From fresh salads and sandwiches to edamame and apple pie, Fresh & Ready Foods is preparing food favorites for the masses. The San Fernando-based food manufacturer and distributor started in 1990 as a 12-person packaged sandwich and salad operation, working out of a 5,000-square-foot facility in North Hills. Today, the Fresh & Ready employs about 275 workers, operates out of three offices — San Fernando, San Diego and Las Vegas — and prepares boxed lunches and Grab N’ Go items for some 300 hospitals, more than 200 college campuses and many retailers, military bases and airlines. Cedars-Sinai Medical Center in West Hollywood and the University of Southern California — among the company’s early clients — continue to be clients today. “We’re every chef’s dirty little secret,” said Art Sezgin, Fresh & Ready’s president. Growing an operation that is heavily reliant on commodity products has not been an easy task for company founder Chuck Lehman and his team of foodies. Over the year, the company has been challenged in keeping consistency in its product lines and resourcing raw materials at the best possible prices. “We’re constantly saying that we don’t make money on what we sell but on what we buy,” Lehman said. According to Hoovers Inc., an Austin, Texas-based business research company, the fresh prepared food industry is highly concentrated with the 50 largest companies generating some 70 percent of the industry’s annual revenue of $8 billion. According to the company, the major U.S. industry players include Deli Express, Ready Pac and Fresh & Ready Foods. Fresh & Ready’s companywide revenues in 2011 were $27 million, a 22 percent increase from $22 million in 2010. Revenues for 2012 are projected to hit more than $30 million. “I kind of get goosebumpy when I say it,” Lehman said. The company’s revenues were about $12 million when it first moved into the San Fernando space in 2005, he said, noting the boost in business has allowed Fresh & Ready the ability to triple its workforce over the years. The company operates 24 hours a day, seven days a week to serve as an emergency on-call service. Fresh & Ready’s high-volume capacity — approximately 50,000 items are prepared each day — and fleet of delivery vehicles and independent distributors allow for a speedy delivery when disaster strikes. The summer season is particularly busy for this type of business as fires are more common in the hot summer months. Lehman and his leadership team, which includes his wife Lisa and his children Courtney Dorne and Cameron Lehman, have had to expand the facility several times to accommodate the growing business. This year, the company expanded yet again, signing a lease for the 36,000-square-foot space adjacent to its San Fernando facility. The expansion will allow for a new gluten-free operation to meet the growing demand for products free of barley and wheat, malt and rye. In terms of a growth strategy, Lehman said there really isn’t one. The company’s growth is a direct result of the demand among its regular customers. “Our customers come to us and tell where we should be going and who we should be,” Lehman said. From restauranteur to entrepreneur FOUNDED: 1990 HEADQUARTERS: San Fernando CORE OF BUSINESS: Manufacturer and distributor of sandwiches, salads, box lunches and baked goods NUMBER OF EMPLOYEES: 275 REVENUES IN 2010: $22 million REVENUES IN 2011: $27 million Food preparation has been Lehman’s passion since his early years as a student at the University of Nevada, Las Vegas’s Hotel & Restaurant School. Upon graduating, he pursued several ventures within the food service industry including owning and operating restaurants and consulting for food manufacturers. Lehman also has experience in packaged foods having worked at Overhill Farms Inc., a publicly traded producer of frozen food products. After years of running upscale eateries in the Los Angeles area, Lehman decided to leave restaurants — which he described as a “difficult mistress” — for a life in prepared foods. “I felt it would be easier to take products directly to the customer than to wait around for them to come to me,” Lehman said. At the time, Lehman said, there was very little competition in the food preparation industry. It was mainly made up of vending machine operators who made sandwiches and traveling food trucks. “As a chef, I knew I could develop a line that was better and offer them in markets that hadn’t been approached before,” he said. Matthew Marsh, CEO and founder of Bell Gardens-based First Class Vending Inc., shared the same sentiment, which was why he chose Fresh & Ready Foods as his primary fresh food supplier when he launched his company in 1994. While Marsh said he’s tried other companies in the past, he’s chosen to stick with Fresh & Ready for nearly 20 years because of the company’s quality and speedy delivery time. First Class Vending purchases nearly 500,000 sandwiches and salads from Lehman and his team to stock the more than 10,000 vending machines he operates in Las Vegas and Southern California. “I would only put things in our vending machines that I would eat myself,” Marsh said. Marsh said he even allows the company to make recommendations on new products for his business. “When they have new items, I just tell them to include (them) in my order.” Development through diversification While many companies in the prepared food market struggled under the weight of the recession, Fresh & Ready has been able to stay afloat by diversifying its operations through mergers and a broadened client base. The company’s leadership team has been expanded through strategic partnerships. Harry Iknadosian, joined the team in 2004 through the merger of his company Deli Delight and was made an equity partner, and senior vice president. Art Sezgin came on board in 2006 through the merger of his company High Noon Foods and was also made an equity partner as well as president of the company. “We got involved with them because we needed good people to come,” Lehman said. Over the years, the company has also expanded its client base. Once catering primarily to hospitals and schools, the company now serves a variety of industries, including airlines, national retailers and military bases. “We’re the preferred vendor of fresh sandwiches and salads for the United States Armed Forces,” Sezgin said. Last October, Fresh & Ready acquired Foodology, a producer of all natural, organic food products. Due to non-disclosure agreements, Lehman declined to offer details on the deal, but said it expanded Fresh & Ready’s offerings to include products such as black-eyed peas and edamame, and allowed the company to develop new items under the label. It also took the company into the retail market. In coming weeks, the company is launching the newest addition to the Foodology family, a guacamole-type dip called Guacamame. The dip has the texture and spicy flavoring of guacamole, but is made entirely of edamame beans. The company’s growth has not gone unnoticed in the food industry. Fresh & Ready has been approached on a number of occasions by other companies looking to acquire its operations. Selling out, however, is not in the cards, said Lehman’s daughter Courtney Dorne. The company has several hundred employees to consider, she said, adding “We have a lot of mouths to feed.” Lehman said he also takes into consideration the next generation of Fresh & Ready, which currently includes his and Harry Iknadosian’s children. Someday, he hopes Dorne and Sezgin’s children will follow in the business. “We have kids we’re trying to keep this business for.”
Packaged Success
