Inside Teton Valley Brands' Trojan Horse Strategy | Matt Price, Teton Valley Brands

Speaker: 00:00
Welcome to Shelf Hell. Today we're speaking with Matt Price, president and CEO of Teton Valley Brands, Idaho company behind Real Hyda Idaho Potato Chips, the Snake River Valley Farms, American Magu Beef Tallow Chips, and then most recent addition to the lineup to the portfolio, Tallow and Stone as well. So super excited to dive into the all things Teton Valley. Matt took the CEO seat back in 2024, I believe, pretty quickly stood up a new production facility, and uh they're kind of off to the races from there. So uh yeah, again, Matt, super psyched to have you on, and maybe just kind of like first off, just for the listeners to set the stage, ones that maybe is maybe not as familiar with with Teton Valley, love to just get quick lay of land, just in terms of the origin story and why behind the organ and the brands under the umbrella, and then uh we'll go from there. Yeah, I mean, and thanks for the the kind introduction.

Speaker 1: 00:51
So Teton Valley brands really started because of a rebellious founder named Kyle Neering, who uh who his whole life he wanted to be an entrepreneur and he was living with his family in St. George, Ida or Utah, and just decided that you know there needed to be an Idaho potato chip. They started rebagging chips in their basement, sold the house, sold the farm, and moved to the Treasure Valley. And when I met the, when I when I met Kyle, they were operating out of a very humble uh 2200 square foot facility in Nampa. So they had figured out a couple things. They'd figured out how to build a start to build a brand, and then probably most impressively, how to shoehorn an entire production line into a very, very, very small space. Like apartments are bigger. It's it's crazy. And when I got involved, I was before I took the CEO job, I was working on the side with Kyle, I guess as you can call as a consultant. And yeah, I mean, I I really believed in his dream of the manufacturing side of what we're doing. And I and again, just just knowing, having some experience building brands before, I saw I saw this vision of Idaho farmers investing in Idaho businesses and everybody coming together to kind of put their arms around, you know, a company that we very much hope is iconic. It's not for sale. We're trying to build something that we don't want to sell, which I know is a little bit staggering in the CPG space sometimes. But today, like you mentioned, we have a partnership with Snake River Farms. We do, we're the only player in the market that's using Wagyu tallow in any real way. So we're using it both in our Snake River Farms product, and we're also using it in our tallow and stun product. So we bel we believe in tallow, we believe in snacks, and I think what we're really trying to do is become the most innovative snack company in the country. Love it.

Speaker: 02:39
Right out right out of Idaho. You have historically a a fair amount of background in the venture capital space. You and I chatted, I think, a month or two ago, and uh we were just talking about all things CPG, and one thing you you told me was that something along the lines of there's oh you're seeing a lot of from your perspective mistakes being made at this moment when it comes to how brands are raising. Tell me more about why you feel that way. Man, it put me on the spot right away.

Speaker 1: 03:03
I mean, yeah, yeah, having having had a and and continue to have a foot in the venture world, obviously you see so many opportunities. And so you see so many different brands, different founders, and a lot of them sing the same song. And I realize everybody's trying to win investment, so don't hold it totally against me. But you know, you you talk of they really hear about this incredibly fast journey that's gonna happen, right? And it's gonna end up in the hands of Pepsi or KDP or Coke. And and again, that's not a bad goal, but the way that the companies are getting built, you know, insists on that one big first round and then continuous rounds. So, you know, you're raising money at huge, huge multiples the whole time, which when it works, when the product and and the category come together and it works is great. And there are brands that have pulled it off. But I think for the most part, the journey for most founders is at least 10 years. And so if you change that timetable, you know, again, I think you're giving yourself so much m so many more options to be successful. Again, there are outliers, they happen every day. I just read that Goodles are Goo Goodles? Yeah, Goodles, yeah, yeah. Got just got bought. So again, there are you know, there's of course good stories, but I don't think that that is for everybody to pursue. Totally. And again, we're trying to do things differently here. I mean, we're the way that we the way that I really wanted to build this business was I wanted to have a revenue engine, a profit engine in it that wasn't connected to the brands so that we weren't endlessly out raising cash against a brand, right? And so copacking for us really quickly needed to come up and underwrite a lot of the things that we're doing on the brand side.

Speaker: 04:50
Yeah.

Speaker 1: 04:50
And luckily we found ourselves in a position where there isn't a whole lot of copaking options in the West for potato chips, and there certainly isn't for for copackers using talent. So we kind of found ourselves in this really interesting, unique spot both on the on the map and also what we're actually manufacturing with.

Speaker: 05:09
How should a brand, how do you decide when venture is the right path, is the right tool versus when it's the wrong one?

Speaker 1: 05:16
There'll be plenty of people that probably will chime in and prove me wrong here. But you know, look, I think it starts with a product that sells itself organically. So for instance, we when we put out both of our tallow brands are right now only around a year old. That's it. And they have national coverage, nationalist sprouts. We actually tested them through the lens of a local company here. My point being is if it doesn't grab people and move itself off the shelf at some scale, like then it if it doesn't do that, then venture capital isn't the right path. It just really isn't. If you're using venture capital to try to support and build up your your actual sales, that there's a disconnection between the consumer and the product, venture capital doesn't work that well in that in that way.

Speaker: 06:02
A month or two ago, you were talking about it on a similar track where it's a long journey, much longer journey than maybe perceived in the media or whatnot. But I think you just mentioned you feel like operators kind of tend into Russian building a brand in general, and I think they can do it in short order. What does building an actual real long-lasting brand mean to you?

Speaker 1: 06:20
That's such a good question. I mean, I think I would I would flip it around and say, I'm a big believer that we focus on building the company and then the company informs the brand, right? Because if if we're funneling all of our cash into social or something else, it's obviously not hitting another part of the company where it needs to. So I think, you know, again, focus on building the focus on building great companies, the brand's gonna come with it. You know, it really will. And I again, that's just uh something I've learned through pain losses. I've been part of and and instrumental in in losing five, six million dollars before. So I know the game, but this time it was to build a great iconic company. And we knew that the brands would follow.

Speaker: 07:06
Yeah. What do you say? What what do some operators miss about what it actually means to build a brand from your experience? Well, I think it's a great question. I think maybe this is not the great same question that you're gonna answer, but I like a thing I often hear is you'll hear people say, you know, building a brand isn't just building website and designing nice looking packaging. Like there's a lot more to actually at actual brand means.

Speaker 1: 07:28
Yes. And honestly, when you get when you get deeper into the industry, like you mentioned, the brand is also how you deal with your co-packer, the brand is also how you deal with your vendors, your stakeholders, your retailers, you know, those types of things. Being dependable, being honest, being able to, you know, really build relationships in this industry is massive. I feel like where where this can get off track oftentimes, and especially in the age of social media, is that the brand gets starts to get propped up and built up before the product actually has a chance to hit. You know, like the product doesn't have that connection to the consumer yet. And so in success, what happens in that scenario is you get a whole lot of trial, right? You get trial that comes in, but you don't get that repeat fanatic business oftentimes. Or if you do, it's a lot smaller than what you thought.

Speaker: 08:18
From a manufacturing standpoint, most brands really tend to stay asset light, lean on Kopackers, like you just touched on, as long as they possibly can. You guys went a different route and built your own facility early on, and you and I think as you put it, you know, none of us were inherently manufacturing guys, but you figured it out anyway. Walk me through that decision process, at least to start, that led you to go vertical.

Speaker 1: 08:41
Yeah, that's a great question. You know, when one of the things I really liked about the business, even it was even after it was so small, was I like that it had a manufacturing component to it. And and the reason why I think that's important is you give the business so much more optionality when you've actually got a manufacturing asset to work with. You know, there's a portion of private label that comes into play now, but it's also extremely expensive. It's extremely hard to control if you've never done it before. I but I was absolutely shocked at how much more management and organizational structure had to go into that part versus sales and marketing. So it was kind of like we built a corporation on this left-hand side, but we were still playing a startup game on the right hand side. So I mean, I think that's a I I understand why why people don't do it. However, we want to build a forever business. We want to build an iconic Idaho business, and we knew that for us to do that, we couldn't run asset light. We needed to build it up. We're also vertically integrated with our potato partner, who's also our largest cash investor. So yeah, we're starting to like, we're starting to learn a lot of these things in both in good and bad. This isn't any picnic by any stretch, let me just tell you that now. But it's a real business, and I'm not saying others aren't building real businesses. I am saying that I know at the end of the day, we always have a game to play. And in success, us working with other companies helps underwrite the success of our brands in a way where I don't have to endlessly raise cash. We have raised cash and we will continue to raise cash, but it just doesn't, I mean, we are as of today profitable, which is uh a feat that I don't I don't think anybody had on their big go card yet. So we're we're we're going through that that space of okay, we have so much more bankability, optionality, and things that would have never happened without us taking a little bit of a step back from the brands and focus on building the company.

Speaker: 10:38
Yeah.

Speaker 1: 10:39
Probably as as eloquently as I can say that.

Speaker: 10:42
Yeah, no, it makes sense. So you went from this small spot in Nampa to I think it's now like a 14,000 square footage facility, quickly ramped up to two shifts. Like curious, like as you're ramping up that quickly, what just for some other founders, operators are thinking of of going vertical early on as well, like what what do you remember broke first? What kind of caught you off guard is ramping this up?

Speaker 1: 11:01
So honestly, the thing, and it still continues to to drive us crazy. And you know, we're building startup brands. And so from a manufacturing standpoint, that's really, really hard to forecast. I mean, we're still waiting, you know, if Costco tells you, yes, here's a whole division, here's a month, right? Like you're gonna scramble to make that happen. So I think still early on, the predictability of the orders and all that, I think that has become something that we have, I don't think we've certainly figured out, but definitely something we've started to really pay attention to. So I would say that get ready for that part, because that part on your operations team sucks and they will hit you for it. What did financing look like for this? You know, again, transferable lessons from other companies, right? I had, due to a pri to our previous company that we had tried here in the Idaho area, I learned or kind of figured out that farmers, middle to large size farms, had some appetite to get involved in kind of the end product. So if you grow the potatoes, there was appetite for them to be in potato chips, right? And and I come from a farm family, so I have no problem saying this, but farmers like risk if you can talk to them at the right time of year. I mean, they are that is the definition of risk, right? And um, and they have made the very best partners. So when we started, when we, I guess not started, but came to this project and knew that for us to be successful, we couldn't be out, you know, garnering $50,000 checks with your traditional angels. Really wanted to have a partner built in into this whole machine. And Cranny Farms for us, who's one of the larger potato farmers, one of the largest farmers in Idaho, certainly one of the largest potato farmers, like came in and really became that equity piece, that that part of, you know, I think the total they have invested probably close to five million in the time that I've been here through both equity and debt. So you having that capital partner on the other side that you want to sit in a boardroom with is uh is been a feat on its own, to be honest. But so we've used almost we've used equity financing traditionally, we've also used plenty of bank financing around the equipment. Great. What have you learned about building a manufacturing team? Well, I can tell you right now, this podcast isn't long enough to house all the things I've learned. I mean, I don't know what I was exactly thinking, but I think going into the to the manufacturing project, staffing it, providing leadership to it, understanding it, you know, it was way more than I thought. I mean, well, I don't know what I was thinking. You know, you're building this other ecosystem in the company that has to run, you know, almost militant, right? For you. I mean, we make food. So there are standards that we have to meet. And there are no, unlike in other parts of the startup where you can cut corners, you can't cut corners on that part. So I think the complexity of it, I think understanding the different layers of manufacturing that I had not worked with before, I think that one really pushed me back and really made me think about wow, you know, what were these two sides of the organization are so different in just maturity and organization and all that stuff. It's just been crazy. Um, the other thing obviously learned was just the certification world, what it takes to be certified and and what Costco needs or what Albertsons needs, um, and then how to get there. But I will say this, it comes down to, you know, who, not how. I think that's one thing we've done a great job was being able to identify the right pieces to help us build that who, you know, that is their expertise. And and we've just today gotten such a great staff going on our operations side. It's it's fun to watch, it's fun to be a part of. We are only now just moving into our own executive offices. So my office is the front of a conference table in the middle of the operations room. So it's been uh it's been a lot of learning uh and meeting the people and understanding just by kind of living here with them.

Speaker: 15:00
How have you approached building a culture that corporate team and production team really feels like one big team? Because in my experience in the past, that that can be a bit of a challenge. Yeah.

Speaker 1: 15:09
You know, I went in sort of idealistic and saying, you know, we want to if the answer, if if we have an issue and the answer comes out of status quo, then we should do the other one. And and that's been difficult. Um and and a little bit more to that point is if I ever find or we ever find ourselves playing the same game that Lay's is as an example, we have already lost because we will never, ever even come close to outspending them in playing that game. And so I think trying to get that established across a, like I said, a very militant A plus B uh culture, getting people to take some chances in terms of strategy, I think, has been a little bit harder than I thought. But to be fair, Tello sort of just walked into our facility in a way. So we've we've certainly gotten some luck from whoever's controlling the world here.

Speaker: 16:01
What can you tell me about uh what I you called it the Trojan horse strategy in relation to your whole approach to scaling up this company, building out an in-house manufacturing facility, growing the brand, all the things.

Speaker 1: 16:17
No, is the Trojan horse specifically. So when we entered into a relationship, then a contract with Snake River Farms, we knew that that wasn't the Snake River Farms product wasn't inherently going to drive our brand equity anywhere, right? It's uh it's a very well-established luxury meat company. But what was interesting about that, and I how I thought about it differently, was okay, Tallow at that time was a new thing. And you're gonna get retailers that are sitting on their hands because they aren't exactly sure about the real thing. There isn't a lot of data yet to support it. And what I've learned and what we did was we took a very well-established brand that was easy to say yes to, which was Snake River Farms Wagyu Kettelcha, and then used that to drive relationships with retailers, distributors, brokers, all those things, knowing that we could come right behind it with our own tallow and stone tortilla chip offering. So we've let the already pre-established luxury brand pave the way, and then we have were quick to load in our own things behind it. So I don't want to say tip the Snake River was by any means a Trojan horse, but that's how we thought about it. And honestly, that's how it's worked.

Speaker: 17:28
With regards to real Idaho chips, what were some of the key variables thinking back that were top of mind for you and the team when you were building out of the brand identity, positioning how you wanted this brand to sound in the market and kind of you know, follow-on questions of kind of what really just makes the brand stand out on the shelf amongst all the other chip brands?

Speaker 1: 17:46
Fabulous question. So I I can't take credit for the origination of the brand. Kyle Neering, our founder, you know, his uh his signature is on the back of the bag. So he's probably a little bit better to talk about the beginning of it. But, you know, one thing I really thought through was, you know, in industries and categories that have branded geography. So you've got the Florida orange juice growers, you've got Napa Valley wines, right? There are people that have like figured out how to brand the area and then elevate the area. So again, knowing that there wasn't any Idaho potato chips in the market, we thought, for sure, that the most recognizable potato state in the world should probably have some cachet as it as it goes to you know building out a potato chip. And we've and we've learned that. I think the other part of this brand that I've taken, we've taken so seriously, and by serious I mean reining back its growth potential, is really focused on this brand is beloved in the state of Idaho. And I mean beloved. People know it everywhere. And so we've really like let that breathe. We've really tried to make sure we really understand as much as we can about what we're doing with that brand specifically before we put it out into other markets. And that's the nice thing about our co-manufacturing business, along with our other tallow brands, is it gives the brand that we started with, the one that we really, really, really, really wanted to make work. You know, we're it puts us on a four or five, six year trajectory where we're not beholden by investors to revenue numbers where we should have had to shove it out down someone's throat and then have it work. So, I mean, I think when when people think about potato chips in in five or ten years, I think there's gonna be a subset of that market. They're gonna come back and and really believe and understand why Idaho potato chips have a differentiator. And they and and they really do. Yeah, totally.

Speaker: 19:39
And on that front, what were some of those key variables that you guys dialed in and played around with between those first iterations of the chips to the version you now ha have in have in the market and some of those tweaks you've made along the way to optimize?

Speaker 1: 19:54
You know, a lot of it kind of flowed right behind the I would say quality of our equipment. So, you know, you add a centrifuge, you can pull a lot more oil out than you did before. You know, we brought in a a fryer, actually have two now, that are like the Ferraris of potato chip frying. And so you're we we got product, uh, there were product improvements that were just naturally coming from the facility that we were building. We have our longest customer, it started out as a six-month trial, and that's Alaska Airlines. And Alaska Airlines continues, that was three and a half years ago. They said we'll give you six months. We're still on every flight. I mean so you know, we're seeing it resonate with people that they're really good chips, and then okay, by the way, they're from Idaho.

Speaker: 20:40
Yeah. So I don't know if that answered your question exactly. What's really different about tallow and maybe specifically Wagyu tallow compared to using the more traditional seed oils, avocado oil, coconut oil, other oils.

Speaker 1: 20:51
Yeah, I mean, I think there are definitely setbacks, drawbacks to using Wagyu tallow or tallow in general over everything else. It's a different, it's a much different cleaning process. It, you know, again, it's it's just enough of a pain in the ass about, you know, to everybody on our team that we're in tallow. But, you know, as far as it goes, once we started the machine, once it goes to the line, I think we've cracked the code where it's no longer so inconvenient. But there's a reason why tallow isn't being produced by every facility. And that's partially because every facility would have to then trade in their kosher certification. And that's just not gonna happen. And, you know, it just it it provided us such a fantastic opportunity knowing that we were planning on growing. Not that we needed to do it today, but in five or ten years that we would have a we could it's really expand on a niche, both brand and manufacturing wise.

Speaker: 21:45
On the tallow and stone side of things, when you guys are building out this brand, what was different when you're building out similar like brand identity positioning, how you wanted uh this brand to look and feel and and sound in the market, and how similar or different did you want it to be compared to real Idaho chips?

Speaker 1: 22:00
Yeah. Such a great question. Again, I mean, I think we started with we started with the price point. So if you look, if we looked across the spectrum, you know, you had at that time, the beginning of it, you had, you know, a a company that was putting out twelve to thirteen dollar five ounce bags of chips. And they were doing it fairly successfully online. But if we as we zoomed into it, you know, it felt like the premium part of the category as you fast forward, as more entrants came into the category, you're gonna see the consumer have a lot more choices than $13. Right. So we really tried to price it first and foremost in a way that was both scalable for us, but also like had the consumer in mind. Which we end up $699, $7.99 on shelves, which that's still a lot of money for a bag of chips, like in any way. But we're seeing it resonate with that consumer who number one is a fan of Snake River and loves the meat eater part of it. I mean, I think that's a big subset of our consumer on that product. And then of course you've got the the health focus three ingredient people that are stoked about it and also having a choice that's something that's somewhat affordable that they can keep coming back to. Are you feeling like a tallow wave right now? Yeah, I think so. I mean, I mean, yes, and you know where we're seeing it, we are in the natural channel and we're we're excited about the natural channel, but for the most part, like what I wanted to build was something on the highest end of premium in traditional conventional grocery. Something that I can drive to Boise, Idaho or small town New Jersey and and still have a chance to, you know, to buy and cut back to get more of it. So I think we really started with price point. I mean, the rest of the Talon Stone story is hilarious, hilarious in the way that we were making kettle chips. We were like, well, let's throw a tortilla in there. And it came out, tasted amazing. You know, we put a brand together inside a week, and uh we were testing it in local places, you know, inside of a month. So in many ways, the beginning of Talon, it's it's the very beginning of Talonstone. And we're letting the consumer drive those those choices and give us those decisions rather than us sitting in a room trying to shoot holes in you know, in consumer research or data, like we're we're letting the consumer drive it, which is I I would that's the only way I think to get it out brand new brands out efficiently is to take it one step at a time.

Speaker: 24:17
From a a go-to-market and retail standpoint, with this two brands, how do things actually work? For example, does the sales team, your brokers, et cetera, pitch the two brands together separately depending on the retailer? Have you found that each brand is kind of resonating with certain retailers better than others as well as consumers? Like how how is that working with kind of a a uh multi-brand approach?

Speaker 1: 24:36
Yeah, no, fantastic question. So it's working well. I mean, I think going back to the Trojan horse part of it, every, you know, most retailers are at least open-minded right now to to tallow as a thing. And I think moving forward, I think it's going to be a thing for I think there's always going to be a space on the shelves for a handful of those brands. But what we've loved was the easy yes to Snake River Farms, provided the like that runway for it to be a very easy yes to tallow and stone. And the tallow and stone performance on a date from the data perspective has I don't know, it has been just like a crazy organic gainer. So, in a way, we've been very fortunate about the product that we put out, the ingredients that it's using in the timing, and and just navigating relationships with key retailers and wholesalers. The most important part is that there's a consumer on the other end that's stoked about the products.

Speaker: 25:30
Yeah. And and our job is to find as many What have you found right thus far, at least over the past say year or so, that's having the biggest impact from a velocity standpoint at retail. No, I well, I think you nailed it.

Speaker 1: 25:41
I think having there's still, I think, a general curiosity consumers have with tallow. What does it taste like? You know, not to mention this is how it was done for you know many, many, many, many years before I was alive. I would say we've been so fortunate because there has been organic pull. Now, of course, we do promos and demos, but I think we've done a good job of positioning ourselves in the right stores at the right time. So we're and so wherever we go, we have a fairly great chance of hitting the consumer that we need to hit in the stores. Plus, it's a basket driver. It's a totally it's something that cross that cross-promotes extremely well. And again, there's I am still shocked at how many reasons there are for a consumer to buy chips. Seems like there's a a new reason every day.

Speaker: 26:27
Last question for you. You're obviously ingrained in the CPG world these days. Any brands outside of the Teton Mali portfolio and or just trends in general in the CPG space, let's say other than Tello that you've been tracking more closely these days, thing that just seem interesting brands you're really following, a big fan of?

Speaker 1: 26:43
Yeah, it's a great question. I mean, I think I've been a fan of the uh the Aqua Fresca brand Bowie for a while, gotten to know and and kind of understand the founder behind Habisa and the Hamas space. So, I mean, I I feel like I've kept an eye maybe on more on people who also then go on to make great products.

Speaker: 27:02
Yeah. But those those two were those two really stand out for me. I love it. That makes sense. I totally agree with all those. Yeah, again, Matt, this has been awesome. What's up with all your knowledge in the space, what's what's the best place for people to follow along with with you specifically? And then where's the best place to follow along with Teton Valley and and the two brands under the umbrella? It's great.

Speaker 1: 27:19
I would say for the most part, LinkedIn is where you're gonna find most of our stuff. I've got a I've got a private Instagram page, so I haven't really flipped it yet. But following along there and then also uh Tetonvalleybrands.com. We need to we are in the process of merging the other brands into the parent company brands. So if you've got any uh brand strategists out there that want to make uh some quick money, we're we're trying to figure out how to how to reposition the parent company and and make a look this a little bit more seamlessly, a little more seamless. But yeah.

Speaker: 27:50
So far that's worked for us today. Love it. Cool. Yeah, I can maybe send you some names for sure. Yeah, fire away, dude. Cool. Awesome. Well, Matt, yeah, this has been awesome. I appreciate the time. I think uh I think that's about the pods.

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