Treasure Valley Business Group

Virtual business A virtual business model is at the heart of Treasure Valley Business GroupÔÇÖs continuing growth, Ruari McCallion learns from president and CEO Gary Lim. Back in 1994, Treasure ValleyÔÇÖs first sale was buying excess frozen potatoes from a manufacturer and having them packed under its new brand, TJ Farms. It then sold them to a grocery chain in the Midwest and made a modest profit. That was the beginning of Treasure ValleyÔÇÖs journey to become a global food marketing company conducting business in the US, Canada, Mexico, the Caribbean and Asia. Today, Treasure Valley Business Group, located in Eagle, Idaho, is a $70 million company with frozen products that include potatoes, vegetables, waffles, fruit, juice, chicken, appetizers and pork sausage. The groupÔÇÖs line of dry grocery items includes salad dressings, barbecue sauce and even chili sauce and salsa. Its success story is based on matching excess capacity around the world with a need.  Treasure Valley is owned by CREO Capital Partners, a private equity firm that specializes in investing in different industries, including food companies. CREO brings to the party a strong financial backing that enables Treasure Valley to invest in excess production from companies and provides the power to hedge on core food commodities. Gary Lim, president and CEO of Treasure Valley, explains. ÔÇ£If, for example, we see that orange juice is going to be in short supply, we have the financial resources to go long and be able to capture incremental sales. Likewise, if a company has the ability to run its line longer to receive a lower overall cost, we can commit to the excess inventory and help it out. In doing so, weÔÇÖre in a very effective position, in terms of both meeting our customersÔÇÖ needs and improving our relationships with suppliers.ÔÇØ This process has helped Treasure Valley attain double-digit growth over the last three years. According to Lim, Treasure ValleyÔÇÖs successful business model is based on being a virtual company. Treasure Valley does not own any manufacturing facilities, and it relies on over 60 trusted suppliers to provide the quality products its customers expect. Suppliers to Treasure Valley emerge from a very careful selection process. ÔÇ£ItÔÇÖs essential to align ourselves with the right manufacturersÔÇöones that think like us, that we can trust, that are looking for good long-term growth, that can work on a handshake. For example, we do a lot of work with Canadian producers that want to get into or increase their business in the US. We also add real value to foodservice companies that want to expand their business into retail. A company thatÔÇÖs hungry and willing to work with us to create a win for them and a win for the customer is the kind of company with which we end up developing a strong strategic partnership.ÔÇØ The bulk of Treasure ValleyÔÇÖs growth comes from the TJ Farms and TJÔÇÖs Premium brand of frozen foods, with annual sales of over $30 million. This has come from same product/store sales and the introduction of new items. In recent years, Treasure Valley has sought out suppliers like foodservice operators who supply the fast food industry with sausage patties and transitioned that product into the TJ Farms Select brand. Likewise, chicken fries, blueberries and waffles were added to the brand from companies that had excess inventory. ÔÇ£We have excellent relationships with key grocery buyers around the country, and with them we can make things happen,ÔÇØ says Lim. In addition, a part of Treasure ValleyÔÇÖs growth strategy is acquisitions. ÔÇ£With our goal to exceed $100 million, in 2008 we added three great brands to our portfolio: 505 Southwestern, a great-tasting line of salsa and chili sauce products; ChrisÔÇÖ & PittÔÇÖs barbeque sauce; and Oh Boy!, a brand of mashed potatoes priced for a family budget. In addition, in 2008 we purchased HaileyÔÇÖs Harvest, a smaller food marketing company that complemented the TJ Farms line of products. This not only gave us more brands to sell but also gave us some great talent. We firmly believe that we cannot be successful without great people,ÔÇØ Lim says. But the great growth in Treasure Valley has not just been via line extensions and acquisitions. In the past three years Treasure Valley has focused its efforts on developing unique gourmet products for the club-store channel. ÔÇ£WeÔÇÖve developed a gourmet, all-natural, nine-ounce twice-baked potato made with Idaho russet potatoes, cheddar and Monterey jack cheese, and a ton of bacon,ÔÇØ says Lim. ÔÇ£Using this same high-quality formula, we created a fully loaded potato skin that cooks up great in a microwave. There is so much bacon in this product that it had to be inspected by the USDA. Great growth at Treasure Valley is based on coming up with good ideas and executing them well.ÔÇØ Lim clearly admits that Treasure Valley would be nothing without the strong support of its customers. ÔÇ£Our customers are our lifeblood and our friends. We treat them with respect and give them a real value to offer their customers.ÔÇØ Treasure ValleyÔÇÖs grocery customers range from industry giants, to club stores, to smaller regional grocers and even dollar stores. Current count has Treasure Valley selling to over 15,000 stores around the country, and one of its successes is to really get to know its customers. ÔÇ£In order to understand customer needs, you have to ask questions,ÔÇØ Lim says. ÔÇ£We sit down with all our key customers a least once a year and have a face-to-face conversation. We discuss where they are going and what kind of help they need. We listen very closely and then go back and look for win-win solutions to help them fill a niche. This not only helps us with them, but our suppliers love the fact that we bring them opportunities. We find great pleasure in working with retailers that want to get to know usÔÇöones that know we can be relied on in times of shortage and ones we know wonÔÇÖt switch for a penny price advantage. We believe in the true spirit of partnerships. ÔÇ£Treasure ValleyÔÇÖs focus is guided by the principle of service,ÔÇØ Lim continues. ÔÇ£We believe in quality and responding to our partnersÔÇÖ needs. Customers know they can call and get a decision without going through several different levels. And they can be confident that when we agree to something, weÔÇÖll do everything in our ability to make it happen. Our good growth depends on our good customer relationships.ÔÇØ Treasure ValleyÔÇÖs business is divided into three areas. Sixty percent of revenues come from retail, with the balance split equally between foodservice and sales of packaging to a broad customer base. ÔÇ£Our packaging business is a real service to our customers,ÔÇØ says Lim. ÔÇ£We help customers of all types minimize the time and effort it takes to manage their packaging needsÔÇöfrom design, to printing and packaging managementÔÇöall for about the same price they would negotiate with their print supplier.ÔÇØ Treasure Valley is a lot of things, but ÔÇ£food marketerÔÇØ is probably the best way to describe what it does. Being a virtual company gives Treasure Valley limitless flexibility. ItÔÇÖs somewhat uncommon in the food business, but itÔÇÖs standard in the high-tech field.