On the marketing front, though, Coleman kept stumbling. He hired a chief executive, a cousin who he thought might guide the company to a new sales plateau, but the two had trouble working together. A contract with a marketing firm in nearby Boulder helped boost revenues, but the relationship ended in a dispute over stock. Soon Grand Union was cutting back its orders, partly because Coleman could offer little in the way of marketing support. Overall sales remained healthy, in the neighborhood of $20 million a year, thanks to rising beef prices and orders from a few new customers. But profits were scarcer than ever. Mel Coleman needed new capital, new expertise, and above all a new approach to the marketplace.
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The turning point came in 1989. Over a 12-month period, he found all three -- albeit at a price that effectively put his company on the line.
The money came from a consortium of three venture capital firms. The lead investor was InterVen Partners, a $51-million fund with offices in Portland, Ore., and Los Angeles. "Here was a market leader that sort of fit the growing 'green' movement," says InterVen's Wayne Kingsley, explaining his interest in Coleman. "Even though it was flying pretty low, it had designed a supply system that could make it into a major company." Together, the three venture capitalists put up about $2.5 million, with more pledged for the future. In return they got more than 50% of the equity in Coleman Natural Meats, and seats on a newly constituted board of directors.
The expertise was to come from a new CEO, Mack H. Graves, a fast-track food-industry executive, a former vice-president of Armour Food Co. and right-hand man to Frank Perdue, the chicken processor. Graves came on board with a six-figure salary, an eventual 5% ownership interest, and complete authority over the company's operations. He would report to the board but not to Mel.
Part of what made Graves attractive to the board was a 25-page marketing plan he had prepared, one that he himself seemed well equipped to implement. "The company finds itself on the threshold of a . . . potentially explosive growth market," wrote Graves. Coleman Natural Meats could sell not only to health-food stores but to supermarkets in New England; New York City; the Baltimore/Washington, D.C., area; and Denver. Graves wrote of establishing the Coleman brand, of selling prepackaged beef, of marketing high-margin cuts to restaurants. A subsequent business plan showed revenues rising from $23.5 million in fiscal 1990 to more than $100 million in fiscal 1995. Lending credence to the vision of growth was Graves's experience, notably with Perdue Farms. Hadn't Perdue revolutionized the poultry business precisely by producing a prepackaged, branded product?
The marketing effort in just one city might cost as much as $1 million. But never mind: neither the venture capitalists nor Graves was interested in a small company. Neither, by now, was Mel. "I looked at my birth certificate and decided I didn't have time for slow growth," he says.
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By late 1990 Mack Graves had mapped out a three-pronged strategy.
Prong number one was straight out of the Perdue book: advertising, a lot of it, and spare no expense. One of Graves's first moves was to fax a message to Ed McCabe, who, as cofounder of the agency Scali, McCabe, Sloves, was a name to conjure with on Madison Avenue. McCabe had engineered Perdue's ad campaign, meeting Graves in the process; now, having recently joined an agency in Miami, he jumped at the chance to land a new client.
With Graves writing the checks, McCabe set in motion the mechanics of a big-league advertising campaign. Director Fred Schuler, who'd filmed Chevrolet's Heartbeat of America campaign, brought his crew to Saguache for some horseback and barbecue shots. Norman Mershon and Hugh McCracken, composers for Buick and other clients, came up with a few bars of original western music for the background. Meanwhile, the company's logo was being redone by top New York City designer Milton Glaser. Graves wrote a lot of checks. The filming cost $256,000; McCabe's services, $7,500 a month. Glaser charged Coleman $25,000; the composers charged $10,000.
Prong number two: publicity. Plenty of companies court it, even to the point of hiring public relations agencies -- but few, Graves knew, had such a good story to tell. Mel Coleman, the fourth-generation Colorado rancher who talked about protecting America's resources, about humane treatment of animals, about a dozen other topics that Earth Day-conditioned media would sop up. Mel Coleman, the pioneer of natural meat, lobbying for the 1990 Farm Bill amendment that set up strict standards for organic food labeling.
Coleman's agency, Wells Communications Inc., of Denver, cranked out a flurry of press releases, boosting Mel Coleman's already-high profile. Mel himself, folksy and eloquent, turned out to be a publicist's dream. He spoke to industry associations. He made the rounds in Washington, D.C. He went on talk shows. Admiring articles appeared in newspapers and magazines.
Prong number three: an intense sales campaign focusing on one target market. Graves commissioned research studies; he brainstormed with colleagues and advisers. The logical place to begin, they concluded, was Boston. Coleman already had a sizable outlet there in the 64-store Purity supermarket chain. The city was home, the research showed, to a large number of affluent, environment- and health-conscious residents who might be expected to snap up the product. Graves knew supermarket-chain buyers there from his Armour and Perdue days; he figured he'd have no trouble getting into the stores. He and field sales director Mel Coleman Jr. began mapping out their distribution strategy. They planned a training program for store and meat-department managers. They commissioned a video for line employees, explaining what was different about Coleman meats, and they worked up some new point-of-sale materials.
