ReGen Brands Recap #20

Francisco Pergola @ Cheddies

The Regenerative Cheez-It®

Francisco Pergola is the Co-Founder and CEO of Cheddies. Cheddies is supporting regenerative agriculture with its cheese crackers made with regenerative cheddar cheese. Cheddies is a healthier cheese cracker alternative or, as Francisco likes to call it, “Cheez-It® on steroids.” Compared to peers in the market, Cheddies has six times the cheese, twice the protein, less carbs, and is certified non-GMO, humane, and regenerative.

The Brand

Cheddies are sold in over 1,000 retailers across the country, including Sprouts, Albertsons, Hy-Vee and HEB. They’ve also partnered with American Airlines. Unlike their competitors who use powdered cheese and more processed ingredients to accommodate for the variable natural flavor of cheese, Cheddies is made with fresh cheddar cheese.

“They just taste better – that’s why people buy our crackers. Yes, our product is regenerative with full transparency on sourcing –  but it’s also delicious. That’s our biggest claim to fame – we’re freaking delicious. It’s just the perfect snack.” – Francisco

When each box of Cheddies becomes a "personal box" for me 😂 ⬇️

Their Healthcare Origins

It all started with a thesis project. Francisco was pursuing his Master’s degree in Architecture, spending hours studying hospital waiting rooms. He quickly became enamored with hospital food culture and realized that patients needed protein, and the only products available were protein bars and shakes. 

As a side hustle, Francisco and his brother Tomas created a dietician-approved, savory, and cheese-flavored snack packed with protein, selling it “door-to-door” to clinic dieticians.  After 8 months of gaining traction in 60 clinics in San Antonio, they were unfortunately shut down by hospital systems obligated to large food service contracts.

Not ones to give up, they decided to pursue a more traditional CPG distribution strategy, which took them down a long path of rejection and project redesign. They eventually participated in CoLab, an accelerator program facilitated by Dairy Farmers of America. Then Cheddies secured its first big retail win with placement in Hy-Vee, thanks to the persistence of a category manager’s wife (you got to hear this story!), and then gained broad distribution working with a leading national food broker. 

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A Better (Regenerative) Cheese

Cheddies, like many brands, ran into supply chain snags during the pandemic. Sourcing fresh cheese in particular offered significant challenges, as massive players like Kraft and General Mills bought up all the available inventory. Unlike other commodities where the timing for getting ingredients is pretty straightforward, cheese requires an aging process of up to eight months.

They decided to get more security around their key ingredient and, at the same time, focus on sustainable sourcing from the best. That’s what led them to Alexandre Family Farm (featured in Episode 11) – the country’s first certified regenerative dairy. Their pitch? Pay Alexandre a premium for their regenerative milk not just because it’s the right thing to do, but because it’s also the highest quality, nutrient-dense milk they could find. Alexandre agreed to partner with Cheddies, and together they’re using their crackers to put a spotlight on regenerative ag in the snack aisle.

“I encourage anyone to buy a box of Cheddies and Cheez-It® and compare the two. The other brands have plenty of ways to convince the consumer that their product is made with cheese, but the minute you try our product, it tastes like cheese, clean and natural. Once your palette recognizes the taste of real cheddar cheese, the other crackers will taste like cardboard.” – Francisco

Our Path to 50% Market Share 4 ReGen

How do we create compelling consumer messaging around regenerative products, speaking to the social and environmental benefits but also the quality of the ingredients and taste? For Francisco, food to a consumer is predominantly about flavor. He believes that consumers will resonate more with “tasty,” “cheesy,” and “crunchy” than even the best messaging around soil health. Food has to appeal visually, it has to draw the consumer in. They’re betting on consumers being more interested in taste, focusing their messaging on taste and quality (displaying a huge chunk of cheddar cheese on their packaging), while also educating consumers about regenerative ag on the backend of the transaction.

“We’re focused on getting enough following to where consumers are saying, ‘This brand is the best, most delicious cracker I’ve ever tasted.’ And then there’s this thing called regenerative – and that’s what we attribute to this product being so fantastic.” – Francisco

You can check out the full episode with Francisco from Cheddies HERE.

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This ReGen Recap was produced with support from Kristina Tober