Louisville is a hotbed of entrepreneurial overachieving—much of it fueled by our global bourbon industry. Nancy Miller talks to three visionary locals who’ve tasted success firsthand.
Matt Jamie, Bourbon Barrel Foods
You have achieved international acclaim by craft-brewing soy sauce. You started your business in your basement and now have a 30,000-square foot facility. That’s heady stuff.
“The products we make, the 2,000 retailers we sell to in the United States and in six other countries, and the reputation we have established…well, it all amazes me. But, my company, Bourbon Barrel Foods, is about much more than soy sauce. We now make about 100 products. We didn’t get to where we are overnight. It’s been more than a ten-year trip.”
Your intrigue with soy sauce was the basis of your company, so why didn’t you launch the company with one?
“Soy sauce takes about six months before it’s ready, so I started with Worcestershire sauce and smoked salt. I smoked the first batch of salt on a Weber grill. The Worcestershire sauce is vegetarian because I don’t like anchovies.”
Who taught you to make soy sauce?
“I taught myself. On a trip to Japan, one of the premier soy sauce makers in the world said, “It was important that you didn’t come here first to learn to make soy sauce. You have defined your product. It’s very unique.” I knew that, but it was a really great thing to hear from him.”
There have been many small steps leading to the success of your company. What was the first major step?
“Writing a business plan, something I had never done before. It was all-consuming and took several months, but I enjoyed it.”
So, you had a business plan. Where did you go from there?
“Three entrepreneurs were invited to make pitches to about 200 investors who had gathered at the Galt House. There was a guy from a tech company, one from a biomed company and me. Those two were asking for 50 million dollars. I was asking for a couple hundred thousand. I didn’t have a product, just an idea. Several people told me they were interested but wanted to see what I did before they invested.
I also worked with Greater Louisville Inc. And before Kent Oyler became president of GLI, he helped me in several ways, such as defining the pitch deck and introducing me to small angel investor groups. At that time, I didn’t wear ties, but I bought a new one for every presentation.
Ron Fox, formerly CEO of Paramount Pickles, mentored me through SCORE, part of the Small Business Association. He was awesome. He had never worked with someone like me who was doing something so different. I’d like to think I impressed him with the research I had done.
I put personal funds into the business and got SBA loans. Now I have a group of investors who believe in what we’re doing.”
Tell us about the special pitch that was a momentous business boost.
“Woodford Reserve asked if I would like do to a promotional item. Before I knew it, I was pitching to the Woodford Reserve brand team. They were assembled around what seemed to me like the biggest table ever. When I left, I hoped it had gone well. At least I knew I had their attention. I had pitched 12 products. They picked 10. That has morphed into our becoming a licensee for Woodford Reserve products such as several varieties of bitters, bourbon cherries and smoked lemon pepper.
We also make Henry Bain’s sauce for the Pendennis Club, Chef Edward Lee’s Sambal Hot Sauce and Nativ Harvest’s spice blends by Mossy Oak.”
How are your sales segmented?
“Food service: 5 percent; wholesale through distributors or direct to retailers: 70 to 75 percent; e-commerce: 10 percent; remainder of sales through our retail store.”
Why did you expand beyond your manufacturing facility and warehouse in Butchertown Market?
“The first year we survived on our products. Last year we opened a 950 square foot retail store on Frankfort Avenue that has been a great brand ambassador and marketing tool. In addition to our own products, we have a curated line of items such as cookware, barware, books and Louisville Stoneware products…things that accentuate the Bourbon Barrel Foods brand.”
You debuted a 350-page book, Eat Your Bourbon, that gives an inside look at you and your company, as well as hundreds of recipes. That’s quite a feat.
“It was a three-year feat. I still pick it up and think, “I can’t believe I did this.” I’m very, very proud of the team effort that made it happen.”
“We’ll be introducing some new products and hope to open in Lexington in the fall. That’s just what’s happening this year. We have a lot of plans for the future.”
Do you have any advice for budding entrepreneurs?
“Become an expert in your industry. Write a business plan. Hold your equity. Don’t be afraid to make mistakes. The best learning experiences I have had came from messing up. I never made a mistake that wasn’t recoverable.”
David Dafoe, Flavorman and Moonshine University
You were in the midst of a great career with Brown-Forman. Why did you break out of the corporate world?
“Any large company has a mission and vision and are on those like a dog on a bone. I was in my 20s and had what I thought were the coolest ideas to do beverages and new products. Brown-Forman is a terrific place to work but I got a little bored and frustrated, so I thought I should do something on my own. I wanted to use some of the creative energy I had worked up over the years.”
The beverage development consulting business you started in the early ‘90s was called Pro-Liquitech. But now everyone knows you as the Flavorman. What’s the story?
“We’re a product development company for the beverage industry, working with clients from the initial development of a concept through manufacturing. Flavorman has a couple competitors but none are as big or as widespread as we are.
I named the company Pro-Liquitech because I thought the “Pro” part was very upbeat and progressive “Liqui” because we were going to develop liquid products. And the “Tech” sounded technical. In 2008, when the economy took a turn for the worse, our orders stopped and the phone didn’t ring. We took an in-depth look at Google Analytics and discovered that people who typed in Liquitech spelled it wrong but could still get to our website. Many people referred to us as Flavorman anyway, so we just started calling ourselves that. Only two customers even cared about the name change. One thought the name was cool. Another said he thought it was childish and not very scientific. Pro-Liquitech is still the legal name. Flavorman is a dba.”
Much of your work is very secretive.
“We work with four of the five of the world’s largest distilleries and other major names such as Jones Soda, MillerCoors, Pepsi Americas and Kellogg, and one of the biggest movie stars in the world who is doing a beverage. But, many of our clients don’t allow us to mention their names.”
You also own Distilled Spirits Epicenter, home to Moonshine University. Now that sounds like higher education with a twist!
“It’s a spirits and distilling education program. The first class, in January 2012, filled up immediately with 40 people. We have about 25 different classes. Associated with it is the Grease Monkey Distillery which is available to Moonshine University students who are distilling their own products as well as to large distillers for small batch runs.”
There may not be a magic formula for becoming a successful entrepreneur, but you seem to have what it takes.
“You have to be willing to take a risk, but you take it after you research and the pros and cons and decide if it’s worth doing.”
Have you had any mentors?
“Yes, three. My paternal grandmother filled in for my father who was killed two months before I was born. She used to say, “You just gotta try. If you fail, it’s ok, keep going.” I still believe that. Another mentor was a guy named George Long, the most patient man I have ever known. He taught me how to taste things and create flavors. My other mentor was John Bujake, who was Director of Research and Development at Brown-Forman. He let me loose on projects but would rein me in now and then. From him I learned the business part of the beverage industry.”
How did you raise the capital for your businesses?
“I saved money from my Brown-Forman days and used a credit card, which is unthinkable now. I wouldn’t recommend it. Then we worked on cash flow. Five to eight years into the business, D. D. Williamson invested for a short time until I bought them out. We have had three SBA loans, all paid off, and small business loans from the city-funded METCO, which have also been paid off. We also have a minority silent investor and a big, fat line of credit that took us 20 years to obtain.”
How have you dealt with setbacks?
“My stepdad was really my dad. When he died in 1997, I had the feeling I just wanted to walk away from the business, but the people here pulled me back. This is the best place imaginable. Another awful setback was in 2009, when there was a huge flood in Louisville that was devastating to us. We were just recovering from the recession. I went in the bathroom and cried because I didn’t think we could recover. Again, I wanted to simply walk away. I felt such guilt for feeling like bolting. The employees were like family, and because of them, we made it through. We were out of business for about a month. We delayed some orders but didn’t miss any.”
What motivates you?
“I like to do new things and I get bored quickly. Our projects, all 83 active ones, are all different.”
Joe Heron, Copper & Kings American Brandy
Nutrisoda and Crispin Cider were your first two entrepreneurial adventures following your career on the medical nutrition side of a major pharmaceutical company. But your grand ambition was to start an American brandy company.
“My wife, Lesley, and I are always focused on the next big thing. We’re interested in the vacant white space. The questions we ask are: How well served is the market and how fragmented is the market? We look at the opportunities for quality enhancement: better ingredients, better packaging, higher prices. We would never have gone into bourbon There are a lot of big brands and craft distillers doing a good job.
In brandy/cognac there are basically six players, so the market is relatively uncrowded. We saw cheap and sweet California brandy and fifty-dollar cognac, with no prices between those. We thought, wow, there’s a big price opportunity. Three and a half years ago, there was no such thing as definitive American brandy, so we invented that with Copper & Kings American Brandy.”
Louisville might not be the first place most people would choose for a brandy distilling location. Why did you?
“We first though of going out west, to Tacoma or Portland. Dave Dafoe, of Flavorman, helped us start Nutrisoda and Crispin Cider, and persuaded us that Louisville was the place for Copper & Kings. Anchoring ourselves in the heartland of American distilling gave us the positioning and credentials to be a true, authentic American brandy. I think Copper & Kings reflects the personality and character of Louisville…great music, food and art. It’s a vibrant, modern city and Copper & Kings is a vibrant, modern distiller. We’re new school, not old school.”
But you didn’t start small.
“No, I like to say head first, boots and all.”
What motivates you?
“I once had a moment of clarity and realized this is my creative expression. Copper & Kings has music running through its DNA, but I might be the most untalented musical person in the world. And I love fine art and photography, but I can’t do any of that. The creative water I swim in is how I start these businesses. There’s a lot of joy in making an idea real and tangible. It’s not only the creative and artistic side but also the joy of people and building teams and becoming part of your community. That’s extremely motivating and powerful and has longevity.”
You weren’t content with distilling only brandy. Now you’re into other spirits.
“We are the accidental gin company. We make gin in a very different style, using a brandy process. We use apple and grape brandy as our base and add botanicals. When we got into gin, we distilled the oldest gin recipe.”
What sets your company apart?
“We are strategically rational. We don’t have an emotional passion play idea. We’re focused on execution. Lesley and I don’t talk; we just do. The highest state of consciousness is the state of doing. Also, we are like lightning. If you’re small, you can’t be slow or you’ll get crushed by the big guys. And we are relentless.”
What have been your major challenges?
“There are always two: having enough capital and having the right people. Both come at you with frequency and intensity. You have to have a team that will support you through highs and lows. We look for people who give energy, who have creative mindsets and are not satisfied with achieving the ordinary.”
How’s business at Copper & Kings?
“We are in 31 markets and will approach selling this year 20,000 cases of everything we make, mainly brandy. The intention is to double that again in 2019 and double it again in 2020.”
You and Lesley are Copper & Kings. Why did you recently sell a minority equity stake to Constellation Brands?
“The financial capital required in brown spirits is enormous. In Constellation Brands, we found a partner that shares our culture and has synergy in terms of our supply chain. Constellation is basically an entrepreneurial company masquerading as a commercial giant. They are really nice, smart people who are excitable and creative. We love that. They get us and they get the business.”
Looking back on your success, is there anything you would do differently?
“I would have gone into gin earlier. The rearview mirror is very unhelpful for going forward. We just attack and move fast enough to pick up the mess behind us. You don’t chop a lot of wood without getting splinters.”