One-on-one with Justin Gold from Justin’s

Other than apple pie, what American food is as iconic as peanut butter? A traditional school lunchbox staple for kids and go-to protein source for vegetarians, it shouldn’t be a surprise that U.S. sales this past year were almost $2 billion dollars, according to the market research firm SPINS.

But given that the typical jar contains only about two ingredients, options for new product development are limited. In fact, the last big breakthrough in peanut butter NPD, adding a layer of jam in each jar, occurred when men still wore corduroy suits. This slow pace of innovation has affected sales growth, which last year slid 4.5 percent.

Such was the state of the category when Justin Gold first started making peanut butter in his kitchen. Twelve years later, Justin’s is now one of the top 10 selling brands, joining stalwarts — Jif, Skippy and Peter Pan — who have been around for 50 years or more. Last year, the company was ranked No. 11 in the food and beverage industry on Inc.’s 5,000 list. Two of the company’s products have received SOFI silver awards from the Specialty Food Association. Additionally, Gold was awarded the Ernst & Young Entrepreneur of the Year Award. And, Candy Industry Magazine estimates the company could reach $50 million in sales this year.

What was Gold’s contribution to the zen of peanut butter? He took his healthy all-natural peanut butter and packed it into squeezable pouches; thus creating a market for a portion-controlled, eat-on-the-go snack.

Millennials, with their ken to graze throughout the day, are a big part of Justin’s consumer base. So is Starbucks, which includes the peanut butter squeeze pouches in its Protein Bistro Packs. As well as parents, who find the squeeze packs very “school lunch-worthy.”

Appealing to consumers with peanut allergies, the company also offers almond butter. And this product niche is really hot. This past year, almond butter sales catapulted 47.8 percent to $138.7 million, according to SPINS.

“Our challenge is to convert peanut butter consumers to nut butter consumers. But it’s an uphill road, and we are willing to put in the work; and have some fun along the way,” Gold explains.

Justin’s Nut Butters are riding the wave of current consumer sentiment. And what are consumers looking for in nut butters? Mintel’s report, Room for Innovation, Expansion in Nut Butters and Sweet Spreads, published in April 2014 identified three key consumer preferences:

55 percent of consumers want more spreads with health benefits.
36 percent don’t want additives or preservatives in their spreads.
22 percent want more indulgent nut-based spreads.

After success with nut butters, Gold has moved on and discovered another underserved product: chocolate peanut butter cups.

As candy historians know, chocolate peanut butter cups were created in 1928 by H. B. Reese, former shipping foreman at Hershey. How can you one-up a confection that has accumulated almost 90 years of product loyalty? In other words, what was Gold’s disruptive marketing tactic?

The answer: transforming a product with deep nostalgic mojo and premium-upping it to appeal to today’s adult tastes and ethical causes. The cups use Rainforest Alliance chocolate and contain 50 percent less sugar than the leading brand. Justin’s Peanut Butter Cups are now the company’s top selling product.

“We can’t keep up with demand,” Gold says.

He considers packaging as the food industry’s blind spot. Extending his desire for using only sustainably produced ingredients, Gold has been exploring the possibilities of sustainable packaging.

“It blows my mind to take these premium high quality specialty food products, made with lots of dedication and artisanal craftsmanship, but they are put in plastic packaging,” he explains. “When we are done with it, we throw away the packaging, which ends up in a landfill where it sits for thousands of years, never decomposing.”

Justin’s has been experimenting with degradable bio-films, making it the company’s mission to sell packs that are 100-percent home compostable.

In 2010, Gold hosted the first Sustainable Squeeze Pack Summit to explore sustainable alternatives to petroleum-based non-biodegradable packaging. At present, his squeeze packs contain 66 percent renewable packaging, the limit with current technology.

“We continue to encourage and explore opportunities; to push the industry to be more thoughtful,” he explains.

With brand recognition for creating healthy, convenient and sustainability produced snacks, all spot-on food trends, Justin’s has hit a sweet spot in today’s snack category. Not only has this brought recognition to Gold's entrepreneurial acumen, but he clearly is having fun along the way.

Below he talks about starting the company, his first big idea, how he decided to enter the confectionery market. His answers have only been edited for clarity and length.

Candy Industry Magazine: How did you start your company?

Justin Gold: After receiving a degree in environmental policy at college, I headed to Boulder for the lifestyle. I am an avid mountain biker, skier, and hiker and a vegetarian. While waiting on tables and living with roommates, I made my own peanut butter at home for fun and as a protein snack. When the jars started disappearing, I put labels on them, “Justin’s.” One of my roommates suggested that I sell them at the local farmers market.

At that point, the goal became less of a culinary adventure and more of a business opportunity. I went to the Boulder University business library and started researching a business plan: how to get UPC codes, labeling laws, kitchen regulations, what does organic mean, etc. While doing this research, I began to realize that there were a lot of successful natural food companies in Boulder, like Celestial Seasonings, Silk soy milk, Horizon Organic Dairy, Rudy’s Organic Bread, Chocolove and Izze Soda. I reached out to these entrepreneurs for advice and mentoring. Eventually, one of them, Izze Soda’s founder Lance Gentry, helped me to raise some capital.

CI: What was your first big break?

Gold: To be honest, the business was failing [at first]. You can’t sell enough jars; you can’t have a big enough margin; not enough product differentiation.

I had been selling my jars locally for a number of years when one day I was mountain bike riding, and I would keep fueled by eating power shots, a power gel in a squeeze pack. I wasn’t really crazy about the energy shot, I was crazy about the protein from peanut butter or almond butter. Then, I had the idea to make these individually packaged peanut butter and almond butter squeeze packs that no one had really done before.

I wrote another business plan for these squeeze packs that would be an on-the-go, healthy snacking opportunity. The innovative single serve, portion-control nut butter market sub-category was born.

I realized that I needed to move fast to protect my idea, given that I hadn’t invented the squeeze pack or almond butter; I just put the two things together. I wrote another business plan and raised more capital.

With this seed capital, I rebranded the company as offering a premium, snacking experience, one deeply rooted in the community, sustainability and organics; all these attributes were important to me and also important to a lot of people in Boulder.

It also created a sense of authenticity of the brand; that it had a story; that people really liked to get behind. Our packaging was redesigned to convey this: playful, fun, but serious, about having a quality experience.

CI: What led you to enter the confectionery market?

Gold: Around this same time, I became frustrated that I couldn’t find a great peanut butter cup experience. Even if I found one, the manufacturer would change it [for the worse]. And I figured that if I was looking for a great peanut butter cup experience, then so were a lot of other people.

But if I was going to create a candy product, it’s had to be the best candy product on the market on multiple levels, because people don’t need to eat candy. I wanted it to be a healthier indulgence, a permissible healthier indulgence made with the best organic ingredients, which has less sugar than the category leader.

CI: What are you future plans?

Gold: Our company is shifting to snacks. We really think that snacking is going to play a larger role in people’s lives. We want to develop snacking opportunities that taste great.

Also, our peanut butter cup is still not in a lot of places; there are still a lot of opportunities to sell cups. We need to develop more formats: mini cups, king-sized cups, white chocolate cups (recently launched), with other nut fillings. We just want to keep it simple and deliver a high quality product every single time.

Now that we have a brand, which is more than just peanut butter and nut butters, it can be a lot of different things (dips, etc.). It’s really exciting to think, ‘Where can we take this brand?’ But we just have to make sure we have permission to go there. For example, a line of Justin’s soda pop won’t make sense. How far can we can push confections and still have our consumers trust us. We are having a lot of these conversations today.

CI: What advice would you give an entrepreneur?

Gold: The most important thing is just to start. You will never end up anywhere if you don’t start somewhere. All these new companies are brave enough to start. Once you start, then it’s a question of what do I have? Why is it working or not working. If it’s not working, then really successful companies start asking why. And they make the right decision for their company to succeed. If they had never started, then they will never get a chance to make the decisions that might be the homerun.

For me, I was making jars of almond and peanut butter. The business was failing. Today, we are making a confectionery product, a peanut butter cup — now our number one bestselling item. If I haven’t started with jars, it wouldn’t have given me the opportunity to get to where I am today.

CI: Where do you see your company in three years?

Gold: In three years I hope Justin’s will be a category leader in snacking and sustainability.

It is coming slower than I anticipated, which is normal. But I think that people are starting to be more curious about a lot of things including, organic foods, GMO, packaging and where it comes from (i.e., is it petroleum-based or plant-based). They’re more curious about their food’s ingredients and where they come from, and whether they are organic or natural. I think that at Justin’s, it’s our responsibility to be a leader in good, healthy snacking and sustainability and being transparent with our customers; by delivering the products that they are seeking.

CI: What’s your legacy?

Gold: A great legacy for this company would be for our kids and grandkids to think back to when we were around and think how silly it was that we didn’t know what to do with our trash; we just buried it. We need to find ways of making our trash more compostable. That’s really important. We sponsored a conference back in 2010. But I haven’t had time to develop another. These past three and four years I have been consumed with trying to keep the wheels on this company that is accelerating extremely fast.

CI: What are the most important things for your company’s success?

Gold: The most important things for my company’s success are No. 1, innovation; what are we doing that’s different? No. 2 is quality. If you are going to be a small brand competing against really large, established companies, you have to have the highest quality products, because that’s the only thing we do have. No. 3, authority. What makes this product authentic and stand out from other brands? You need to have a really great story. That adds “shop”.