July 8, 2019 Issue
Tierra Farm manufacturing and distributing Certified Organic Nuts, Seeds, Dry Fruit, Chocolate, Coffee and Nut Butter throughout the US to Co-ops and Independent Grocery Stores
Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor, CEOCFO Magazine, Published June 24, 2019
CEOCFO: Mr. Kletter, what is the focus at Tierra Farm today?
Mr. Kletter: The focus at Tierra Farm is to continue as we have for the last two decades of manufacturing and distributing certified organic nuts, seeds, dry fruit, chocolate, coffee and nut butters throughout the entire US, mainly to co-ops and independent grocery stores.
CEOCFO: What is the key to producing quality products?
Mr. Kletter: The key is repetition. We source only the best products which we inbound ourselves through brokers from time to time but we receive all the products on its own so we are not buying mass quantities at discounted rates etc. The most important part is our process, so when we produce, we are doing it in small batches, hand roasted and in most cases, hand packaged, so our level of quality continues to be consistent across all manufacturing. In other words, if there is something that is not right with the product, whether it be a defect or a particular quality issue or it is just not the right size or shape or something we are interested in, we can cut that off in there different areas, one on the inbound, two on the processed roasting process and three, on the packaging level.
CEOCFO: Does that happen often?
Mr. Kletter: We refuse or reject maybe between seven and nine percent of the product that we bring in. That number is a little misleading because there may be a pallet of cashews for example that are damaged or out of compliance and therefore the numbers would spike a little bit, but across the board, typically speaking, we reject a reasonable amount of product from source.
CEOCFO: Is that because the source itself might have changed what they are doing or is it just a bad batch?
Mr. Kletter: It could be a number of things. One is we are in the organic world, so without pesticides and chemicals, there is a whole range of potential situations that could evolve. One is on the harvesting side, on the transport side from a preservation standpoint and also the nature of the product itself. It is not synthetic, so there is always an opportunity for something to go wrong.
CEOCFO: You took over as CEO in 2017; what attracted you and what has changed under your leadership?
Mr. Kletter: This was a role that was introduced to me. I have known the owner and founder of the company for a number of years on a social and personal level. He looking for a leader and the timing was right for me. The attractiveness to the role was one, it is the food business, so it is something that is very relatable and you can get very excited about processing food. Not only is it something healthy and fun but it is topical and interesting to talk about. My wife jokes and says I have the fun job. She is an occupational therapist.
The reality is that when I looked at this as an opportunity, I said to Gunther Fishgold, who is the Chairman of the company, why not take a ride and visit a couple of accounts, I did not care if he set them up and I said I was going up there to put on a particular display but I really wanted them to understand what this looks like and what Tierra Farm product looks like in the store etc. We went to two accounts one afternoon in December of 2016 and it was an awesome experience. The presentation of the product, how the store received us as individuals visiting blew me away. I instantly knew this was a great spot for me so we came to an agreement and I started in early in 2017.
CEOCFO: How often do you add or subtract products?
Mr. Kletter: We have gone through a process of the last 9 months to a year of looking at products that we do not have enough of a differentiator in. We also look at products that do not make a lot of sense, but I will tell you that the one thing we do if we are going to remove a staple product such as California Raisins, we want to make sure that our customers can buy them from someone else. We are not removing something that is non-replaceable. We do this on occasion with the no brainer stuff; if the product is not moving, we know it is not going to work and we pull it, but we are adding products as well. Our differentiator is our roasting process, the proprietary blend and system that we produce in. We are adding constantly and we have three new exciting products coming out this quarter.
Mr. Kletter: It is small batch. Typical companies will roast thousands of pounds of one product in a particular roast, if not more, using a walk in oven. We roast in convection ovens in small batch, eight pounds or less per tray. It is a dry roast not an oil roast which makes the product farm more health and shelf stable. Oil roasted products can spoil pretty quickly.
CEOCFO: Are people willing to pay for quality more now than in the past?
Mr. Kletter: We have had a very successful organization here for two decades. Our pricing has always been above the average commodity and it has also always been a higher quality type product. I am seeing that more people are interesting in paying a little additional than they would have in the past. The masses have started to say that they are willing to pay more for better quality. You are seeing that across the board. The co-ops and independent grocery stores have started to blossom and flourish and have attracted buyers from the mainstream marketplace.
CEOCFO: What is the key to good packaging? Is the Tierra Farm name almost enough today as you have been around and well-known?
Mr. Kletter: Our packaging is incredibly simple by design. We want the product to speak for itself. We use a clear container with a very small label so that you can see the quality right through it. Far too often many companies are using high graphic bags and containers or cans. I am not saying they are hiding the product but very often you will open something and be surprised how it looks. We want our customers to see our product right through the container itself. That is incredibly important for us.
Our brand at times looks like we are more of a regional or local type brand based upon our packaging, which is not a bad thing. We consider ourselves to be craft organic, a term we coined a couple years ago and we have used that on our packaging. We have a few logos depicting that. Craft organic to us is just that, small batch and in a package that speaks for itself.
CEOCFO: Do your customers tend to carry a large variety of your products or will they take one or two?
Mr. Kletter: Our average customer is probably carrying at least twenty of our products. My largest account by virtue of product sku, not dollars, we have 192 products in one particular account. I would say the average account is significant.
CEOCFO: How do you reach out for new business?
We do it both in advertising, by phone and face to face. We are constantly
calling on new accounts, independent grocery stores, co-ops etc, that have
an interest in our product. We sample them heavily. We make contact and send
some samples out and the product speaks for itself after that.
CEOCFO: What surprised you Tierra Farms has grown and evolved?
Mr. Kletter: The one thing that surprised me and I have been most pleased with is our culture and employee base. As businesses grow, you have to make difficult decisions because with ten employees, you can do certain things and with fifty you will do other things. The elasticity and loyalty of our base employees has been refreshing. We just had our company family picnic yesterday and just the participation level and general desire to be part of an awesome organization is incredibly impressive.
CEOCFO: What type of regulatory issues, if any do, you fall under?
Mr. Kletter: We are certified organic, which is a regulatory compliance that we are mandated to adhere to for our products. We are also gluten free and kosher, so those are all regulatory and we are working towards continuing our SQF, which is a food safety certification that has been initiated and is becoming more and more stringent, which is great. Those are things that we adhere to from the regulatory standpoint.
Mr. Kletter: We often speak to conventional type stores and my only hesitation is it has to work for both of us. We are so proud of the stores we sell to and the standards to which they adhere that we would not want to jeopardize that on either side. We have looked at a conventional relationship whether it is a regional store or nationwide store and I just do not believe that that is the right fit at this moment. Maybe it is a different product that we would sell in that channel but right now that typical line works very well where it is.
Mr. Kletter: We have a small presence on our website. The product is just differentiated a little bit from a sizing standpoint. Direct consumer is an interesting model and it is not something we have pushed on all that much and that is respect and loyalty to our stores. We are in 1,100 stores nationwide. There is not a state in the US that we do not sell to and we find that most folks can find our products that they are looking for.
CEOCFO: You talked about the corporate culture. You mentioned as you grow there are some things that are different. What has changed in your approach to be sure you continue to have that ambiance?
Mr. Kletter: If we are making decisions for the company, I look at it as a greater good decision. Maybe there was a situation where one employee had certain hours that they kept because of situation outside of work and we said that was not good for the entire culture of the business. We are also incredibly transparent with our staff. We let them know what we are doing, how we are doing, why we are doing it etc.
Once a quarter, we get together and have a company meeting called a rewind which gives us the opportunity to talk about all the things we have done in the past and its coming forward. It is done during working hours so that people are not taking time off from their families and what not to attend. We really like to let people know what is happening and we are very straight forward about it. We are opening a brand new distribution facility and we were very transparent that this was what we were doing, why we were doing it and that we were going to shift some of the work from our local Valatie, NY plant to Albany and we did not want people to find out about it in other ways, so I think it is the biggest and best way to handle things.
CEOCFO: What is your favorite product?
Mr. Kletter: Number one for me is our coco dusted salted cashews.
CEOCFO: What is ahead for Tierra Farm?
Mr. Kletter: We want to continue what we are doing on a larger scale, really continuing to grow our business. We have pulled back over the last maybe six to nine months to align ourselves from a production standpoint to grow up a little and allow us to produce more, but we want to continue to be not only a great provider of organic products as we are but continuing to employee great people, help the communities in which we live and work and to also be able to give folks in cross platform and opportunity to eat something that is healthy and tastes good at the same time.
We are working toward our B corp certification which we are incredibly excited about. It is something that we have worked really hard at and is on the radar soon. At the end of the day, we are an environmentally conscious company that prides itself on our relationships with our farmers and customers and employees alike. We just happen to sell awesome, organic nuts, seeds, dried fruit, coffees and chocolate.
We are an environmentally conscious company that prides itself on our relationships with our farmers and customers and employees alike. We just happen to sell awesome, organic nuts, seeds, dried fruit, coffees and chocolate.- Todd Kletter
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