Where: Louisville, Colorado
Industry: Food & Beverage
Products: Crisp crackers
The cracker innovator manufactures in partnership with one of the biggest names in the Boulder County food business: Fresca Foods.
Founder and President Craig Lieberman started 34 Degrees as an importer of Australian crisps before pivoting to manufacturing in 2008. "When Craig made the decision to start manufacturing the crisps in the States and start selling them, he partnered with Fresca Foods from day one," says Robin Koiro, senior brand director for 34 Degrees.
While 34 Degrees is headquartered in Denver's RiNo Arts District, the 500-employee Fresca manufactures for 34 Degrees and other partner brands at three facilities in Louisville, then distributes from a warehouse in Aurora.
The division of labor plays to each company's strengths. "34 Degrees runs all of the brand marketing, the front of house," says Allie Brimlow, Fresca Foods' corporate development manager. She describes Fresca as a "turnkey partner" that "facilitates everything on the back of house: all of the manufacturing, packaging, supply chain engineering, warehousing, logistics."
The relationship got even closer in 2017, when Fresca invested $3.4 million in 34 Degrees in exchange for a 10 percent ownership stake. "It puts us on the same side of the table where we're both investing in the growth of the company," says Brimlow. "When we handle the back of house, it really unlocks entrepreneurs to go out and do what they do best -- which is grow the brand."
Where 34 Degrees manufactures
34 Degrees manufactures at a Fresca Foods facility in Louisville, Colorado, using proprietary ovens. "They're very unique," says Brimlow. "They're not something you would find at other co-packers."
The operation has expanded from one oven to five ovens (which 34 Degrees owns) in the last decade. "34 Degrees has grown a lot over the last 10 years, and Fresca has supported that growth every step of the way," says Brimlow.
The partnership has allowed for 34 Degrees to better navigate the ebb and flow of demand. "Our business model is custom manufacturing," says Brimlow. "There's a lot of benefits to that. One of them is the ability to respond really quickly to demand volatility."
Case in point: Seasonal demand spikes during the end-of-year holidays. With Fresca's "shared service model," says Brimlow, "We have the flexibility and the capacity to support that flux," she explains. "We don't have anything such as an MOQ [minimum order quantity]. That doesn't really exist for us. We are so flexible in how much we run and when we run it. Our staff is all cross-trained -- we incentivize our production associates to work across many different systems. We have 24 manufacturing lines making 24 different products at Fresca."
The diversity of product puts Fresca in a unique position when it comes to product development, and 34 Degrees has tapped into that knowledge base. "About two years ago, 34 Degrees launched a new sweet snacking line called Sweet Crisps," says Koiro. "From the R&D perspective, Fresca was a big help ideating that product and getting that dialed in."
Initially, 34 Degrees used the same boxes for Sweet Crisps as its six-flavor entertaining line, leading to some "consumer confusion," she adds. The solution came in the form of resealable pouches. "We worked with Fresca on the manufacturing side to put [Sweet Crisps] into bags instead of boxes," says Koiro.
New for fall 2019, 34 Degrees Original Gluten Free Crisps required a new manufacturing layout. "We needed a dedicated space in order to run that gluten-free item," says Brimlow. "We ended up sectioning off a portion of the facility to be dedicated gluten-free."
The product wasn't born from an intentional process to develop a gluten-free crisp, but rather through experimentation with ingredients based on flavor first and foremost. "Through the R&D process, the base of the chickpea flour was brought to the table," says Koiro. "We came at it from looking to create a delicious-tasting crisp, and gluten-free was just an added bonus to that."
Koiro says there are more new products in the pipeline at 34 Degrees. "We have some exciting things coming for 2020, but we're not quite ready to put it out there yet."