By Eric Peterson | Aug 13, 2018
Fort Collins, Colorado
Salsas and sauces
Fort Collins, Colorado
Industry: Food & Beverage
Products: Salsa and sauces
Jim and Ann Watterson opened Roberto's Burritos in a Fort Collins alley in 1988, and customers got hooked on the restaurant's salsa. "People would come in and request the salsa," says Doug, their son. "I came along a couple of months later. I was in between sales jobs. I jumped in and put some sweat equity in, and here we are now."
The Wattersons shuttered the restaurant in 1998 to focus on salsa manufacturing. The first decade of operation paralleled the craft beer boom in Colorado, with Pace playing the role of big beer. "Local salsa was still pretty new in the grocery store," says Doug. "It's just like the microbrews where you always had Budweiser and Coors, then microbrews started popping up."
Salsa sales surpassed ketchup in the early 1990s. "We kind of rode that wave," says Doug. "Now everybody makes salsa. There's much more competition for shelf space." The differentiator for Roberto's "is our name and lasting reputation of quality and consistency."
That stems largely from attention to detail. "We're hands-on," explains Doug. "We're still right in there with our helpers."
Roberto's sells 13 different SKUs, including refrigerated and shelf-stable versions of their mild, medium, and hot salsas, plus specialty products like peach salsa and enchilada sauce.
"We use high-quality tomatoes and fresh ingredients," says Doug. Pace and other large salsa manufacturers "put tomato puree in there and really get the most out of everything. It really gives it a starchy, covered-up taste."
"It's just being willing to spend the money on quality ingredients," he adds. "You taste the difference."
While he likes to use local ingredients, the seasonal nature of supply means he relies on national distributors like Shamrock and Sysco.
The operation is based in two buildings at another family business, A Big A Self Storage on South College Avenue in Fort Collins. "My dad bought some vacant land and put a storage-unit complex on it about 20 years ago," says Doug, noting his father passed away and his mother retired. "We gutted a bunch of units and made it FDA-approved. . . . My wife and I manage storage units and make salsa."
Growth has remained steady at "3 to 4 percent every year," says Doug, as distribution remains largely local. Roberto's is available at about 500 locations, including King Soopers, Safeway, Costco, and Sam's Club stores throughout Colorado and neighboring states, as well as Natural Grocers, Whole Foods, and Sprouts and numerous independent markets. "We solidify the Rocky Mountain region as best we can," says Doug.
Challenges: "Just keeping costs down," says Doug. "Every year, your suppliers go up and labor goes up a little bit. We're still managing to keep our ingredients first thing rather than cheapen those to save a buck.
Roberto's needs to "stay relevant price-wise," or customers might opt for a national brand like Pace or Ortega. "There are a lot more choices out there," he adds. "That's a huge challenge."
The changing landscape for retail and e-commerce represents another challenge. "There has been a little shakeup with Whole Foods with the Amazon buyout that's even affected us little guys," says Doug. "It's gotten pretty tight. They've come down on shelf space. . . . Before the Amazon deal, we had a beautiful spread in all of the Whole Foods."
Online sales "is where we're trying to keep up as well," he adds. "It's an unsettling time for small, local food companies. . . . In the 30 years I've been in this business, I've never really seen anything like this."
Opportunities: In-state growth. "We're riding the wave of people moving to Colorado," says Doug. Out-of-state expansion is trickier: "When we look at going into another region, there's already another Roberto's Salsa there."
Pre-packaged snack packs with chips and salsa for craft breweries. "We go through LoCo Foods," says Doug.
Needs: Workforce. "It is really challenging to find young people to help out," says Doug, citing increasing competition for labor from brewing, cannabis, and technology companies.