When it comes to the natural foods business, almost nobody knows it better than John Maggio. In his 20s, John and his brother successfully launched Boulder Potato Chip Company. Since selling that business, he’s been involved with the launch of over 100 new products, including Poore Brothers Chips, Bob’s Texas Style Chips, the TGIF brand, Rokkits, Colorado Spice, Tambobamba, Backpacker’s Pantry and Shrewd Foods, the first-ever gluten free and sugar free brownie. Although I haven’t had the opportunity to pick up one of his brownies at Whole Foods, I hear they are delicious.

In addition to launching those products, John is a partner at American Outdoor Products, which operates Backpacker’s Pantry, Astronaut Ice Cream and Colorado Spice.

Here are some interesting things you’ll learn while reading this interview:

• Becoming successful in the Natural Foods Industry is not just about luck. You must succeed at brand building and being first to market
• When launching a natural foods products, claim your own region first and then go national
• You must template your product launch the right way so that when you do get into a national chain, you will know how to survive it

The Interview

John, what is American Outdoor Products?

At American Outdoor Products, we have a 57 year old brand of backpacking food called Backpacker’s Pantry, we have a 30 year old freeze dried novelty product called Astronaut Ice Cream, and we have our Colorado Spice Company, for which we have retail, food service and industrial lines.

In the busy season, which is the middle of the summer, we operate in a 25,000 square foot space with about 50 to 55 employees. Because we are a manufacturer, we put the ingredients together. We might have a thousand ingredients in-house at any one time, so there are a lot of moving parts.

What’s the corporate culture like at American Outdoor Products?

American Outdoor Products allows me to sit here at nine in the morning and talk to you. I don’t have to be there at six in the morning until eight at night. It’s a lifestyle business. We have a lot of people that bike to work. If you have jeans on and a nice shirt, you’re probably the best dressed guy there. It’s a fun business.

How did you learn about American Outdoor Products?

The Colorado Spice division made seasoning for my old company, Boulder Potato Chips, when we first started making flavors. I knew them for a long time. I paid them for a long time as a vendor. We were a great customer and they were a great vendor.

At what age did you start Boulder Potato Chips?

When my brother and I were about ten in Rockford, Illinois, we started eating this product called Old Salty’s. At the time in Rockford there were three brands that weren’t Frito; Old Salty’s, Mr. G, and Mrs. Fischers. My Dad knew and worked with, as an attorney, the gentleman that started Old Salty’s, so we ate that product growing up. It was a thick, kettle style and as it turns out, a really junky potato chip high in saturated fat. That’s how I found out about potato chips.

I never had any real passion for potato chips and never thought, “This is what I’m going to do with my life.” When I graduated from the University of Miami [Florida], I played professional sports. I was a professional golfer for two and a half years. I tried to play in every tour that they would consider me for. I’ll paraphrase somebody else’s line when I say that my career started off slow and then just tapered off from there.

After leaving Florida, I went to an entrepreneurs program at the Kellogg School at Northwestern. Literally after that program, all I could think of was, “geez, this guy’s potato chip company [Old Salty’s] is 50 miles away. We could be in the North Shore of Chicago through Milwaukee. There are nine million people here that he’s not going to because he’s stuck in this little Winnebago County. So we got him real excited about selling his company and he was willing to do that. Then the price kept going up and then he wasn’t sure if he wanted to sell. He’s now 70 and his nephew runs the business.

My plans kind of turned to dust and I moved to Colorado on a whim and ended up realizing there wasn’t anything like this potato chip company out here. So Boulder Potato Chips started.

How did you know how to start a potato chip company?

This gentleman in Illinois was instrumental in helping us learn some of the top broad-brush parts of the business. The rest of it was trial by fire.

At first, we were going to build a manufacturing plant. Then I went and visited some guys who built equipment. They told me that I was crazy, but said that they had just lost their biggest customer and would be happy to make me a product. We modeled the business plan around doing that.

What did you learn from the potato chip business?

It taught me distribution. I was always at the back of grocery stores and retail shops.

We had a distributor in Denver called Rainbow Natural Foods, which is now the Midwest group of the largest natural food distributor in the world. I remember going in there and there was a banner that said they did a million dollars that week in revenue with 40,000 SKUs. Now they do a million dollars every eight minutes. At that time, the whole industry was $6 billion worldwide and now its $58 billion in the United States alone.

How does the natural products industry landscape look?

We, like many other industries, have an issue of consolidation. Even with all of the sales people and brokers, we don’t have many customers anymore. Maybe 900 customers bought from the backpacking side of our business, but only 10 of them account for 92% of the business.

It seems as though every mom and pop has a natural foods product that they’d like to sell, especially here in Boulder. How competitive is this market?

I tell people that if there’s an industry that isn’t competitive, tell me what it is because I’ll do that. Certainly being a potato chip business when there is an 800lb gorilla in Frito-Lay and PepsiCo is a monstrous task. With that being said, yes, there are a lot of mom and pops that have a lot of products. But there is also a lot of what I would call “farmers market” kind of products. They don’t have extendibility outside the region and maybe outside a couple stores. They haven’t done the job of building up their brand.

How important is brand building?

I’ll give you an example with Shrewd Foods. We have a brownie. If Whole Foods wanted to come out with a brownie, they’d have a brownie in four days that was gluten-free and sugar free.

The race is to get somebody or a lot of somebody’s to wrap their arms around your brand and make you their guy. There is only so much you can do with seasoning and the rest is brand extension and the ability to innovative and make yourself stand apart.

Say I had a natural foods product and I wanted to bring it to a national chain like Whole Foods. As someone who doesn’t have much experience in that, is it possible?

It’s almost impossible if you don’t know how to do it. You could really misstep and one misstep could put the sword in the heart of the whole proposition.

People come to me and ask, “How do I do this?” If I decide to help those companies, I can bring them through this process and to the right channels.

What qualities do you look for in a company when deciding whether you will help them?

Number one is the people. Number two is the market. Gluten free is growing like crazy. Organic is growing like crazy. It’s a rocket ship that gives you the best success as a small brand and can help you with your exit strategy. 

In general, what advice can you offer people who want to become entrepreneurs?

If you want your dream to happen, be willing to let go of the reigns. Stick to your strengths and find the right people to help you with the other parts of the business.

John, thanks for spending time with me to talk about your experiences in the Natural Foods Industry.

For those that have an interest in contacting John, he’s graciously offered to publish his email (johnfmaggio [at] comcast.net)

Related Links:

American Outdoor Products
Shrewd Foods