In the competitive landscape of the food industry, Red’s has emerged as a beacon of innovation and quality in the frozen food sector. Founded by Mike Adair, Red’s journey from homemade burritos to a beloved frozen food brand spans over 15 years of perseverance and dedication. I sat down with Adair to reflect on the company’s humble beginnings, the evolution of its product portfolio, and the strategic decisions that have propelled Red’s to success in an ever-changing market.
Dave Knox: Let’s start with the founding story of Red’s and what inspired you.
Mike Adair: I had been in finance for years after college but felt there had to be more to life than mutual funds. After leaving that career, I found myself in business school, taking hikes with my dog Red, and pondering my future. My wife’s burritos were a hit, and with a project due for an entrepreneurship class, I named it Red’s. That marked the start of a 15-year journey of ups and downs.
Knox: Transitioning from homemade burritos to a successful frozen food company isn’t straightforward. How did you make that leap?
Adair: Well, there’s a key aspect I omitted about the beginning of my journey. I’ve always had a passion for consumer goods, not because I’m an avid consumer myself, but because I’m fascinated by the idea of creating products that can positively impact people’s lives. I envisioned reaching hundreds, eventually thousands, and beyond with a product crafted to the highest standards.
So, I began just as you might expect – with no clue about what I was doing. The recipe wasn’t even real; it was more like scribbles on paper, mostly in my wife’s head. We had to figure out how to turn that concept into something reproducible, establish a manufacturing process, and navigate the complexities of packaging. It was a step-by-step process of solving one problem after another until suddenly, we had a product in hand. Then came the next set of challenges: getting onto store shelves, convincing people to buy, setting the right price point, finding long-term production partners, and, of course, figuring out how to turn a profit. It’s been a journey of tackling each obstacle methodically, one piece at a time.
Knox: Talk me through that journey of the last almost 15 years of building this business. You started with the burritos. How has the portfolio evolved over the years?
Adair: The evolution has been significant. Like any food company or entrepreneur in the food and beverage industry, we’re brimming with ideas and innovation. However, the crucial aspect to remember is the product itself. If it doesn’t meet expectations and provide a positive experience, it can tarnish the brand’s reputation. So, our primary focus has always been on refining our products to ensure they are top-notch. Over the past 15 years, we’ve continually honed in on perfecting our offerings.
Of course, along the way, we’ve made mistakes. We’ve launched products that didn’t resonate with consumers, whether due to pricing issues or mismatches in flavor profiles. We’ve introduced big burritos, quesadillas, bowls, and more, only to realize they weren’t hitting the mark. Through trial and error, we’ve remained steadfast in our commitment to delivering excellence.
Listening to consumer feedback has been instrumental. We’ve paid close attention to whether they’re buying our products and whether they’re satisfied with them. Their input has guided our decisions on portion sizes, ingredients, and flavor profiles. This ongoing dialogue with consumers has been invaluable in shaping our product lineup.
We’ve learned to support the winners and cut ties with the underperformers swiftly. This has allowed us to refine our innovation pipeline and focus on what resonates most with our target audience. While we’ve always operated in the frozen food space, we’ve fine-tuned our assortment to cater to snacking occasions, offering items like chicken, steak, and carnitas.
We’ve also found success in the breakfast category. What began with breakfast burritos has evolved into a thriving breakfast sandwich line. Our turkey sausage, Canadian bacon, traditional bacon, and sausage options have proven to be hits with consumers. It’s been a rewarding journey of evolution and innovation, and we’re excited to see where the next 15 years take us.
Knox: You mentioned you’ve really stayed true to that freezer aisle for the most part. What’s changed in the freezer aisle over the years?
Adair: The freezer aisle has undergone a remarkable transformation over the years. Traditionally, it was viewed as a necessary but uninspiring destination, often associated with low-quality, highly processed foods high in sodium. But , this perception has shifted significantly. Today, the freezer aisle is a dynamic and enticing space, offering a wide array of premium options.
We’ve witnessed this evolution firsthand with brands like Red’s. Consumers now recognize the freezer aisle as a source of nutrient-dense, convenient, and delicious products. The emergence of premium offerings has elevated the freezer aisle shopping experience, offering consumers restaurant-quality meals in the comfort of their own homes.
Moreover, advancements in reheating technology, such as air fryers, toaster ovens, and turbo chefs, have further enhanced the appeal of freezer aisle products. These devices allow consumers to quickly and easily transform frozen meals into restaurant-worthy experiences, mirroring the quality of homemade dishes.
In essence, the freezer aisle has become a hub of culinary innovation and excellence. While it’s difficult to predict exactly where we stand in this transformation, it’s clear that we’re only in the early innings. As more consumers discover the exceptional offerings available in the freezer aisle, I anticipate that the momentum will continue to build, creating exciting opportunities for both consumers and brands alike.
Knox: With the landscape of entrepreneurship in the food and beverage industry evolving over the past 15 years, what advice would you offer to aspiring entrepreneurs looking to enter this space today?
Adair: It’s a dynamic and accessible field, which is both its greatest strength and challenge. On one hand, the accessibility of food entrepreneurship means that anyone with a unique recipe or family tradition can embark on this journey. However, this accessibility also results in a highly competitive landscape with numerous entrants vying for attention.
The key to success lies in ensuring that your product meets a genuine need in the market. It’s essential to offer a solution that resonates with consumers, one that they will not only enjoy but also purchase repeatedly and enthusiastically recommend to others. Your product must be consistently producible at a price point that remains attractive to your target audience.
In our case, we focus on premium ingredients and ethical sourcing practices, which align with consumer preferences for natural and sustainable options. While this positioning may limit our ability to compete with highly processed alternatives on price, we believe in delivering a superior experience that justifies the investment.
One common pitfall I’ve observed among entrepreneurs is rushing to market before perfecting their product. It’s tempting to focus solely on marketing and distribution efforts, but without a strong foundation, these efforts are akin to pouring gasoline on a smoldering ember—it extinguishes rather than ignites. Instead, prioritize refining your product until it’s truly exceptional before scaling your marketing and distribution efforts.
Success in food entrepreneurship requires a relentless focus on product quality and market fit. By prioritizing these aspects, entrepreneurs can build a solid foundation for long-term growth and sustainability in this dynamic industry.
Knox: When it comes to establishing the manufacturing aspect of a food business, especially in the frozen food sector, entrepreneurs often face a critical decision: do they opt for in-house manufacturing or partner with a co-packer? What was your approach to tackling this challenge, particularly considering the complexities of producing frozen goods?
Adair: It was a constant battle, and it continues to be one. If I had the wisdom back then that I do now, I might have chosen to start a simpler venture, perhaps a vegetarian chip company. Dealing with meat products meant adhering to USDA regulations for all our production, adding another layer of complexity. Then there’s the frozen aspect, which presents its own set of logistical challenges. However, these hurdles also create a higher barrier to entry in the frozen food market, which can be an advantage.
For many entrepreneurs, the allure of self-manufacturing is strong from the outset. It’s essential to consider the significant fixed overhead costs associated with establishing and maintaining manufacturing facilities. Entrepreneurs often underestimate the time and capital required to scale operations, leading to financial strain.
In our early years, we partnered with several co-manufacturers, a decision I’m grateful for as it allowed us to focus on building our brand without committing to significant fixed costs. Co-packers can offer the flexibility needed to adapt to changing demand and product iterations. However, finding the right partner who can deliver quality and be a true collaborator is crucial.
About eight years ago, we made the decision to transition to self-manufacturing. While this brought its own set of challenges, it allowed us to have full control over product quality and innovation. We could pivot quickly in response to customer demands and ensure a superior consumer experience. I must emphasize that this decision wouldn’t have been feasible in our early years. It required substantial volume and stability to absorb the fixed overhead costs associated with self-manufacturing. Jumping into self-manufacturing too early could have drained our resources and hindered our ability to invest in other critical areas of the business, such as people and innovation.
In hindsight, finding the most cost-effective approach, often starting with co-manufacturing, is prudent for many entrepreneurs. If venturing into self-manufacturing, it’s essential to keep operations lean and agile, focusing on perfecting the product and gathering feedback from consumers. Success in the food industry hinges on getting the product right and adapting to meet consumer needs, whatever the manufacturing model may be.
Knox: Funding is a critical aspect of building any business, and over the years, we’ve explored various avenues, from bootstrapping to venture capital and private equity. How should entrepreneurs approach the decision-making process when it comes to financing their ventures?
Adair: In my experience, bootstrapping should be the initial strategy whenever feasible. It allows you to retain control and ownership of your brand while instilling financial discipline. Many entrepreneurs rush into partnerships with venture capitalists or private equity firms early on, only to find themselves relinquishing significant control of their businesses down the line. These partnerships can sometimes lead to conflicting visions and decision-making processes, which may not align with the entrepreneur’s original goals.
Every dollar counts when you’re starting out, so I always advise raising as little capital as necessary to reach key milestones. This approach allows you to demonstrate progress and attract further investment on your terms. It’s essential to anticipate your financial needs over the short to medium term, ensuring you have enough runway to achieve significant milestones, such as expanding distribution or launching new product lines.
While profitability is the ultimate goal, achieving it in the early stages of a consumer goods business can be challenging due to the competitive landscape and various operational costs. Reaching profitability before scaling too rapidly can provide greater autonomy and flexibility in decision-making.
As your business matures, consider seeking funding from semi-institutional sources or continuing to leverage personal connections and advice from mentors and advisors. Building a robust network of support can provide invaluable guidance as you navigate the complexities of growth and expansion.
The key is to strike a balance between securing the necessary funding to fuel growth and maintaining control over your business’s direction and destiny. By approaching financing with a strategic mindset and a focus on long-term sustainability, entrepreneurs can position their ventures for success in the dynamic landscape of the food and beverage industry.
Knox: It’s incredible to reflect on the journey from those early days to where Red’s is today. What’s on the horizon for the brand?
Adair: It’s a surreal moment for me, realizing that my daughter is now fifteen, and I began this journey when she was just three months old. Looking back, I realize how much I’ve grown alongside the business. One of the most rewarding aspects has been building an exceptional team. In the early days, resources were scarce, and we wore many hats, but now, surrounded by talented individuals, I can focus on what I do best: fueling the company with passion and ideas.
As for the future of Red’s, we’re committed to staying true to our roots while seizing new opportunities for growth. Frozen foods offer vast potential, and we’re determined to elevate the category with premium offerings. Our focus remains on snack and breakfast items, where we see tremendous potential for innovation and expansion. We’re doubling down on our commitment to providing high-quality options that cater to the diverse needs of households, from single individuals to large families.
There’s nothing more fulfilling than seeing people connect with our products on a personal level. Whether it’s a child who loves a particular item or a family gathering where everyone enjoys our offerings, it reinforces our mission to make a positive impact on people’s lives through food. I feel incredibly fortunate to be part of this journey and remain as passionate and dedicated as ever. With exciting opportunities ahead, I’m eager to see where the next chapter takes us.