[00:00:10] Ray Latif: Hey, everyone, I'm Ray Latif, and you're listening to the Top Podcast for the food and beverage industry, Taste Radio. This is episode 232, which features an interview with Sarah Frey, the founder and CEO of fresh produce grower and supplier Frey Farms, and who is affectionately known as America's Pumpkin Queen. Just a reminder to our listeners, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues. And of course, we'd love it if you could review us on the Apple Podcasts app or your listening platform of choice. When Harvard Business School publishes a case study about how you successfully negotiated a deal with the world's largest retailer, you must be doing something right. Sarah Frey was barely in her 20s when she began supplying melons and pumpkins to Walmart stores across the U.S., a relationship that helped her family's company, Frey Farms, become one of the largest suppliers of fresh produce in America. At the time, however, Frey Farms was a few years removed from a period of turmoil and potential foreclosure. Determined to save the farm in which she was raised, Sarah assumed the reins while she was a teenager and gradually built the business into one with farmland in seven states and total sales exceeding $1 billion. In the following interview, I spoke with Sarah about how she engineered Frey Farms's remarkable turnaround despite having no formal business training, how she identified and utilized advantages her company had over larger competitors, and how she navigated Walmart's corporate culture. She also explained why the key to farming is managing risk, how consumers' relationship with food has evolved during the COVID era, and what she's learned about building a beverage company as the founder of watermelon juice brand, Tsamma. Hey folks, it's Ray with Taste Radio. I'm going to call right now is Sarah Frey, who is the founder and CEO of Frey Farms. Sarah, how are you?
[00:01:59] Sarah Frey: I'm doing great, Ray. How are you today?
[00:02:01] Ray Latif: I'm doing pretty good. It looks bright and sunny where you are. Is it?
[00:02:05] Sarah Frey: It is. It's a beautiful fall day. I'm at the farm in Southern Illinois. We just wrapped up our pumpkin harvest for the season, and I'm ready to actually get out and enjoy some of this beautiful weather.
[00:02:16] Ray Latif: Indeed, yeah. We had a bit of a rainy, wet weekend here in the Boston area. It actually snowed last Friday, and we got about six inches, so a little weird for late October.
[00:02:29] Sarah Frey: Yeah, I saw all of the pictures from the Northeast with all of the pumpkins covered in snow. So you guys had a snowy Halloween.
[00:02:38] Ray Latif: We did, we did. You know, it's interesting because we're just past peak pumpkin season right now. And I had read a passage in your book, The Growing Season, that stated that if you ever bought a melon or Pumpkin Queen America, chances are that you are my customer. You being Sarah Frey, the customer being Everyday Americans. That is mind-boggling. Just for context, how many watermelons and pumpkins do you grow each year?
[00:03:09] Sarah Frey: Millions and millions of watermelons, thousands and thousands of semi truckloads, and the same for pumpkins. But we actually grow more watermelons than we do pumpkins, but we're best known as America's pumpkin farm. I think probably because people get really excited about pumpkins, especially this time of year.
[00:03:28] Ray Latif: So you and I have met once before. It was at a BevNET Live conference in winter of 2017. And we were chatting about your watermelon juice brand, Tsamma. And I got the sense that hard work was something that was so ingrained in you and something that was just such a cornerstone of who you are and what you're all about.
[00:03:51] Sarah Frey: Yeah, you know, Ray, I was raised on a very small, struggling farm in southern Illinois. And I grew up with four older brothers and, you know, I was a farm kid. So I was used to, you know, getting up early every morning and doing chores before getting on the school bus and then putting a full day of work in at school and then coming home. you know, changing clothes and going right back out to work on the farm and not coming in until, you know, nightfall until it was time for dinner. And that was sort of my routine day after day after day. So I think, you know, a very strong work ethic was ingrained in me at a very early age. And then I was able to really sort of tap into my entrepreneurial spirit at an early age as well. When I used to join my mother on that summer delivery route, fresh produce summer delivery route that she had when she delivered melons to about 12 grocery stores, you know, during the Indiana melon season, which is like a July, August window here in the Midwest.
[00:04:56] Ray Latif: How did your upbringing shape your perspective on food itself?
[00:05:02] Sarah Frey: When I was a little girl, everything that we consumed here on the farm was clean, simple, and delicious. It was either food that we had grown, harvested, hunted, or gathered. So we had a truck patch when I was a little girl and we raised most of our own fruits and vegetables and then we would can those fruits and vegetables in the summer, you know, so we would have, you know, that kind of food in the wintertime. we would gather wild berries. My brothers and I would go out and pick blackberries when I was a little girl. We'd come back covered with sugars, but with buckets full of blackberries to make fresh pies, pastries, jams, jellies with. And there were so many things for me growing up, like the fresh smell of spearmint growing outside of the kitchen window. You could literally smell the spearmint that was growing alongside the house. You know, there were so many tastes so many flavors so many senses, and I can close my eyes and go back to that very simple time of life on the farm. And that really is what guides me those memories are really what. Guide me when I think about how we're going to make products, how we're going to, you know, take the summer watermelon juice, for example, the way I grew up nothing went to waste, we found a use and a purpose for everything that we grew and. that theory still applies today. So with the Tsamma watermelon juice, I really struggled at the end of each growing season when I would see how many watermelons were left over in our fields that were visually imperfect in some way. and didn't meet the quality standards to ship to one of our retail partners to be sold in the produce department, but the internal quality of the melon was still, you know, really good. And so for me, it was a challenge of how do you find that fruit's greater purpose and look beyond the visual imperfections of the ugly fruit and then turn that into something greater. And that's really, Ray, I talk about this in my book, The Growing Season, that's really what I've tried to do in both life and in business. And then in the Sarah's Homegrown line, that line is really inspired by my memories of growing up here on this farm where food was clean, it was simple, it was delicious, and nothing was artificial. You know, it was just real food. So when we make our agua frescas, that's what we keep in mind. So it's real fruit. It's, you know, some of the products actually have sugar in them, but it's real sugar too. And I don't care what I make as long as it's real.
[00:07:56] Ray Latif: Let's go back to your first foray into entrepreneurship. You started selling pumpkins out of the back of a pickup truck when you were 17 years old, which sounds like the start of a really great story. Is that really how Frey Farms was started?
[00:08:13] Sarah Frey: Yeah, you know, so when I was little and I would accompany my mom on that melon delivery route, for me, those were some of the fondest memories that I had as a child because I actually got to get off of the farm and go deal with people and go make deals. And, you know, I was this tiny little human going into grocery stores, talking to grown men saying, hey, I'm, you know, I'm here with cantaloupes and watermelons today. How many would you like to buy? And fast forward to the time that I was, 16 years old and I was able to drive myself and, you know, have my own truck. My mom went to work for a radio station. And I took over her route, which consisted of about 12 stores, and I grew it to about 150 grocery retail stores. And I didn't necessarily do it just because I loved life on the farm. In fact, I spent most of my childhood dreaming of escaping rural poverty. I didn't want to stay behind. I didn't want to live here in this isolated part of America. I had big dreams. I wanted to move off to the city. and then ultimately you know at this point I make this decision that I'm going to stay on the farm and I have to figure out how to save the farm because the farm was financially distressed and my four older brothers had all left and they had all went off to college. So for me it was only natural to continue to grow that business that I saw that my mom had sort of started when I was a little girl and it was a natural fit for me to start to sell more melons. You know, that's really, it was really as simple as that. It wasn't any more complicated than I have to sell more melons and then ultimately start growing my own fruits and vegetables as well.
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[00:10:49] Ray Latif: It's interesting that you realized after the fact that to escape poverty, you would need to embrace the business that you were born into.
[00:11:00] Sarah Frey: Sometimes getting ahead, for me, meant staying behind. I made the decision as a teenager, not because of my love of the land or my love of agriculture, any of those things. I made the decision to stay and build the business because of my family. I grew up in a very, very tight knit family with my four older brothers. And I remember each time one of them would leave the farm to go off to college. And, you know, it was like sad because there, okay, there went another brother, there went another brother. And pretty soon I'm, I'm the only kid left on the farm. So really, For me, it was actually quite incredible to as a teenager, you know, you sort of have this epiphany and like normally with teenagers, for the most part, the world revolves around them. Right. And that was true for me as well. I thought about my own needs and wants and desires, but there was this moment when. You know, I looked around at this farm that we all grew up on and said, you know, if I leave, we won't have a place to come home to. We won't have a place to gather. So really, the drive was to take over the farm and to build something that I knew my four older brothers could come home and work with me on. And I knew that I had to build it beyond just the 100 acres of farmland that we had been raised on.
[00:12:32] Ray Latif: Yeah, let's talk about building the business because at 17, you learn a few things, but I assume that you're not ready to teach an MBA course at a local university. How did you learn about business and what did it take for you to get up to speed as quickly as you needed to?
[00:12:55] Sarah Frey: it was sort of a learn as you go but then I also surrounded myself with people who were very knowledgeable about the industry that I was in and I had a lot of really great mentors along the way a lot of you know usually a lot of old-time sort of farmers that had been in the fruit and vegetable production business for many years and You know, they were happy to see that someone full of youth and vigor had an interest in a profession that they had dedicated their lives to. So I had a lot of really great mentors and a lot of people cheering me on along the way. I attended high school and college simultaneously, and I went to a junior college in Southern Illinois that I started attending when I was 16 years old. But I can't really point to formal education as being anything that ultimately helped me as far as learning and growing my business. It was really just a function of doing it. And I think that that's, you know, a lot of people have great ideas or they have ideas about starting a company and they always think that they have to get things just perfect. But for me, I found that just actually getting started is the most important thing. And then surrounding yourself with people who have a skillset and talents that are different than your own. And as I grew the business, that's what I did. I mean, I started hiring people that I knew had qualities and skills that were different than mine, but that would complement what I was building.
[00:14:26] Ray Latif: Now, a major turning point for the company was when you negotiated a deal with Walmart. And you may not have had a formal business education, but your ability to partner with Walmart is something that is taught at Harvard, at Harvard Business School. There's a case study about how you negotiated that deal. How old were you at the time and how did you get what you wanted out of that deal?
[00:14:52] Sarah Frey: Well, I started doing business with Walmart when I was a teenager. But the deal that the negotiation study actually took place, I was in my early 20s when that particular deal was done, the one that Harvard published the negotiation study on. And it was really about how to become co-managed. And Walmart had supplier partnerships. And I had been a supplier for several years because I started with them so young and so early. But they had different sizes of companies that would reach what would be called co-management status. And my competitors, it was really kind of a David and Goliath story where my competitors were really large produce companies. And, you know, I was just starting out and was much smaller, but I was still a valued Walmart partner. And what I had to do was ultimately position myself and not sort of fight in the same way that the giant companies fought or negotiate in the same way that the giant companies negotiated. I had to think differently, very similar to how David had to think differently in the story of David and Goliath. and I had to learn to fight differently as well. So that's really the basis of the case study and how a small supplier like Fry could ultimately compete with much larger suppliers and gain the same status with a large company like Walmart.
[00:16:24] Ray Latif: What's one example of having to fight differently? You know, you don't have the budgets or potentially the team at that point to help negotiate that deal. So what was it or what's one example again of an opportunity that you saw to align with Walmart in a way that the Giants wouldn't be able to?
[00:16:46] Sarah Frey: Anytime someone starting a business, you think about all the disadvantages you have when your competition to big corporation. It's important not to get bogged down in that because ultimately you have advantages that they don't have. you can be nimble, you can be scrappy, you don't have layers and layers of decision makers. When you're the entrepreneur, you are the decision maker and you're the deal maker. Sometimes you're the sales person, you're the operations person, you're the person sweeping the floors, you're sort of doing it all. But there are certain advantages to being a small company and a nimble company. and you're able to pivot and maneuver and do things that large companies can't. So it's like the difference between being out on a speedboat and being out on a big ship. It takes corporations a long time to sort of turn the ship around. But if you're on a speedboat, you can maneuver around much quicker. And I think for what I was doing, I had that advantage of being able to deliver things on time and get things to market much quicker, accommodate last minute requests for the customer, because they were reaching out to us and we had that attitude of do whatever it takes to make the customer happy. And the larger companies, their phones were shut off at five o'clock, everybody went home. But we were a smaller company and as Walmart was growing their business, they needed that sort of last minute type service to stay in stock on certain things. And really in that partnership, they knew that they could count on us or call us at any time if they realized that they were gonna be short on inventory or if they needed something done. If they needed it done quickly, they would call fry before they would call one of the larger suppliers that couldn't respond or react as quickly. So, I mean, there are hundreds of examples of that. And I think it's just important to just be aware of. the qualities that you have as a smaller company and really identify the services that you can provide that larger companies can't when you're having to compete with them and really lean in on those strengths and ultimately you know that's how that's how smaller companies are able to to compete and brands are able to grow and You know, we have to dig out our own market share for the products or the services or the things that we're providing. But in many ways, being a smaller company was an advantage.
[00:19:32] Ray Latif: Was it difficult to kind of work your way through the corporate, I guess, environment, bureaucracy of a Walmart?
[00:19:41] Sarah Frey: Not really. I mean, with that particular customer, it wasn't really hard because the people that I had been working with were ordinary people who were doing extraordinary things at their store levels. So I actually started delivering the fresh produce to their stores before I ever went to their distribution centers and before I ever became a national supplier to them. And so for me, it wasn't really difficult. It was more of, you know, learning the culture. And all of that happened very organically because I had that relationship directly with each store. So I started doing business with Walmart when they still had division one stores before they were all converted to super centers. And That's really what I think probably set me up for success with that particular partner because I learned their culture from a very young age.
[00:20:43] Ray Latif: Sarah, you talked about culture as being an important part of identifying what the Walmart culture was all about. And you mentioned that it's ordinary people doing extraordinary things, which is an amazing statement. Tapping into that culture seems like it requires a little bit of cultivation in terms of your relationship with the buyers or your counterparts at Walmart. Can you talk about how you found those ways to enhance those relationships.
[00:21:16] Sarah Frey: All of our interactions were very straightforward. So there really wasn't a whole lot of fuss in doing business with Walmart. They wanted to know a few things. Do you have the product? What's the price? Can you deliver it on time? Can you keep us in stock? So it wasn't like a complicated deal. You just had to be able to deliver. You had to say what you were going to do and do what you said. And for me, at such an early age, one of the things that as I reflect back on that particular retail partnership, one of the things that sort of stands out the most is the fact that as part of their culture, Walmart didn't care about race, they didn't care about gender, they didn't care about, you know, they gave you the opportunity, regardless of what your background was or who you, if you performed, you know, you would be six, a successful partner with them and be able to grow your business. And if you think about it, I mean, I was a teenage kid when I started doing business with them. And I was a girl, no one in that company ever looked at me like, Hey, you're a teenage kid and you're a girl. You know, so they were oblivious to all of that. They just wanted to know, can you deliver the product? And for me, that was, it was very refreshing to build a partnership with an organization that had that, that culture because I really was no different than, you know, many of the, the associates that were running the stores or the departments within the stores. It was all about just getting the job done, building, growing, and staying in stock. Like I said, it was pretty straightforward. I was doing business with a lot of really ordinary people who were doing extraordinary things as that company was growing.
[00:23:10] Ray Latif: Were other retail partners judging you because you were a teenager and you were a woman?
[00:23:17] Sarah Frey: There were certainly other partners that it was harder to get into because those departments were ran by much older men who were used to doing things a certain way. And they had their sort of book of suppliers that they had been accustomed to calling on, you know, for the past 30 years. And so there were other customers where I think that my age and my gender probably played a role in, you know, why I wasn't able to secure those accounts. But in the case of Walmart, I know the first big national deal that I did with them I did it with a produce buyer that really wasn't that much older than me. She looked like me. I was virtually a teenager, and I think she was probably in her early 30s. But it was very straightforward and very matter of fact. And she just said, this is what I need. Can you do it or not? And I said, yes, I can. And as I walked out the door, I'm like, OK, now I have to figure out how to make this happen. I feel like Walmart was so diverse and I dealt with so many different people who came from various backgrounds, various ages, races, genders, all of those things. And I always felt like I fit in with them. And I never felt like anyone was ever judging on anything other than, can you deliver?
[00:24:57] Ray Latif: I'd love to talk about farming. Do you still consider yourself a farmer?
[00:25:02] Sarah Frey: I do. I'm probably an entrepreneur first and foremost, but you know, my roots are, I like to tell people, people say, what do you do? And I say, well, I'm a farmer. I do a lot more than farm, but it's certainly farming is, is certainly what I'm grounded in and rooted in.
[00:25:24] Ray Latif: Well, farming is the backbone of America, yet unfortunately we hear seemingly every day that small farms are dying and that farming is one of the toughest professions to make a living. That being said, when you and I spoke last, you said something really interesting, which was about risk and the risk analysis that farmers need to take in order to be successful. Can you talk a bit about that?
[00:25:55] Sarah Frey: Yeah, that's really what we spend the majority of our time doing is figuring out how to manage risk. We farm now in seven different states, Florida, Georgia, Illinois, Indiana, Arkansas, Missouri and West Virginia, and there are various crops that we grow in various states and so much of our time and attention gets put into. planning out what risk we're willing to take in what region and on what commodity and what part of the country and it's sort of like running the traps on okay if this crop during this window fails or gets taken out by a weather event then what other crops do we need to come off and hit just perfectly to offset that loss? And I mean, we find ourselves having to really game out an entire year's worth of growing seasons before we make final planting decisions. And I think for a lot of farmers, that's ultimately how they spend so much of their time. And the farmer is really a gambler. So if you think about, you're going out, you're plowing the fields, you're planting the crops, you're investing all this time, energy, and money into a crop that can literally be taken out with one weather event, you're taking a gamble every time you go out there. The farmer's also an optimist too. And if they lose a crop, they wanna come back year after year after year. And I think I also mentioned when we spoke that you in fruit and vegetable production and farming in general, really, you have to have two really good years out of five. You can have three mediocre years, but you need two really good years out of five to stay in business. So that's what the farmer is always looking toward. And I think in terms of why many small farms have struggled and went by the wayside, you know, I think back to how I was raised and where I was raised and how small our farm was. The farm was large enough to support a family if we were going to grow our own food on it, but it wasn't large enough to support a business. And you had to have a certain amount of acres in order to be able to do that. And I think for me, I knew when I took over the farm, I wasn't necessarily thinking about how do I make the acreage bigger? It was really the question that an entrepreneur has to ask themselves every day, and that's how do I do more with less? and it takes thinking about things in a non-traditional way. I know that when I planted fruits and vegetables on this farm in Southern Illinois, all of the neighbors around here thought I'd lost my mind. You know, they saw all these pumpkins growing. They were used to seeing thousands of acres of corn and soybeans growing, you know, that got harvested by combines. And here I was, I took the land and, you know, they were driving by and they would see this this farm speckled with all of these orange dots and workers out in the field with me picking these pumpkins up and putting them on the school buses. And they thought, oh my gosh, the fry girls completely lost her mind. But I had to think about what I could do differently. I knew that I would be, I knew when I took over the farm that I would instantly fail if I was to follow any sort of traditional model. and I had to think about and ask myself, how do I get more out of less?
[00:29:41] Ray Latif: I imagine the movie Fields of Dreams resonates with you. Sometimes people told Ray Kinsella he was crazy, but then by the end of the movie, well, he was proven correct.
[00:29:51] Sarah Frey: Yeah.
[00:29:52] Ray Latif: There is some good news for small farms in that people are a little bit more aware and want to be more aware of where their food is coming from. I think you mentioned last time that they want to know the who, the where, the how, et cetera. But communication is really important. It's one thing to have a small farm and produce a really high quality product. It's another thing to communicate that information to the end consumer. You know, what are some of the effective ways? What are some ways that you've seen farms do it well? What are some of the ways that you guys do it well?
[00:30:28] Sarah Frey: Especially in the year 2020, everyone has learned that we all need to be more aware and connected to our food source. So when the food supply was threatened early on, and many of the staples or favorite brands were out of stock on the grocery store shelves, people started thinking about Okay, supply chain. Who grows my food? Where does my food come from? How is my food, you know, manufactured? And, you know, then there was this sudden interest in farming and what was being done in America, what we were what we were growing, what we were manufacturing. So when something like, you know, as essential as the food supply is threatened, people start to really think about it and it becomes very important. When the grocery stores are stocked and everything's going great and there's no threat to it, nobody really thinks about it. They're just like, yeah, is it here? Is it available? But I think what has happened in 2020 is consumers actually had this moment in time where they were forced to think about supply chain, to think about food production and agriculture and how important the role of the American farmer is. And I don't think a lot of people really even realize that over 50% of our fresh produce in this country now is imported. And you know, that is something that we probably need to get in check as well. And we need to make sure that we're supporting American farmers and that we're helping keep them in business. And that's really, that's really part of the consumer's job too, because if you don't like the fact that 50% of your fresh produce comes from other countries, then you're going to be more committed to supporting American farmers, supporting purchasing more local products at your farmers markets, or demanding that your retail partners carry more you know, more fruits and vegetables that are grown in the US, especially when they're available. I mean, there are some winter months when you have certain crops that aren't available domestically. But when those two overlap, take, for instance, you know, when when Mexico starts ramps up their production, they overlap with the state of Florida. And there's always a big market gap in between the price because labor is so much cheaper and Mexico to produce the same commodities. That's where we really need retailers to step up and say, you know, you know what, it makes sense for us to provide these American grown products and we're committed to keeping these farmers in our country in business. American farmers need a combination of support from both consumers demanding that of retailers and then retailers being committed to keeping their domestic grower partners in business.
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[00:34:38] Ray Latif: It would seem that there's a great opportunity to create a bigger name for Fry. You know, when I buy a pumpkin or a watermelon, rarely do I look at the label and say, oh, this comes from this particular producer or that one. Have you been able to take advantage of that opportunity and create a brand name that is recognized among pumpkins, watermelons, you know, akin to perhaps the way, say, Ocean Spray owns the commodity of cranberries?
[00:35:06] Sarah Frey: Yeah, so this was actually the first year where we transitioned all of our labeling over to the Sarah's Homegrown brand. So the only CPG item that's available under Sarah's Homegrown right now are our bottled beverages, our agua frescas, but we actually started putting all of the premium products that we produce on all of the various farms. We started labeling with the Sarah's Homegrown brand to tell that story, you know, the farm story, and to make it more personalized as well. other than just, oh, here's the last name of a family farm. So now consumers have the personal connection with me and my story. And The Growing Season, the book that I wrote, has actually really helped with that as well. And then we're building our social presence where consumers can reach out at Sarah Frey or at Sarah's Homegrown and on the Sarah's Homegrown platform. our focus is to educate consumers on what they can do with the products, not only that we grow, but that other farms across America produce. So there's an emphasis on American grown, what's in season, what's fresh, what's local, and then tips and, you know, recipes and tricks and different things that you can do to incorporate more locally grown food into your meal plans. As we grow that brand, Sarah's Homegrown, that our focus won't only just be on what we're doing and what our company is doing, it's going to be on what other farms, other small and mid-sized farms are growing in regions and highlight what products they have available and how consumers can support those other small farms as well.
[00:36:57] Ray Latif: Education, communication, both really important. There are two other really important aspects to getting more consumers, getting more of your products into consumers' hands, and that's accessibility and affordability. Not everyone has access to high quality produce, and some people just can't afford it. Which is more important, accessibility or affordability?
[00:37:21] Sarah Frey: You shouldn't have to be in the top 1% to be able to afford to eat clean, healthy, delicious food. And everything that we do, we're very mindful of that. And we want to produce things in such a way that are good for the consumer, good for the farm, you know, and good for the planet. All of the while keeping in mind, we have to either manufacture or we have to grow in such a way and maximize our yields so that the food is affordable. And, you know, one of the ways we were able to do that is by using more of what we grow at the farm, therefore driving the cost down on the ingredients that we use, say, in beverage. So if you look at the melons that are used in Tsamma watermelon juice, that's good for the farm because it returns more profits back to to the farm because ultimately the farm is using up more of the products that they're growing and getting a return. So from a business standpoint, that's good. And then from an environmental standpoint, that's also good because you're wasting less food. And then it also benefits the customer because the customer is accessing a clean, healthy, delicious product made from farm fresh fruit at a lower cost than what they would normally pay because at the end of the day it's, you know, the raw ingredients that are being produced on the farm, by the farm, and for the farm. So it's like the consumer is enjoying the benefit of a lower cost premium product by doing business directly with the farmer who's also, you know, growing the watermelon, making the juice, taking up more pieces of that value chain.
[00:39:17] Ray Latif: Yeah, let's talk about consumers' relationship with an upcycles product like Salma. And as much as I appreciate the mission of reducing food waste, Quality is really, really important to me. The fact that this food is maybe a little scarred or isn't as beautiful as a particular, you know, potato or watermelon that you might buy from a Whole Foods, but it's got to be really, really high quality in terms of its flavor and its usefulness. Is that been your experience? I mean, are you saying the same thing with consumers in that they care more about how the product tastes and the price point than they do about the fact that it is helping reduce food waste?
[00:40:06] Sarah Frey: You know, I think number one, consumers care about what does it taste like? Does it taste good? You always have to start there, right? And then it's the number two thing is how much, okay, now how much does it cost? So I think that that's, you know, that's the one and two. And then four, consumers really to wrap their mind around telling any story beyond that you sort of have to pick and choose and we just went through and did this exercise with the Tsamma brand and some consumer research and the next thing that they wanted to know or the the next most important thing was in the research that we did was they wanted to know that it was made on the farm by farmers, which was really interesting. They cared more about that than they cared about whether it was reducing food waste or whether we were incorporating the visually imperfect or otherwise known as ugly fruit into the ingredients to make the product. So there's sort of a hierarchy of what's important to the consumer and taste wins every time. And then second, it's price. So for us, as we, you know, like I said, it makes good sense for the farm, returning profits back to the farm when we incorporate more of the products that we grow into delicious ingredients. that might not otherwise be used on the farm and would be wasted. So there's another term for that in the industry. It's a little crass, but it's called turning trash into cash. So that's turning, you know, more profits back to the farm. But then ultimately we're doing other good things because the ingredients that are being manufactured are really high quality ingredients that if we weren't making them at the farm, you know, on the farm with the product that would otherwise be wasted, they'd be very expensive, clean ingredients. So it's sort of lowering in the cost. So you're getting a higher quality ingredient at a lower cost because that product would have been wasted otherwise. And then it's also the right thing to do for the environment, for the planet, because you're ultimately, you know, when you use more of what you grow and you waste less than, There's sustainability and there's there's an environmental impact to that as well. And that's also very important to us as growers and as farmers as stewards of the land.
[00:42:43] Ray Latif: So knowing this now and having gone through that research about that hierarchy of importance to the end consumer. Has that changed the way you think about the mission of Tsamma and potentially other initiatives and other brands that could be born out of Frey Farms?
[00:43:05] Sarah Frey: I don't know that it changes the way. I guess that's really always where we started was, does the product taste good? You know, that's like first and foremost. I don't really, I don't think about anything else. I don't think about, okay, how many melons were saved in this process or, you know, how many other ingredients were we able to bring in from other farms that might have otherwise been wasted. That's not really necessarily where my head goes first, because I know that we're turning out really great tasting, high quality ingredients, no matter what we're bringing through the plant. My head immediately goes to, you know, how does it taste? It has to taste good. And then we'll work backward from that. So I wasn't really shocked about one or two, you know, the, how does it taste? And then what is the price? It was, you know, three, four, and five that I didn't necessarily know how that would shake out and what was important to the consumer. And I think a lot of it had to do too. I mean, we put the survey out, it was, you know, in 2020 and ultimately people are thinking more about their connection to their local farmer. And that's probably why that had such a high ranking.
[00:44:16] Ray Latif: I imagine, though, that you were pretty shocked about the challenges of selling a packaged beverage brand.
[00:44:22] Sarah Frey: Well, first of all, I didn't know anything about the beverage industry when I got into it. I thought, oh, you know what? I've been drinking watermelon juice my whole entire life. I thought everybody drank watermelon juice. Wait, you know, I need to put this in a bottle. It seemed really easy, right? My gosh, we've learned so much. I've learned so much. You know, the differences though, I think for me, I can do this all day, every day, you know, as far as making the watermelon juice and never get tired of it because I control the supply of it. I don't have supply chain issues. Let's put it like that. So that's a biggie, you know, so when you can check that box and say, okay, you control your supply, but then there were other things, you know, like, okay, does it make sense? Are we going to, are we going to manufacture on the farm? Are we going to try to bottle on the farm? Do we want a bottling partner? I mean, there were all of these things and all of these challenges from an operation standpoint that we, we overcame those very quickly. But one of the things that I certainly didn't take into consideration was the amount of marketing that is required to really build a beverage brand. I thought you put it in a water, you know, you're going to put watermelon juice in a bottle and put it on the store shelves. It's going to sell just like a watermelon or a cantaloupe or you know, the sweet corn that we grow or whatever. No, that's not really how it works.
[00:45:39] Ray Latif: It's the anti field of dreams. If you build it, they will come. Not in the case of a beverage brand though.
[00:45:44] Sarah Frey: No, no. I found that out very quickly and I thought, well, wait a minute. I didn't sign up for this. What do you mean? I need to spend millions and millions of dollars to build a brand. So we've taken an unconventional approach because I still own all of our brands. It's not that we wouldn't take on a strategic partner or take in investment dollars. It's just, it hasn't been top of mind because The brands are so closely connected to what we do and the source of the production and the raw ingredient part of it. I felt like we were afforded the opportunity. Unlike many other brands to grow our brands slowly and organically and drive cost out of making the products, so I felt like we've had an advantage in the sense that if we just focused on certain. areas of the country. I know that originally when we started making Tsamma, we were like, you know, the mentality was, oh, give it to everybody, you know, it's watermelon juice, give it, give it to all of these retailers. And then we learned very quickly, no, no, no, you need to, you need to focus on a certain part of the country and really grow the brand there before you move on to another geographic part of the country. And so that's what we've been able to do. And we've been afforded the time to do that because We ultimately we still have a hundred percent sort of control over that and the ingredients that go into all of our beverages So that's been good, but there have certainly been so many learnings for me in the beverage industry But I gotta tell you I really enjoy it, you know for as much as I love agriculture and as much as I love You know the fresh fruit and vegetable industry. I love business in general and it's been a challenge and and I've enjoyed the challenge and I have really learned a lot, Ray. And I think that ultimately the things that we've invested in in beverage over the past seven years will ultimately pay out. I mean, if you think about it, we're making beverages for the food service industry now, custom formulations and that business, you know, up until gosh up until all the restaurants in America shut down this year that business that line was really growing well and it was making up a lot of volume and you know I felt like that segment of Frye was really growing and it was um it was on a path to really at some point probably be even bigger than the fresh produce side of the business. And that, you know, we've had a stumble here, but many businesses have had stumbles in 2020 because of all of the things that have happened with COVID. But I have faith that we'll get back there and, you know, we'll continue to churn out products for both retail and food service.
[00:48:50] Ray Latif: Well, just as you've learned about the beverage industry over the past seven years, I imagine that there's going to be a lot of people who learn quite a bit about you as a business person from this podcast. And Sarah, I can't thank you enough for taking the time to sit down with me today. I know it's been a long month for you and it's been a challenging year, but You bring such a great energy to this profession of ours, and it's such a nice thing to see. So thank you so much for joining me today. Good luck with everything going forward.
[00:49:23] Sarah Frey: Thanks for having me, Ray. I really appreciate it.
[00:49:29] Ray Latif: That brings us to the end of episode 232. Thank you so much for listening, and thanks to our guest, Sarah Frey. As always, for questions, comments, ideas for future podcasts, please send us an email to ask at Taste Radio. On behalf of the entire Taste Radio team, thank you for listening, and we'll talk to you next time.
