Coming from four generations of Sonoma vintners, Jon Sebastiani ’12 knows how important it is to balance the opportunity inherent in current market trends with the need to build a company that will thrive over the long-term. He kept that balance in mind as he sought to establish and dominate an emerging niche in the food industry by launching Krave Jerky in 2011. He spent four years building the business, which he sold to The Hershey Company in March 2015; he will stay on, however, continuing to oversee the brand’s market expansion and growth.
A longtime fan of jerky, Sebastiani was determined to make it appeal to health-conscious consumers. “Across the board, we’re seeing dieticians and nutritionists recommend the idea of healthy snacking as opposed to traditional meals,” he says. “I was looking for a product that had the potential to cause real disruption, and it struck me that this category was misunderstood by the average American consumer. I was buying the product for myself for the health benefits, so I knew that when it’s manufactured appropriately, it’s a very good health snack. This was an idea that I was alone in doing, and I wanted to be a leader. I wanted to be the first one to try to change the profile of jerky.”
Sebastiani was enrolled in Columbia Business School’s Executive MBA program when the idea began to take shape, and he essentially workshopped the concept among his professors and fellow students as he pursued his degree. “The program gave me the courage and initiative,” he says. “In almost every course, I was able to use the company as a case study, as a class project.”
The input from the School community was both inspirational and practical. In late 2010, as Sebastiani was raising angel investments for the business, he got a lesson in how to make the most of those funds. He had planned to purchase his own manufacturing facility so that he could be in command of the manufacturing process and quality control. “Coming out of the wine business, that is what everybody does,” he says. “But one of my professors helped me pivot away from that and instead encouraged me to research and find co-manufacturers. It was a very significant shift in my focus at that time, and it allowed me to preserve capital. All the capital that we raised was put into the brand and into our people.”
Investing in the brand was critical because he wanted his product to be a market disruptor, to combat a prevailing consumer attitude that jerky “was junk food and could not be considered gourmet,” he says. “So the first challenge was to overcome the stigma associated with jerky. As people tasted our product we saw that their attitudes changed immediately, and they became our best evangelists. So we used the private equity capital to build up strong marketing and sales teams to really create brand awareness and drive the growth of the category.”
Rather than target men at sporting or similar events, Sebastiani used a strategy that many might consider counterintuitive: his initial marketing campaign was directed at women, in venues such as yoga studios. This approach played up the product’s health-conscious attributes and what Sebastiani calls Krave’s “interesting gourmet flavors.” The packaging employed “bright and pastel colors that were more appealing to women. And it worked. When we spoke with retailers and customers alike, oftentimes Krave Jerky would be compared to a Cliff bar or Chobani Greek yogurt — brands that ‘better for you’ consumers prefer for that healthy snack. I felt that if we could put jerky in the same sentence as those brands, then we would be alone in our category.”
Far from walking away from the company following its acquisition by Hershey, Sebastiani has big plans for it. “Their experts on the supply side are going to be instrumental not only in continuing to improve our existing products, but helping us introduce new flavors and concepts,” he says. “We believe this idea of portable protein snacking is going to continue to be a big trend. Also, Krave employs about 75 people, while Hershey has more than 1,000 salespeople, so I imagine the brand is going to become far more visible and merchandized in new locations.”
The company’s success is a point of pride not only for Sebastiani but for the faculty members who shepherded the enterprise through its incubation stage — including two professors who were among the company’s early angel investors. “That was a great feeling, to have your professors invest in your company,” he says. If all goes to plan, someday the phrase “aged like a fine jerky” may just enter the lexicon.
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