The Retail Hustle: Craft food companies face challenges of scale in the fight for shelf space

Seven Sundays recently launched into select Costco stores in the Midwest, and the buckwheat used in the Blueberry Chia Buckwheat Muesli still comes from Whole Grain Milling in Welcome, Minnesota // Photo by Madalyn Rowell

It’s the quintessential American dream: a home cook creates a lovely jam in their kitchen, and doles them out as holiday tokens to friends and family. Next thing you know, a giant food corporation sweeps in, dropping buckets of cash in their laps for the rights to produce said item en masse. 

That may be the dream, but the reality is that there is a long journey between point A and point B, and most don’t make it past G, much less the astronomic payday. But the one thing small craft producers have in common is the determination and drive to overcome the at-times monumental challenges on the path to getting their products onto store shelves.

Seven Sundays

When a career in finance in the Big Apple was no longer holding the spark it once did, Hannah Barnstable and her husband Brady moved back to the Midwest, armed with a plan: to live for every day, and create a product that will help others do the same.

“In finance, I worked with food companies, touring facilities, and I would always think, ‘That’s how we get to a loaf of bread?’” Hannah explained. “It’s very complicated here in the States, it’s all about marketing. We thought there had to be a better way.”

Hannah Barnstable // Photo by Madalyn Rowell

The couple fell in love with muesli during their honeymoon in New Zealand. Back in her New York kitchen, Hannah set out to recreate the simple mix of grains, nuts, seeds, and fruit—similar to granola but without the added processed sugars and oils. “It’s really big outside the United States,” Hannah explained. “The only muesli we had in the States was terrible. You’d pour it into a bowl and get powder.” The couple saw an opportunity to bring the wholesome food to the U.S. market.

Hannah secured a spot in the Midtown Farmers Market and began using the kitchen at Hot Plate, the Minneapolis diner known for its quirky breakfasts, to make her muesli and package it in simple coffee bags topped with tin ties. She rode her bike to farmers markets that first summer, pulling her wares in a small trailer.

Hannah’s electric smile and sunny disposition might suggest that producing and selling an artisan product is easy as pie, but the young company had its share of challenges. “The sourcing was, and is, our biggest challenge,” she said. “We are so particular about ingredients because the flavor depends on quality of products, not processing.”

Once Hannah was confident in her recipe, she chose to outsource the bulk of the work to a co-packer, and enlisted the help of a distributor. “We started growing to a legitimate size pretty quickly, we were in 50 to 100 stores by year two,” she said. “And then there was this one month when we went from 100 to 500 stores. Cereal sales were starting to decline and distributors and retailers were intrigued by what we were doing.”

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Seven Sundays // Photo by Madalyn Rowell

Starting small isn’t as simple as it sounds. “No one wants to drop off a 50-pound bag of oats,” Hannah explained. “Once we got bigger, suppliers were more willing to work with me.” All of her chosen suppliers were able to keep up with her rapidly growing demand, which can often be a challenge. Even the smaller farmers could keep up. The product recently launched into select Costco stores in the Midwest, and the buckwheat used in the Blueberry Chia Buckwheat Muesli still comes from Whole Grain Milling in Welcome, Minnesota, who still do their own milling from organic grains.

“We learned so many lessons in the past five years: what we are good at, how the food world works,” Hannah said. “We hope to become a brand that represents the idea that nature knows best, it can be so simple.”

Buddy’s Nut Butters

Andrew Kincheloe, aka Buddy, of Buddy’s Nut Butters, knew he wanted to be an entrepreneur all along. After college, he set his sights on one of this favorite things, peanut butter, as a way to follow his dreams, and he already had the name. “I’m a mama’s boy,” he admitted. “My mom has always called me Buddy. So when I started playing around with the idea of creating a nut butter company, my mom said, ‘You have to call it Buddy’s.’”

The choice of selling a food product was a no-brainer for the young entrepreneur. “I love, love, love food,” he explained. “My grandmother always emphasized how much of the food she was making came from her own garden. My parents instilled in us the value of short ingredient lists—simple, real foods.”

Buddy’s Nut Butters // Photo via Buddy’s Nut Butters’ Facebook page

Kincheloe began mixing mason jars of honey peanut butter in his apartment kitchen, selling out every weekend at the Minneapolis Farmers Market Annex during the summer of 2012. He was growing fast and he needed a commercial kitchen space, but he ran into challenges with his central product. Crops of peanuts can fluctuate based on the weather, and the product itself was getting a bad rap at the time. “People were clearing their commercial kitchens of peanuts because of allergies,” he said. “But I was confident based on my sales over the summer, and 90 percent of American homes still had peanut butter on their shelves.”

City Food Studio, who were just starting out at the time, welcomed his business peanuts and all. Kincheloe realized his initial hurdles turned out to be great lessons in combating challenges in a tough business. “In the beginning I thought, ‘Why is this so hard already?’ Problems that I may have perceived as big, like a delay in shipment, I now realize it’s a pretty small thing. If I could handle that back then, I can handle this today,” he said.

Heather’s Dirty Goodness, Inc.

“I just made up a rub for lamb,” says Heather Manley, creator of Dirty Goodness. “I gave it to friends and clients. I called it a lamb rub but they were using it on anything but lamb.”

Manley creates the recipes for her spice blends, but she’s enlisted the production help of Wayzata Bay Spice Co. from the very beginning. Since the original order only involved nine stores, Manley delivered products herself, giving her better control over timing and presentation. Another method Manley employed for maintaining control of her business was to place orders with Wayzata Bay only after obtaining orders from her outlets. “I don’t carry a lot of inventory so I am never really too far out of pocket,” she explained.

Every food business involves constant reassessment. Manley found her original packaging was too large and expensive, so she rebranded into smaller glass jars, which dropped the price and allowed Dirty Goodness entry into new outlets.

The full lineup of Heather’s rubs and seasonings // Photo via Heather’s Dirty Goodness, Inc.’s website

Manley knows well the value of relationships with grocers. Her dad suggested she contact Kowalski’s, a grocery chain known for its support of the little guys. “I sat down with Terri Bennis at Kowalski’s and asked her a million and one questions,” Manley said. “She gave me a million and one recommendations.”

“I did everything she said to do, all it takes is action,” Manley emphasized. Kowalski’s put Dirty Goodness in all its stores. Terri Bennis, vice president  of perishable operations at Kowalski’s, is known among up-and-coming food entrepreneurs as a passionate advocate for local producers. Bennis has been with the family-owned grocery chain since 1994, and cites meeting local entrepreneurs as her favorite part of the job. “We really enjoy helping them get their product to market,” she said. “We are the right sized company for small producers to start with, but many that get started here end up growing to regional or national distribution.”

For ardent go-getters seeking to penetrate a challenging market, Bennis has some words of wisdom. “[We look at] what that category currently looks like. For example, everyone makes the best salsa, but that category is really saturated,” she explained. “Sometimes more unique items that have multiple uses are what our customer responds to.” Bennis said her team prefers to look at brands that first tested the waters at a farmers market, garnering a loyal customer base that wants access to the product year round. Legalities, logistics, and liability concerns can also bog newcomers down. “My advice,” she said, “is have a plan.”

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