We’re excited to introduce you to the always interesting and insightful Ryan Wagner. We hope you’ll enjoy our conversation with Ryan below.
Ryan, thanks for joining us, excited to have you contributing your stories and insights. One thing we always find fascinating is how differently entrepreneurs think about revenue growth and cost reductions – both can be powerful ways to improve profitability. What do you spend more of your time and energy on?
From the moment I wanted to start a company, those in my circle preached top line growth. There will always be time to work on the bottom line and everything in between, but without the top line, cash flow dries up. In the last 3.5 years of starting and running Driftless Provisions, this advice has been critical to our survival. I spent roughly 3 years working on salami recipes and techniques before launching our company. Those small 20LB batches were critical to getting the flavor profiles and basics down, but didn’t prepare us for the obsticles of scaling production, cash flow, or quality assurance, to name a few. These lessons happened while we were in the thick of it. Taking orders
We’ve made numerous mistakes along the way that have cost us dearly and most likely could have been avoided had we slowed down and worked on cutting costs by minding efficiencies and reducing waste, but we also would have simply run out of money. If the top line pipeline dries up or slows down significantly, the clock begins to tick. Case in point, we transitioned earlier this year to a nitrate free salami of a larger size and in different packaging. During that transition we slowed sales of our older product as we phased it out but couldn’t see the new line as it wasn’t ready yet. We burned through nearly all of our cash reserved that should have lasted us 6-9 months in a matter of 2 months. It was stunning (not to mention terrifying) how fast money was going out the door without checks coming in.
Now that we are over 3 years in business and have settled on certain practices, it is much easier to track our labor, materials, and overhead to work on cutting cost. Sales have continued to climb since our transition and have stabilized enough to now turn towards the middle of the P&L to make us profitable.
Ryan, love having you share your insights with us. Before we ask you more questions, maybe you can take a moment to introduce yourself to our readers who might have missed our earlier conversations?
I grew up in rural Wisconsin hunting and fishing as a pastime but also as a way to connect with friends and grown-ups. When I left home for the Marines at 18, I quickly realized that hunting in particular was not something the majority of America partakes and along those lines, connection with where people’s food derives was not an everyday concern. As much as big ag and big food companies had crept into rural household pantries, it was even worse in urban centers.
As I moved through my 20s and into my 30ths, it was clear that I wasn’t satisfied with civil engineering and life in a bigger city. I decided to reconnect with my rural roots and our food system and create a premium salami and sausage company. Through several years of trials and tribulations, I was able to hone recipes that were market worthy. During this process I learned a lot more than that. I learned to do on-farm slaughters for friends and friends of friends that had decided to raise animals but didn’t like the system a full-grown animal going to market faced. I also learned a lot about the restaurant world and our connections with food by working on a small vegetable farm and at a farm to table restaurant. These connections shaped my desires to tie people back to the food system.
Drawing connections between the land, animals, farmers and each other is a cornerstone of our business. While it can be difficult, and a lot of times feel like it is lost in the everyday turmoil of staying afloat, we strive to do as much as we can with the resources we have. From connecting with local farmers and helping with on-farm slaughter to drawing connections to each other by putting great food on the table and spurring conversation. Our work is an ongoing promise to our customers that we strive to do right by our food system and deliver quality food to the table.
Okay – so how did you figure out the manufacturing part? Did you have prior experience?
We currently manufacturer all of our own products, but that was not always the case. Salami making at scale is a very capital intensive business and something that we certainly couldn’t have just started out of the blue. We took our recipes to a more established salami company in the region and worked with them to create our first products. This took a Kickstarter campaign and a small personal loan to pull off, but we had product on the shelves within 3 months of launching the Kickstarter. Naively we thought that one round would fund the next and so forth, but that proved to be not even close to true. We ended up having to raise more money time and time again in order to pay for bigger batches, packaging and distribution. Somewhere to the tune of $55K just to keep that ball rolling.
Then we hit co-packer nightmares. Our first co-packer essentially dropped us as we had begun stealing market share. The second made the first batch, which was decent and the second batch, which was 50% garbage. Literally garbage. So we tried to sue for our money back and began the search for new c0-packers. We bounced between another 2 processors before we found a quality product but on the side we hustled like crazy to secure a space to manufacturer our own products.
I could write a novel about co-packaging nightmares but equally as long could be a book on manufacturing in-house. From raising capital, to equipment failures, staffing, and quality control. If it can be an issue, it has been. That being said, making mistakes in-house have been a lot less costly and a lot more meaningful that paying a co-packer to make mistakes with your money.
Can you open up about how you funded your business?
Our business founds its initial capital through a Kickstarter, the crowd sourcing platform. We had found a manufacturer to make our first round of salami but needed to pay for it. This seemed like a viable option since we could award participants in our new products. My initial business partner and I had a strong network and were able to compile an email list of about 2,000 contacts to generate interest in our company. We set our campaign funding to $10,000 and raised that amount in the first 48 hours. We then increased it to $20,000 and nearly met that goal before time expired at 30 days.
This was enough money to pay for initial supplies including meat, co-packing fees and packaging materials. We quickly moved through this money and needed to go to private investors to pay for another round and other overhead we were starting to take on, but the initial round of Kickstarter money allowed us to prove concept, gain market share in local grocery stores and convince those private investors that we could be onto something.
Contact Info:
- Website: www.driftlessprovisions.com
- Instagram: @driftlessprovisions
- Facebook: @driftlessprovisions
- Linkedin: https://www.linkedin.com/company/driftlessprovisions/