By Melissa Repko
The Dallas Morning News
WWR Article Summary (tl;dr) For entrepreneurs, trying to get a product on store shelves has plenty of ups and downs. Between recipes, branding and manufacturing, finding success is no easy task. The following article takes a look at four entrepreneurs who are facing the challenges head on.
The Dallas Morning News
Each week, Texas gourmet grocer Central Market receives hundreds of products, from new energy bars and frozen cinnamon rolls to nut butters. They come from home cooks who think they have a winning recipe, foodies who believe they have spotted the next trend and bakers who have stands at farmers markets.
The flood of packages at Central Market and other major grocers illustrates how food entrepreneurship has gained popularity as customers crave foods with local ties, responsible business practices or interesting origin stories.
But Chris Bostad, Central Market’s director of perishables and non-perishables, said what he and his buyers pick to put on store shelves comes down to one quality: how it tastes. The store uses blind taste tests and asks staff members for reviews.
“It can be a great story, but if the product doesn’t deliver, it doesn’t matter,” he said.
For Texas entrepreneurs, trying to get their product on store shelves has many ups and downs. They must perfect their recipes, pick a unique name and brand, find a manufacturer or commercial kitchen and persuade a store to give them a chance.
The world of food comes with different health, safety and logistical challenges than other kinds of startups, said William Rosenzweig, the dean and executive director of the Culinary Institute of America’s Food Business School near Napa, Calif. Food companies must cope with slim margins, stand out from similar products and scale up without losing their soul, he said. And when they need to increase supply, they typically have to grow produce or raise animals — things that can’t happen overnight.
The growing number of food entrepreneurs inspired the CIA, one of the country’s most well-known culinary schools, to start a program last year to train the next generation of food company founders.
Rosenzweig has first-hand experience in the food industry as founding CEO of the Republic of Tea, which is based in the San Francisco Bay Area. Before he started the tea company, he went to a food show hoping to gather research for his product. He was surprised to discover more than 100 tea brands there. He realized he had to figure out how to give customers a striking tea experience.
Food entrepreneurs rarely strike gold like yogurt company Chobani or flavored water company Vitaminwater, he said, but they can grow steadily by tapping into emerging food trends, such as using all-natural ingredients, offering easy ways to control portions and using sustainable, environmentally-friendly production and packaging.
“It takes 15 years to become an overnight success in food, so you have to be geared up to create long-term value,” he said. “You’re dealing with the ephemeral quality of food. Everybody is an eater, so everybody thinks they’re an expert.”
We spoke to four food entrepreneurs in the Dallas-Fort Worth area about what inspired them to start a company — and what they’ve learned along the way.
Case study #1: When to expand
It all began with a Food Network show and a mixing bowl.
Michael French watched a chef make nuts on an episode of “The Best Thing I Ever Ate,” and French, who works on the side as a private chef, thought to himself, ‘He’s leaving something out.’
French decided to make his own version. He tested recipes in his Carrollton kitchen — mixing nuts with sugar, vanilla, caramel and cayenne pepper. He handed out jars to friends, neighbors and family members for feedback. And after a late night paging through a dictionary, a company and family project was born — Frenchie’s Fabulous Nut Company. For Michael French and his wife, Janie, the nut company has become a time-consuming side project that they hope to scale into a thriving brand and profitable business.
About four years after Michael French made his first batch of nuts, he’s written a large check and handed over his recipe to a Chicago manufacturer. The manufacturer will make 22,800 bags of the nuts in the first run of the product. Then, a distributor will include it in a catalog skimmed by grocery buyers across the country.
The nuts are already sold at local farmer’s markets and in seven Total Wine stores, but this year will be a big one: He plans to quit his job and focus on Frenchie’s Fabulous Nut Company full-time.
The sweet and spicy nuts made the made the top 25 in H-E-B’s Primo Picks Quest for the Texas Best in 2014. For the Frenches, the contest was a turning point.
They were approached by buyers who told them the night before the judging, “No matter what happens tomorrow. We want your product on our shelves.”
“That was validation for us that we couldn’t let this product go,” Michael French said.
The contest got them in the door of San Antonio-based H-E-B, which carried the nuts in some of its stores. It also helped get them into Total Wine. The nuts sell for $18 for a small and $24 for a large.
Finding a manufacturer that could make the nuts in bulk was a challenge. The Frenches couldn’t find a factory that would work with nuts, a potential allergen, and also a wet ingredient like caramel. They eventually found a place in Chicago and went back and forth with trial batches that were shipped overnight.
Working two jobs, raising kids and staying up late making nuts has been “like being shot out of a cannon,” Michael French said. Every member of the family has gotten food handling certifications to help out. Janie French, who works in commercial real estate, handles marketing and billing for the company. And their 16-year-old and 26-year-old sons help with cooking and packaging.
The couple has spent about $40,000 to start the company.
Michael French has continued to experiment in the kitchen. He’s made hatch chile peanuts, dark chocolate-drizzled walnuts and cashews mixed with pork belly.
“People are really excited about new and different things,” he said. “They don’t want Lay’s anymore.”
Case study #2: How to scale
When Callie McDole was growing up in Jackson, Miss., she watched customers come to her family’s restaurant and douse crackers with her dad’s special sauce. Since college, she’s thought about selling bottles of the remoulade and Thousand Island-like sauce to people, even those who hadn’t gotten a taste at her family’s restaurant, the Mayflower Cafe in Jackson.
McDole started working on the sauce when her daughter was growing up. She first had to figure out the ingredient measurements. Her father made the recipe by heart. She made a trial batch at her daughter’s University Park elementary school and made other batches in the kitchen of her Greek Orthodox church.
In 2005 and 2006, she started working with a manufacturer. Then, she faced her next hurdle — figuring out how to make big batches of the sauce and still have it taste like her dad’s.
“It’s hard to duplicate a recipe when my dad and brother make it in five to seven gallon batches, and we make it in 200 gallon batches,” she said.
A fortuitous introduction helped connect McDole and her father’s Southern-inspired dressing, Papou’s Comeback Sauce, to customers. One of her friends introduced her to a man she was dating, Shannon Wynne, the Dallas restaurateur behind The Flying Fish. The seafood restaurant has locations in Texas, Tennessee and Arkansas. Wynne tried the sauce and wanted it to be in his restaurant. Since 2006, the comeback sauce has been served on top of its fish tacos and as a dipping sauce for appetizers like fried calamari, bacon-wrapped poppers and fried pickles. (Her friend, Kimberly, went on to marry Wynne.)
A few months ago, the sauce went onto grocery store shelves at nine Central Market locations. Each bottle sells for about $7.
McDole, who is Greek, named the sauce to honor her father. Her daughter grew up dipping her carrot sticks in the sauce. She called her grandfather, Papou, which means grandpa in Greek.
For McDole, the sauce is not only a tasty condiment. It’s a tribute to her mom and dad. Before her father died, she showed him the label for his sauce. It includes a big picture of him with his name: “Mr. Mike” Kountouris.
Case study #3: Capitalizing on a trend
When Melissa Blue got married, her mother-in-law gave her a Bosch mixer and a prized cookie recipe. At family gatherings, the cookies were fought over and eaten straight out of giant freezer bags. Years later, when Blue made the cookie recipe at her Fort Worth home, she realized the cookie recipe was naturally gluten-free and the perfect treat for her niece, who had an allergy. Then, she had another thought: What if I commercialize the cookies?
She called her childhood friend, Melissa Mehall, who lives in Austin. The two business graduates of University of Texas at Austin and mothers of young children spent about $10,000 on ingredients, nutritional analysis and other expenses to get the company up and running. They found a manufacturer in Fredericksburg and began delivering samples to grocery stores across Texas.
The cookies, called Meli’s Monster Cookies, are pre-baked and stay on freezer shelves. The cookies can be thawed out in five to 10 minutes. They sell for about $6 to $8 and come in three flavors.
The cookies landed in their first freezer aisle about three years ago at the Royal Blue Grocery, a specialty food store in Austin. It’s since made it onto freezer shelves in more than 500 grocery stores, including about 300 Walmarts in nine states, including Texas.
Mehall said she and Blue had to learn the ropes of the food industry. On phone calls with grocery store buyers, they’d google acronyms and food industry lingo. They learned to budget for reclamation and spoilage fees, the price charged by stores for the products damaged during travel or left out of the freezer too long.
Now, Mehall and Blue are focused on expanding the line of treats. A dry mix for the cookies will debut in 2017 and individually-wrapped cookies for packed lunches or grab-and-go may be coming soon, too.
Case study #4: Refreshing a brand
Fort Worth entrepreneur Justin Anderson started his first granola company in high school after breaking a bracket of his braces on the snack. Today, the 29-year-old’s products are sold in more than 5,000 stores — but they have a very different look.
His product used to be called Anderson Trail. Central Market sold the granola in several flavors, such as blueberry and peanut butter. But Anderson decided to rebrand his granola into a healthy indulgence after seeing customer trends and going to trade shows.
At one of the food and beverage shows, Anderson remembers seeing a booth for Zico Coconut Water. He was struck by the packaging, which had a refreshing, beach-inspired illustration. He decided his granola could use a new look.
With the help of the designer behind the coconut water, he gave his granola brand a makeover. He hired Bill Schneider, a former Frito-Lay executive, as CEO. The end result was Woats Oatsnack, a granola snack mixed with dessert-inspired flavors, such as shortbread or cookies and cream.
“It’s a way you can feel like you’re having a treat, but you don’t feel so bad about it,” he said.
The snack is made in New Braunfels and carried by stores, including Walmart, Target, Kroger, Central Market, Sprouts and Fresh Market. Woats sells for about $5.
Rebranding the company came with a hefty price of about $200,000, Anderson said, but he said last year Woats hit $1.2 million in sales. But Anderson has lofty goals. He said he’s shooting for $50 million in annual sales.