Under Pressure

0
Under Pressure
Robert Atallah with high-pressure equipment at CedarLane’s factory in Carson.

Los Angeles frozen-food pioneer Robert Atallah has a fresh business plan to deal with the cooling of the frozen-food market.

His Carson manufacturer, CedarLane Natural Foods Inc., built its brand by making health-conscious frozen meals, such as vegetarian lasagnas and eggplant parmesan. Now, Atallah wants to strike again with ready-made, nonfrozen fare, and he’s investing millions in new high-tech pressurization equipment that keeps food fresh much longer without freezing.

The company is emphasizing nonfrozen packaged offerings that include curried tofu, edamame salads and specialty hummus, and plans to launch more, including lasagna and broccoli au gratin. This “fresh” side of the business has gone from 25 percent of the company’s revenue to 65 percent in the last six years, Atallah said.

That’s a major pivot for CedarLane, which had to add the expensive pressurization technology to its production line to improve the food’s longevity and make national distribution possible.

“On the fresh side, I wouldn’t be surprised if we’re going to accomplish 100 percent growth this year,” he said.

The company, which sells to retailers such as Safeway Inc. and Whole Foods Market Inc., last year began using a machine that extends the shelf life of refrigerated foods to as many as 90 days, up from 20 when they were simply sealed and kept cold.

While the process adds to manufacturing costs, the company will recover that by lowering costs associated with freezing. The much longer shelf life helps. As a result, the retail cost of the nonfrozen lasagna would be the same as the frozen, in the $5-$6 range.

The new processing machine, made and sold by Avure Technologies Inc. in Franklin, Tenn., uses extremely high pressure to kill bacteria without changing temperature. The food molecules are compressed 15 percent to 17 percent for one to three minutes.

The effect is comparable to placing the food deep underwater, said Ash Husain, executive vice president of research and development and technology at CedarLane. The process begins with food products sealed in flexible plastic. Then they’re put in the machine, which subjects them to the high pressure.

“This is the most revolutionary technology the food industry has discovered,” Husain said. “You retain most of the quality that you started out with.”

The machine and its technology cost more than $3 million to purchase and put into operation. The machines are also being used by Hormel Foods Corp. in Austin, Minn.

The company is acquiring another of the high-pressure machines so it can expand distribution of its fresh items into the Northeast by the end of May and into the Midwest by the end of the year.

Atallah would not disclose revenue, but said the fresh business has helped revenue grow 43 percent last year.

He is also buying up property. The company last year bought a 96,000-square-foot building in Carson where it will move its headquarters and consolidate its receiving, shipping and inventory operations.

The 589-employee company operates in three buildings a few blocks from each other. It manufactures at one of the buildings, a 47,000-square-foot facility that’s filled with employees wearing white coats and hairnets cooking and packaging the food. They work in temperatures of 40 to 45 degrees Fahrenheit.

Atallah is responding to a frozen meals market that is cooling down. A report last year by Mintel Group Ltd. analyst David Browne in San Francisco estimated the U.S. market will post annual declines through at least 2016.

Steve Horowitz, president of food consulting firm Stephen Horowitz & Associates in Beverly Hills, said consumers have developed a bias against frozen foods.

“Consumers have an image that something fresh is better than something frozen and defrosted,” he said. “That’s a natural bias.”

To address that change, companies are adding products to meet demand for natural and organic goods, said Corey Henry, a spokesman with McLean, Va., trade group American Frozen Food Institute.

“Consumers have really high expectations,” he said. “They have a keen awareness of what they want.”

Customers are looking for healthy qualities and organic offerings that haven’t always been associated with frozen items.

“You can’t turn your back on those customers,” Henry said.

To be sure, CedarLane is not about to abandon frozen foods. The company’s flagship product is a frozen three-layer enchilada. The company originally marketed it as “Mexican lasagna” and changed it when it failed to sell. Now it’s CedarLane’s top product.

“There’s nothing wrong with the frozen food. It’s about perception,” Atallah said.

Atallah left Lebanon and came to the United States in 1974 with $36 in his pocket. He started selling homemade hummus and founded CedarLane in 1981.

He wants to try new products on American consumers. He said American tastes have changed dramatically since he tried and failed to sell baba ganoush when he first started doing business in Los Angeles.

Now he’s adding new twists to traditional hummus, the first food he sold here. The company recently unveiled such products as smoothies and nonalcoholic cocktails made with hummus.

Atallah said customers now are now more open-minded to exotic tastes.

“The people are open to different infusions of flavors and that makes it quite exciting,” he said. “We like to be the ones who show off.”

No posts to display