Nathan Stern
Director of Operations, Fuel Kitchens
THE CHALLENGE
Fuel Kitchens is a contract manufacturer in Pueblo, Colorado specializing in condiments, beverages, and specialty food products. They're good at what they do - take a brand's recipe, scale it to production, deliver consistent quality.
But they had a problem: they were only capturing half the value they could deliver.
For years, Fuel Kitchens operated as a toll manufacturer - clients shipped raw materials to them, Fuel Kitchens manufactured the finished product. It worked, but it left a massive revenue opportunity untapped.
The gap between what clients wanted and what Fuel Kitchens could deliver was costing them:
Lost deals to larger co-packers - brands chose competitors who offered turnkey services
Smaller contract values - manufacturing-only contracts vs. full-service relationships
Client frustration - emerging brands don't have procurement teams; they need partners who handle it
Limited growth ceiling - toll manufacturing revenue scales linearly with production capacity. Nathan knew the opportunity was huge.
The apprehension was operational:
Cash flow exposure - buying materials upfront before client payment meant significant working capital risk
Cost visibility nightmare - how do you quote turnkey services when ingredient prices fluctuate weekly?
Lead time uncertainty - taking responsibility for procurement meant taking responsibility when suppliers failed
Margin pressure - one pricing mistake could wipe out profit on an entire production run
Data chaos - their systems weren't set up to track supplier relationships, pricing trends, or lead times across dozens of ingredients
THE SOLUTION
Fuel Kitchens deployed Tenkara with one clear goal: make turnkey manufacturing operationally viable and financially attractive.
Data Organization: First step was bringing order to chaos. Tenkara ingested Fuel Kitchens' fragmented supplier data, pricing history, and ingredient specifications, organizing everything into a unified system. Suddenly Nathan could see which ingredients they already sourced, at what costs, from which suppliers.
Cost Intelligence Agent: Began tracking pricing trends across every ingredient Fuel Kitchens used. When a client requested a turnkey quote, Nathan could instantly see current market pricing, recent trends, and seasonal patterns. No more guessing at costs or building in massive safety margins that made quotes uncompetitive.
Supplier Discovery Agent: For each new client recipe, Tenkara automatically identified and vetted qualified suppliers for every ingredient. What used to take Nathan weeks of research and phone calls now happened in days, giving Fuel Kitchens the supplier relationships to confidently quote turnkey services.
Lead Time Tracking Agent: Monitored supplier lead times continuously. When quoting turnkey work, Nathan could commit to realistic production timelines based on actual supplier performance - not optimistic guesses. Clients got certainty; Fuel Kitchens avoided over-promising.
Margin Optimization Agent: Calculated procurement margins automatically based on ingredient costs, handling fees, and working capital costs. Nathan could price turnkey services competitively while ensuring profitability, and adjust margins by ingredient or by client based on volume or relationship.
Credit Terms Agent: Worked in the background to secure extended payment terms with suppliers. Getting 45-60 day terms instead of net-30 meant Fuel Kitchens could often collect from clients before paying suppliers, dramatically reducing cash flow exposure.
STRATEGIC EXECUTION
Turned procurement from a fear into a feature
Built repeatable systems for quoting and delivering turnkey services
Created margin transparency so Nathan knew exactly what to charge
Eliminated the operational heavy lift that kept them from capturing more revenue
THE RESULTS
Since implementing Tenkara, Fuel Kitchens transformed their business model and revenue trajectory:
20%+ revenue growth expected in first year from new turnkey service offerings
2 clients retained who were about to leave for competitors with procurement services
Six Figures in additional contract value from converting toll relationships to turnkey
48-hour turnaround on turnkey quotes - competitive with much larger co-packers
Zero cash flow crises despite taking on procurement risk for first time
A boutique hot sauce brand came to Fuel Kitchens with a growth problem. They'd been managing their own purchasing. The small orders, sourcing problems, and high prices were distractions for them to deal with as an emerging brand.
Pre-Tenkara:
"We'd love to help, but you'll need to ship us the ingredients. We don't do procurement."
Result: Brand went to a larger co-packer offering turnkey services. Fuel Kitchens lost deals routinely.
Post-Tenkara:
"Send us your recipe and target pricing. We'll quote you turnkey by this week.
Tenkara pulled pricing on every ingredient, identified suppliers, calculated margins, and Nathan delivered a competitive quote in 36 hours. The brand signed. Fuel Kitchens captured not just the manufacturing fee but also procurement margin on every ingredient.
Fuel Kitchens' typical toll manufacturing contract:
$150K-$200K annually in production fees.
Same client as a turnkey relationship:
$200K-$280K annually (production + procurement margin).
With Tenkara enabling turnkey services, Fuel Kitchens expects to convert 40% of their toll relationships to turnkey within 18 months - and win new deals they previously couldn't compete for.
Conservative estimate: 20% revenue increase in year one. Nathan thinks it'll be higher.
Nathan and his team went from dreading procurement conversations to actively pitching turnkey services.
Fuel Kitchens is now actively marketing their turnkey capabilities to emerging food brands.
Their pitch is simple:
Tenkara makes that promise deliverable. When a client sends a new recipe, Nathan's team can quote it accurately and quickly. When production starts, they have the supplier relationships and lead time visibility to deliver on time.
The brands that used to go elsewhere? They're coming to Pueblo now.
