Some snacks are born with a different attitude—and latitude.
Sydney, Australia sits at 34° latitude—and is the city where Craig Lieberman, founder and president, 34 Degrees, Denver, discovered his passion for food and wine while attending graduate school. It’s where he had his first taste of Australian crispbread. And it was the inspiration for his foray into the food industry.
“Back in 2003, my original plan and vision for 34 Degrees was to import a range of different specialty foods from Australia and New Zealand,” says Lieberman. “I was super impressed with the cheeses that I had there—some really unique, specialty cheeses that were so different from what I had experienced in the U.S. or Europe.”
This ultimately led Lieberman to the idea of importing various specialty products that make up a typical cheese board—products that bring people together, products of gatherings and celebrations.
And then Lieberman discovered the crackers. “I was scouring different specialty markets and found some really unique wafer-thin crackers—again, really different than the crackers that I had grown up eating or had been exposed to. I loved them—the uniqueness of how thin and crispy they were, how well they paired with the cheeses, so I started importing those, as well.”
A perspective shift
While cheeses had brought Lieberman into the business, it was those Australian crisps that were piquing the interest of retailers. They started making requests, and in 2008, he started looking into making them himself in the U.S., purchasing an oven and experimenting with production.
This shift from importer to producer was strategic. “I wanted to improve my focus and get more control,” says Lieberman. “I felt like I could have a much better focus on the crisps, controlling the supply and also fixing some of the aspects of the imported products I felt could use some improving—things I wasn’t completely satisfied with. I loved the idea of getting more directly involved with the manufacturing side of things. That was a really big shift for the business.”
But after his initial experiments, Lieberman quickly realized he needed to find a manufacturing partner that had the requisite expertise and background for successful cracker production. “That way, I could focus on marketing, developing the brand and building distribution.”
Lieberman had worked to develop formulas for the crisps in Australia, and initially intended to produce them there, exporting the finished products to the U.S. But he eventually decided that he would prefer to have a closer, more-interactive relationship with his manufacturing partner, and began an intensive search in the U.S.
This search eventually led him to Fresca Foods, based in Louisville, CO. “After meeting with Fresca just once, we realized that they were the ideal partner for what we were trying to accomplish—not just in the short term, but part of our vision for how we want to build the business,” says Lieberman.
Birth of a business
After working with the Fresca Foods team to fine-tune the existing formulas, the 34 Degrees line of crisps was born. And thanks to the retailer relationships Lieberman had built via his importing business, the brand was able to quickly build national distribution.
“A lot of my customers and distributors had success with the Australian version of the cracker, so they were really excited to learn that we are going to be making our product domestically, supply wouldn’t be an issue, that we had dropped the price point, and had improved the products and packaging. It was a win-win all around.”
From the start, a key catalyst for success was tied to merchandising. Today, it’s not uncommon to see snack products in displays in the deli department. But a decade ago, when 34 Degrees got its start, that approach was more unique—and it was a great fit for the brand. “It’s really hard for a product like ours to stand out, and also for consumers to understand the point of difference,” says Lieberman.
“Also, we saw the opportunity to partner with the cheese brands and deli experts to get them excited about what we were doing with the hope that they would get their customers excited about it,” says Lieberman. The initial 34 Degrees merchandising strategy involved spending a lot of time in retail stores trying to understand how the crisps would fit in, how they could stand out. “Our product was made with cheese pairing in mind, so the closer we could merchandise the products next to the cheeses and the dips, the better.”
The lineup of savory crisps currently features Natural, Sesame, Rosemary, Cracked Pepper, Toasted Onion and Whole Grain. Jennifer Swift, director of marketing, notes that the Natural variety is the best-selling product in the savory line, and that Rosemary also has robust sales.
34 Degrees has established partnerships with retailers like Whole Foods Market, Kroger, Walmart, Sprouts, HyVee, Wegmans and Publix. Costco also carries multi-packs, with four boxes of the crackers bundled together.
“We’ve achieved national distribution throughout the U.S. and Canada,” says Jennifer Margoles, vice president, marketing and community. “I think our opportunity now is to expand channels, to bring the products to more points of contact, to different types of uses and occasions.”
Outside of traditional retail grocery, Lieberman sees 34 Degrees crisps as a great fit for foodservice bento boxes or airline snack kits, as well as for service at wine bars and wineries.
Swift notes that she sees a tremendous opportunity in the evolving “snack meets meal” segment. “It’s exciting to see innovation at retail and foodservice locations, from grocery stores to coffee shops, with on-the-go cheese and cracker boxes that contain fruit, olives and more.”
A little something sweet
Innovation is also a reliable pathway toward expansion. The most-recent innovation at 34 Degrees has been development of sweet versions of the crisps, including Chocolate and Vanilla, adding Sweet Lemon and Cinnamon in January 2017. The company subsequently launched these four sweet flavors in resealable, snackable bags this past summer.
“We’re excited about the line of sweet crisps,” says Lieberman. “Our product type lends itself really well to go in a sweet direction. We’re seeing trends with sweet and salty—and a blur between cookies and crackers. Also, our product is very snackable and—beyond entertaining—can be part of everyday enjoyment. The sweet crisps can help expand that opportunity. They have the same texture and crunch as the savory crackers, but they work well as a standalone snack—and they can be enjoyed every day.” The sweet crisps fit nicely into the ongoing thin and crispy cookie trend.
To help diversify appeal, the sweet crisps are now available to retailers in new stand-up, resealable pouch packaging, a design that fits well in the snack aisle. The new packaging notes that the crisps are “Deliciously Thin” and “Irresistibly Snackable”—and that they only contain 120 calories per serving.
Swift notes that retailers could also display the sweet crisps in the produce section, near the fresh berries, while including whipped cream in the merchandising mix.
The Fresca connection
34 Degrees has developed a distinct relationship with its manufacturing partner, Fresca Foods. In October 2017, Fresca Foods invested $3.4 million in 34 Degrees to spur expansion of the brand.
Lieberman notes that the relationship between 34 Degrees and Fresca Foods has featured unique agreements from the start. For instance, when production and/or labor costs drop, the business structure allows both companies to reap those capital benefits. “We’re really working to achieve the same goals.”
The Fresca Foods investment will help fuel brand growth via further expansion into untapped retail markets and foodservice, as well as new product innovation, notes Lieberman.
It will also enable expanded brand storytelling through marketing and online initiatives. “I think consumer marketing is a big piece,” says Margoles. “We’ve been incredibly entrepreneurial in our growth so far, and now we can be more sophisticated and execute things on a bigger scale.”
Also, the scope of the different snack and bakery products Fresca Foods manufactures for other companies brings a significant strategic advantage to 34 Degrees in terms of supply-chain sourcing efficiencies and stability.
The Fresca Foods manufacturing facility is SQF Level 2 certified. The facility is also 100 percent wind-powered, as is its paperboard company partner.
Quality is built into every aspect of production. “We are dedicated to maintaining the highest level of quality assurance,” says Scott Moore, director of operations. QA team members conduct checks on various aspects of production several times before and during product runs, including the production space, equipment and the crackers themselves.
“We have continuous production,” says Cory Hardison, production manager, Fresca Foods. “If we make a change to some aspect of the line, such as a tweak to the oven, we’ll make the change and we’ll be back up and running five minutes later.”
Depending on demand, up to four lines can go into operation. When 34 Degrees got its start, it had one oven—but then added another one about every 18 months to continually boost production capabilities in order to keep up with mounting demand. Hardison notes that product runs have strong consistency, with very little waste, yielding an average of 98 percent useable/saleable product.
It helps that 34 Degrees has positioned itself as an artisan cracker brand. “We’re not producing same cracker every single time,” says Moore. “Every one of them is just slightly different.” He notes that the ovens are designed to make “perfectly imperfect” crisps.
Currently, the lines are mostly automated. The cracker batter is manually pumped from the mixers to the depositors on the lines, but Hardison notes that aspect could be automated to further streamline production.
A publicly displayed board outlining production details, including target and actual output, helps keep the staff on track, serving as the center of discussion for supervisors whenever product run troubleshooting and analysis is required, such as when production drops off for a period during a shift. It also tracks sanitation schedules, including when sanitation crews release the production room.
Operational software tracks production in real time, with data accessible to supervisors via mobile phones or tablets. Automated alerts help keep operational leadership in the loop on all production metrics. “If I notice that production dips down, I can make a phone call to the leader find out what’s going on,” says Hardison. This lets supervisors monitor multiple jobs at once within the Fresca Foods facility—which could have several different brands simultaneously running products—and still stay on top of production, even remotely when away from the facility.
Hardison notes that finished product storage and distribution connections are handled at a warehouse in nearby Aurora, CO, just east of Denver.
As part of its mission, 34 Degrees has established a program to support worthy causes, like fighting hunger in the surrounding community and region. “We’re very proud of our commitment to giving back,” says Swift. “As a brand, we have made a promise to donate 1 percent of the crackers baked in our ovens.”
The company has worked with nonprofit groups like Food Bank of the Rockies and its “Children’s Totes of Hope” program, which distributes tote bags on Fridays to children from families in need. The bags are full of food products that they can take home over the weekend—foods that very often are their only source of sustenance on Saturday and Sunday.
34 Degrees is also working to better understand its core consumers, notes Margoles, conducting a significant level of market research. “We’re working to understand our consumer. We’ve learned a lot about brand champions this year—how our products serve their needs.”
And Margoles notes that there’s still a lot of opportunity for growth in this pursuit, now fueled by the investment from Fresca Foods, to build connections between 34 Degrees and its expanding core—and prospective—consumer base.
At a Glance
Company: 34 Degrees
Website address: www.34-degrees.com
Number of employees: 11
Products: Savory and sweet crisps
Brand: 34 Degrees
Founder and President: Craig Lieberman
Director of Operations: Scott Moore
Vice President, Marketing and Community: Jennifer Margoles
Vice President, Sales: Lars Bjorklund