Watershed Foods to enter popcorn market via new business unit

GRIDLEY, ILL. — Freeze-dried food products and ingredients maker Watershed Foods LLC aims to enter the ready-to-eat popcorn business via partner Aunt Em’s Gourmet Popcorn Inc.

Plans call for Gridley, Ill.-based Watershed to buy Aunt Em’s equipment, expand its production capabilities and then operate the Deer Creek, Ill., company under a newly formed entity called Heartland Food Solutions LLC, said Derek Karr, chief financial officer of Watershed and Heartland.

To that end, Illinois Governor JB Pritzker and the state’s Department of Commerce and Economic Opportunity (DCEO) has granted $1 million in development funding to the Village of Deer Creek to support the expansion of Heartland’s operations, including the employment of 40 workers in the community. The state said the grant will enable Heartland to enter the popcorn manufacturing market by “assisting with the purchase of equipment after acquiring an existing company and keeping much-needed jobs in this small community of less than 700 people.”

“The ready-to-eat popcorn market is growing rapidly as consumers shift toward healthier, better-for-you snacks, and we’re seeing strong demand across both existing and new customers,” Karr said when the grant was announced Dec. 30. “This grant funding allows us to invest in equipment, create new jobs and add new capabilities. This will enable us to reach new customers and support continued growth while growing with Deer Creek and the surrounding communities.”

Karr described Aunt Em’s as a sister company of Watershed, along with Congerville, Ill.-based seed snack maker Top Fox Snacks. He said the opportunity to grow Aunt Em’s arose when its owners indicated they were looking to retire.

“What we’re looking to do is expand in the (village) of Deer Creek, add more employees and expand the (Aunt Em’s) building footprint as well, because there are capacity constraints,” Karr said in an interview. “So acquiring new equipment, hiring more people, probably adding a shift and then just expanding the customer base and adding some new capabilities. We’re looking to do drizzling, for example, or protein popcorn, or being able to do new processes — buying new equipment that doesn’t exist there today (at Aunt Em’s).”

Aunt Em’s was founded in 2002. Its popcorn varieties include kettle, white salted, real cheddar cheese, cheddar ranch cheese, real buttered, buttery caramel, and buttery caramel and cheese, produced for private label customers. The company said its products are certified gluten-free and that organic and GMO-free popcorn also are available.

“The movement from microwave popcorn to ready-to-eat popcorn, whether it’s the SkinnyPops or LesserEvils of the world, is a growing market right now,” Karr said.

No timetable has been set, Karr said, but Watershed — whose offerings include freeze-dried yogurt, freeze-dried fruit, freeze-dried powders and premium food ingredients for healthy snacks — plans to purchase Aunt Em’s equipment and begin the transition process to Heartland Food Solutions in 2026.