It's Snack Time in Seattle

From crackers to chips to nuts, the Puget Sound region has it covered.
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Close your eyes and think of crackers. What do you see? Puffy Oyster Crackers? Square Saltines? Round Ritz?  Triscuits? Wheat Thins? Goldfish?

Paul Pigott would prefer that you see flat, crispy Croccantini — thinner than RyKrisp, sturdier than matzo, hefty enough to swipe through a tub of cream cheese and flavorful enough to complement the Cambozola that’s on special in the cheese cooler at the end of his outstretched arm. And he’s taking steps to increase the odds. 

Used to be there was but one size: 8 ounces of 4-by-7-inch crackers for $5.99. But now the supermoms piloting Bugaboo strollers through the aisles of Whole Foods can select from the original Croccantini (seven flavors), a six-ounce carton of Mini Croccantini (also seven flavors) or — new this year — a 4.75-ounce bag of Croccantini Bites in Italian herb (“inspired by a Tuscan garden”), tomato basil (“summertime in an Italian villa”) or spicy olive (“with a kick of Mediterranean heat”). 

Together, these flatbread crackers dominate the salty-snack displays in the specialty grocery channel — seven of the top 30 items in the category carry La Panzanella Artisanal Foods Company’s label — and that makes Pigott very happy.

Always an independent, entrepreneurial type, Pigott — a scion of the family that founded Paccar Inc. but who never joined the truck-making business — spotted an opportunity in 2003. Ciro Pasciuto, an Italian immigrant who ran a deli and bakery on Capitol Hill called La Panzanella, wanted to retire. At the time, half of La Panzanella’s $2 million in annual sales came from flatbread crackers, the rest from the neighborhood deli and the sale of rustic breads.

The recipe for the crackers had come from Pasciuto’s mother, who started baking them during a visit to Seattle. They were crispy and crunchy, so they were named Croccantini, Italian for “crunchies” or “crunchy bites.”

Pigott bought the company and, before long, decided to concentrate on making and selling the Croccantini. He sold the bread business and, when La Panzanella moved its cracker production facilities to Tukwila, closed the deli.

Pigott, 55, grew up in Seattle, went to college back East — at Hamilton College in upstate New York — and returned home to get an MBA at the University of Washington. A veteran of the dot-com bubble in the late 1990s (destinations.com; linkstime.com), Pigott found a measure of stability in the seemingly old-fashioned business of food production.

“I’ve learned an awful lot of what it’s like to run businesses,” he told BakingBusiness.com in 2012, “and I really began to appreciate businesses that have a positive cash flow, because in the dot-com era that was rather scarce.” 

In the meantime, the appetites of millennials became increasingly apparent. Half of all adults were replacing as much as 50 percent of their traditional meals with snacks. And so convenience food became a $126 billion phenomenon — a growing proportion of all grocery spending. Crackers alone account for $7 billion a year. 

La Panzanella has been surfing that wave. Today, Croccantini are distributed throughout the United States and they also show up in snack-loving countries like Japan, China and Australia. There’s now a second bakery in Charlotte, North Carolina, to facilitate better East Coast distribution. La Panzanella’s employee count is approaching 200.

Pigott says La Panzanella has the nation’s No. 3 specialty cracker in the grocery channel, and the No. 1 cracker in the specialty category. Locally, La Panzanella sells its products at Whole Foods, PCC Natural Markets and QFC stores, almost always in the higher-priced deli or cheese sections because the price of the crackers is relatively high: $6 or so for a box of the original Croccantini, roughly four times the price of a box of Ritz crackers. The challenge is to increase sales while maintaining the image (and reality) of a “healthy snack.” Croccantini have a rustic, handmade look. Equally important: They’re made from natural ingredients and offer consumers a low-fat, dairy-free, vegetarian/vegan option for their snacking pleasure.

 
 

Paul Pigott eschewed the family truck-making business, Paccar, in favor of
an entrepreneurial course that eventually led him to La Panzanella. 

The challenge is to increase sales while maintaining the image (and reality) of a “healthy snack.” Croccantini have a rustic, handmade look. Equally important: They’re made from natural ingredients and offer consumers a low-fat, dairy-free, vegetarian/vegan option for their snacking pleasure.

Four of five Americans tell pollsters they’d be willing to try something new — a new flavor or a new product. Within that group, flavor is even more important than “healthy.” The new La Panzanella Bites come in a bag, something the company hasn’t tried before. The target: millennials who often don’t eat complete meals and can be enticed by healthy snacks. Several times a day, in fact. “The average American might eat two snacks a day,” Pigott explains. “For millennials, that number might be five a day.”

Like the originals and the newer Minis, the Bites are big enough to use as scoops for dip, and they come in several flavors, although the seasoning is on the outside of the cracker and disappears quickly on the tongue. Pigott is not concerned. The secret, he says, is to leave the original recipe alone. “No tampering, no cutting corners,” he declares.

Last year, he sold 300 million crackers. 

 

DIG IN
An abbreviated history of the potato chip hereabouts.
You can trace the whole concept of salty snacks to Saratoga, New York, known a century ago for its racetrack and its Saratoga Crisps. Word of this delicious novelty food spread across the country.

In 1903, a 13-year-old Croatian immigrant named Marko Narančić arrived at Ellis Island with 15 cents in his pocket and no English. He took a series of jobs: in a steel mill, as a meatpacker and finally in a hotel, where he moved from kitchen flunky to pantry boy to fry cook. He eventually became a chef on the Milwaukee Road’s “Olympian” train from Chicago to Tacoma, and ended up working at Tacoma’s Bonneville Hotel as master chef.

The Saratoga Chip was nothing more than a deep-fried, thinly sliced piece of potato, which young Narančić learned how to make using an abundant crop of spuds outside his back door in the Puyallup Valley. In 1918, he rented a storeroom behind his apartment for $5 a month and began selling his chips door to door, to households and grocery stores. Along the way, Narančić changed his name to Marcus Nalley and added other Nalley products — pickles, beans, chili, salad dressings — and built a factory complex in the canyon off State Route 16, the so-called Nalley Valley.

Nalley Foods eventually became Tacoma’s largest employer. When Marcus Nalley died in 1962, his company was operating 10 potato chip plants around the country. 

The business has had several owners since the ’60s, starting with W.R. Grace and Company (1966), then Curtice-Burns (1975), which was acquired by an agricultural cooperative (Pro-Fac) in the mid-’90s. Pro-Fac begat Agrilink in ’97, and in 1998, Agrilink acquired Dean Foods, which owned the Birds Eye brand. Agrilink changed its name to Birds Eye Foods in 2003 and was acquired by Pinnacle Foods Group in 2009.

Pinnacle is controlled by The Blackstone Group investment firm and also owns another Northwest icon, Tim’s Cascade Snacks. The “Tim” of Tim’s Cascade Style Potato Chips was Tim Kennedy, who started making small batches of extra-crunchy potato chips 30 years ago. Within two years, they were being named “best in Seattle” and went on to win national recognition.

Tim’s started expanding into different flavors — almost two dozen over the years, but always sold in the signature red-and-white striped bag. And it still produces chips in the Northwest, at a factory in Algona. — R.H. 

 

DIG IN | SAHALE SNACKS, TUKWILA
Taking trail mix to a higher level.
More than a decade ago, two Seattle friends were climbing Mount Rainier. They would usually load up with gourmet food but they had packed for efficiency on this climb, so all they had to sustain themselves was ordinary trail mix. When they got off the mountain, they headed straight for the kitchen, determined to create something better. Not less nutritious, just tastier.

The two pals, Josh Schroeter and Edmond Sanctis, had known each other for 25 years, ever since attending Columbia School of Journalism and working at NBC. Their kitchen experiments eventually produced several combinations of nuts and fruit glazings (cashews with pomegranate, almonds with cranberries, among others) that would form the basis for Sahale Snacks, which they named for Sahale Peak, one of their favorite climbs.

Then came the hard part: producing their recipes in commercial quantities and recruiting executives who knew how to manage a food company. Well, they succeeded. Eric Eddings and Erika Cottrell had both worked at Tully’s Coffee and Monterey Gourmet Foods and knew their way around branding and food production; they signed on as CEO and VP of marketing and operations, respectively. As testimony to their savvy, Sahale Snacks was named Food Processor of the Year (by Seattle Business magazine, no less) in April 2014.

The Sahale Snacks line has since expanded with “to-go” packaging. Its products are distributed to 10,000 Starbucks stores and hundreds of Whole Foods and Costco locations.

Sahale Snacks has grown into a $50 million company with 150 employees. In 2014, The J.M. Smucker Company (annual revenues: about $5.5 billion) bought Sahale Snacks from Palladium Equity Partners, a private equity fund that had owned Sahale since 2007. 

Schroeter and Sanctis, meanwhile, continue to spend time in the mountains together. “Our last major climb was a ridiculous, horrendous and grueling effort to get up to some hot springs high on Glacier Peak,” Schroeter reports. Their food focus has also shifted to higher peaks, namely the Himalayas. The new food they’re involved with is a Himalayan staple known as tsampa, a high-energy roasted-barley product made by a new social-purpose company called Sherpa Foods.

 

DIG IN | OBERTO BRANDS, KENT
Where’s the Beef?
According to MarketResearch.com, meat snacks like the beef and turkey jerky products from Kent-based Oberto Brands are the darling of the healthy-ingredient snack market, with sales up 8.6 percent in 2015. Meat snacks will continue to grow fast, with an anticipated compound annual growth rate of 9.6 percent between 2016 and 2020, driving annual sales of the category to $5 billion in 2020. 

 

DIG IN | PARTNERS, KENT 
Gotta love a company whose best-selling product is called Wisecrackers.
Kent-based Partners, a Tasteful Choice Company, also has granola and a line of gluten-free snacks, and it has been around for nearly a quarter of a century.

Marian Harris was working as a bookkeeper in downtown Seattle when she opened her first restaurant, called Partners. It was an unusual luncheonette, an unheard-of — at the time — combination of deli and bakery.

Like Paul Pigott at La Panzanella, Harris left the restaurant business behind to concentrate on making high-quality crackers. That was the fall of 1992. These days, Partners has 85 people on the payroll and Harris was recently inducted into the Specialty Food Association Hall of Fame. Partners’ 35 varieties of crackers, cookies and granola are sold in all 50 states and around the world. 

 

DIG IN | CONTINENTAL MILLS, TUKWILA
The Krusteaz people woo a younger audience. 
If you need further proof that the local food industry is tapping into the meteoric rise in snack food consumption, look no further than Seattle’s own dowager aunt, Continental Mills. Four score years ago, a Seattle women’s bridge club came up with the notion of an easy “just add water” pie crust mix, which became the Krusteaz family of products (see page 32). This year, Continental Mills, the Tukwila-based parent of Krusteaz, launched a line of tortilla chips and popcorn snacks called Buck Wild in the hope of tapping the massive millennial market.

The company has been on a cross-country Buck Wild Road Trip, stopping at music, food and beer festivals with its SnackShot, a cannon that shoots snacks, which people attending the events try to catch in their mouths. This fall, Continental Mills announced nationwide distribution of Buck Wild products through Walmart. 

The Amazing Rise of Amazon Studios

The Amazing Rise of Amazon Studios

A few years ago, no one was streaming new content from the retail giant. Roy Price has changed that dynamic.
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When the 89th Academy Awards celebration begins on February 26, Roy Price is sure to be in the audience. If early predictions are accurate, he will be anticipating an award or two for Manchester by the Sea, a film that’s been the smash hit at all four major North American film festivals this season.
 
A huge comeback for writer/director Kenneth Lonergan, Manchester by the Sea stars Casey Affleck as a lost soul forced to contemplate adopting his reluctant teenage nephew. With Manchester receiving six Academy Award nominations, Roy Price could be a happy man on Oscar night. And Amazon.com shareholders, who have seen Amazon’s stock price rise 340 percent in the past six years, would likely be giving a standing ovation. 
 
Price, 49, who until recently lived in Seattle’s Laurelhurst neighborhood, is chief of Amazon Studios — the arm of the Jeff Bezos empire committed to revolutionizing entertainment. Based partly in Seattle but mostly in a new 85,000-square-foot Santa Monica production facility, Price’s team of renowned Hollywood execs and industry veterans has been responsible for more than 100 prestige movies and blockbuster shows. They now make and acquire original films and TV series, which are streamed via the company’s on-demand video service. 
 
Amazon is likely second only to Netflix in total streaming customers. And Manchester by the Sea is its first big Oscar contender. Even if Oscar snubs Amazon, its Hollywood profile is at an all-time high. Back in 1998, when Amazon began selling DVDs, Hollywood studios actually refused to make DVDs of their films available for sale online. Now, Hollywood returns Amazon’s calls, and Price can hire talent like directors Woody Allen, Steven Soderbergh and Spike Lee, and Manchester producer Matt Damon.
 
It’s a coup for Price, who started planning this Hollywood invasion in 2000, when he quit Disney after six years as animated-series VP to become a digital media consultant. He then joined Amazon in 2004, launching its video-on-demand service in 2008. When archrival Netflix started making its own shows, like the popular and critically acclaimed House of Cards, Price got the green light to launch Amazon Studios in 2010.
 
Netflix spends about $6 billion a year on 1,000-plus hours of original programming. Amazon’s production is ramping up sharply — in the second half of this year it said it was spending twice as much as  in the same period last year — but its attitude toward releasing actual numbers on its business is a lot like the secretary who defies Javier Bardem’s nosy killer character in No Country for Old Men: “Did you not hear me? We can’t give out no information!”
 
Regardless, Price is happily gobsmacked at how fast Amazon Studios has taken off. “Our first show, Garry Trudeau’s Alpha House, came out three years ago,” says Price, who has a mind sharp as a bear trap and a jaunty, quirky personal manner. 
 
Alpha House earned some applause, though no Emmys — something that changed in Amazon Studios’ second year, when it nabbed five Emmy Awards to Netflix’s four. Amazon’s first hits — Transparent, a noble, exquisitely trendy comedy-drama about a transsexual dad, and Mozart in the Jungle, about a madcap orchestra conductor (Gael García Bernal) and a young oboist (Lola Kirke) — won four Golden Globes in the past two years, plus an abundance of the industry’s most prestigious other prizes. 
 
Price plays everything close to the vest, but these days he doesn’t conceal his glee. In his first time at bat in the Oscar race, he has hit what could be a home run with Manchester by the Sea.
 
“We only came out with one movie last year,” Price remarks. “We’ll have 15 this year.”
 
And while he is all smiles about Amazon’s entry into the movie world, his ambitions for TV are just as energetic. He spent a reported $70 million for an eight-episode series from Mad Men creator Matt Weiner and $160 million for 16 episodes of a David O. Russell drama starring Robert De Niro and Julianne Moore.
 
Amazon hasn’t said yet when the programs will air. 
 
Amazon’s successes are catching the attention of media watchers.
 
“As soon as Amazon entered the awards race, that scrappy media player zoomed to the front of the pack,” says Tom O’Neil, editor of the Gold Derby awards-prediction website. “Transparent won Best Comedy Actor for Jeffrey Tambor at the Emmy Awards in 2015, the first time a streaming service won a top Emmy category. Amazon not only proved it was a serious player, but it’s playing for the long haul ahead.”
 
Amazon is betting big money — O’Neil estimates about $2 million — on the Emmy and Oscar races. In December, as part of the studio’s marketing campaign, Damon and Bezos hosted a party under a big tent at Bezos’s Beverly Hills mansion, stocked for the occasion with the best scotch, plenty of shrimp and lots of stars.
 
Bezos spoke to Anne Thompson of the independent-film website IndieWire, who reports, “[Bezos] wants to build a brand that means taste and class, and the person he leans on for advice is pal Harvey Weinstein.” Weinstein is the legendary Hollywood mogul whose films have earned more than 300 Oscar nominations. The Hollywood Reporter notes that not since Weinstein’s 1999 battle for Shakespeare in Love against Steven Spielberg’s Saving Private Ryan has there been a dramatic, bragging-rights Oscar contest like Amazon’s Manchester vs. Netflix’s 13th, a hot Oscar contender in the documentary category, which would be Netflix’s fourth Oscar nomination.
 
“Amazon is following the same strategy HBO pursued at the Emmys back when it was the New Media Kid in Town,” O’Neil explains. “In the 1980s, HBO craved the approval of its peers and so campaigned aggressively to win Emmys. … Now, HBO is The Establishment and it’s facing hungry new foes like Amazon.”
 
To O’Neil’s point, HBO, which dominated the Oscars and Emmys for two decades, didn’t make the Oscar documentary semifinalist list of 15 contenders this year. Netflix, with 13th, and Amazon, which acquired the U.S. rights to Gleason, did. Clearly, back in 2000, Price guessed right about the future of internet entertainment.
 
In 2008, Amazon’s digital video sales generated revenues comparable to that of a neighborhood Blockbuster store. How on Earth did Roy Price turn this modest digital store into a rocket ship to Emmy and Oscar acclaim?
 
It helps that he is Hollywood royalty. Price’s mom, Katherine Crawford, was an actress who appeared on the 1970s Seattle-set show Here Come the Brides. His dad, Frank Price, ran Columbia and Universal studios, and his namesake maternal grandpa, Roy Huggins, created and produced breakthrough TV shows like The Fugitive, The Rockford Files and Maverick
 
Perpetually clad in jeans and a black leather jacket, Price can swim with Hollywood sharks, speak their upbeat lingo and still talk digital business jargon with the nerdiest of nerds. His parents tried to steer him away from too much show biz, but after graduating from exclusive East Coast schools (Phillips Academy Andover and Harvard University), he went to USC’s Gould School of Law, worked as an assistant for an agent who grew up to run Hollywood’s top talent agency, CAA, and went into the family business.
 
He is irreverent, puckish and infinitely bolder than most Hollywood execs, who live in fear of making a mistake and getting fired. Price takes entertainment seriously — he actually rewrote the story of Bosch, Amazon’s adaptation of the Michael Connelly crime novels, but he isn’t self-important. The Disney film The Barefoot Executive, about a chimpanzee that’s adept at picking TV hits, is one of his favorites.
 
“That is an awesome, awesome movie,” says Price, who loves monkeying with Hollywood tradition. “You’re not going to find the most interesting new show on TV by being easily put off by risk. You have to be sort of bold. In today’s competitive environment, the conservative path is the riskiest path.” 
 
Price doesn’t seem to need a chimp to pick hits. Like his forebears, he is a maverick with an analytical streak. His grandpa’s show, The Fugitive, which became a $387 million movie, broke all the rules of its day. “Every network passed on The Fugitive at least once,” he says. “You couldn’t have a guy wanted for murder as your protagonist! The whole concept was offensive! But it was a huge hit, and the offbeat protagonist has become very popular.” 
 
Offbeat protagonists are the foundation of Price’s empire: trans dads, madcap maestros, Nazis running half of America in Philip K. Dick’s The Man in the High Castle, and a Vietnam-era writer who sells out his talent in Woody Allen’s Crisis in Six Scenes. As with The Fugitive, he notes, “Every studio passed on Transparent.”  
 
Price also doesn’t fret about industry headlines, which note that shows by Netflix, FX, HBO and Hulu often get more viewers than Amazon. Though he’s in competition with traditional studios for viewers in theaters, on TV and on devices, he’s in a different position because Amazon’s business model is unique. He needs to grow viewership, but he doesn’t make money from ads whose prices are based on viewership ratings, which (natch!) Amazon won’t disclose.
 
Instead, he must grow membership in Amazon Prime, a service that costs Amazon customers $99 a year (or $10.99 a month), for which they get free two-day shipping on products purchased through Amazon and streaming of all the Amazon shows they can watch. Analysts say Price drove much of Amazon’s 53 percent growth in Prime membership in 2015 to an estimated 54 million (it’s now over 60 million). Prime members effectively subsidize all the shows Price is busy creating, whether or not they watch anything.
 
“Their strong belief is the more time you spend in the Amazon ecosystem, the more money you spend with Amazon,” media analyst Richard Greenfield told The Los Angeles Times last year. “The key for Amazon is how do they get you to spend more time in that ecosystem — and it’s with having a deep catalog of movies, TV and music.”
 
Much more important than ratings, then, is converting casual customers into Amazon Prime members — who buy three times as much from Amazon as non-Prime customers — and breaking through the noise of the vast landscape of entertainment options.
 
“You’ve got to make it interesting and worthwhile and buzzworthy to stand out in a crowded market,” says Price. “What you’re really looking for is that really ambitious, completely addictive, binge-worthy show that’s in the top 20 or 10 — or one — that people are talking about. In 1977, you could get a lot out of a show that simply retained the audience of a previous show. But today, it’s on demand — they have to demand it. So you’ve got to earn that.”
 
Audience habits are changing at warp speed, something Price and his boss, Bezos, who devotes serious time to Amazon Studios, are obviously factoring into their plans. Most Hollywood programmers live or die by ratings and first-weekend grosses. Bezos and Price play a longer game. Their goal is to retain audiences for years, not weekends, and they have the benefit of the world’s largest database of consumer behavior. 
 
Instead of relying on Nielsen polls of viewers, who can lie about what they watch and are increasingly hard to reach as people ditch their land lines, Amazon and its tech rivals can tell exactly what its customers are watching, and algorithms tell an informative story about particular products they might like. Netflix mined data showing its customers loved the original British House of Cards and Kevin Spacey before shelling out $100 million for the United States version, but Amazon has even more customers and data (just not more streaming customers—yet). These tech game changers are making Hollywood nimbler, less irrationally traditional, more customer-driven. Cable companies give you mostly channels you don’t want; Amazon, ever more cleverly, gives you what you do want. 
 
The key question is whether the ability of Amazon and Netflix to observe individual customer behavior gives them an advantage over broadcasters’ Nielsen survey data, says Michael D. Smith, a Carnegie-Mellon University information tech and marketing expert, “and so far, the answer seems to be ‘yes.’ As Amazon and Netflix emerge as competitors, it will be interesting to see whether Amazon’s ability to observe both retail purchase data and video views gives it an advantage over Netflix’s video-only data — and the jury is still out on that one.”
 
There’s also no telling what else Bezos will take over. But it’s worth remembering that the bestselling bio about him is called The Everything Store and his original name for Amazon was “Relentless.com.”
 
An Oscar could provide an altogether different type of boost in visibility. Guests at December’s Manchester by the Sea Oscar campaign bash say Price and Bezos’s hunger for the gold doll was absolutely palpable. Yet many — maybe most — people have no idea Amazon is in the movie and TV business. So if a $2 million Oscar campaign can catch the eye of 300 Academy voters, it could produce recognition for a movie that might then be watched by one billion people.
 
Even for the famously frugal Bezos, whose Amazon executives fly coach, that kind of return is definitely worth a $2 million investment.