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Case Study: From Farmers' Market to Whole Foods

The founder of Justin's explains how his company shook up the nut butter category.
Packets of Justin's nut butter.
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In 2003, Justin Gold began peddling his homemade organic nut butters at a farmers' market in Boulder, Colorado. With just $25,000 in seed money raised from family members, Gold planned to build a strong local following for his company, Justin's, and expand slowly. In 2004, he persuaded a local Whole Foods to stock his product.

Today, Justin's line of organic nut butters, organic chocolate peanut butter cups, and all-natural candy bars is available in more than 15,000 national retail stores, including Whole Foods, Target, and Starbucks.

The 20-employee business generated $20 million in sales last year. That represented three-year growth of 614 percent, enough to place Justin's at No. 594 on the 2012 Inc. 5000. "We're a 10-year overnight success," says Gold, who is now eyeing convenience and drug stores. Here, he offers tips for getting onto store shelves, then into shopping carts.

1. Man the front lines. "When you first get into Whole Foods, you pinch yourself," Gold says. "You might think all the hard work is done. But most products fail." To boost his chances of success, Gold started by selling just three products: 16-ounce jars of cinnamon peanut butter, honey peanut butter, and honey almond butter--for $5 to $10 a pop in a Boulder store.

He delivered the jars, stocked the shelves, and manned the sample table, where he got valuable feedback from shoppers. "It gave me time to work out my flavors and my message," he says.

2. Start local; Thnk National. In the beginning, Gold focused his expansion efforts primarily on local health-food stores and specialty shops. But he also met with national retailers at trade shows and in their offices to make his pitch.

"They told me the same story: 'Come back next year and we'll see how your sales improve,' " Gold says. "But I wanted them to know who I was." The strategy paid off: By 2008, Justin's nut butters were available in Whole Foods stores around the country. The next year, they launched in Wegmans, Safeway, and Kroger stores.

3. Build grass-roots loyalty. In lieu of traditional advertising, Justin's sends free products to brand ambassadors and encourages them to spread the word. Some ambassadors are fans who have contacted the company via email or Facebook.

Justin's has also recruited influential fitness and nutrition experts, such as Dave Ellis, a sports dietitian who stocks the training facilities of many professional sports teams with Justin's squeeze packs. Unsolicited plugs from celebrity fans, including actress Eva Mendes, have also added some extra honey.

4. Shake up your category. A big factor in Justin's success has been its individual squeeze packs, which are geared toward campers, dieters, and brown baggers. Gold, an avid backpacker, drew inspiration for the product from the high-energy gel packs sold at outdoor-gear stores.

Justin's 1.15-ounce nut-butter packs, which retail for 50 cents to $1 each, have helped boost profit margins and set Justin's apart from rival brands. "We breathed life into a stale category," Gold says. "If I was just making nut butter, I wouldn't be here today."

 

 

IMAGE: TriathleteFood/Flickr
From the July/August 2013 issue of Inc. magazine




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