While some food manufacturers have sauce development and processing capabilities as core competencies, others purchase ready-to-use (RTU) prepared sauces from other companies and simply assemble them. For those in the latter position, there’s an economic reality that margins are significantly lower because the costs of purchasing and shipping prepared refrigerated sauces is very high.
Midas was approached by a $300M processor who had been using prepared sauces from its inception. The company had no internal expertise in making sauces and understood the huge learning curve they faced in trying to bring that portion of their processing in-house. They not only needed the equipment but the technical expertise to match and design manufacturable sauce systems and get them into production.
The company was facing supply constraints in getting specialty sauces done quickly and easily, and they knew they were leaving money on the table with their current RTU paradigm. They could not compete with the outsourced sauce model, and they didn’t see a path to bringing sauce-making in-house.
The company became committed to developing an internal sauce-making capability in a non-cook, instant format, which isn’t an easy feat. For those who have never made sauces, there is a tremendous amount to learn from equipment, agitation, pumping, shear, freeze/thaw, quality control and assurance to actual R&D and development of formulations. In short, it’s a lot of complexity and a lot of expertise to develop all at once.
The Midas team advised them on getting the appropriate equipment requirements for mixing, agitation, holding, pumping, and more. They matched existing items and provided a library of innovative prototype sauces that would arrive as a single SKU, and all be prepared in the same manner—by just adding water to a pre-tested product with even-bag ratios.
The processor was so satisfied with Midas’ work they named Midas their R&D partner for all specialty sauce projects. They were able to transition all new sauces to in-house production and plan to replace all current RTU sauces as soon as additional capacity is available. Development times dropped from months to weeks and the projected overall savings on sauces is $2M to $3M annually.