We’re taking a few days off to relax and celebrate the holidays. We’ll be back in the new year with some exciting, new developments.
Merry Christmas, everyone!
in Stuttgart.
Merry Christmas
in Stuttgart.
in Stuttgart.
Sharpening Up
We’ve been busy tying up all the loose ends here at Peapod so that we can start the new year with a bang.
Since every fresh start needs a sharp knife, I finally took the blade on the slicer to get sharpened. Look how sharp it is now!
Workhorse 
James battled hard to get that blade off.
The dullness really snuck up on me (as dullness does). Even the guy who sharpened the blade commented on its poor state. I can’t wait to test it out.
What I’ve Been Listening To
One of my recent favorite podcasts is called Edible-Alpha. It’s hosted by Tera Johnson, founder of Tera’s Whey, and it’s packed full of useful information and insights into the food industry. Tera talks to guests in the food world about how to grow a successful food business. I’ve been tearing through the episodes, soaking up as much as possible. For anyone interested in the food industry, I think you’ll find it fascinating.
Happy Thanksgiving
There are so many things I am thankful for this year. Creating Peapod has been one of my favorite parts of the year, and it has only been possible because of the support of my family and friends. Thank you all!
We’re planning a proper Thanksgiving feast with some friends next weekend. To tide us over until then, we made and devoured a pumpkin pie.
Happy Thanksgiving, everyone!
Pricing and Retail Markups
The last few months have been a study of product pricing. The big question was: how much are customers willing to pay for our product? I was eager to collect lots of data since I didn’t have a good feel for market prices. What I didn’t realize is that we were also gathering valuable information on retail markups.
The jerky is on the shelves of various different retailers: butcher shops, sporting facilities, different types of specialty shops. Surprisingly, the retail markups vary wildly, even within similar categories of retailers, and even within the same geographical region. Some shops want to keep 20% of the sale price. Others want to keep 60%!
Even though I define my own product unit price and my own suggested retail price, the numbers have to fit within retailer expectations in order to get on the shelves at all. At the same time, our product prices across all store shelves have to be pretty consistent. This means that if the retail markups vary wildly, our income per package also varies wildly.
For a 15g bag of jerky selling for 3 Euros (including sales tax), some retailers might expect to pay Peapod just a little over 1 Euro. And this value is assuming that we do our own distribution instead of outsourcing to a distributor. We currently do distribution the old-fashioned way.
There are obviously lots of other factors in play here, such as volume of sales at each retailer or marketing strategies.
In reading about pricing within the food industry, I came across this rule of thumb: take the cost of your materials+packaging+labeling and multiply it by 4 in order to estimate the sale price of the product. If customers will pay at least this price for your product, you might have a working business model.
We’re in the process of developing a working business model.
Does This Count as Competition?
Our local grocery store started carrying these pocket sandwiches. I usually taste test foods similar to ours, but in this case I just really don’t want to. Any volunteers?
Competition from the Black Forest
Look what I found!
Beef jerky found here in Stuttgart 
The fine print
It’s competition from the Black Forest! The thing that struck me is how shockingly similar their product packaging and labeling looks.
I bought a package of their Magic Mustard flavor for a taste test, thinking it would be most similar to our Old Country Road flavor. It actually wasn’t. They’re both spiced, dried beef, but the character is pretty different. Our jerky is thin. We slice it to 2mm before drying. It’s chewy but sometimes almost crispy too. The Black Forest variety was more chewy, like a hunk of meat. A totally different experience. Also, I like our flavor better. Maybe I’m impartial though.
Also, the fine print says “made for Black Forest Snacks GmbH,” strangely not “made by Black Forest Snacks GmbH.” There was no information online either as to who actually produces the jerky. So I guess we’re not actually sure who the competition really is.
Our First Disaster
It was the day our first batch of customer-ready jerky was finished. I had hardly slept the night before out of excitement. James and Kiddo met me at the kitchen so we could package it up together.
A couple of hours before the jerky should have been finished, we snuck some pieces from the oven. They didn’t seem as dry as they should have been. How strange. The possibilities raced through my mind. Did we miss a step? Did we need to open some more windows for better air flow? Was the air today extra humid?
Also, the jerky tasted spicy. Maybe the air was extra humid AND the garlic was extra spicy. It could happen, I rationalized!
I reread the recipe. James reread his notes. After some investigation, we figured out what happened. Some of the ingredients were accidentally tripled in the marinade. Tripling the honey meant that the jerky didn’t dry properly. Tripling the garlic and ginger meant that the jerky was spicy. Tripling some things but not other things meant that the flavors weren’t properly balanced. What a mess.
How can two engineers spend months meticulously refining and documenting a process, only to botch the recipe on the day it actually mattered? Mistakes happen.
We nailed the second attempt.
Notes on Fennel Seeds
Here’s a picture of our Old Country Road jerky. Notice the fennel seeds on top?
These are a few brands of fennel seeds available in Stuttgart. The two on the left are from Edeka, a big supermarket chain in Germany. The one on the right is from our local Asian market. Although they may look similar at first glance, they are actually noticeably different. I discovered this by accident.
Malaya (left) has the smallest seeds. It was actually this size difference which first caught my attention as I sprinkled the toppings onto the jerky. Edora (middle) has the most intense aroma and flavor, and the seeds are even noticeably puffier when chewing. In terms of price, Edora costs about three times as much as the other two brands!
The clear winner for our jerky is Malaya. Jerky toppings should have an interesting and complementary flavor without being overpowering. The texture and mouth feel are just as important. Malaya was our favorite in all of these categories.
Kiddo had no preference.
Customer Feedback
I’m learning a lot by talking to customers. I get all sorts of feedback: some positive, some negative, and a whole range in between. Here are a couple of gems.
“Ugh, I don’t like this. This is very bad. Nobody should make this. Why are you making this? It’s just not good. Please. I don’t think this is necessary. It just doesn’t taste good. In any case, it’s not for me. It’s not my thing. Do you have to make this?…[pause]…But don’t let me discourage you!”
“Hmm. I guess it’s ok. It’s kind of weird. We don’t really have this in Germany. Are you familiar with Landjäger (typical German sausage available in all grocery stores)? Why don’t you sell Landjäger? People buy that.”
This kind of feedback is hard to take seriously. I usually thank them for their feedback, and then I make a mental note to tell James about it later so we can share a good laugh.
People share their opinions on the packaging too. One store declined to sell the jerky entirely because our packaging was deemed inadequate. Someone else told us that the packaging is too neutral and not catchy enough. I like our packaging. I think it looks high quality but also homemade. I won’t go into detail here about packaging and labeling though because that story is a blog post for another day.