New plant, products put San Diego’s Circle Foods on track for growth.
by Bob Garrison
Here’s proof that what goes around comes around. What started in the early 1980s as a small tortilla bakery – Circle Foods – has become a well-rounded ethnic and specialty foods company with everything from frozen Mexican entrees to refrigerated quiche and dips.
Even Circle Foods’ storyline has a certain “round-about” theme.
Recognizing consumer interest in thicker Mexican tortillas, Enrique Zagursky purchased a small San Diego tortilla plant in 1983. It didn’t take long then to prove that Zagursky was on target. Price Club picked up Zagursky’s Tortilla Land flour and corn tortillas and Circle Foods soon expanded to meet production demands. Later, Zagursky led the business into carnitas (shredded Mexican-style meat), salsa and even into restaurants.
Fast forward to 2007. Recognizing a broader, larger wave of consumer interest in ethnic specialties, Canadian entrepreneur and investor Stephen Bronfman purchased Circle Foods, which, by that point, was back to just tortillas.
For Bronfman, the president and CEO of Claridge Inc., Circle would become a new ethnic and specialty foods platform. To it, he quickly attached La Terra Fina, a refrigerated quiche and specialty dips processor in Union City, Calif. Then he led Circle Foods into a secondary line of fresh Indian Roti flat breads (Roti Land). Likewise, Circle began staffing up and laying the groundwork for a new line of frozen Mexican entrees (Nuevo Grille) and a larger, single San Diego operation to house everything (except La Terra Fina).
Circle Foods opened that new 160,000-square-foot plant and headquarters last spring.
A food industry veteran with more than 20 years experience, Erik Brenk is Circle Foods’ general manager and chief operating officer.
“We have seen a dramatic series of changes on all fronts during the past 12 to 18 months,” he says. “It starts with the leadership team – all of whom joined the company in the last two years. Circle Foods also brought in several key experts in sales, marketing, engineering, operations and other keys areas to fill out the team in preparation for further growth.”
For the moment, Circle Foods employs about 400 people and its processes about 75 SKUs for North American club, foodservice, private label, mass and retail customers. Brenk notes that company has posted double-digit annual revenue growth in each of the past three years and expects to finish its current fiscal year (ending March 30th 2010) at the same level.
To his earlier point, a new facility and management team are fueling Circle Foods’ latest new venture into frozen entrees.
This spring marked the debut of Nuevo Grille, a frozen Mexican entrée line. Three introductory varieties are Grilled Mini Chicken Soft Tacos, Grilled Four-Cheese Quesadillas and Grilled Carne Asada Quesadillas. While officials work to move distribution eastward, Circle Foods is preparing to introduce eight more Nuevo Grille items including mini burritos, mini quesadillas and mini taquitos.
Brenk says the company also has converted a majority of its products to an all-natural ingredient profile. It likewise has developed a few new lines of refrigerated “finish-at-home” tortillas, roti and wraps.
“The key for Circle Foods – being a smaller but very nimble supplier – lies in innovation,” he says. “Taking our ability to turn around product concepts instantly and prepare them for immediate roll-out is key. Having all functional teams within one facility and the ability to pilot any product on-site affords us this opportunity.”
Meanwhile, there’s every indication that Bronfman – like Zagursky before him – is right on target for opportunity. Chicago researcher Mintel shows sales of ethnic foods have climbed steadily since 2004, set to reach a record high of $2.2 billion in 2009. In addition, Mintel forecasts solid growth of nearly 20 percent from 2010 to 2014.
Mexican/Hispanic foods represent the largest segment of the ethnic foods market with nearly two-thirds (62 percent) of sales. Meanwhile, Mintel says Asian and Indian food segments are driving the market growth – having posted gains of 11 percent and 35 percent growth, respectively, from 2006 to 2008.
Brenk concludes, “We are focused on creating our own niche within very competitive categories such as tortillas and Mexican products. Differentiation and the creation of consumer value are critical.”
FAST FACTS Circle Foods LLC
Location: San Diego
Top executive(s): Eric Brenk, general manager, COO
Product line(s): Frozen Mexican entrees, refrigerated quiche entrees and dips, fresh tortillas and Indian roti breads
Brands: Nuevo Grille, La Terra Fina, Tortilla Land, Roti land
Distribution: North American sales to club, foodservice, private label, mass and retail customers.