a good item. And obviously the good thing from what all
the other efforts we're working on is it's 100% vegetables and produce. So it's something
that we'll get right in now and upon it. It's awesome. The other thing obviously is all
natural, natural, organic. Those are the two things that are really pushing right now.
We're working on a line of all natural dressings with one company that we'll be introducing
this summer. And they're going to have a national launch of it late July or early August. And
they're very good products that we'll be making for them there. It's actually, I don't know,
it's almost a hot fact, but it's not. It's going to be a shelf staple product, but actually
there's some cooking involved in making the dressing, which is pretty unusual. And then
we're working, I spent about four hours yesterday looking at how we're going to make an organic
chocolate syrup. So it's going to be interesting. Of course, the big thing there for us as a
processor is you have a line that's certified, which means you got to have a line that you
can say there's no residual or anything else that's not organic on it. And then you got
to have storage vessels for all those organic ingredients as they come in. So that you maintain
that chain of custody, if you will, you know, organic fashion. So I think you'll see a lot
more of the organic push. Some of the products aren't going to be able to make it because
there's just not enough resources out there to make organic products. I serve on the board
of a company up in Winchester, Virginia, and they're trying to get a push toward organic
products there. But there's just not enough of it available in the world to make everything
organic in that area to pursue any percentage of the marketplace. Now, of course, the other
thing, you know, I'm not saying I'm mistrustful, but most of the organics, for example, in
the Apple industry, they come into the US now. They're all coming from China or Mexico.
Now, that's where they're coming from. So if you see organic in it, of course, it'll
also say country of origin on the bottle, too. So you'll see where that is. But I think
that's where the direction where all of us go. And everybody wants something new, wants
something different, wants something flavorful. And sometimes they just want a colorful package
or something that's old.
