Behind its North Valley restaurant, El Pinto's salsa factory is humming, churning out jars and jars of the spicy stuff. But El Pinto's twin owners say it's not the jars but new single-serving size plastic tubs that got them a big opportunity with cranberry giant Ocean Spray.
Ocean Spray wanted to make 12 ounce plastic tubs of cranberry salsa and a cranberry relish and turned to El Pinto. "They were having difficulty doing it in their facility so they were looking for somebody that was capable of doing it," said El Pinto owner John Thomas. "They were supposed to buy 200,000 cases per year of this product for at least three years," said Michael Cadigan, El Pinto's attorney. So El Pinto says it sunk around $1 million in costs and a lot of time and effort buying and modifying machines to make the products and develop the recipes themselves.
In April 2012, on the day when El Pinto was supposed to start cranking out Ocean Spray's products, a nasty storm hit and knocked out power to El Pinto's machines.
"It played havoc on our equipment," said El Pinto owner Jim Thomas.
According to a lawsuit filed by El Pinto against Ocean Spray, the cranberry company used that as a reason to back out of the deal claiming El Pinto violated the terms of their contract.
"I think Ocean Spray found another company they wanted to do this project with, and they had to find a way to get rid of El Pinto," Cadigan said. "When they found a way to do it cheaper in Canada, they pulled out."
The lawsuit also accuses Ocean Spray of sharing trade secrets with that new business partner including salsa recipes as well as salsa-making techniques. "What we see is in Canada they're using exactly the same recipe, and we think that they're using much of the same technology," Cadigan said.
Ocean Spray spokesperson Kellyanne Dignan responded to a request for comment with the following emailed statement: "Ocean Spray ended the business relationship after El Pinto failed to meet their contractual obligations. The claims in this lawsuit are factually incorrect and legally flawed. We will vigorously defend ourselves against this lawsuit."
As for El Pinto's owners, they say they'll stick to what they know going forward.
