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Gourmet food processor creatively weathers the recession

September 1, 2010
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As graduates of the Culinary Institute of America, Lori Daniel and Eliot Swartz, co-founders of Two Chefs on a Roll, knew they couldn’t continue being creative when 80-hour workweeks consumed all their energy; they realized  hiring an innovative CEO was the next step to take to grow their business. Their decision to hire CEO Jeffrey Goh was a good one: Their private-label business, which began with creating exotic desserts for white table cloth restaurants, today has two plants, one on each coast.

“Our business is all about creativity, passion and innovation-driving the business with new ideas,” says Goh. This applies to design, manufacturing, packaging and shipping.

But the recession has brought about challenges and a new way of thinking. Goh calls it the “new normal,” where, for example, a previously priced $1.99 item now has to sell for $.99, yet margins still have to be made. “We were willing to manufacture our products late at night or early in the morning to get lower transportation costs through Los Angeles,” says Goh. Several new solutions in distribution and reworking products came about via internal discussions and meetings with customers.

Scaling to manufacturing capabilities was one solution. The processor’s production center in Carson, CA handles desserts and frozen foods. The newer Scranton, PA facility makes primarily savory products. Goh also sees a role for strategically placed “micro-plants” in the future-ones that serve their immediate areas.

Vertical integration within Two Chefs’ supply chain has also been instrumental in business growth. Goh sees it as providing new and effective methods of packaging and distribution-where processors might own the farms or contract directly with them and outsource packaging upstream.

Creating new niche products and controlling manufacturing costs are important. For example, Béarnaise sauce is typically created by restaurant staff. Goh and his team, in collaboration with the staff of a chain restaurant, went through several iterations before finding a sauce with the right taste and texture that could be manufactured and packaged like sticks of butter to make it a practical enhancement for a steak dinner at the casual dining restaurant.

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