February 20, 2011

The Bottom Line: An enterprise that sticks

By J. Hemmerdinger jhemmerdinger@pressherald.com
Staff Writer

YORK - Jonathan King and Jim Stott never planned to make millions selling jam.

click image to enlarge

James Lawrence puts caramelized sugar into a mixer that is making Dark Chocolate Sea Salt Caramel Sauce at Stonewall Kitchen in York. The company is celebrating its 20th anniversary this year.

Gregory Rec/Staff Photographer

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Tricia Gautreau moves bottles that are preloaded with herbs and spices into a filling machine, where they will be filled with Cilantro Lime Dressing, at Stonewall Kitchen in York.

Gregory Rec/Staff Photographer

Additional Photos Below

STONEWALL KITCHEN

HEADQUARTERS: York

HISTORY: Jonathan King and Jim Stott launched Stonewall Kitchen 20 years ago selling jam at New England farmer's markets. They initially made their products in the kitchen of King's grandparents' summer cottage. In 1995, they gained national attention when they won an Outstanding Product Line award at the Fancy Food Show in New York City. Today, Stonewall products are sold by retailers nationwide, including Whole Foods Market, and overseas.

NUMBER OF EMPLOYEES: 350. Stonewall's payroll swells to about 500 during the busy seasons of summer, fall and early winter.

EXECUTIVES: President and Creative Director Jonathan King, 45, and Vice President Jim Stott, 56.

WORTH NOTING: Stott and King were nearly broke when they launched the company. Today, King estimates Stonewall is worth at least $70 million. And there are no outside investors: Stott and King own nearly all of the company, and two longtime staffers have small shares.

FINANCIALS: Stonewall's yearly revenue is about $50 million.

When the partners launched Stonewall Kitchen in 1991, they just wanted to earn a few extra bucks to pay off student loans.

But the market for specialty jams, jellies and sauces, which the partners initially cooked in King's grandparents' summer cabin, proved bigger than they imagined. Much bigger.

Twenty years later, Stonewall is a multimillion-dollar company whose products are sold nationwide and overseas.

Though King and Stott say they didn't expect such success, they know the ingredients that created it: high-quality products, passion for their work and good timing.

"I didn't have a dream of being big. I was just keeping up with demand," said King, whose office at the York headquarters is decorated with a photo of his three golden retrievers and a 4-foot, elaborately framed poster advertising Veuve Amiot champagne.

"There was no business plan!" shouted Stott from across the room, lounging in a comfortable chair. "We had fire in our bellies. We just made it."

The Stonewall partners haven't always made jam. Stott once owned a residential construction company and waited tables.

King also worked at restaurants, and at a greenhouse in New Hampshire. In his spare time he made jam, which he often brought to work. One day a coworker suggested he try selling it at farmer's markets.

"If she hadn't said that, I would have never thought about it," King said.

He gave it shot, with Stott's help.

The night before the first market, they stayed up late cooking jam. And they sold out the next morning.

For five years they stayed on the farmer's-market circuit, setting up shop every Saturday in coastal towns throughout northern New England. They expanded their offerings to vinegars, oils, pesto and baked goods.

Soon, wholesalers and specialty food stores began buying their products, and Stott and King moved operations from the cottage kitchen to a 1700s-era barn in Kittery.

Their big break came in 1995, when they attended the Fancy Food Show in New York City. They drove down in a U-Haul, and brought back an Outstanding Product Line award, which King compares to winning an Oscar. They also left New York with orders from 500 retailers nationwide.

Around that same time, King said gourmet, specialty and all-natural foods were gaining popularity and more Americans were shopping at farmer's markets.

Demand for their products increased, and the partners relocated Stonewall to York. A few years later they moved again, to 13 acres off Interstate 95's Exit 7 in York. They built a 60,000-square-foot headquarters on the site, complete with corporate offices, production space, a cooking school, cafe and retail store.

The site has became a tourist attraction that King said draws roughly 500,000 visitors yearly.

All that traffic also benefits York, said Town Manager Robert Yandow.

"(They) draw traffic and people to the town of York, and while people are here they are visiting other areas of the town and patronizing other businesses," he said. "Having Stonewall here adds to the town's reputation."

At the York headquarters there's a two-story warehouse King calls his "pantry."

"This warehouse only holds our raw ingredients," he said during a tour. The space is packed, floor-to-ceiling, with boxes of spices, mustards, syrups, oils and other goods.

Nearby is a walk-in freezer that can hold 400 pallets of perishable food. It is kept at roughly 2 degrees Fahrenheit, and in winter is stocked with boxes of blueberries that go into Stonewall's Wild Maine Blueberry Jam.

Stonewall makes roughly 225 products in York, from jams to pesto, chocolate sauce to flavored butter, dips to dressings.

King said Stonewall outsources very little work. Marketing, public relations, and accounting are all handled in York. There's even an in-house photography studio where Stott shoots Stonewall products for the catalog.

Most of the cooking occurs in four 150-gallon steel kettles on the second floor. Below the kitchen is the packing line, where products are bottled, capped and prepared for shipping.

King said the company will cease production in March, when they take delivery of new "vacuum kettles" made by a company in the Netherlands.

Stott said the vacuum kettles pull air out of the berries as they cook. The berries then expand when the kettle is opened, pulling in all the surrounding juices.

Vacuum kettles aren't cheap. The cost of the project, which includes other new equipment, is roughly $1 million, said Stott.

But he thinks the price is worthwhile -- vacuum-cooked jam tastes and looks better and lasts longer.

Stott said colleagues in the jam business often ask why he's spending so much money on the project.

Because he can afford it, and he owns the company, he responds.

"(Jonathan) and I own it. There's no board of directors. My bottom line is flavor and quality," Stott said.

King and Stott, who are life partners, each own close to 50 percent of Stonewall Kitchen. King's sister, Executive Vice President Natalie King, and his sister-in-law, Chief Operating Officer Lori King, own small shares.

Stonewall Kitchen has nine retail stores -- three each in Maine and New Hampshire, two in Connecticut and one at National Harbor near Washington, D.C.

The company's products are also sold at Whole Foods Markets throughout the country, and at specialty retailers like four-store chain Draeger's Market in California, Texas-based grocery chain H-E-B and 18-store chain Roche Bros. based in Wellesley, Mass.

Robin McNamara, Roche's director of specialty foods, said she sells "gobs" of Stonewall products, including baking mixes, marinades, sweet pepper jam, hot pepper jam, kitchen towels and batter bowls.

"You name it, we have it," she said, adding that customers like the unique flavors and variety of products.

"They are always rotating things in and out. They appeal to the foodie," she said.

McNamara estimates Roche earns $1.3 million selling the Stonewall goods.

"God bless America and Stonewall Kitchen," she said.

Stonewall's revenue tops $50 million annually, 17 percent of which comes from jam sales. Retail sales account for 40 percent of sales; the rest comes from wholesale business, Jonathan King said.

The company has traditionally competed with other small jam makers, but King said Stonewall is "creeping up" on big brands like Smucker's and Polaner.

A few years ago, Stonewall hired an international salesperson to expand Stonewall's European presence.

King estimates the company's value is at least $70 million, and he and Stott have big expansion plans, envisioning Stonewall retail stores in every major city.

By 2014, they estimate, the company will be worth between $85 million and $100 million, depending on the pace of retail expansion.

King and Stott are open to selling the company at some point, but only to the right buyer.

"Our heart and soul is here," said Stott.

When asked what advice they have for other entrepreneurs, King said newbies should start slow and small, borrow little, understand what their customers want and perfect their recipes.

Stott said not to let lack of experience stop you.

"Ignorance was our friend," he said. "We knew what we didn't know, so we hired the right people."

And one more thing, Stott said: "Do what makes your heart sing."

Jonathan Hemmerdinger can be reached at 791-6316 or:

jhemmerdinger@mainetoday.com

 

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Additional Photos

click image to enlarge

Wild Maine Blueberry Jam was one of the first jams Stonewall Kitchen ever created and it remains their top-selling product. For its 20th anniversary, the company has made a special Wild Maine Blueberry Champagne Jam. A switch to vacuum kettles is planned as a way to keep improving.

Gregory Rec/Staff Photographer

  


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