100 Million Dollars Baked in a Pie
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Amtrak's Acela Express, with service between Washington, DC, and New York. A Lamborghini Diablo. Misspent youth.
Some things go fast. And some things grow fast. Weeds. Amy's Kitchen. Or the caterpillar, the world's fastest-growing animal; some types can eat their full body weight in a day. Wait, wait. Back up. Amy's Kitchen?
Are you craving vegetable pot pie? Or a can of soup with organically grown ingredients? Perhaps some nonprocessed pasta sauce? Amy's Kitchen will deliver. Figuratively speaking. This is not Domino's; rather, it's a brand of frozen food product you can find in plenty of grocery stores nationwide.
Named after their baby daughter, it's the brainchild of Rachel and Andy Berliner, who set out to start a small business-"I thought it might bring us $3 million a year," says Andy-and somehow proved you can stay true to yourself and become filthy rich in the process. Last year, their company made $90 million in retail sales; this year, it should exceed $100 million. They have 650 employees, and their products can be found across the United States and around the globe.
There are no rules to starting a business, of course. But if you want your business to grow quickly, here are some helpful suggestions, courtesy of Rachel and Andy Berliner.
It was 1987. Rachel, then 33, and Andy, then 40, were expecting their first child. They wanted some stability for their daughter and independence for themselves. So they decided to start their own business. But what kind? Like many novice entrepreneurs, they had desire, but no idea.
The idea came when Rachel started worrying about how she was going to be able to cook nutritious meals for herself and her equally health-conscious and vegetarian husband once their twosome turned into a threesome. There seemed to be no satisfying microwavable convenience-food items aimed at vegetarians. And so an idea was born.
So was a baby. Amy arrived several months before they incorporated in 1988, and Rachel and Andy finally decided what to make. "One of our ideas was a pot pie, because we had-well, at least I had-grown up on Swanson's and Banquet pot pies, and a vegetarian could no longer experience that," says Andy. "And I thought, there have to be other vegetarians who feel that way. I mean, it's comfort food. It's a memory from childhood. So that was our first product, an organic vegetable pot pie."
The company name, too, came from brainstorming. "We thought of Natural This and Natural That," says Andy, "but they all sounded like every other health-food product. Finally, Rachel's mom said, 'What about Amy's Kitchen?'"
Start in a Familiar Field
Before starting Amy's Kitchen, Andy had been president and owner of an herbal tea company. "To some extent," says Andy, "I knew the natural-food industry." Enough said.
Think Niche Market
Rachel and Andy began Amy's Kitchen in their barn, where they worked on sales and marketing and did the bookkeeping. But a bakery handled production-for a few months. "Then we got a call," says Andy, "and they told us we had 30 days to find another manufacturer." Rachel and Andy were doing so much business-about 36,000 pot pies a month-the bakery said it didn't have the staff to devote to Amy's Kitchen.
For details on how they handled this setback, see Expect Problems. Suffice it to say, they handled it well, because by mid-1989, Amy's Kitchen was in virtually every U.S. health food store, and as they added new products, the stores just kept the welcome mat out. "We weren't making money, but we weren't losing money," says Andy. "Our sales were growing, and we added a broccoli pot pie, and a macaroni and cheese pot pie and an apple pie, all within 14 months of starting."
They had somehow discovered a niche that entrepreneurs had overlooked and customers were clamoring for. "The product was such a success because there was a need for quickly prepared health food," Andy says. "We were just in the right place at the right time."
Take a Financial Risk
If you can get an investor to throw scads of money your way, then congratulations and don't forget (ahem) the business journalists who inspired you along the way.
But be warned: Dotcom mania created something of a myth that VCs are an entrepreneur's best friends. The truth is, they're only going to take a risk if they're sure there isn't a risk. So be prepared to pony up some collateral. Rachel and Andy started Amy's Kitchen with $20,000-partially funded by pawning his gold watch and selling her car. And for the first three years, though their customers loved their food, "we couldn't figure out why we were doing this," admits Andy. "We never seemed to have money. But the letters we got were so appreciative. That kept us going."
Never Hurts to Ask
Some entrepreneurs hide from creditors; Andy hired his.
Granted, Don Watts, a soft-spoken man, doesnt seem the sort to get very angry. But as a member of the board of directors of the dessert company that had sold a pie machine to Andy in 1988, it fell to Watts to do some collecting. The dessert company wanted its money, but "trying to collect was very difficult, because Andy had started on a shoestring," recalls Watts. "And then one day Andy called and asked if I could help him [manage his finances]."
Watts met with the Berliners and agreed to come in once a week. "We tried to pay the bills as best we could," says Watts. "The ones we could pay we did, and the ones we didn't have to right away, we let slide-which is typical of most businesses."
Andy's admission that he needed help worked for Watts, who says, "If you don't level with your suppliers, you're going to find that they don't believe you, and they'll shut you down."
When the bakery telephoned the Berliners and said, "You're too big for us," that wasn't good news. "I panicked," says Andy. "I spent the first 15 days scrambling, looking for another bakery, and the last 15 days realizing we were going to have to make the pot pies ourselves-realizing that nobody would put the time and care into it that we would."
So Andy hired five employees, moved the business out of the barn and rented some space. "Our freezer was a freezing truck at the loading dock. We would mix the raw materials and freeze things in there," says Andy.
But that didn't solve their problems overnight. "There was always the right way, and the way you can afford," says Andy. "There were a lot of discouraging moments, because we were working so hard, and things were going well, yet it was hard to make payroll and buy new equipment."
"We always had to buy funky equipment," adds Rachel, who designed the packaging while taking care of Amy.
So how will you be able to fight the urge to give up? Or freak out? "Be realistic," advises Andy. "Forget the fact that maybe [you] don't have enough money right now. Are things going well? Do people like the product? Are the profit margins there? Do you feel in your heart that things are going the right way? Don't worry about the things going on in the moment."
In theory, if you sell a product people want, you should eventually see the light of day. That's how it happened for the Berliners. In 1988, they had three employees, and by 1989, there were 24. By 1991, they were doing business in Canada and had hired seven more employees. They were selling 15 different products by 1994. In 1995, they watched their staff double from 87 to 175. Not surprisingly, they went global, and revenue kept rushing in.
Don't Forget Who You're Serving
Obviously, the business is yours, and individually, not every customer is right. But listen to them en masse. "We really try to please the customer," says Rachel, "and we really try to see what people want in foods, what their palates are, what their needs are. So instead of just thinking what we like to eat, we ask ourselves, 'What would most people like?'"
For instance, Amy's Kitchen sells a macaroni and soy-cheese dish. "Now I personally don't like it," admits Andy, "and I don't think Rachel does either, but for people who can't eat dairy, it's a lifesaver. They love it."
Stay True to Your Mission
Today, Amy's Kitchen employs a staff of 650 and has 75 products in stores around the globe. They're in freezers-like the Grilled Cheese Toaster Pops-and on shelves, like the Puttanesca Pasta Sauce. And this year-as duly noted-their company is going to rake in $100 million in retail sales.
"I think part of our success is that we personally care about making a good product, and who's getting it," says Rachel. "The motivation isn't to make money; it's to fill a need and take care of people."
And if you can do all that, you'll grow fast, and you'll go fast. In your new Lamborghini Diablo.
Geoff Williams is a freelance writer in Cincinnati. He drives a '93 Ford Probe.