100 Million Dollars Baked in a Pie
Who'd have thought you could rack up millions with a veggie pot pie? Discover the recipe for success, straight from Amy's Kitchen.
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 andowner of an herbal tea company. "To some extent," saysAndy, "I knew the natural-food industry." Enoughsaid.
Think Niche Market
Rachel and Andy began Amy's Kitchen in their barn, wherethey worked on sales and marketing and did the bookkeeping. But abakery handled production-for a few months. "Then we got acall," says Andy, "and they told us we had 30 days tofind another manufacturer." Rachel and Andy were doing so muchbusiness-about 36,000 pot pies a month-the bakery said itdidn't have the staff to devote to Amy's Kitchen.
For details on how they handled this setback, see ExpectProblems. Suffice it to say, they handled it well, because bymid-1989, Amy's Kitchen was in virtually every U.S. health foodstore, and as they added new products, the stores just kept thewelcome mat out. "We weren't making money, but weweren't losing money," says Andy. "Our sales weregrowing, and we added a broccoli pot pie, and a macaroni and cheesepot pie and an apple pie, all within 14 months ofstarting."
They had somehow discovered a niche that entrepreneurs hadoverlooked and customers were clamoring for. "The product wassuch a success because there was a need for quickly prepared healthfood," Andy says. "We were just in the right place at theright 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 businessjournalists who inspired you along the way.
But be warned: Dotcom mania created something of a myth that VCsare an entrepreneur's best friends. The truth is, they'reonly going to take a risk if they're sure there isn't arisk. So be prepared to pony up some collateral. Rachel and Andystarted Amy's Kitchen with $20,000-partially funded by pawninghis gold watch and selling her car. And for the first three years,though their customers loved their food, "we couldn'tfigure out why we were doing this," admits Andy. "Wenever seemed to have money. But the letters we got were soappreciative. 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 toget very angry. But as a member of the board of directors of thedessert company that had sold a pie machine to Andy in 1988, itfell to Watts to do some collecting. The dessert company wanted itsmoney, but "trying to collect was very difficult, because Andyhad started on a shoestring," recalls Watts. "And thenone day Andy called and asked if I could help him [manage hisfinances]."
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 haveto right away, we let slide-which is typical of mostbusinesses."
Andy's admission that he needed help worked for Watts, whosays, "If you don't level with your suppliers, you'regoing to find that they don't believe you, and they'll shutyou 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 daysscrambling, looking for another bakery, and the last 15 daysrealizing we were going to have to make the pot piesourselves-realizing that nobody would put the time and care into itthat we would."
So Andy hired five employees, moved the business out of the barnand rented some space. "Our freezer was a freezing truck atthe loading dock. We would mix the raw materials and freeze thingsin there," says Andy.
But that didn't solve their problems overnight. "Therewas always the right way, and the way you can afford," saysAndy. "There were a lot of discouraging moments, because wewere working so hard, and things were going well, yet it was hardto 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 freakout? "Be realistic," advises Andy. "Forget the factthat maybe [you] don't have enough money right now. Are thingsgoing well? Do people like the product? Are the profit marginsthere? Do you feel in your heart that things are going the rightway? Don't worry about the things going on in themoment."
In theory, if you sell a product people want, you shouldeventually see the light of day. That's how it happened for theBerliners. In 1988, they had three employees, and by 1989, therewere 24. By 1991, they were doing business in Canada and had hiredseven more employees. They were selling 15 different products by1994. In 1995, they watched their staff double from 87 to 175. Notsurprisingly, they went global, and revenue kept rushing in.
Don't Forget Who You're Serving
Obviously, the business is yours, and individually, not everycustomer is right. But listen to them en masse. "We really tryto please the customer," says Rachel, "and we really tryto see what people want in foods, what their palates are, whattheir 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-cheesedish. "Now I personally don't like it," admits Andy,"and I don't think Rachel does either, but for people whocan'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 75products in stores around the globe. They're in freezers-likethe Grilled Cheese Toaster Pops-and on shelves, like the PuttanescaPasta Sauce. And this year-as duly noted-their company is going torake in $100 million in retail sales.
"I think part of our success is that we personally careabout making a good product, and who's getting it," saysRachel. "The motivation isn't to make money; it's tofill a need and take care of people."
And if you can do all that, you'll grow fast, and you'llgo fast. In your new Lamborghini Diablo.
Geoff Williams is a freelance writer in Cincinnati. He drivesa '93 Ford Probe.
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