SAN ANTONIO, TX — From a sweet treat to a savory delight, consumers are finding new ways to snack. However, they are also increasingly seeking clean-label, better-for-you products.
Emerging brands like San Antonio, TX-based Cheddies are stepping up to the plate to fulfill that need, one innovation at a time.
This snack brand’s journey began at the Pergola family dinner table. At this particular meal, Francisco Pergola, CEO, and his brother Tomas, co-founder, listened as their parents, both doctors, shared the challenges their patients faced in finding healthy snacks that would satisfy their cravings.
“At the time, there were protein bars and protein shakes galore, and I think the only savory snacks on the market were Quest Chips and Simply Protein,” Francisco said. “[My parents] said, ‘All our patients want to eat are Cheetos and Doritos. Why isn’t there a slightly better option where they don’t feel like they’re making a compromise but just making healthier eating decisions?’”
That conversation ignited the idea for a new kind of salty snack with a better-for-you focus. With an evergreen entrepreneurial spirit, the Pergola brothers created their own cheese cracker.
Enter Cheddies: a protein-rich cracker with cheddar cheese as its main ingredient. The product is also certified non-GMO, humanely produced and made from regenerative ingredients.
The brothers took advantage of myriad opportunities to develop their company, participating in pitch competitions and accelerator programs such as the Dairy Farmers of America (DFA) CoLAB program in 2018 and SKU Accelerator’s Austin Track 8 in 2020 to gain additional connections, resources and support.
“We want to be the best cheese cracker out there, not just another cheese cracker. To be the best cheese cracker, we have to use the best cheddar cheese.” — Francisco Pergola | CEO | Cheddies
“We applied to the DFA program because Cheddies’ main ingredient is cheese — we pride ourselves on being the only cheese cracker made of cheese,” Francisco said, noting that the brand has the highest percentage of fresh cheese in its product when compared to similar products in the category. “We wanted to get the inside scoop on who’s making cheese, buying cheese, and how it’s being pushed around the country … we wanted to see if there was at least foresight on how we could overcome some costly hurdles.”
The CoLAB experience accomplished exactly that. Participating in the DFA program made all the difference when the Pergolas experienced a cheese shortage during a trial run.
“Our number came up short, and we were empty-handed and freaking out,” Francisco recalled. “We really needed cheese for the following day to finish our trials. It was a pretty do-or-die situation.”
On a time crunch, the brothers reached out to their DFA connections in hopes of securing enough cheese to finish the trial run.
“We called our connections at DFA, and they were like, ‘Don’t worry, we’ve got you guys,’” Francisco said. “When we arrived at the facility at 5 a.m., there was a truck waiting for us in the parking lot with a pallet of exactly the cheese we needed. It was a really cool moment for us.”
An initial round of funding from friends and family enabled the brothers to do a small pilot run in Pennsylvania at a co-manufacturing facility that had a mini cracker line and that didn’t require full batches.
“We were going to do 80-lb. batches, which is still a lot of product, but it was a manageable number to explain to people,” Francisco said. “Come the first PO, we could reproduce this at a larger scale.”
From there, the Pergolas invested in branding and marketing, which included developing a website and social media presence, to get the word out about Cheddies.
As the pair worked to bring their product to market, they hit a pandemic-sized speed bump, which made ingredient acquisition challenging for Cheddies’ core ingredient: cheddar cheese. Due to the time it takes for cheese to age before it can be used — and the inability to stock up on supply as CPG giants bought up the cheese reserves during COVID — the Pergolas found themselves sourcing the ingredient from various suppliers.
“There was a bunch of fresh, two-week-old and one-month-old cheese, but we didn’t need that,” Francisco explained. “It put us in a fragile situation where we were buying a quarter pallet out of Vermont and a quarter pallet out of Wisconsin, and it was unbelievably costly.”
He also noted that the varying cheeses impacted product quality.
In brainstorming ways to prevent another cheese shortage from limiting their operations and maintain consistent quality for Cheddies, the Pergola brothers looked into how they could create their own cheddar cheese.
“It’s not a terribly complicated process by any means, so we got to researching,” Francisco said. “We want to be the best cheese cracker out there, not just another cheese cracker. To be the best cheese cracker, we have to use the best cheddar cheese.”
This story has been adapted from the October | Q4 2023 issue of Commercial Baking. Read the full story in the digital edition here.
