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Thelma’s is outgrowing the startup title

Increasing production by 20,000 is a lot easier for Thelma’s owner Dereck Lewis than increasing production by two million.

But that’s the way the cookie crumbles.

What started as a mom and her son selling cookies and ice cream sandwiches at the Des Moines Farmers Market has evolved into an operation with a 17,000 square foot office and production building with ten different flavors.

“Every time you become a click bigger, you need more on hand,” Lewis explains. “More inventory, all that stuff and then warehouse space for trucks and equipment. And now we will need offices, we’ve never needed those before.”

But Thelma’s has never been this big before.

Assembled cookies rest before being wrapped and frozen.

Growing pains

Lewis and his mother came up with the idea of putting ice cream between their cookies during 2010 after starting a warm cookie delivery franchise in Minnesota. Lewis had a friend with an ice cream machine and put ice cream between cookies.

“Then we started making my grandma Thelma’s snickerdoodles with ice cream,” Lewis says.

In 2012 Thelma’s launched at the Des Moines Farmers Market.

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The cookies and sandwiches were assembled all across central Iowa, from a shared kitchen by Buzzard Billy’s restaurant across from Wells Fargo Arena to the shops at Roosevelt on 42nd Street and the BrickStreet Market in Bondurant.

They are now comfortably assembled in a 17,000 square foot building on the east side of Des Moines, where they moved in 2016.

“Scaling up production while keeping the product quality the same is really tricky,” Lewis said. “That’s really hard, because when you make bigger batches of things it’s hard to make them seem like they are from your house.”

Lewis says as the batches become bigger, they must be assembled more efficiently.

“And your processes when you are low volume can be inefficient because it doesn’t really matter, but now we have to constantly edit our processes to make sure it’s efficient.”

But what makes Thelma’s unique hasn’t been lost.

“We fill by hand, we are touching all the cookies a bunch of times,” Lewis says laughing. unnamed (9)

Becoming part of the 80 percent

Lewis says in the grocery business 80 percent of what a shopper puts in their cart they do every week.

But getting into that club takes time.

Thelma’s first wholesale seller was the Gateway Market in downtown Des Moines and then the Hy-Vee in Urbandale in 2013.

Dan Van Gundy, is the frozen food manager of the store and said the variety of ice sandwiches Thelma’s offers is what makes them different from other sandwiches.

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Thelma’s has prime location in the frozen food section at the Urbandale Hy-Vee.

Lewis said an entire display of sandwiches immediately sold out.

“That’s where we learned the most as far as how much we could scale up,” Lewis said. “So then I figured with one Hy-Vee doing well, there’s so many Hy-Vees and that’s exactly what we did.”

Thelma’s is now sold in eight states and 520 retailers.

“We want to be a popular regional item,” Lewis says. “So that means expanding in those states. And then maybe expanding out offerings into other things.”

Lewis said he’s exploring potential fundraising opportunities where Thelma’s can serve as a sponsor for little league teams or youth programs.

“I think it’s a unique offering and a way to reach small communities that maybe can’t get our product,” Lewis said. “It’s a great way to support those communities and  build our brand going into 2018.”

Thelma's is outgrowing the startup title | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at
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