Oct 10, 2024
Success Stories
Justin's: How I Built A Peanut Butter Company And Sold It For $281 Million
Summary
Product Innovation and Market Disruption
Justin Gold disrupted the "sleepy" nut butter category by introducing unique flavors like cinnamon, Sriracha, and chocolate, and launching the first commercial nut butter squeeze pack in 2006.
The company's success stemmed from capitalizing on market opportunities, being in the right place at the right time, and rapidly innovating to meet consumer demands.
Growth and Financial Success
Justin's grew from a kitchen operation to generating over $50 million in annual revenue by 2015, culminating in a $281 million acquisition by Hormel in 2016.
Community and Location Impact
Boulder's supportive entrepreneurial ecosystem played a crucial role in Justin's success, allowing the company to move fast and capitalize on opportunities.
Business Ethics and Acquisition Terms
The acquisition by Hormel included conditions to keep the business in Boulder and retain all employees, demonstrating a commitment to the company's roots and workforce.
Timestamps
00:00 Justin Gold founded an organic nut butter company, Justin's, and made it stand out in the market.
00:32 Justin started a peanut butter company, worked hard, and eventually sold it for $281 million after borrowing $75,000 and making $50 million in sales.
01:28 Justin started making his own nut butter, experimented with flavors, and labeled the jars "Justin's", which led to the origin of his successful company.
02:24 Justin built a successful peanut butter company without a business degree by seeking guidance from natural food companies in Boulder.
02:52 Justin built a successful peanut butter company by testing and selling unique flavors at a thriving farmer's market and local stores.
03:34 Justin built a peanut butter company by creating a community around his product, and it took off when he started packaging it in a convenient, on-the-go format.
04:22 Justin built a successful peanut butter company, expanded product line, and eventually sold it for $281 million to Hormel.
05:18 Justin built a successful peanut butter company in Boulder, which was acquired for $281 million, and he attributes his success to being in the right place at the right time and having a supportive community.
Transcript
00:00 Let's say you wanted to reinvent an everyday item you buy at the grocery store, for example, peanut butter. How would you make your product stand out? Would you change the label? Offer a bunch of eclectic flavors? Maybe you'd just repackage it in a way that people had never seen before. It's crazy to believe that we're talking about peanut butter, right? It's like one of those categories that no one really ever thinks about. Justin Gold is the founder of, you guessed it, Justin's, an organic nut butter company whose products can be found in grocery stores all over the country.
00:32 Over 12 years, Justin went from grinding peanuts in his kitchen to inking a multi-million dollar sale of his company. But it didn't happen without hard work and a lot of luck. Every day I had to show up and do the work. The dream is one thing, and then the reality of all the steps it takes to achieve. That dream is overwhelming. There's three numbers to look out for in Justin's story. $75,000: the amount he borrowed to produce his first nut butter squeeze packs. 50 million: the amount that Justin's was making in sales by 2015. And $281 million: the amount that Justin sold the company for in 2016. Here's how Justin Gold cracked the nut on nut butter. This is Founder Effect. In 2004, Justin was living in Boulder, Colorado. As an avid biker and vegetarian, he needed to find alternate sources of protein.
01:28 One of those sources was nut butter. 20 years ago, there were two types of peanut butter smooth and crunchy. There was one almond butter brand. It didn't taste very good, but when you ate a handful of almonds, it tasted amazing. Unsatisfied with the grocery store selection, Justin opted for a different route. Curiosity got me thinking. Well, if you can grind your own peanuts and make peanut butter, how hard can it be to make your own? Using his food processor, Justin began grinding his own nuts and experimenting with flavors. He used ingredients like cinnamon, bananas, even Sriracha. The problem was, he had hungry roommates. And I was making all these concoctions, and I would put jars all over the kitchen and my roommates would stop and like, would always be eating them all. So I literally wrote "Justin's" on all the jars. And that kind of became the– the origin of the whole company. His nut butters good reviews, at least from his roommates, made Justin think about where he could go from there. The idea popped into my head.
02:24 This could be a great business, but how do you start a business? I don't have a business degree. And so then I asked myself, well, I wonder if there are any natural food companies here in Boulder where I can gain some insights. And that's when, like, that's when someone turned the lights on in the room, basically. It turned out that Justin had plenty of resources for guidance. Boulder is home to many organic and natural food and beverage companies like tea company Celestial Seasonings, Horizon Dairy and Rudi's Organic Bakery.
02:52 There's a lot of camaraderie, there's a lot of high energy, there's a lot of creative thinking and a lot of entrepreneurship. Boulder also has a thriving farmer's market, which became the perfect testing ground for Justin's product. He sold peanut and almond butter not just in their classic flavors, but also with cinnamon, cayenne pepper, chocolate and honey. You get instant feedback on what products are working, what products aren't, you know, based on variety, based on flavor, based on price. The reality of being at the farmer's market and seeing all these other brands that are also trying to get their products elevated to that category in that space was really overwhelming. Justin eventually started selling his peanut butter in local stores, including Boulder's Whole Foods.
03:34 I literally would make it myself. I would deliver it to the back of the door, and then I'd stick around and I'd do a demo and I'd hand out samples and I'd, you know, give samples to the cashiers and people working the front end and the back and, and really built this kind of community at each store I visited. And it was that community that I have a lot of gratitude towards for helping also build the brand. Still, the amount that Justin was selling in stores wasn't enough to offset the cost of production, and he was still waiting tables and working in retail to make ends meet. It wasn't until he started thinking outside of the jar that Justin's really took off. So I'm on a mountain bike ride and I'm eating an energy gel, and I was curious why you couldn't put peanut butter or almond butter in that same type of squeeze pack and have– and have an on-the-go plant based protein experience like an energy bar.
04:22 Justin was able to find an old machine that made squeeze packs. He borrowed $75,000 from one of his roommate's parents to purchase it. In 2006, Justin began distributing his new product. We launched the first commercial nut butter squeeze pack, which really differentiated us in the category and led to other innovations which continued to grow the brand. Justin began getting orders for squeeze packs from chains like Whole Foods and Wegmans, and eventually larger retailers like Target. In 2011, the company expanded its product line, introducing its own chocolate nut butter cups. In 2015, the company that Justin started in his kitchen was bringing in over $50 million a year in revenue. It was around that time that Justin's got an offer of sale from food giant Hormel. The answer at first was no. You know, we weren't ready. Six months, maybe another year went by and they asked again. And at that point I was like, well, let's have a conversation. Let's talk. Justin told Hormel that he would be willing to sell on one condition.
05:18 The business has to stay in Boulder. It's the people that make businesses extraordinary. So no one can lose their job. What blew my mind was– it was really encouraging. Was they were like, that's why we love it, you know? And so to me, it wasn't, you know, Justin's was being sold is that they were buying in to what we were doing here in Boulder in this organization. In 2016, Justin's was acquired by Hormel for $281 million. There was something here that they found special. They reached out to us and said, we have to have this. You never want to build something that you want to sell. You want to build something that somebody wants to buy. Justin eventually left his namesake company in 2021. He says that ultimately, his success comes down to being in the right place at the right time. The one thing that a lot of people, I think misunderstand is how lucky I was, right? And so, yes, I put in a lot of work and yes, I asked a lot of questions and had a lot of coffee and bike rides with people. But there was a small window of opportunity and I was able to disrupt a category that was kind of sleepy at the time. And because this community was here and so supportive, I was able to move fast and– and I just feel a lot of gratitude for that.