How I Built This with Guy Raz - How I Built Resilience: Justin Gold of Justin's

Episode Date: October 31, 2020

Justin Gold is the founder of Justin's, known for its nut butters and chocolate peanut butter cups. He talks about how he started by pulverizing peanuts in his home blender, and describes how his customers are shopping differently during the pandemic. These conversations are excerpts from our How I Built Resilience series, where Guy talks online with founders and entrepreneurs about how they're navigating these turbulent times.Order the How I Built This book at:https://smarturl.it/HowIBuiltThisSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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the secrets of how to develop an entrepreneurial mindset, how I built this, the book is for you. It's now available wherever books are sold and in most countries around the world, or by visiting how I built this.com or guyraise.com. And thanks. Hey everyone and welcome to How I Built This Resilience Edition. On these episodes, as many of you know, we talk with entrepreneurs and other business leaders about how they're thinking creatively during this very disruptive time. And today we're going to hear from Justin Gold. He's the founder of Justin's, which makes peanut and almond butterers, protein bars, and other nut snacks. And ever since the pandemic started, Justin has noticed a few changes in the way people shop for their comfort food. But first,

he told me a bit about how he got his start. So I'm a vegetarian. And 17 years ago, I started making peanut butter and almond butter in my kitchen with a food processor, mainly because I sound like a fossil, but back then there were two types of peanut butter, right? It was smooth and crunchy, and that was really it. There were a few brands of almond butter. None of them tasted really good. You know, when you ate a handful of almonds, it tasted amazing. So curiosity led me down a path of experimenting. And then with a food processor, I was making all these concoctions, putting them in jars, literally putting them in the fridge and in the cupboards. My roommate started eating them all. I started writing Justin's on the jars, right, to kind of protect it.

And at that point, someone said, hey, this is a really great product. You ever thought about turning it into a business? I didn't know anything about business, but what I didn't know how to do was use a library. So I used CU's business schools library. I didn't go to college. That's Colorado University. Yeah. In Boulder.

I didn't go to school here, but I knew I felt confident using their library. And I wrote a business plan and I got a lot of help from local mentors. advisors and people in the community launched at the farmer's market. And when I launched it, it was just with the jars. And I got them into a few local stores. And I was really struggling. And what got us kind of noticed, I guess you could say, was getting outside the jar and getting into a squeeze pack. And the squeeze pack was really our single point of differentiation. And it allowed consumers not only to travel with portable plant-based protein, but also have it as a trow size to try something new like an almond butter.

Because almond butter was, you know, over $10 a jar. And that's a big ring for someone to try something new. But for a squeeze pack, alleviated that pain, brought them into the franchise. Then we also do chocolates. And it's not because it was a really smart, deliberate business decision. It's because I love peanut butter cups. And no one was making one. Who doesn't?

Those are the things I pick out of my kids' Halloween bags, the peanut butter cups. But just going back on those squeeze packs, for those who don't know what they are. I mean, it's pretty self-explanatory, little sort of squeezy packs of peanut butter, kind of like those energy packs. I use those when I run. They're great. And so that was really the differentiator. It wasn't the jars of peanut because they look different, but that wasn't what got the attention. It was those little squeeze packs?

It was. I thought the jars would be enough because we had a honey and we had cinnamon and a maple and just the flavor differentiation. But it still really wasn't enough to stand out on shelf. And what happened was the squeeze pack, not only. that it create a whole new subcategory of products, but it also made this portable protein kind of nut butter a reality. And it all came because I'm a big mountain biker and I wanted protein. I didn't need more sugar or carbohydrates. And what was really fun is when we first launched the product, people didn't know what to do with it, right? They were like, well, do I put it

on a sandwich with with jelly and then eat it together? No, no, no, put it on an apple, banana. Eat it right out of the pack. And they're like, oh. Really? And then what happened is when other companies started to create their own squeeze packs, it really validated it as a category. It's been really special. But what it's really done has been a trial vehicle for our jars. And that's really helped grow the jars. And during the pandemic, the jar business has been the strongest part of our business because it is that household plant-based protein that is a staple. I read an interview you gave where you described the first kind of three years. I think one of the things you did,

and this is really cool for anybody who's starting a business now, that in the early days you would go to Whole Foods and you would look at all of the glass jars at Whole Foods to find out what brands were being made in glass jars and where they were manufactured or packed. And you contacted a glass jar copacker in the area and begged them to have some time on their line. And I guess you got like overnights and weekends.

And you basically spent three years just packing your own nut butter into glass jars. And that was not sustainable, right? It was not profitable. It was not sustainable. It was just a grind. How did you keep going? What made it, what made you not just give up? A, I had a goal. I knew what numbers I needed to achieve. And I had a plan on what retailers I needed to roll out to to achieve those numbers. And it was the optimism that I had from the local community. Boulder is a great community. They support local. They support natural and organic. They support the entrepreneur. And I also realized that I'm not really a skilled operator.

My passion and skill is outside of the manufacturing. But I knew that I had to hit certain volumes in order to get to a manufacturing facility where then I could focus on other things, sales marketing and growing the brand. And so I really worked really hard knowing that there was a light at the end of the tunnel. In March, when it became clear the pandemic was going to be a serious thing, people rush to the stores to buy toilet paper and energy bars. And I'm assuming nutbutters, too. I'm assuming that you probably saw a spike in sales. Is that right, by the way? We did. We did. Not across the board, but across some parts of our business, yes. Then were you bracing for a decline in revenue? I know that Justin's nutbutters were purchased by Hormel in 2016. So you've got a parent company, but you're still operating independently and you still work there.

Were you guys kind of bracing for a decline in revenue? So the first thing we had to do was make sure that everyone in our organization felt safe, supported, and that they had food and that everyone knew that we weren't going to just shut down our business. So I think giving people this sense of security gave them the optimism to continue to do their job because they knew they were taking care of. And we didn't know what to brace for, to be completely honest. we started to reach out to our retailers to see what they needed. And they told us exactly what they needed, which was more product.

Everything flowed downstream. So then we reached out to our contract manufacturers to make sure that we stayed in supply. And we actually had to make sure that they were taking care of their people. It's like having four holidays back to back to back, this unprecedented demand. And so the first thing we had to do was kind of cut back on the skews that weren't our top sellers. And then our manufacturers went to seven days a week. It's monitoring their progress and monitoring stores and allocating this to stores based on their demanded needs and then pulling resources away from food service and putting them more towards grocery. You know, it's it was wild and it continues to be wild.

And what kind of trends are you are you noticing or seeing in terms of sales and consumption? I mean, are people sort of back to consuming Justin's nut butters in the same way, you know, because people aren't making school lunches for kids as much? but people have more time, for example, to exercise. And also, they're eating at home. So are you noticing any trends that you hadn't seen before? Yeah. And it's fascinating because one of my roles is innovation within our organization. So it's trying to guess and to understand the things that I need in my daily life.

The trends we're noticing are people aren't shopping the stores as much right now, right? You're in and you're out. So a lot of the impulse purchases have been flat, if not declining. So some of our chocolate items that were single serve aren't doing nearly as well as the chocolate items that are in multi-backs. Same goes with our jars are doing really well because it's something you can take home. Our squeeze packs aren't doing as well as the jars because it's more of an on-the-go activity. And I feel like people aren't as on-the-go as they are right now. They're at home and they can take a spoonful almond butter or peanut butter rather than have a squeeze pack or something.

And so we've noticed that a lot of the trends are at home. We've also positioned ourselves well with a lot of retailers by being a part of their online kind of shopping programs. Consumers aren't going into stores as often. And so the brands that have leveraged themselves with the online platforms, the Instacarts and whatnot, are seeing success with that as well. And that was something that caught me by surprise. But now I get it, right? That's part of the future. When we come back in just a moment, more of my conversation with Justin Gold and advice for

future entrepreneurs who may be wondering is now the right time to take a leap. Stay with us. I'm Guy Raz, and you're listening to How I Built This Resilience Edition from NPR. And one more thing, the New York Times best-selling book How I Built This is now available. It's a great read and a great gift for anyone looking for ideas, inspiration, wisdom, and encouragement to have the courage to put out an idea into the world. It's filled with tons of of stories you haven't heard about how some of the greatest entrepreneurs you know and respect started out at the very bottom. Check out how I built this, the book, available wherever you buy your books. Hey, welcome back to how I built this Resilience Edition. And I'm talking with Justin Gold.

He's the founder of Justin's, which makes nutbutters and snacks. Justin, put on your entrepreneur's hat for a moment. I mean, you started this business in 2004 when you were in college. I think you were studying to be a lawyer. Right now, a lot of people are out of work, but there's also some indication that many people are considering starting their own businesses. I think the number of applications for employee identification numbers has increased by half a million this year compared to this time last year, and that's the first step in starting a business, as you know. Do you think that it's a good time to do that? I mean, do you think that despite the challenges that there are opportunities at this moment?

It depends, right? I mean, there's two things are the most important to me. Number one, is there an unmet consumer need? And number two, are you passionate about it? So if there's a problem that you've identified, that you're passionate about fixing, then absolutely. Now is a great time to start a business. Hopefully there's enough people that share that pain point

that you can turn that into a business. But if you're bored, you're looking for something to do and you're not sure, that can be tricky. But again, if you don't start somewhere, you'll never end up anywhere. So I never turn entrepreneurs away with a bad idea. I always talk to them and say, look, I don't know if this is a good idea or not,

but if you're passionate about it, you think it's meeting an unmet consumer need, then launch it, see what happens. And guess what will probably happen is if it fails, you'll learn from that failure and pivot it to hopefully find your success. And if you are lucky and you get it, you know, right the first time, wow. I mean, when you started selling nutbutters, you weren't making a whole lot of money. And I don't think you were profitable.

But how did you know that it was going to work, that you should continue? Was it just people saying this is awesome? This is so good. Was that basically it? You never know, right? I mean, you never know. And I think it's the law of attraction. I think that if you think about growth and you think about success,

and you'll find the people that'll help encourage it and promote it. I was always thinking that this was going to work. I just didn't know how or when. And let's face it, I got a lot of encouragement. People were like, wow, this is really great. This is a great idea. You know, I got a lot of how come no one's ever done this before? And those really gave me a lot of encouragement to continue.

And I also got a few people who were peanut butter. Why would you go into peanut butter? Imagine, guy, like, here I am. I wanted to be a lawyer. My parents were, oh, Justin, our son's going to be a lawyer. We're so proud. And then I decided not to go to law school, jump out of the LSATs. You know, I graduated degree in Environmental Policy.

I moved to San Francisco Bay Area. And I worked at a restaurant in Point Ray, Station House Cafe, worked at that restaurant for a year, moved to Colorado. My parents are now, oh, our son, he's confused. He'll figure it out. And then I come to my mom and dad, and I go, Mom, Dad, I figured out what I want to do. son you're going back to school you want to be able no no I'm going to make organic peanut butter and almond butter and my parents were like oh what have we done what have we done you know so I also got some naysayers and my parents of course were fabulous but it was a lot of people also had a lot of skepticism because it's a huge category with huge companies and it had been the same for a long time and that's where I got lucky I imagine that when you were working at that restaurant in Point Reyes you weren't thinking I'm going to do nut butters like there was was some point where you had a revelation, you know, where you thought, this is the thing I want to do. And then it kind of stuck with you. What's your recommendation for finding an idea,

coming up with something to start? Wow. I don't know. I guess for me, there's two things that I did, right? Number one, when I was up until three in the morning writing a business plan, and grinding almonds and peanuts and adding hot pepper and cinnamon and fresh banana and dried banana and chocolate and staying up all night and eating until I had to lie down on my back because I just couldn't fit anymore. When I was up all night doing this stuff and then I'd be, holy crap, it's three in the morning. I knew that this was something powerful because it had such a grip on me and it was so exciting. And it didn't feel like work. It still doesn't. And that's the whole goal.

So number one, I knew there was something there because it was really fun. And the second thing was I was very optimistically cautious, right? So I worked second jobs. I was waiting tables up until I had two employees. I got a job at REI and I was selling backpacks and skis and sleeping bags when I had five employees. And so I was constantly putting everybody else first to make sure that, you know, we can make payroll. We can keep making the products. I'll get health insurance somewhere else.

I'll have a second job. And so I didn't take the total leap until everybody else is being paid fair and living wages. And then I finally was able to pay myself a fair and living wage. So even though I had all this confidence, I put a lot of people first to make sure the business was being served before I was being served. All right. We're getting questions here from our listeners. And this is from random texts from YouTube. This person asks, I sell a brewing cocoa as a coffee alternative.

at a farmer's market, what advice do you have for someone like me who is selling at a farmer's market but wants to move to regional distribution? The first thing you have to do is start locally, right? You have to own your home. And that gives you some success there. Then once you own your home, you have permission to move out to the next layer. And the next layer can be specialty gourmet stores. It can be coffee shops.

It can be natural food stores. And then you concentrically keep growing. But you have to own your home. And if you can do well in your home market, that will give you the success and the momentum to continue to that next concentric ring. So essentially you're saying this person has to, when you say own the home, like the farmer's market, people who come to that farmer's market need to know, oh, you want brewing cocoa? That's where you got to go. You got to get it into all the other coffee shops. You got

to get in the hardware store. You got to get it in grab and go locations, the grocery stores. And what's crazy is if you see one product in one store once, you kind of like forget it. But if you see the same product in four or five different stores, you're like, right, all right. Clearly, I have to try this product. And so owning your home is getting it everywhere. And then once you own your home, you can kind of understand your consumer, understand where you belong. Maybe coffee shops is your direction. Well, maybe grocery is your direction. Maybe, you know, performance outdoor stores is your direction. And if you own your home, you can kind of, you know, assess what's, what's working and what isn't. And to take that

and you can expand it. All right. Here's another question from Facebook. Stephanie Leisner. Stephanie he asks, now that more competitors are coming up with their own natural organic versions of nut butters, how does Justin stay differentiated in the brand of choice? That's a really tough question. It's one that I haven't had to think about before. And so right now, there's multiple ways. Number one, we have to stay consistent. We have to continue to deliver a high quality product. We can't take any steps backwards because that'll give a consumer reason to leave. The second thing we have to do is be better, continue to create. better products, innovate in the new categories.

And I think the most important thing is really have a greater purpose, that buying a jar of almond butter not only is it good for our bodies because it's a high protein plant-based product, but we're supporting farmers, we're supporting pollinators, we're supporting hunger relief programs, we're supporting non-GMO, organic, regenerative, all the things that are going to restore balance to our bodies and the earth. And I think purpose is really important.

All right, here's a question from Jessica Goldstein. Jessica's curious why the presence of palm oil or anything other than just nuts, why is that necessary as additions to your products? I'm looking at your ingredients and it's just dry roasted almonds and palm oil. So why? It's a great question. So palm oil is in a lot of food products. And if it's harvested correctly, it's really a beneficial oil because it's a non-hydrogenated oil that helps contain those free and loose almonded peanut oil. so you don't have to continue to always stir it.

And palm oil is controversial. And so we've done a really good job identifying sustainably grown palm oil so we can make sure that we're giving back to our communities, to our consumers, to the places we buy it. And that's why we use it. There are palm oils that are grown organically and sustainably, and I mean, I use it for cooking sometimes. But there's, of course, other parts of the world where forests are clear-cut to plant, palm oil groves and that's where a lot of the controversy comes from. And palm oil is in a lot of food products. It's in a lot of cosmetics where they don't have ingredient statements.

It's in cookies. It's an ice cream. It's in chocolates. And what's interesting is with our products, we use a very, very small percent of it. But when there's two ingredients, right, it's very visible. Before we let you go, Justin, what's something that you kind of want to take away from the last year with you in the future when, let's say the company, goes back to normal and you are on the road again and you're traveling again or you're you know,

you're back in the office. What's something that you've kind of learned about yourself or about your leadership style or about the way you you want to work that you want to continue to do after this pandemic hopefully ends? I don't know if we'll ever experience normal. Whatever normal is is what we're living today, right? So this is normal. And I think that when the world evolves, I think that this need to travel and this need to be in person and this need to be away from our family, I think that will evolve. And I'm not saying that this is going to be the future, but this is a part of the future. And I think that we all need to consider what does that mean?

And how does that impact our lives? And what are the opportunities for food products, for snacking? How does that evolve categories and grocery? How does it evolve the way we interact with each other? And so it gets me really excited to think about that. And the most important thing for me, and we talked about this off the air, was the time I've spent with my family that I wouldn't have otherwise. And that's really precious. And that has me reconsidering my needs in once, not only for the organization, but also for my family.

That's an excerpt for my conversation with Justin Gold, founder of Justin's. To see our full interview, you can go to Facebook.com slash how I built this. And if you want to see all of our past live interviews, you can find them there or at YouTube. If you want to find out more about the How I Built This Resilience series or other virtual NPR events, you can go to nprpresents.org. This episode was produced by Liz Metzger with help from J.C. Howard, Will Mitchell, Bruce Grant, Matt Adams, El Manion, Gianna Capitona, John Isabella, Julia Carney, Neva Grant, and Jeff Rogers. Our intern is Farah Safari. Thanks for listening. Stay safe and I'll see you back here in a few days. I'm Guy Raz, and you've been listening to How I Built This Resilience Edition from NPR.