Taking Crofter’s Organic to the next level

PARRY SOUND, ONT. — Crofter’s Organic is known for its organic and low-sugar fruit spreads, jams and jellies. The company was founded in 1989 by Gabi and Gerhard Latka in Parry Sound, and they have consistently grown the company’s position in spreads category.

Fast-forward 36 years, and Crofter’s is a large supplier of organic jams, jellies and fruit spreads in North America. The Latka family is still involved, and the company still manufactures its products in Ontario, but now at an expanded production facility that was completed in 2018.

The company has seen plenty of changes since its founding, including bringing on investment partners. The Chicago-based Frontenac private equity (PE) firm recapitalized Crofter’s five years ago and helped expand the brand’s positioning, upgrade its systems and enhance its innovation and product development processes.

Frontenac has sold its interest in Crofter’s to Power Sustainable Lios, a PE firm based in Toronto that focuses on mid-market agri-food investments. Joining as co-investors were BMO Capital Partners of Toronto, Farm Credit Canada of Regina, Sask., and the Latka family. Terms were not disclosed.

During Frontenac’s involvement, Crofter’s named Tim Jax as chief executive officer in January 2024. Jax had been vice president of marketing and innovation at Pretzels, Inc., and held management positions at Conagra Brands and TreeHouse Foods before joining Pretzels, Inc.

Jonathan Belair, founder and managing parter of Power Sustainable Lios (and now a Crofter’s board member), told Food Business News his company identified Crofter’s as an attractive acquisition target for several reasons.

“They are branded and private label with a strong presence and a great team and offer innovation in a category that’s under-innovated, if you will,” he said.

Belair said other potential investors also were evaluating Crofter’s, and that Power Sustainable Lios was “really pleased” to be able to partner with the business.

“The (Crofter’s) management team is fantastic,” he said. “We’re really blessed and feel that it’s one more investment in what’s going to be a very busy situation in the next few years.”

Crofter’s currently produces a line of fruit spreads positioned as premium and sweetened with cane sugar. Another line, called “Just Fruit,” is sweetened with organic apple juice concentrate. The company also makes two flavors of organic fruit spread available in squeezable pouches.

From its beginning, Crofter’s Organic has tapped into several ongoing consumer trends, including organic, fewer ingredients, less sugar and sustainable production.

| Photo: Crofter’s Organic

The new investment is expected to expand the company’s capacity, enhance its marketing efforts and innovate for both its branded products and private label customers. Belair said those are all part of the strategic initiatives the company will be working on for the next 12 months in its operating plan.

That plan is “deeply committed to private label and accelerating the brand,” he said, adding that discussions around production capacity will address whether investment is needed in continuing automation or new sites.

“With great demand and capacity, are we investing in people from the top of the house to the women and men actually producing the product in Parry Sound?” he said.

From the beginning, Crofter’s has tapped into several ongoing consumer trends: organic, fewer ingredients, less sugar and sustainable production. Its products are also made in Canada, which could be an additional draw for some shoppers. Belair said those elements will continue to be emphasized on product labels.

“All those factors are attributes that the company promotes,” he said. “If you look at the current packaging and labeling, there is clear messaging.”

Additionally, given Crofter’s fruit-forward jams, jellies and fruit spreads, he said it’s important that sugar is not the top ingredient.

“The product is very strong; it speaks very loudly in the category,” Belair said, adding, “Our investment is not about changing the value proposition but rather accelerating what they’re currently doing.”