By Hanna Neier, Hungry Marketing' s Senior Content Editor
It started with an obsession over beef jerky and a group of college buddies tinkering with recipes. Then came a write-up in New York Magazine and SlantShack Jerky went from a stand at Greenpoint Market to the grocery aisles at Whole Foods. Hungry spoke with David Koretz, CEO, about organic growth, the importance of brand authenticity, and challenges with profitability.
HM: How did SlantShack Jerky begin?
DK: We were a group of friends from college. Josh Kace was a huge jerky fan growing up. A year after we graduated from Columbia University, Josh had some free time and decided to make a better snack for himself. His roommates jumped on board and it became their project. More people started tasting it and more friends jumped on board. By the time we had our initial meetings, there were 10 – 30 people there. The group of co-founders pooled together a small bit of money to get everything started, about $50,000. We used some personal credit cards to give us breathing room on early inventory purchases, though nothing too major.
We were working out of Josh’s shitty old apartment. We called it the slant shack—a ball would actually roll from one side of the apartment to the other. That’s how we got our company name. Selling jerky out of the apartment was technically not legal and definitely not scalable. We looked into what our options were to bring everything to the USDA approved level. We found a family farm in Vermont and launched production from there.
We all had other full-time jobs and were pitching in on the side. I oversaw production, someone else was in charge of ordering materials, another person did the newsletter. We just had this organic desire to create a delicious product that was well made. I eventually left my job to do this full time—Josh and the other original members are now silent partners.
We started selling at the Greenpoint farmer’s market in Brooklyn. We were written up in New York Magazine and things really took off from there.
HM: You’re based in Brooklyn, now. Why here?
DK: We are all New Yorkers, and we want to be seen as a New York brand. Brooklyn is such an inspiring and innovating community to be a part of. It’s sort of an informal incubator environment. As we started to grow the business we were bringing our product to market here. We were part of the first Smorgasburg.
We spent the last year rebranding and preparing the brand for broader growth; we launched new packaging earlier this year. Business operations will continue to be based in Brooklyn. Production is done out of state.
HM: Were there any challenges in scaling the company?
DK: Coming out of the apartment there was a lot of trial and error. None of us had any experience in the food world. We didn’t have a business plan.
A few years in, the Vermont facility we originally partnered with said they weren’t comfortable laying out the capital investment necessary to increase production while retaining the quality consistency we needed. So we had to find a new production partners that could support our goals for scale and long-term growth.
HM: How did you get into Whole Foods?
DK: After the New York Magazine article, Whole Food reached out to us. They were charged with finding new brands to curate, and the head of the meat department in the Northeast region saw a space for jerky innovation.
We talked about what would go into working with Whole Foods. As we were launching our initial production partnership with the family farm in Vermont, it gave us confidence to go ahead. It took 13 months from the initial conversations with Whole Foods to finally landing on shelf. We later secured a loan from the NYBDC/SBA to support sales growth throughout 2013 and 2014.
At first we had two SKUs in the NYC stores. It was really a great performance year. We launched into a second region of Whole Foods in year two and had another great year. After our third region, we had to take a step back to figure out how to scale while still maintaining the quality that our brand is built on.
HM: Do you have plans for further expansion?
DK: We are planning on strategic growth. We’re in a competitive, hot market category that has had some significant acquisitions in the last few months. You can find jerky everywhere now. And organics that are non-GMO are growing at even higher clips.
Our focus is on building a sustainable, efficient business model, not dropping our prices to compete with commodity jerky. If we have slower growth than our competitors, that’s fine, as long as we continue to grow and open new doors.
HM: Are you making much of a profit?
DK: Profit margins are very tight in the food industry, particularly with a handmade, artisan product like ours. Growth beyond the local, artisan model requires significant sales and marketing expenditures (product samples, in-store demos, promotions, etc.). Recent changes to our operations and new packaging launch improved our cost structure, gross margin, and profitability outlook.
We’re in a particularly competitive sector of the food industry, we’ve bootstrapped our growth until this point. With supply chain challenges sorted out, we’ve developed a business strategy we believe in and are considering options to support that strategy, including our first fundraise.
HM: Your business has a strong storyline. How does that play in?
DK: This whole thing was born out of Josh’s passion to make a better snack. People relate to that. It’s why people bake their own brownies instead of buying them. Hearing about a bunch of friends sitting around, making beef jerky, it takes people back to their childhood lemonade stands. Our story is something we always come back to when we meet with buyers or go on social media. It resonates.
The challenge though is how we broadcast that story to a wider audience.
HM: Do you have an exit strategy?
DK: We’re committed to our community and promoting healthy living and better-for-you food production. If we could be acquired by a bigger company that can help us get the message out, then that’s something we would consider.
HM: Any advice to future food entrepreneurs?
DK: Anyone new to the industry is likely to make a lot of mistakes early on and, to be honest, I think you're better off not having much money in the bank as you navigate that trial-and-error stage. It’ll push you to better research and ultimately make you more business savvy. The best route is to jump in and get your hands dirty, land on a few shelves and see how it goes. Then, you can use that early exposure and feedback to drive some fundraising.