Episode 108: Quinn and Austin Simkins
On this episode of the Be EPIC Podcast, The Simkins brothers sat down with Matt Waller to discuss founding their company and the triumphs and challenges of entrepreneurship. Read More
More About This Episode
The Simkins brothers, Austin and Quinn, are Co-Founders of Natural Way Food Group. Established in 2017, the company was created to produce flavorful nut butters that offered little sugar and used olive oil instead of palm oil. On this episode of the Be EPIC Podcast, The Simkins brothers sat down with Matt Waller to discuss founding their company and the triumphs and challenges of entrepreneurship.
To learn more about Natural Way Food Group and their products, check out their website.
0:00:07.1 Matt Waller: Hi, I'm Matt Waller, Dean of the Sam M. Walton College of Business. Welcome to Be EPIC, the podcast where we explore excellence, professionalism, innovation and collegiality, and what those values mean in business education and your life today.
0:00:27.6 Matt Waller: I have with me today Quinn and Austin Simkins, who are co-founders of Natural Way Food Group. Their products are in 700 stores, including Whole Foods, Walmart, Sprouts, Safeways, Albertsons, Amazon, Harps, and Central Market. And they have peanut butter and almond butter and different flavors, and it really is delicious, I've tried it. In fact, we gave samples of it to several people in our office, and every one of them said it was great. Now, so here's my first question for you two, as co-founders. One, what made you decide to go into this business of all of the businesses that are out there? What got you interested in this?
0:01:20.2 Quinn Simkins: To first off say, we didn't first start with peanut butter and almond butter. We actually started with a family recipe for chocolate-covered peanut butter, like a candy product, that was a family recipe. That was back in 2017. When we started with that product, we quickly realized that we're grinding our own peanuts for the inside of that product, and we both ate a lot of peanut butter, we were both pretty active, I like to be outdoors quite a bit, and so we saw the need for a healthy sustainable peanut butter, and we started to do some experimenting and really found out that some of these flavored options were really fun, really exciting, kind of fit our personality and our lifestyle really well. So it didn't necessarily start as peanut butter and almond butter, but from the start we've been involved in food.
0:02:15.0 Matt Waller: I noticed that you all have... You use olive oil in your peanut butter. Why is that important?
0:02:23.8 Quinn Simkins: Over 50% of products on shelf in grocery stores, retail settings have palm oil in them. There's been a lot of research done around palm oil and how destructive it can be to the environment, particularly rainforest areas where they slash and burn rainforests to grow the palm fruits. We wanted to go with something that was different, something that nobody else was doing on shelf, something that was good for the environment, and something that added some extra health benefits as well. We tried several other different oils and we really liked the olive oil because it didn't add any extra strange taste to it, and it allowed us to get the consistency that we wanted. It also allowed us to feel good about the ingredients that we were putting in our products, and it was something that's good for the environment.
0:03:25.1 Matt Waller: Well, I noticed, I really like your label design and so forth, and of course, it's called Natural Way, and I wondered, and I haven't asked you about this yet, but when I read that it was Natural Way, you two are from Arkansas... In fact, you're both alumni of the Walton College, and Arkansas is referred to as the natural state. Was there any connection there? Is that just coincidental?
0:03:52.2 Quinn Simkins: So yes, we are both graduates of the U of A. I got my undergrad in agricultural business and then came back to the business school, got my MBA. And Quinn got a double major in finance and accounting. We've loved the University of Arkansas. We are both born and raised from the state of Arkansas, from Fayetteville. And you are correct, it is the natural state, I think that played a little bit into it. We wanted something in our name that was going to let the customers know that what they were getting was a very natural product, and the Natural Way was not trademarked and so we jumped on that, got it trademarked, and it's been a great name because people know when they pick it up, they're getting a really natural, healthy good for you product.
0:04:41.5 Matt Waller: You know, I personally started a little... I guess it was a year and a half ago for me, I started a vegan diet, I think I've mentioned that to you before, and I did it for health reasons primarily, but then I started... Not only did I go vegan, I started really paying attention to what kind of ingredients were in products, and I've been surprised that I've been eating for 50 some years, not paying attention to this. And all of a sudden when I turned 56, I started paying attention to what I was eating. And I noticed, sometimes you pick up a package, and there's like 100 different ingredients, I'm exaggerating a little bit, but a lot of different ingredients that I have no idea what they are, but I noticed you all kept your ingredients fairly simple.
0:05:38.0 Quinn Simkins: Yeah, absolutely, we want our brand to be, first of all, a clean label, and you mentioned the labels, and we worked really hard to make sure those represented ourselves, our company, and then the ingredients as well. What people see is something that... It's very simple, but it's also very, very natural and healthy for you, so honestly, when we have people taste it or try it at different places, that's one of the first things that people do is they flip the jar around and look at the ingredients, so we realize the importance of that. Well, and Dean Waller, I'll say that you are not alone in the fact that there are a lot of people out there that have gone their whole life and they eat what is put in front of them, and they don't really look at ingredients.
0:06:21.5 Quinn Simkins: And there is a massive, I'll call it a food awakening going on within the United States right now of people making that switch to natural products and wanting to know what they're putting in their body and being able to actually pronounce the ingredients, and so there's a shift in the natural space for sure, of more simple products, just getting back to what is good food, that is what Natural Way will do down the road with new products, with the current products, it will be stuff that people know what they're putting in their body.
0:07:00.4 Matt Waller: Well, I think part of the reason for that resurgence might be the baby boomers, like I'm actually at the end of the baby boom, 'cause I was born in '64, but I think baby boomers are starting to reap some of the results of not eating well, but I noticed you all also have... Not only you have peanut butter, you have almond butter, and that's something I really like. It's a delicious alternative. I mean, peanut butter is fine, but I slightly prefer almond butter, and it's so hard to find. I know in some cities it's not, but I tend to struggle to find it in Northwest Arkansas. There's a few places where you can go in and make it yourself, and I've done that in a few grocery stores, but it doesn't turn out as well, and I don't really have time to do it every time I want it. I'm glad that you all are providing that, and I'm glad your distribution's increasing, but is the demand for almond butter growing as well?
0:08:03.8 Quinn Simkins: Yeah, so almond butter, that category is growing faster than the peanut butter category, it's kind of a newer trend, and part of it is... And I'm by no means a doctor, but there is some science starting to come out, peanuts are a little bit more inflammational to the body than almonds are. And I think that a lot of people are interested in that, exploring that. The one hangup with almond butter right now is the price is higher. I think as it gains more popularity, becomes a little more mainstream, that price will continue to come down. There's more almonds farms, and so forth. But yes, it's something that's growing, it is starting to become a little more mainstream in grocery stores, but like you said, it can be very tough to find a good one until you try Natural Way almond butter, and then you're like, "Okay, I found the one."
0:09:02.0 Matt Waller: Well, I like to... For breakfast, and I used to eat eggs for breakfast almost every day, and sometimes bacon, and sometimes cereal, and the problem with cereal is, it's full of sugar, and I really never thought about that. And eggs are full of cholesterol. Of course, as a vegan, I'm not doing that anymore, but one thing I have started doing for breakfast periodically is I'll make a piece of toast, spread almond butter on it, and then put blueberries on it, and that is a delicious breakfast. If you compare that to the traditional breakfast that I talked about, from a health perspective, they're night and day, but in addition, you all have a Natural Way almond butter original, which has no sugar added, but you've come out with other flavors. Is that correct?
0:09:58.2 Quinn Simkins: Correct, yeah, so we have four main flavors of both kinds: We have original, which has no added sugar, the honey of the peanut and almond is our most popular flavor. We have chocolate swirl, we have coffee, it's made with actual coffee, and then we have two seasonal peanut butters, which is our pumpkin spice and gingerbread. So we've been really excited to develop these flavors over time, we've had some come in and some go out, but we've gotten great recommendations from customers and created some flavors that people are really excited about, and that's something that we'll continue to kind of cycle stuff in and out as we go, and as we grow. But yeah, if you go back to what you said as well on the added sugar, that's something we pride ourselves in is when we first started the nut butters, we did some research on shelves and quite a few brands would add quite a bit of sugar to their peanut butter or almond butter, you can go pick up some brands that have six, seven, eight grams of added sugar or potentially even more in one serving.
0:11:04.0 Quinn Simkins: And our most is gonna be three grams of added sugar, so we wanted to keep it very low, and then there's so many combinations, we've heard all kinds of really cool stories about, "Oh, I use your products for this, and toast and blueberries and smoothies," and the product goes with so many different things, it's very versatile as well.
0:11:25.9 Matt Waller: So I wanna shift gears here a little bit, we've been talking about the product... I'd like to talk a little bit about the business. One of the things that impressed me about with what you've done so far is you're doing the packaging, the labeling, the production, the distribution, the marketing, the sales, you're doing everything, and the listeners can't see this, but we're doing this recording virtually, and Quinn and Austin are sitting in their facility, and I see a forklift behind them, or the hand truck, and pallets of cases that are shrink-wrapped and ready to go out to stores. You all must have had to learn a lot to be able to do all of this?
0:12:14.8 Quinn Simkins: Honestly, when you say all those things, it sounds like a lot, when you list all those.
0:12:18.1 Austin Simkins: 'Cause it is a lot, yeah.
0:12:22.2 Quinn Simkins: Neither one of us is really afraid of failure to start with. We've made our fair share of mistakes, but I think we've learned a tremendous amount from those mistakes. We've learned what not to do in a lot of ways. I think the other thing too is we have a great network of people around us, and Northwest Arkansas provides a great network of people who have created their own business or worked with people who have. And if we don't know how to do something, we go to somebody else and say, "Hey, this is what we're trying to do. Can you help me? And if not, can you point me in the right direction?"
0:13:00.2 Matt Waller: Well, you know, Northwest Arkansas has the highest density of expertise in consumer products and supply chain and probably anywhere in the world, so you're smart to leverage that, especially having been through the Walton College, you're probably one or two connections from the absolute top experts in the world on any of these subjects. What's been the most challenging aspect of ramping up this business? Was it coming up with the right ingredients, the right production methodology, packaging, distribution, sales? What would you say was the most challenging?
0:13:43.4 Austin Simkins: I think the most challenging part so far has been cash flow, and that has really hampered our ability to market the product properly. I will be the first to say that I apologize to my marketing teachers for not taking marketing seriously in school. It is a humongous deal, and we're just starting to really understand how big of a difference it can make when done properly, but the cash flow has been hard as a startup, especially through COVID this year, and it's made it to where we've had to make cuts on marketing. And that's been hard for us because we know the difference that it can make, but sometimes things get really thin as a start-up and you're like, "Okay, we gotta float until the cash flow comes back around," so that's been a struggle for us.
0:14:44.5 Matt Waller: I can imagine, especially with COVID and demand spiking, the whole category, grocery categories increased, and so when you've got increasing demand, you've got to produce more product, and you've got to purchase more product and labeling and packaging and transportation, etcetera, etcetera, and your cash flow... It takes time to catch up to that.
0:15:10.5 Austin Simkins: I would kind of lump it into the growing pains category. We're at the point where we're ordering more products, more raw ingredients, more jars, more labels, but it also makes it harder, cash flow for a bit until you kinda get used to it and things kinda settle down.
0:15:28.5 Quinn Simkins: And kinda to add to that. It's forced us to be creative, which I think is a skill that we've used in a way to manage that, and also it's helped us just understand that that's part of owning a small business, is being creative and being lean when it's very difficult. We've worked out on a space that... We obviously would have liked to have a bigger space, but it's just been... Our goal is to produce as much as we can out of the small space and still make it work.
0:16:01.0 Austin Simkins: And speaking on the space, we're about to grow into, starting the beginning of next year, we're about to grow into a 10,000 square foot space, so that will be tremendous as far as being able to organize things more efficiently, and having actual production line going and not storing raw ingredients right up there next to it and kind of sectioning off different areas to better improve food safety, so when we get a pallet of, let's say, peanuts in, it's not sitting in the same area as the production area or as finished goods that are about to go out. So we can better monitor what is in the facility in different areas. We're excited about the extra space.
0:16:52.7 Matt Waller: Well you know, you're seeing a business from the creation of the business to... You've had to pivot various times on your product and your business model, and now you've finally got that down, and now you're starting to scale. And having experienced that, that's the best way. What you've learned about business is phenomenal through this process, and the connections you've made, so no matter what you do for the rest of your career, this knowledge and experience and network you've developed as a result of this is extremely valuable, but it really is a sacrifice as you all know. Entrepreneurship seems a little glamorous from the outside, and it is, but it's also extremely challenging. I guess, as brothers, you all have one another to encourage one another, but it must have been a very challenging row to hoe, and probably still is.
0:17:51.7 Quinn Simkins: Yeah, absolutely. I think first off, your own money is on the line, and that makes things more difficult, that we've put in everything that we've saved up to this point, and so our entire savings is poured into something that we care so much about, and our family is a big part of our company, our parents and our grandma who lives locally as well, and then Austin just got married and I'm about to get married, and so it takes a support group of people around us that believes in us and believes in the company and just some of those sacrifices that, yeah, we might have to work weekends, or we might have to work 60, 70, 80 hours in a week to get a project or an order finished, and without those people around us or even without each other, owning a business by yourself, to us sounds like one of the hardest things to do because you don't have that sounding board of, "Okay, well, I have this project, I need help with it." And you have somebody else in Austin and myself to help you through those things.
0:19:01.8 Quinn Simkins: So yeah, we're very thankful for the people around us, but there have been times when you're like, "Man, this is one of the hardest things I ever signed up for.
0:19:12.6 Austin Simkins: Well, and just kind of some insight on the path that we've taken, like we shared earlier, I have my undergrad MBA from the U of A, and Quinn has a double major from the U of A, we could have very easily gone and gotten a job, making a steady salary, and instead we decided, "I think we'll forego a salary, and we'll actually just start paying money ourselves to get this thing off the ground." And we are finally at the point where this company is profitable, and we are able to pay ourself a little bit. It's never been something that's about the money, something more about the passion of the project and the passion of the company, but at the end of the day, to be able to build something that can sustain the life that you want to live from scratch is pretty incredible.
0:20:00.0 Matt Waller: So you've started your business at a time... Not just started, but you're growing at a time when the environment is so tumultuous and uncertain and equivocal. How have you dealt with that in managing and growing your business?
0:20:18.7 Quinn Simkins: I think it forced us to be creative on how we attacked growth and things like that. In a year when lots of businesses have gone out of business, or lots of businesses have seen decline, we've actually doubled our revenue, added about double the amount of stores. So 2020 has challenged us in a way of, I think, more so of understanding supply chain was extremely disrupted during all of this in terms of getting raw materials in and trying to make sure things were getting to customers on time.
0:20:54.3 Austin Simkins: The amount of meetings that we had of, "Oh my gosh, are we gonna get those peanuts in time?"
0:21:00.7 Quinn Simkins: Yeah, yeah.
0:21:00.7 Austin Simkins: And just was...
0:21:01.0 Quinn Simkins: Yeah. We've had some suppliers that have told us lead times got as much as a couple of months, three or four months, so understanding that cash flow is important, but we also have to have product to fulfill those orders, it just made us understand inventory management and supply chain, just put that much more effort and time into those things, so just kind of analyze maybe some of those areas in the business that we had, but we weren't quite optimizing as much as we could have. So we added about 350 new stores this year, it probably would have been more had COVID not come around, but yeah, it's been an environment where we just keep our head down and keep working hard, and we've seen some awesome growth that we're really proud of this year.
0:21:47.8 Matt Waller: Well, to be able to manage that growth, I would think at some point, you're going to need some investments, is that right?
0:21:56.3 Quinn Simkins: So unfortunately, growing a CPG food company takes a lot of money, and it can go quickly if you're not careful with it. We definitely made some mistakes early on as far as spending money in ways that we wouldn't do again, but thankfully, they were at a very small scale. We are in the middle of raising our first amount of capital, outside capital, or private capital, I guess you would say. We're hoping that that will all be squared away by the beginning of next year, and it will give us the funds to have an actual structured marketing program, allow us to be able to build out this new facility that we have, and just... A lot of different things like that. It's something that we've worked very hard on. And when we bring on that capital, we have some really wonderful people. We wanna build a team around us of advisors and investors that we can go to and say, "Hey, we have this problem, we need help fixing it, or growing through it, and things like that." So we know that we're gonna put together a team of investors as well as a team internally around ourselves that really models what Natural Way is about, first of all, and then helps us grow two, four, six times the next year, and also into 2022 as well.
0:23:26.3 Austin Simkins: And the team part is crucial, money is important to have. It's the blood of the business, it makes it go, but we are trying to put a superstar team around us, so when we walk in the door, we're not the smartest person, we are probably the least smart person in the room. We have a lot of really smart people that have done what we're trying to do before already, and they can help us kind of navigate what's ahead of us.
0:23:56.4 Matt Waller: Well, congratulations, what you're doing is really impressive, and the progress you've made is super impressive, so I wish you both the best in this endeavor, and thank you so much for taking time to visit with me about it.
0:24:14.9 Quinn Simkins: Absolutely.
0:24:15.0 Austin Simkins: Absolutely.
0:24:15.1 Quinn Simkins: Thank you so much.
0:24:19.2 Matt Waller: Thanks for listening to today's episode of The Be EPIC Podcast from the Walton College. You can find us on Google, SoundCloud, iTunes, or look for us wherever you find your podcasts. Be sure to subscribe and rate us. You can find current and past episodes by searching, BeEPIC Podcast, one word, that's B-E-E-P-I-C Podcast. And now be Be Epic.