Back in the Black With High-End Frozen Food
Monday, February 5, 2007
The air inside Cuisine Solutions' Alexandria plant felt barely warmer than the 35 degrees outside. Clad in layers of clothes, lab coats, hair nets, rubber knee-high boots and gloves, workers lined up along a conveyor belt were processing a steady stream of raw lamb shanks.
The first workers put the cuts of meat into plastic bags and the next added a freshly made rosemary mint sauce, and then the bags were vacuum-sealed. Workers at the end of the line put the 26-ounce packets in trays and loaded them into tanks of nearly boiling water. There the lamb would slow-cook for more than two days before being removed and flash-frozen. Thus prepared in what is called sous vide style, the food will last up to 18 months without preservatives.
Soon, the lamb would be on its way to restaurants or Costco stores, to airlines or possibly to military kitchens in Iraq -- an expanded list of clients that is driving a comeback for the 35-year-old purveyor of high-end frozen foods.
Like other food and hospitality companies, Cuisine Solutions suffered in the post-Sept. 11 world. It had built its business on hotels, conference centers and airlines, and frightened Americans were cutting back on travel, particularly to big business meetings. In fiscal 2002, the formerly profitable company reported a loss of $6 million and had to make layoffs and cut salaries.
Management knew it had to diversify the company's roster of clients, so it developed new product lines to serve retail, military and, most recently, restaurant customers. Year by year, the picture got brighter: Losses declined to $4.1 million in 2003, $1 million the following year. In 2005, Cuisine Solutions reported a profit -- $1.7 million. And last year profit skyrocketed, increasing 113 percent to $3.7 million.
For the quarter ending Dec. 9, revenue increased 40 percent over the comparable period a year earlier and profit more than doubled. Key factors were increases in retail and military sales -- up 66 percent and 76.3 percent, respectively.
"This was a very good quarter," said company President Thomas L. Gregg, touring the 66,000-square-foot plant with a reporter.
Although the military has been a big growth area, it doesn't mean soldiers in the field are eating Cuisine Solutions' juicy steaks and blackened trout. The food can only go to places with facilities that can keep it frozen. Gregg said military security rules prevented him from saying where the food was going or even which entrees the troops were getting.
Today, the military accounts for 20 percent of the company's sales. "On-board services" -- trains, planes and ships -- account for 20 percent, while food service to banquets and convention centers makes up 16 percent. Restaurants, the company's newest target, account for 4 percent of sales.
Retail accounts for 41 percent, and Gregg describes it as the "most important" sector. Costco alone makes up 10 percent of volume, but more upscale chains including Wegmans and Balducci's are also customers. The company's chief marketing tools are in-store tasting tables and word of mouth. "Retail is the first place we can be promoted one taste at a time," Gregg said.
These aren't the old-fashioned frozen dinners, with prepackaged meals that include side dishes. Cuisine Solutions' retail products are specific dishes, and turning them into meals is up to the consumer.
Above the clanking of the cold assembly lines on a recent morning, executive chef Roger Mallet was preparing a tasting menu: smoked salmon with a chipotle remoulade sauce, char siu duck, mini crab cake and scallop with lobster foam, chicken with a morel sauce.