Can an Organic Chip Company Survive the Snack Aisle's Street Fight?
In 1980 Bernard, fed up with the ashram-like limits of his wife’s carob cakes and organic lentils (when she was traveling he would replace all the food in the house), decided to turn his cravings into a business, and sold his auto-parts store to buy a $3,000 potato slicer. Soon, he was thick-cutting spuds and frying them in kettles for an extra-crunchy, real-potato taste.
The chips were a hit with tourists, and lines grew outside the new company’s factory storefront in Hyannis. Bernard took his place at the center of a new generation of entrepreneurs who were able to introduce flavorful, premium pleasures — like another New England company, Ben & Jerry’s — to a public that was becoming more conscious about what it ate. Riding the momentum, Bernard and his investors sold Cape Cod to Anheuser-Busch’s Eagle Snacks division in 1985 for a reported $7 million. For Bernard, the sale meant success, but it meant something else for Dawes. “I don’t think I’ve ever fully gotten over the first sale,” she says. “Cape Cod chips was like my sibling. It was something I was extremely proud of.”
Dawes walks to her desk and pulls out a photo of her sitting atop a stack of boxes at the Cape Cod factory. The picture used to sit on her father’s desk, and she kept it when he died. “That was my life, that was my reality,” she says. “It was a small business, there was always chaos, we never had any money, and all of a sudden, it was gone, and I never understood why they did it.” Dawes’s “sibling” came home a few years later, though, when Anheuser-Busch shuttered its fumbling snack business in 1996. Bernard bought the chip company back, and Dawes, who had started a job as a consultant in Boston, returned to run the marketing effort for Cape Cod — and to help Bernard rebuild the brand.
But the family reunion was brief. In the scramble to buy Cape Cod, Bernard had relied on venture capital, and his shareholders had to be paid. So in 1999, having returned Cape Cod to prominence, Bernard and his investors flipped it to Lance Inc. for $30 million. (Lance has since merged with Snyder’s of Hanover, of pretzel fame.)
That second transaction hardened Dawes’s feelings toward institutional investment. “I think I just chose not to consider the possibility that it was going to be sold in a few years when we bought it back the second time,” she says. Which is why, when it comes to her own company, Dawes is being extra cautious. “Our independence is extremely important to us,” she says. “I’m not closed to the idea of a sale completely, but I don’t think I’ve ever truly gotten over Cape Cod.”
LATE JULY GOT ITS START in 2003, when a pregnant Dawes, living in New York City, was searching in vain for an organic saltine to quell her nausea. Soon after, she was hard at work in her apartment, digging through recipes in old Farmers’ Almanacs.