Jon Thomsen spent about eight years in Latin America, where he worked with the Peace Corps and for New York-based Solomon Brothers investment bankers
Turning cookies into dough
Lite Harvest's owners pick Clackamas as home to their growing low-carb cookie company
01/22/04
JIM KADERA
CLACKAMAS -- When Jon Thomsen and Mike Martin traveled to San Francisco last week, they had a bet between them on whether they could give away 6,000 cookies in three days.
Outgrowing two smaller sites in Portland, the business partners recently moved their Lite Harvest Foods to bigger quarters in the Clackamas industrial area.
Their Low Carb Enhancements cookies were to be tasted this week by gourmet food buyers from around the world at the Fancy Food Show in San Francisco.
"If it looks like we'll run out, we'll have more FedXed to the show," Thomsen said.
It wouldn't be the first time they have improvised since starting Lite Harvest, a low-carb cookie company, in late 2002. At times last year they had to limit purchases until getting more production space.
They worked with a real estate broker to find industrial sites for rent in the Portland area. After they made a preliminary commitment to lease a unit in a business park on Southeast 98th Avenue, they went to the Clackamas County business development staff for help to get county permits quickly.
To attract companies, members of the county development staff attend trade shows and communicate often with real estate brokers representing firms seeking new sites.
"Specialty food products have a significant presence in Clackamas. They are a target industrial cluster that we go after," said Greg Jenks, county business development coordinator.
Food processors are attracted to the Clackamas area because of its freeway access, favorable leasing and other business costs, and a skilled work force, Jenks said. Most of the area is zoned for industrial use.
Besides Pacific Seafoods, Interstate Meat Distributors and other food processors, Fred Meyer and Safeway distribute food to their Oregon stores from warehouses in Clackamas. Safeway last year opened a new $15 million frozen foods building, and will add another $15 million in improvements to its distribution complex in the next few years.
Martin said they moved the Lite Harvest bakery to Clackamas to be closer to some of their buyers.
Super Target stores and General Nutrition Centers are their biggest national buyers. The cookies are sold by a few independent retailers in the Portland area including Bob's Red Mill in Milwaukie.
They hope to become a supplier to Fred Meyer.
For now, Lite Harvest has two competitors in the United States making similar products, Thomsen said. "We know the big companies like Nabisco and Keebler will begin making low-carb cookies, too," he said. "But we feel we will do well by supplying a gourmet product and good service."
From business school to baking Thomsen, 33, and Martin, 35, took a long route to reach the food processing industry after earning master's degrees in business administration from Northwestern University in Illinois.
Thomsen, a Canby High School graduate, spent about eight years in Latin America, where he worked with the Peace Corps and for New York-based Solomon Brothers investment bankers.
"It wasn't what I wanted to do," he said. "I went to business school to work for myself. So I left in late 2000 to look for a little business to buy.
"I looked at a hundred different things. I went to a natural foods show in Anaheim in March 2002 and saw the low-carb thing. And I saw a lot of little disorganized companies."
Believing he had the business savvy to run a low-carb company, Thomsen asked an Oregon banker to help him find a small business to buy. Thomsen settled on an insolvent Portland cookie firm.
A woman had started the business baking the cookies in her home oven, but she lacked the know-how to grow the business.
Thomsen recruited Martin, who also had worked in Latin America, as his partner in the business, which was renamed Lite Harvest.
Thomsen, the chief executive officer, handles the marketing and sales, while Martin, the president, manages the cookie production.
A key decision, Thomsen said, was changing the recipes. "We substituted butter for trans-fat margarine and began using real chocolate and flours high in protein and low in carbohydrate" he said. "Our material costs increased, but you can charge more for low-carb foods."
The suggested retail price for a box of six, 1-ounce, individually wrapped cookies -- they offer eight varieties -- is $4.99, but some retailers charge more, Thomsen said.
He said the company had an independent nutrition laboratory verify the carbohydrate content of its cookies. Each cookie has 2 grams net carbs. Net carb is reached by subtracting sugar alcohols and fiber that don't affect blood-sugar levels, Thomsen said.
They started the business with three employees in 900 square feet rented in Southeast Portland, making 400 to 900 cookies a day. Now in 12,500 square feet, they and 17 employees bake tens of thousands of cookies daily, Monday through Friday.
If sales increase enough, a second shift could be added, boosting jobs further, Thomsen said. That's possible because the interest in low-carb food is a trend rather than a fad, he said.
Their new bakery is equipped to make up to 8 million cookies a year, he said. Production could be expanded there to make up to 40 million annually.
The partners are working long hours to grow the business. "There are a lot of challenges every day," Martin said, "but it's a very rewarding experience."
"I knew nothing about the food business," Thomsen said. "It's been a challenge to figure it out. We work seven days a week, and I've never had so much fun."
Jim Kadera: 503-294-5919; jimkadera@news.oregonian.com
