InfraReady Products occupies a modest grey building in Saskatoon’s industrial area, across the street from Maple Leaf Foods. Inside is a business that produces over 250 food products for companies from around the world.
On a late August day, a delegation of Mexican business people has stopped at InfraReady for lunch. The menu features food InfraReady has a hand in producing, featuring burgers with a pulse extender and black bean brownies baked by Monica Deschner, who runs InfraReady’s lab.
Saskatoon entrepreneur George Barreras has a machine dispensing the hot oatmeal drink his company, Oat Deal, is trying to launch in the Canadian and Chinese markets. (Barreras rents space from InfraReady.) The Mexican delegates dig into the lunch, and seem especially impressed by the brownies.
Later in the afternoon, Mark Pickard, founder and president of InfraReady, takes me on a tour of the maze-like building. Behind the reception desk is a door to the lab where Deschner and her colleagues are checking samples for quality and food safety traits, complete with thorough paperwork. If it weren’t for the hand sieves and grain samples, it would look a lot like any other office space.
Pickard explains the company hires university-educated employees with a food science background for the lab. He wants a strong technical core in the lab, with staff who can spot food safety risks and ensure customers are getting the product attributes they want.
The food processing equipment lies beyond the labs. This is where the infrared machine works its magic. The machine itself — an off-white, hopper-fed contraption — doesn’t stand out to the untrained eye, but it represents much of what differentiates InfraReady from competitors.
The infrared system works a little like a microwave, emitting waves to heat water molecules within the food ingredients. This pre-cooks the grains and pulses without destroying the nutrients. It also drops the microbial count, extends shelf life, and improves digestibility and flavour.
InfraReady uses the process on a wide range of crops, from pulses to wheat to quinoa, producing ingredients that end up in tortillas, flour, snack bars, cereals, crackers, soup mix, meat extenders, and just about any other food you can think of. InfraReady counts Nestlé among its clients. It also produces soup mix on a philanthropic basis for the Friendship Inn, a local community centre that runs a soup kitchen.
Back in the early ’90s, Pickard was working for the Saskatchewan Wheat Pool. He looked at infrared technology, and he saw an opportunity. Using his food science and business background, he wrote a business plan and presented it to Milt Fair, CEO of the Wheat Pool. Fair was a chartered accountant, and Pickard was ready for questions on numbers.
But Fair only had one question: Who’s going to run it?
Pickard said he would.
With that assurance, the Saskatchewan Wheat Pool provided the capital to incubate InfraReady Products. It wasn’t that Pickard had written an excellent business plan, he now says. It was because he was willing to invest his social capital, i.e. his career, in the venture. Every investment ends up being an investment in people, he says.
In 1994 InfraReady launched with three employees, no products and no customers. But they did have a business model so Pickard and his colleagues went to work, and succeeded with products for the baking industry.
But by the late ’90s the Sask Wheat Pool was shifting to a publicly traded model. The Pool had several small companies, and started evaluating what they should keep and what they should sell. The consultants’ conclusion on InfraReady was that it was “too small to make a rounding error difference,” says Pickard.
Pickard was given the option to buy the company. He could see a bright future for InfraReady, so he convinced venture capitalists to invest, along with a supplier, Bill Hetland. InfraReady gave Hetland a chance to integrate his seed farm and seed cleaning operation into the food processing supply chain, Pickard explains.
By 2003, the venture capital money was costing about 18 per cent per year. “It was like having a credit card balance you could never get rid of.”
So Pickard looked to his supply chain. He had a business relationship with Ken Davis, who was based in Singapore. Davis became “the third amigo,” and InfraReady used his investment to redeem the venture capitalists. Davis has exclusive rights to InfraReady’s products in southeast Asia, also bringing insight into those markets, along with a sales force and offices in several cities.
In fact, with Hetland, Pickard, and Davis, InfraReady has partners from supply through distribution.
And although the three of them don’t meet often, when they do, it’s productive.
The value-creation index
During InfraReady’s early days, Pickard had to do everything from learn how the production equipment worked to research and development.
“Even though you’re a small company, you have to have the functionality of a large one in a lot of ways to get that credibility,” he says.
So as the company grew, Pickard’s management style had to change. The people working at InfraReady were better at their jobs than he would be, he explains, and they carried the company forward.
“I think that’s when I learned not to be a micromanager,” he says. It’s about being selective in how you participate.
Since Pickard now has people to whom he can delegate, he invests more time working on the business rather than in the business. “I think that’s my role,” he says. “Nobody else in the company can really do that.”
Evaluating success means looking at factors beyond the bottom line, such as employee retention and customer longevity. Pickard also tracks key performance indicators showing how the company is doing against the plan. One he particularly follows is the value creation index, measuring value created relative to the labour.
Pickard has also become the corporate memory. He remembers stories such as how they hung in at a trade show until the last hour. A customer came, and that visit led to $1 million in new business. Or the competitor who was getting out of the business. He gave InfraReady his customer list because InfraReady’s people were friendly to competitors, Pickard says.
He looks back at one of his mentors, a man who was “quietly confident,” and thinks that’s what InfraReady has become. InfraReady’s people don’t need to make a bunch of noise, says Pickard. They know what they need to do, so they focus on executing it.
The right people
For a business owner to spend more time on the business, he needs employees he knows can handle the day-to-day, which raises a big question. Even if you can find and recruit those people, how do you hang on to them?
Pickard thinks about bosses he’s had, and others he’s observed. Good or not, he’s learned something from them. He also thinks about what good people look for. “They want some control in their work. They want to be the masters of their work.”
InfraReady needs employees with a range of abilities. On the food processing floor, two men handle the heavy bags filled with product, a job that takes strength and stamina.
The administrative assistant is the front-facing person not only for InfraReady but for Western Malt Distributors, another company Pickard has his hand in. Western Malt distributes malt by the bag to home-based brewers and companies as large as Great Western.
InfraReady also used to have a marketing manager and business development managers. But the company hasn’t had a business development manager since 2009. Over time, Pickard concluded that they made sales because of the whole organization’s teamwork.
Customers’ initial concerns are around technical aspects and product attributes. Once those concerns are met, customers look at business aspects such as pricing, lead times, and customer service.
“And so we found by having customer service and production planning together in one individual, when a customer contacts him, he can tell them where the order’s placed, when it’s going to be produced, and when it’s going to be shipped,” says Pickard.
These days, Pickard tends to recruit technical people and teach them marketing rather than the other way around.
It’s not just InfraReady employees that Pickard relies on. The depth and breadth of relationships with allies are key factors in any company’s success, he says. InfraReady only has so many people, and they’re trying to do many things.
That means looking at who else can get behind a project and how InfraReady can leverage resources at institutions such as the University of Saskatchewan. Those factors add up to the enabling environment.
“And I would say in Saskatchewan that we have a very good enabling environment.”
In many ways, that enabling environment has grown stronger since he started out, says Pickard.
He credits good provincial policies that support the processing industry. “If other people knew, they’d be coming here.”
Risk versus opportunity
There are some obvious risks to the food processing industry, with food safety among the biggest. But Pickard has encountered other business risks that aren’t so obvious, such as being hit by ransomware during a software upgrade, or having a landlord sell the building InfraReady was leasing at the time.
Opportunity and risk go hand in hand, so how does Pickard decide which risks are worth taking?
It’s about weighing risk and reward, he says, and expecting delayed gratification. If running a business like InfraReady was easy, there’d be one on every corner, he chuckles.
It’s also about mindset. “If you don’t think you can do something, you probably can’t. So if you get on the right side of your thinking, you probably can.”
When evaluating a new opportunity or food trend, Pickard says they look at whether there are recognizable benefits to customers or consumers, and whether InfraReady can create any unique features. For example, microbial content in food is a huge concern for any company making ready-to-eat products. Many food-borne illnesses start with raw products.
Risk is also an opportunity for InfraReady since the company’s technology drops microbial counts. InfraReady also provides a certificate of analysis stating that the ingredient is low in microbes. There’s so much litigation in the food industry that major brands will pay premiums to suppliers who can assure food safety.
Pickard says a sincere commitment to food safety is vital. That means having a strong technical core in the lab, and a management that supports a food safety culture.
Startups should prioritize accreditation for food safety, says Pickard. A company might still send its own auditors, but accreditation gets you in the door.
Still, one of the natural outcomes of being entrepreneurial is feeling sometimes like you’ve bitten off more than you can chew, says Pickard. There are always some nights when you lose sleep worrying.
“That still happens now,” Pickard says. “I don’t think you ever get away from it.”