Is launching successful food products on your list of goals?
Well, you’re definitely not alone.
As a matter of fact, there are over 20,000 new food and beverage products launched every year. While that might seem overwhelming, today’s guest, Alan Berkel, will be discussing one of the most important cornerstones that all successful food and beverages companies have in common, operations and effective supply chain management.
On this show with Alan, you’ll learn:
- Why 5 SKUs are better than 1 when it comes to launching a new product
- How KRAVE Jerky went from a few million dollars a year in revenue to being acquired by Hershey
- What the FDA hates to see on your packaging
And much more…
Alex: So how many people are at Sonoma Brands?
At our office there’s eight, we have another six on the Sales and Marketing team. What’s great about a start-up is that we all support each other. I work closely with marketing and help them out, so we all wear many hats around here.
Alex: It’s fun, it’s also stressful having that dynamic where you’re wearing lots of different hats and having a lot of different roles.
It’s stressful but it’s a good stress because it just keeps things different and challenging. You really take ownership in what you doing just because you’re apart of so many aspects of a common goal. So it’s something special for sure, compared to doing one job every day, five days a week, fifty-two weeks a year.
Alex: Have you been in food for your entire career?
Actually, no. I started working in food three years ago when I joined KRAVE Jerky. Before that, I was in operations for consumer electronics which was an OEM audio company and that was specialized in Bluetooth audio devices.
Alex: Is there a lot of correlation between the operations side with consumer electronics and consumer packaged goods with KRAVE?
Not so much, because the lead times are very different. For a project in consumer electronics, at least in the audio stream, lead times were about nine months to plan the product and develop it, but in food (specifically some of the products we’re working on) it’s a lot less, like three months. And then if we want to change a SKU or size, we can get it changed and launched within six weeks.
Alex: What was it that made you gravitate towards the food industry and your current position managing supply chain and the operations side of things?
The opportunity came to me. It was through a colleague. She was working at a company called KRAVE Jerky and they had an operations role that opened up. I met with the founders, and it seemed like a good fit, so I decided to move my career into the consumer packaged goods industry and found myself in the meat world working in jerky.
I like the challenge of trying to learn a whole new industry and understand how the supply chain works where. With consumer electronics that never have an expiration date vs raw ingredients that could spoil within a few months, it’s a lot faster-moving in the food world.
Why Hershey starting craving the taste of Jerky
Alex: How big was KRAVE when you joined the team there?
In 2013, they were just about fifteen million in revenue a year when I joined. We doubled that in 2014. And then at that point, Hershey Chocolate bought us and took over.
Alex: That’s when you know you’re doing something right.
Yeah, it was definitely something special, the creative team behind it.
Alex: So what were some of the biggest factors that caused such a huge increase in revenue year after year?
Jon Sebastiani, the founder of KRAVE, saw a gap in the snack industry – specifically in the jerky market segment, that it was sort of a stagnant product. It was mostly just dried meat you could find at a truck stop or convenience store – really no growth.
He decided to mix up and stir the pot in this segment, focusing on specific target demographics – the female demographic, and active lifestyle for marathon runners, or hikers who’d enjoy an all-natural, healthy snack. He developed a product that’s flavorful, more tender, moist – something that you can eat quickly.
The marketing team and branding team did a phenomenal job with the packaging and aesthetic to drive the excitement behind the main product. I think that was probably the biggest factor of the success of this company was branding and style.
Alex: That sounds really interesting. It’s a novel approach to marketing beef jerky, especially going after a female demographic. I would never think to do that.
Jon Sebastiani was strategic with the sales. He focused on selling to grocery and completely ignored the convenience channel where you typically find jerky. He left that open for later on in the life cycle of KRAVE. Early success was with small Mom and Pop shops, grocery stores and specialty, leaving the convenience channel wide open for when Hershey came in and bought us.
How Long It Takes the Pros to Launch New Products
Alex: With KRAVE and Sonoma Brands, I’m sure it’s probably a similar process. What goes into bringing a product to market – especially a food-related product?
Once we have an idea, there’s a whole process of coming up with flavor profiles, and honestly you want something more than just one flavor so you have a product line. Once we come up with the product and flavors, (typically five to seven flavors) I start working with the R&D team, developing the recipes and sourcing ingredients. Not all ingredients work the same with each other.
I guess I could talk about KRAVE and sourcing meat; each cut of meat had a different fat content and that could change the dynamic of each piece, so you are really working closely with R&D and your suppliers to find the right ingredients for each recipe.
Usually it’s about a two-month process if you’re focused on it. Once you have that recipe, it’s just a matter of finding a place to produce it and making sure the raw materials are on their way, and that it’s the right source so that you can begin production.
timeline of Launching successful food products
That’s typically product development stage of what you actually eat. Then there’s the whole other side to the product life cycle which is packaging and the logistics. That’s a little bit more complicated. Packaging: you have to come up with the artwork, but you can’t do the artwork until you have a completed product in order to get nutritionals and have those placed on a bag before you’re ready to submit artwork to the printer.
You’re juggling a lot of balls at one time: making sure your claims are compliant with regulation, having the right recipe so that you can get nutritional values accurate onto the bag, box or label (whatever you’re making). There are a lot of components to the artwork, and that’s probably where most of the delays are seen. If you get it wrong and it’s denied by the FDA or USDA, in KRAVE’s situation, that adds to your six weeks and you have to push out your launch date even further.
Alex: So the time frame from when an idea comes to mind and it’s proven to be a viable option, to when it’s actually put on the shelves is about two months. What’s the typical time frame to actually get on it the shelf?
For artwork, you need those two months to finalize the recipe. Simultaneously, you’re designing the artwork with your graphics team. Once you have those two in place, you’re ready to go to print. Printing can take between four to eight weeks, depending on where you’re printing. If it’s international, usually it’s eight to ten weeks. If it’s domestic (in the US), I’ve had experiences where it’s been as early as four weeks, but typically around six weeks.
That whole process is two months, or say eight weeks. Production in the food industry can happen in less than a week. In total, I’d say probably five months.
Why five flavor profiles are better than one
Alex: You mentioned usually starting with a minimum five flavors for a profile. Why do you guys do multiple as opposed to going with one flavor that seemed to be the best?
It helps establish a brand. If you just had one flavor, then it’s just a product. It’s really hard to put out that product in a market where consumers have so many different choices. It’s really difficult for a customer to differentiate.
The goal is to have a strong brand, and a strong brand has multiple product lines so that consumers have a variety to choose from.
The goal is to have a strong brand, and a strong brand has multiple product lines @alanberkel Click To Tweet
Alex: There is so much that goes into it – so much I haven’t even thought of. I’ve just now started to wrap my head around it as you’re talking about it.
There’s a lot of moving parts. That’s why I enjoy supply chain – everyday there is a challenge and you just have to get the problem solved quickly and efficiently. That’s one of the reasons I love being in start-ups – you can do that with a small team. You can make decisions a lot quicker than large companies that have processes and approval gates that you have to go through.
Alex: Working as a start-up you can definitely be more swift and agile. There’s a lack of funding at times but there’s definitely pros and cons.
That’s very true. It can be stressful – longer hours as you’re trying to do a lot of work with few people on the team but it’s definitely rewarding and you feel ownership in doing something great.
Alex: There are many challenges, I am sure, with supply chain – managing the short shelf-lives, sourcing and all the different things that go into it. What are some of the more difficult projects, or the most difficult project that you can think of that you’ve had to manage?
Sample packs are probably the most challenging. You have multiple flavors packed into a bag. The consumers love it because they can go with the one product – one SKU – and then they’ll have multiple flavors to choose from. But from a supply chain standpoint, you have to be able to have all the flavors produced at the same time, and then take it to a co-packer, which is like a third party that specializes in putting your product into some type of merchandizing unit.
Whether it’s a display tray, or we have these things called “shippers”, where you would ship the product in this cardboard case and when the case is removed, they’re ready merchandise for the store.
There are some products we’ve sold to big box stores like Costco and Sam’s Club where it’s a 10 count-variety pack. It takes a lot of work, a lot of coordination to get all the pieces to the right place and make sure that the right best-by-dates are stamped on each bag. Usually you have just a couple of weeks to do it in.
Alex: Sounds like a nightmare. Thing is, I love sample packs so I will forever think I’m making someone’s day a little worse by buying those.
Ha, yeah. But then you accomplish it and everyone pats you on the back, and it’s on to the next product. It keeps things interesting and it’s a lot of fun. Obviously it’s a big win for the team if we can make a 600-pound order by the deadline.
Alex: Sounds like you’ve got a couple of products launching with Sonoma tomorrow. What are some of the bigger successes, or most innovative…? What have you been most proud of in your career?
Every day is a new challenge. I am always eager to take on that next opportunity where it pushes me to learn and grow. My career definitely took off when I joined KRAVE, as it was a company that was growing at a tremendous rate. There was a lot of opportunity to be with a great team. The most proud I am is just working with a team that gels well together, and we all have each others’ back and realize we’re all in it together. There’s no room for anyone who doesn’t want to be there.
I just love being part of a team, and being in a team with that mentality that no matter how hard it is, we are all there for each other to make it happen and all growing together. That’s probably the most fun and proud moments I’ve had is that aspect of start-up world.
Every product, every project that we execute on time is great – a reason to celebrate, but nothing in particular as far as of big projects. Every day is a win.
There’s always successes and obviously there’s failures which we’ve had – missed timeline for customers, we’ve had quality issues on other projects and products. Those are the hard times. Those were stressful but, going back to the team, if you have a strong team, it helps solve problems. That’s where it all works and makes sense and makes it worth going to your job each day.
Alex: I totally relate to that, especially in the start-up world where you’ve got a small team. The lows are low, but the highs are really high. It makes it all worthwhile when you come together and achieve or accomplish something. Even if it’s as simple hitting a deadline, it feels good and it’s something not be taken for granted, especially in the start-up that doesn’t have these regimented systems and processes in place to ensure that it gets done.
Right. It always has to be a team effort, and there is not one person that makes it happen – it’s the group. That’s where I think the most rewarding is – that you’re doing this together with other people.
Alex: Out of curiosity, do you have any personal productivity hacks that you use on a daily or weekly basis?
I minimize meetings. I don’t like meetings, pretty much …
Alex: … and podcasts – hate those.
Ha, podcasts are okay, but conference calls, meetings – to me they waste time. I think it’s important to have at least one a week to make sure everybody is in the same room together. We talk but mostly all my communication with my team is done in-person.
We go for a walk, we talk through projects, processes. I really try to spend a lot of face time with my team so that I have a clear idea of what’s happening on all channels of the supply chain.
As far as emails go, I have my routine. In the early morning I grab a coffee and sit down for an hour and a half to two hours and answer emails. Any time after that is dedicated to my team and making decisions as a group.
Alex: Are you able to close off on the emails that are unanswered and then check your emails throughout the day?
I just prioritize. Some emails that need to be get answered will get answered. Some emails don’t have to be answered because things will change within 24 hours. Prioritizing emails is good but working daily with the team and making decisions during the day is what helps things move along quicker and more efficient.
Alex: That’s one of the things, the tyranny of the urgent, that’s a matter of self-control; of knowing that you don’t HAVE to answer those emails is probably one of the biggest things for everyone these days.
I’ve had so many instances where I have an email come through that you already answered and then something else pops up and completely changes the conversation. I would have just given incorrect or obsolete data if I had answered that email right away. I’m not in a rush to answer all my emails every morning, I just try to answer the most important ones and I wait for the other ones until the right time.
Alex: Last question – do you have a book or a couple of books that you’ve read throughout your life that have influenced the direction of your career, or just the way that you think in general?
One that I have read a couple of times is “Good to Great” by Jim Collins. It talks about a good, strong leader and what differentiates a good leader from great leaders of companies in the business world.
Another book that I’ve really like is “Delivering Happiness” by Tony Shay. It was a very inspiring book and really easy to read. It just talks about his story of how he got to where he is. It’s definitely a quick read but inspiring at the same time.
Alex: Awesome. Thanks so much for your time Alan. I really appreciate it the super interesting insight into something that most people really don’t even think about. There’s so much that goes into every single product that you see out on the shelves. No one gives two thoughts when they buy that sampler pack.
It could be just a bag from the shelf, but there’s a whole team. That product comes from all over the world, so there’s a large supply chain behind each product.
Alex: You killed it with KRAVE to the point of them being acquired, and now I’m sure you’re doing the same thing with Sonoma. So, I’ll be excited to see what you guys here over the next couple of days.
Thanks Alex. I appreciate it.