Enduring, Evolving, Efficient
Pik-Nik Foods Offers New Snacks to Consumers Worldwide
Since 1939, Pik-Nik Foods has produced quality snack foods for the U.S. and the world. But there was a renaissance when its parent company, Tri Valley Growers, filed for bankruptcy in 2000, and a new team took over Pik-Nik.
Alma Dacanay, now Pik-Nik’s CEO, was the new Pik-Nik’s second employee. “When we first started, we were only starting shoestring potatoes,” Dacanay recalls.
But the company now has expanded to a full line of snack products to supplement their mainstay, offering such new guilty treats as cheese balls and fried onions in addition to numerous flavors of shoestring potatoes. This diversification, Dacanay explains, was a natural progression.
“If we were to only sell shoestring potatoes, we would be limiting ourselves to just one product line, whereas our focus is to try to get as many consumers to like other salty snacks that we would be able to make.”
While Pik-Nik offers high-quality products, Dacanay has no illusions about the company’s small size. “We are in a niche for the salty snack category,” she says, moving in a different circle and therefore offering no competition with snack giant Frito-Lay. Pik-Nik knows it has long enjoyed the patronage of a smaller, select consumer base, and seeks a ‘quality over quantity’ approach. “We focus on the consumers who like to consume our shoestring potatoes, and that’s where we’ve focused our sales effort.”
New tastes, new products
As part of Pik-Nik’s enduring commitment to its loyal consumer base, the company has carefully monitored taste trends as they change and evolve over the years. “Over the last 20 years, we’ve taken out old flavors, and introduced new ones that we feel are more up to date with consumer tastes,” Dacanay remarks. Such close attention to consumer buying trends have greatly enhanced the company’s longevity and continued success.
This drive to introduce new products is enhanced by the company’s broad international market. Pik-Nik’s products may be found not only across the United States but around the world, with many consumers in Asia, Australia and the Middle East. In these regions the company stands by its pledge to cater to customers’ tastes, offering kosher and halal products as well as gluten-free and non-GMO offerings.
Pik-Nik’s large international presence is one of its major strengths. From its location just outside San Francisco, the company can package and export all its international sales from nearby Oakland across the Pacific.
Dacanay points out how, over the past twenty years, Pik-Nik’s international sales have eclipsed domestic. “When we first started, our export sales were about 40 percent of our total sales versus 60 percent domestic. Now, it’s reversed.”
Rather than adding preservatives, Pik-Nik has instead invested in highly durable packaging which gives its products a two-year shelf life. This enhances its ability to export products to faraway places, gaining customers around the world.
And as a result of Pik-Nik’s enduring quality and strong international markets, the company has carved an additional niche. “We are the largest exporter of shoestring potatoes,” Dacanay remarks with some pride. “No other company that can say that they sell more shoestring than us.”
Healthy gets healthier
Although some may wish to file Pik-Nik’s products in the category of ‘junk food’, the company is well aware of the rising demand for healthier snacks. This has led to the company’s latest addition, organic shoestring potatoes. Far from compromising Pik-Nik’s primary product lines, Dacanay relates how this new organic offering furthers the company’s ideals.
“Organic has been an uptrend for all food items, not just snack items, and we felt that offering an organic shoestring potato would increase our sales and cater to customers who want to still indulge in salty snacks, but they want to be healthier than others.”
Happily, the new organic product line offers healthier snacking for Pik-Nik’s consumers at a modest price increase. The higher resources (and thus higher cost) of organic manufacturing are the traditional hurdle, but Dacanay says the premium on Pik-Nik’s organic products should not deter the consumer. “Retail-wise, they’re about 20 to 30 percent more expensive,” she says, “but in terms of the final retail price to the consumer, it’s not that much different.”
Building a lean business
This smaller price increase is reflective of Pik-Nik’s lean business model and low overhead. “Since we’re a very small company, we only have about ten to twelve people on our payroll,” Dacanay notes. The manufacturing process is outsourced to a third-party company, which also manufactures snacks for many other companies, leaving Pik-Nik with a small logistics, marketing, and leadership team.
All employees receive cross-training, to ensure they understand all aspects of the business. “I try to make sure that whoever we hire is up to the challenge and is open to cross-training, because they need to know what else is happening in the company,” Dacanay says.
Through cross-training, the company has created a small but highly effective and efficient workforce, belying Pik-Nik’s size and global reach.
“We’re a small company,” Dacanay says. “A lot of people are amazed that we’re able to operate with such a lean force. And that’s the reason we’re currently still in business.”
This lean and efficient business model, she says, helps the company better focus on its business model of providing salty snacks at affordable prices around the world. “We want to keep as small an overhead as possible, so that we can operate within margins that are acceptable to the owners of the company.”
Focus on the environment
As Pik-Nik begins its twentieth year under the present management, the company’s leadership remains committed not only to larger markets but to more efficient and environmentally-friendly manufacturing processes, too.
Dacanay relates how her colleagues inherited severely antiquated machinery when they purchased the company from Tri-Valley Growers in 2000. “It was about thirty years old already,” she recalls. However, in 2016, Pik-Nik purchased all-new equipment as a solid investment in the company’s future. “We have a brand new line of equipment, and it’s given us more throughput and less waste of raw material.”
In addition to the new and better machinery, Pik-Nik is working to be more environmentally conscious. While the company’s potatoes arrive pre-peeled, the company’s cleaning and manufacturing processes utilize a significant volume of water.
Pik-Nik now recycles all wastewater for the benefit of crop growers, saving water and returning nutrients to the soil. Additionally, the company sources potatoes from California and Oregon, reducing freight costs and lowering the environmental impact from shipping.
Yet while these measures help Pik-Nik remain competitive domestically, the company is facing new challenges both domestically and internationally. In the U.S., according to Dacanay, consumer buying habits are moving away from grocer and supermarket purchases – Pik-Nik’s traditional strength – and shifting to lower-cost convenience stores and small club grocers.
“The domestic market has been a challenge with all grocery items, including our salty snacks,” she says. As consumers’ disposable income has shrunk, she says, convenience stores and dollar stores have filled the gap – leading to smaller profit margins for Pik-Nik.
Further, new chains, such as the German-owned discount supermarket Lidl, offer new competition with traditional U.S. grocers. As an increasing number of grocery chains, such as Whole Foods, Kroger and Publix, introduce delivery options, they are also incentivizing healthier snack options.
But despite these challenges, Dacanay remains optimistic about the future. “Although the economy is improving we foresee that dollar and convenience stores will continue to grow,” she concludes, “but traditional grocers will too if they keep up with the trends.”
Internationally, Pik-Nik is facing grassroots competition. “We’ve seen growth of stick manufacturers outside the USA. They’re not as good as our potato sticks, but some consumers may not be as discerning as others,” Dacanay says. While these global companies are growing, the claim of ‘Made in the U.S.A.’ nevertheless remains highly motivating, even in 2020.
“It says that the product is high-quality, it’s inspected, it’s FDA-regulated, unlike other stick manufacturers out there.”
On with confidence
As Pik-Nik looks to the future, the company remains confident in its evolving product lines such as its new organic shoestrings. With a strong global presence in Asia and the Middle East, the company is also investigating potential markets in Latin and South America.
Despite growing challenges domestically and abroad, Dacanay and her team are confident of their business model. The Pik-Nik brand has endured 80 years serving up satisfying, salty snacks to generations of consumers.
With its new team providing strong leadership, positive consumer responses and a lean company profile, the company is poised for additional growth.