Louisville’s Fresca Foods takes $3.4M stake in 34 Degrees

This week, Louisville’s Fresca Foods announced it had taken a 10 percent equity stake in Denver cracker brand 34 Degrees. It’s the third such buy for Fresca, which gets the bulk of its business by providing manufacturing and other services for food brands.

In 2015, it bought California organic snack brand Wonderfully Raw, since renamed Sejoyia. Earlier this year, it acquired Denver-based Open Road Snacks, a maker of popcorn and chips.

But Fresca isn’t on a buying spree, insists CEO Todd Dutkin. It merely recognized three great opportunities and took them, he said — “a right place, right time” kind of thing.

There’s no denying Fresca is growing, adding 100 employees and more than 100,000 square feet of facilities space in the two years since bringing on Sejoyia.

Editor’s note: This interview has been edited for length and clarity.

1. How did 34 Degrees and Fresca come to find one another?

Lieberman: I started the business in 2003, importing cheese and other items from Australia that I discovered when I went to grad school in Sydney. The product is actually named for the rough latitude of Sydney. My customers loved the things I was importing, but they were obsessed with these crackers. They were thin, wafer-y, cripsy — very unlike the thick, buttery crackers we grew up with in the U.S.

Ultimately, I realized I had a successful product on my hands, but one without strong branding. So I decided to develop them here in Colorado. I intended to make them myself, but I didn’t know anything about manufacturing. That’s when I found Fresca.

Dutkin: Our business model was and is helping folks at early stages — selling at farmers markets or just in one region of Whole Foods — with value-added manufacturing. We let the entrepreneur focus on the brand and sales, and we focus on supply chain, everything from sourcing.

We started the development of 34 Degrees from zero and launched it in September/October of 2007, so almost exactly 10 years ago.

2. So the investment was a result of the long partnership, not the continuation of an acquisition or investment strategy for Fresca?

Dutkin: Our strategy is to go long with existing partners. This is not a numbers game for us. We’re taking really good ideas and people that have worked together well and making the whole greater than the sum of the parts.

I don’t think continued investments in brands is our strategy. Stronger vertical integration — that’s where we’re going.

Lieberman: I felt so strongly they would be such a great investment partner because they have been such a good manufacturing partner, for 10 years. We could have gotten investment from someone else, but someone else doesn’t make our product.

3. How have your strategies been realized in growth, both for 34 Degrees and Fresca?

Dutkin: The day I started at Fresca (in 2003), we lost our biggest client. That client was 30 to 40 percent of our business. So when it came time to make payroll and pay rent, it was tough.

Today, we have roughly 450 employees and 330,000 square feet of space over six facilities.

34 Degrees is a great business. It’s self-owned, self-financed and has been profitable since Day 1. The core of their business is still the four original products. Those are the entrepreneurs that we find have the most success, versus those that jump around to the next shiny object.