Justin’s does not disclose its revenues, but Gold confirms they are in the “$50 to $100m range” - and says the brand is still generating triple digit growth, with huge potential to grow, despite its relative maturity.
“Nut butter is a multi-billion-dollar category, so the sky really is the limit. Retailers are cutting space devoted to jams and increasing space for nut butters, so it’s a really exciting time. Healthy fats and protein are really on trend now.”
The sky really is the limit
Gold - who wanted be an environmental lawyer but changed his mind after completing an environmental studies degree - opted for a change of scenery in 2002 and moved from Pennsylvania to Boulder, Colorado, where he waited tables, and did a lot of mountain biking.
As a vegetarian trying to ensure he was getting enough protein, he also began throwing nuts in his food processor, adding everything and anything from maple syrup to honey, cinnamon and vanilla.
He began scrawling his name on his jars
Pretty soon his room-mates started helping themselves, liked what they found, and started scoffing his stuff with impunity.
So Gold began scrawling his name on his jars (Justin’s) to tackle the thievery. It didn’t work, but it got his entrepreneurial juices flowing. If his friends liked them this much, maybe other people would too?
Pretty soon, he was doing a roaring trade at Boulder Farmers Market, then local Whole Foods stores, and 10 years later, Justin’s branded products are available throughout the US and Canada at retailers from Stabucks to Whole Foods Market, Safeway, Kroger, Wegmans, Vitamin Cottage and Sprouts.
I was devastated
But the big breakthrough came when he put his nut butters into portion-controlled squeeze packs, and sales went through the roof.
The rationale was simple. First, as a sports enthusiast that wasn’t a big fan of sugary bars and gels, he wanted something more appealing that could be squeezed out of a sachet and eaten on the go - like peanut butter. He also wanted something convenient for traveling.
Second, making a return from selling jars of nut butter is not easy without economies of scale, whereas selling single-serve portions enables you to charge a higher price by weight - while still offering value to consumers. It also makes shoppers more willing to try something new.
I bought a 30-year old machine designed to make sachets of hair conditioner, and I manufactured them myself
But it took a while to convince other people, he admits.
“To start with, no one would contract manufacture them for me.
"I talked to all these companies with squeeze pack machines and they said we don’t want nuts in our factory because they are allergens, so I went out and bought a 30-year old machine that was designed to make sachets of hair conditioner, and I manufactured them myself.”
At first, retailers weren’t sure either, he says. And early attempts to sell the squeeze packs in the energy bar aisles were a failure. “I was pretty devastated.”
But as soon as retailers started stocking them next to the jars of nut butters, they took off, he adds.
“We had all the early adopters in the natural products sector like Whole Foods and Vitamin Cottage and Wegman’s, and then we started getting calls from retailers like Target.”
Several new product innovations then followed, from chocolate nut butter cups to bars.
Peanut butter for dogs?
As for money, he started by borrowing cash from friends and family to buy his first nut grinder, and as it became clear that he might be onto a winner, he found some angel investors in Boulder. Last year, he sold a minority stake in Justin’s to private equity firm VMG Partners.
So what’s next? All nuts make great nut butters, says Gold, who works with three co-manufacturers that produce his products to his recipes/specifications. But that doesn’t mean Justin’s will necessarily launch scores of other nut butters.
“You have to look at price and availability. Walnuts and pecans are very expensive.”
You can’t just throw everything at the wall and see what sticks
You also have to focus, he adds. “When you start out, you say yes to every opportunity; as you get bigger, you have to start saying no.”
Take new flavors: “We’ve launched things that haven’t worked, like cinnamon peanut butter. It tasted great, but retailers are not going to stock a product that people eat occasionally, where people will buy maybe one jar a year, when they could be using that space to sell something people eat every day. It doesn’t matter how great it is.
“We also looked at peanut butter for dogs, and there’s a market for it. But as you grow you’ve got to focus. You can’t just throw everything at the wall and see what sticks.”
If you love what you do and you’re having fun, it doesn’t feel like a job
So what keeps him awake at night?
Nuts, says Gold, who says the drought in California is particularly troubling, with all kinds of options being considered to ensure a reliable almond supply, from buying his own orchards, to setting up exclusive partnerships with growers.
So 10 years in, does he find time to get out on his bike and switch his smartphone off, or is the price of running your own business - particularly one growing as fast as this - that any hope of a work-life balance goes out the window?
“Everything has been hard, from making sure we didn’t grow too fast and couldn’t keep up, to worrying about running out of raw materials, and finding the right investors,” he says.
“But if you love what you do and you’re having fun, it doesn’t feel like a job.”