Crunch Time

Can an Organic Chip Company Survive the Snack Aisle’s Street Fight?

The idea behind Late July was to mix organic values with well-crafted, indulgent snacks. In the beginning, the brand took familiar products like Oreos, Ritz crackers, and saltines — the kind of stuff Dawes wasn’t allowed to eat as a kid — and “fixed” them for an organically conscious generation. That meant no trans fats, no genetically modified organisms (GMOs), no artificial flavors, colors, or ingredients — just real stuff like whole grains, sugar, chocolate, peanut butter, corn, even flax, chia, and spelt. Dawes was determined to earn the certified, regulatory-approved, USDA Organic seal, a standard that means a food is made with at least 95 percent organic ingredients. Late July’s products debuted with that seal prominently displayed, a badge that announced to corporate and consumer buyers alike that these snacks were different.

To help get the fledgling company off the ground, Dawes coaxed her father out of retirement. Together they raised $2 million via the “friends and family” route — a method her father had always shied away from. In exchange for the startup money, the family gave up 40 percent of the business, keeping 60 percent for itself. “It was a real eye-opening experience,” Dawes said. “Our friends and my dad’s friends found out we were looking for money. And checks just started showing up.”

So did the buyers for the super-markets. The brand’s cookies and crackers struck a chord with buyers like Perry Abbenante from Whole Foods, who saw the potential in supplying the growing phalanx of organic consumers with ready-to-eat products that extended beyond produce. “Late July was very inventive,” Abbenante says. “They were taking those old classics and making them clean.”

For six years, Dawes and Bernard worked side by side: He took care of the initial sales calls while she developed new products. The brand grew every year. Then, in October 2008, Bernard got sick. What started as back pain on a visit to the Georgia factory was quickly determined to be pancreatic cancer, and it moved like a freight train. Over Christmas he had a stroke, and by March, with the most important natural-foods show in the country, Natural Products Expo West, just around the corner, Dawes knew he was dying. What’s more, she saw that her business could end up in trouble, too. The economy was faltering, and as family budgets grew tighter, she worried that shoppers’ appetites for organic snacks would wane.

Bernard wanted her to go to the expo despite his illness. It was imperative that she meet with the buyers and distributors who could keep the brand growing. All the players — the natural-foods stores and co-ops from Berkeley to Burlington, and the big stores like Whole Foods, Target, and Costco — would be trick-or-treating the aisles, hands outstretched for samples of the next big organic hit. To Bernard, the future of the business he and his daughter had built was more important than his condition.

His speech compromised, Bernard got a friend to insist that his daughter go. She bought a ticket, showed it to him, and convinced him that she was getting on the plane. And then she stayed at home with her father, anyway. It’s a decision she says she’s never regretted.

A more complicated decision, though, was to begin broadening Late July’s product line. Dawes understood that there was an opening in the marketplace for an organic tortilla chip, yet she couldn’t help but feel that moving into chips would encroach on her father’s legacy. She also knew that chip competition is fierce. “I thought it was completely crazy,” she says. “The chip aisle is a monster. But [Late July] had been around for a while. We built a foundation and said, ‘Let’s just go for it.’”

 

  • Daniel

    As one of the 103 employee-owners of a growing, local, organic food and beverage company, Equal Exchange, and especially as the person responsible for raising the millions in capital we need, I read t

  • Daniel

    Here’s my view as one of 103 employee-owners of a growing, local, organic food and beverage company, Equal Exchange, and especially as the person responsible for raising the millions in capital