FreshFry is going global thanks to an exclusive deal with a $65 billion international company.
The Louisville-based firm is partnering with Sysco (NYSE: SYY) to expand its FreshFry Pods, a pod that extends the life of frying oil, into 10 markets worldwide.
This initiative is the first of its kind at Sysco and was selected by an innovation council representing a dozen countries, according to a news release. Internationally, FreshFry Pods will be sold exclusively as Sysco Classic Fry Oil Filter Pods.
Prior to this deal, FreshFry had expanded into Canada and Panama to meet demand there, said Jeremiah Chapman, co-founder and CEO of the company. In a recent interview, he told me those efforts proved successful, noting that while sales in Canada were 25% of those in the U.S., FreshFry's growth curve there has been significantly more aggressive.
Following indoor dining restrictions during the coronavirus pandemic, restaurants are juggling supply chain issues, food shortages and inflation. That includes frying oil — which has tripled in price since FreshFry was founded in 2014.
"When FreshFry first started, oil was like 40 to 50 cents a pound to buy, and now it's $1.50-plus, and it's still going up in some markets," Chapman said. "... But the global conversation really started to take off because of what was happening in Ukraine.
"Ukraine is a major provider of sunflower oil. It isn't a global supplier, but it's very significant in the EU [European Union]. And just like FreshFry, Sysco hadn't done this before. We will be their first domestic supplier going global through their channels."
Prior to this new agreement, FreshFry had an existing relationship with Houston-based Sysco, a wholesale corporation that markets and distributes food products and kitchen equipment to restaurants, health care and educational facilities around the world. The companies began working together in late 2018, putting FreshFry Pods in all 50 states.
But FreshFry wasn't ready for that kind of scale back then, Chapman said.
"Our manufacturing broke in 2019," he admitted. "It was like, 'Ship it and we'll figure it out' — well we shipped it, and we didn't figure it out. We were canceling orders left and right and couldn't fulfill them.
"We knew what scale felt like for an unprepared company."
By the time the company did figure it out, the coronavirus pandemic hit, and FreshFry was hit with a one-two punch. Restaurants weren't interested in buying new products when they were just trying to stay afloat.
That, coupled with the growing pains the year prior, nearly took FreshFry under, Chapman said.
The startup came away from those experiences with a couple of valuable lessons — ones Chapman said will be key in making sure this global expansion is a successful one.
"If you're stocking someone globally, you're going to spend a lot of money, time, effort and capacity filling shelves, and filling shelves does not mean people picking it up off the shelf," he explained. "If you build your capacity to fulfill the shelving demand and your velocity is low, you're going to hemorrhage money.
"But if you build the relationship, where they will transparently tell you what the shelf filling really looks like, and you get the commitment early, you can build that up."
Chapman credited his co-founder, Chief Operating Officer Jacob Huff, with doing an "incredible job" of understanding the company's operations and what it will take to bring it to the next level.
He added that Louisville has played a critical role in FreshFry's success thus far. The Vogt Award-winning company's first distributor was Louisville-based Creation Gardens, and later Sysco Louisville, which got the startup on the radar of Sysco's corporate team.
And Chapman, a chemical engineer, got the idea for the company as a student at the University of Louisville.
"Yes, we've done a lot of hard work, but it was a lot of grace and assistance from other people," Chapman said. "What that does, looking forward is as FreshFry continues to expand, we have to stay true to our roots — you know, why do we do what we do."
In the midst of this international launch, FreshFry will look to build relationships with other global companies in Louisville, and strengthen its relationships with local restaurants, too.
FreshFry employs 11 people at its headquarters at 2600 River Green Circle near the Ohio River in East Louisville. It has raised $5.3 million in venture capital to date, and recently invested more than $500,000 to bring its manufacturing operations to its Louisville facility.
Chapman didn't have an estimate for how many jobs the company will add as a result of the expansion, as it is still identifying what demand will look like in the new international markets.
The three-phased launch begins this month with Sysco’s businesses in the Bahamas, Panama and Canada (re-launch following an initial launch in January), as well as International Food Group, Sysco’s export business, which will ship to South America. In the following months, Sysco will distribute pods to Ireland, France, Sweden, Mexico, Costa Rica and the United Kingdom via Brakes, the release continued.
The terms of the new deal with Sysco, other than its exclusivity agreement, were not disclosed. FreshFry also declined to disclose revenue.
“The Sysco Classic Frying Pod provides solutions to help commercial kitchens address inflation and supply challenges in the global edible oil market,” said Collin Williams, Sysco's director of international merchandising, in the release. “Sysco is proud to support the growth of this plant-based technology that helps to mitigate waste, while also saving operators time, money and labor.”
