Sam Edwards III of Edwards Virginia Smokehouse: 5 Things You Need To Create a Successful Food Line or Specialty Food

Know your customer. What flavor profiles do they like? What is their price sensitivity? You may end up with a great new product in your mind, but if the taste, packaging, shelf life, or price point is not what the customer wants, then why make the product? Sometimes, a product with a great sales history needs a little tweaking to gain market share in a new market. This happened to us when a Bloomingdale’s specialty food department manager told us New Yorkers don’t want to buy a massive 12-pound cooked bone-in Virginia Ham. They like the flavor profile, but it was too much meat for a NYC refrigerator or typical city kitchen. In the early 80s we came out with the “petite” fully cooked boneless Virginia Country Ham that weighed 2–3lbs for those customers that need just enough for a small gathering or a couple of weeks for themselves. It was a hit and still continues to be one of our best-sellers across the country. Growing up in the south, we always kept a Virginia Ham on the kitchen counter covered with a tea towel, so if guests showed up, we always had something to eat. Those traditions were not prevalent everywhere else, so we adjusted.

As a part of our series called “5 Things You Need To Create a Successful Food Line or Specialty Food”, I had the pleasure of interviewing Samuel W. Edwards III. He became involved with his family’s business at an early age, and in the late 1970s, Sam became the third-generation Edwards to take charge of the company. Throughout his career, Sam has expanded the company’s production facility, introduced new products such as Petite Ham and Surryano, and cultivated nationwide support for the “Great American Country Ham.” He has done all of this while staying focused on the traditional curing techniques taught to him by his father and grandfather many years ago. He currently acts as a board member for the National Country Ham Association, Chairman of the board for the Surry Economic Development Authority, council member of the Grow VA program for economic development in the Commonwealth of Virginia, and was honored in 2017 with induction into the Specialty Food Association Hall of Fame.

Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?

I became involved with my family’s business at an early age. Initially restricted to performing mundane tasks like sweeping, chopping wood, and cleaning the grease pit, it wasn’t long before my father and grandfather began teaching me the art of curing and monitoring Edwards Virginia country ham, bacon, and sausage.

Can you share with us the story of the “ah ha” moment that led to the creation of the food brand you are leading?

We stand on the shoulders of family and employees of a 94-year old business curing Virginia Hams, Bacon, and Sausage, so I am not sure that we qualify for a specific ah-ha moment. I feel as though we have been fortunate to experience many ah-ha moments over the four generations we have operated. When I came into the family business full-time after graduating college, I quickly learned that producing high volume commodity grade product was not going to be sustainable. My father allowed me to realize that lesson by growing sales in one year by over 30%, but the bottom line did not improve at all –- making that my ah-ha moment number 1.

Over 94 years, the pork industry has changed a lot, and I recognized the need to find fresh pork that was reminiscent of the pork from the pre-industrialized era for several reasons. For curing artisanal products, one must start with excellent raw materials. In the mid to late 1990s, we realized the genetically modified pigs raised to be super lean, grow fast, and look almost identical, was not going to work for the long-aged and dry-cured meat model we were making. By the late ’90s and early 2000s, small farms and fresh meat processors produced pre-industrialized Heritage pure breeds of pork like Berkshire, red wattle, Tamworths, and Duroc. After seeing and tasting this product, it reminded me of the fresh pork of my father and grandfather’s time — this pork was being raised without antibiotics, added hormones, on pasture, and certified humanely treated from farm to harvest. Our goal has always been to produce a better-tasting product, and we got the ah-ha side benefits of helping small producers, better handling of livestock, and healthier antibiotic-free meat. The other benefit of using Heritage pork in our product line is breed diversity. The trend in the US was toward particular breeds of commodity industrialized pork, this type feeds the masses and is safe to eat, but is not the best for what we do. Breed diversity has saved some breeds from extinction, and it could help protect the food supply should a disease break out that affects the commodity pork supply. but not the Heritage Breeds.

In 2005, we began marketing our 18-month aged Surryano Ham using this Heritage Pork to compete with the imported dry cure prosciutto and serrano. The ah-ha moment was when the chefs of this country showed a real interest in using American made, dry-cured meats using Heritage Pork for all of the reasons we did: better flavor, antibiotic-free, certified humanely treated, and breed diversity. Ah-ha moment #1,926.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

In the 1980s one of our first large accounts in Virginia were military bases in the mid-Atlantic region. Apparently, I did not clearly explain to the buyer that the price quoted was the price per pound and not the cost of each ham. The price at the time was roughly $3.00 per pound on our invoices, but the commissaries were selling the hams at $3.50 per ham. Not only did ham sales in the commissaries go through the roof, but it disrupted our normal supply to our non-military customers. We were thrilled at the sales, and wanted to check out how they were promoting our product so we could duplicate it. When I got to one of the local stores to see for myself, I discovered the government’s math error — a ham that was usually $50 was selling for $3.50. Lesson: Communicate, communicate, communicate!

What are the most common mistakes you have seen people make when they start a food line? What can be done to avoid those errors?

1. Not testing your product for food safety, including proper SSOP, SOP, and HACCP plans*. Ensure you understand the food safety requirements and have the documentation to back up that your product is safe for human consumption. Hiring a food safety consultant can help you be aware of all the government agency requirements to open a food manufacturing facility. In addition to the food safety side with the FDA and USDA, there are facility considerations relating to the DEQ, EPA, OAR, at the local, state, federal levels, etc.
2. Not knowing your customer. Manufacturers are not understanding of what their customers want because they do not involve their customers in product development. This includes all aspects of the product; what form the product should be sold in, flavor, packaging, distribution, and price point. Ask chefs and retailers you respect what they think — they all have an opinion, and most are very helpful. Then, test the product thoroughly for consistency, food safety, and ensure the packaging handles travel from the plant to the shelf.
3. Thinking that food distributors sell. Most distributors typically don’t sell, they take orders and distribute. Do your research and get the best sales brokers and sales managers that are a fit for your company.
4. One I hear often is companies not asking for enough money from their banker in the beginning for operating capital and capital projects. When in doubt, ask for at least 10% more than you think you will need. If the bank does not loan it to you, someone else may. If they will not, then maybe the project should not happen. How to convince lenders to lend you money is a whole subject on its own. Be honest and do not over-promise expectations. Prepare a well thought out proforma with achievable detail. Communicate often and early with your lender — about the good and the not so good.

*A recommendation: HACCP is an excellent process for introducing a safe product intended to take subjectivity out of the food safety analysis and base it solely on risk assessment using science and research. However, many in the USDA still use a very small regulation in their arsenal of evaluation, which says if the Inspector thinks that there is a food safety issue, then that Inspector can stop you from making that product. This is often not based on science and analysis, but rather what they interpret is an issue. If the Inspector in charge is having a bad day, be prepared for a very subjective application of the rules. This is another reason for having a third-party consultant on retainer to back you up and hold the USDA accountable for their poor judgment. Clearly, it is not in the manufacturer’s best interest to make an unsafe product as it will be the end of the business. However, bureaucrats can also cause a business’s death due to inspectors and or regional USDA managers that do not follow their regulations.

Let’s imagine that someone reading this interview has an idea for a product that they would like to produce. What are the first few steps that you would recommend that they take?

First off, think of who your customers would be — understand what they want by asking them. Especially chefs and retailers, as they all have an opinion, and most are very insightful. Then testing the product thoroughly to ensure it is safe. If this is a food product, determine which government agencies need to see this product before you can sell it. Reminder: Nothing kills a project slower than government bureaucracy. You have to be patient. To expedite the process, some consultants can walk your product through the government approval process and speed it up a little…maybe. In my experience, getting a product reviewed by the FDA is thorough but not that difficult. If your new food product is a meat product, the depth of scrutiny and the USDA’s approval process is painfully slow, capricious, and arbitrary.

Many people have good ideas all the time. But some people seem to struggle in taking a good idea and translating it into an actual business. How would you encourage someone to overcome this hurdle?

You have to BELIEVE! Do the research, do the math, and once you see the positive research results, you must have the tenacity to bring it to fruition. This is an oversimplification as research and math can cover a lot of subjects. Sometimes partnering with a company that makes products in the same product line that would be interested in co-packing for you will help get you off the ground, but be prepared for thin margins. And last but not least, some consultants and organizations help startups. For example, in Virginia, we have the Virginia Food and Beverage Association.

There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?

If you start small with a family recipe for your grandmother’s apple butter, starting on your own and working with a food association in your state would be an excellent way to begin. There are also incubator groups at some colleges and universities that can help at a low cost to assist you with everything from product development to food safety and marketing. If you have a mature line of products, then hiring a consultant may help sales growth, whether in foodservice, the retail arena, or direct to consumer trade. Whatever area you are looking for help, I think it makes sense to use a consultant in the food field when developing a food product versus someone who has helped create a different product line such as jewelry, clothing, or pharmaceuticals. I have seen companies use consultants that work across many product lines and there are some similarities but vast differences too.

What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?

We have never used venture capital for fear of losing control. Banks have always stepped up to cover our growth needs. At times I have told them the next time I ask for money, say no.

Can you share thoughts from your experience about how to file a patent, how to source good raw ingredients, how to source a good manufacturer, and how to find a retailer or distributor?

I have never filed a patent, but I understand there are patent attorneys that can take care of that for you. Belonging to several national organizations in your industry can help source good manufacturers, retailers, and distributors. One of the best in the specialty food industry is the Specialty Food Association. Along with their winter show in San Francisco and summer show in New York City, they have regional events that can help anyone — from startups to the most mature companies. We have been participating in their seminars and food shows since 1983. Also, it seems like every significant food source has an industry group that can be very helpful. For instance, small to medium size meat processors should belong to the American Association of Meat Processors or for the cheese industry, American Cheese Society.

Here is the main question of our discussion. What are your “5 Things You Need To Create a Successful Food Line or Specialty Food” and why? (Please share a story or example for each.)

1. Know your customer. What flavor profiles do they like? What is their price sensitivity? You may end up with a great new product in your mind, but if the taste, packaging, shelf life, or price point is not what the customer wants, then why make the product? Sometimes, a product with a great sales history needs a little tweaking to gain market share in a new market. This happened to us when a Bloomingdale’s specialty food department manager told us New Yorkers don’t want to buy a massive 12-pound cooked bone-in Virginia Ham. They like the flavor profile, but it was too much meat for a NYC refrigerator or typical city kitchen. In the early 80s we came out with the “petite” fully cooked boneless Virginia Country Ham that weighed 2–3lbs for those customers that need just enough for a small gathering or a couple of weeks for themselves. It was a hit and still continues to be one of our best-sellers across the country. Growing up in the south, we always kept a Virginia Ham on the kitchen counter covered with a tea towel, so if guests showed up, we always had something to eat. Those traditions were not prevalent everywhere else, so we adjusted.
2. Understand all of your costs to make the product. Determine the price that customers will be willing to pay for your product and compare it to other products in the marketplace. If your BBQ sauce is 50% more than the rest of the “specialty” sauces, then that will be a tough sell. Talk to others in the industry about their margins for distributors and what to pay brokers. There is nothing worse than selling a ton of product at a loss because you miscalculated the cost of goods sold or what marketing costs the retailers, distributors, and brokers will ask to sell your product.
3. Before you introduce your product to the marketplace, be sure you are making a product that is 100% safe and you have the documentation to back that up. Get approvals to make this product from all the government agencies needed at the local, state, and federal levels.
4. Spend more time hiring the right people, whether for production management, planning, shipping, or sales/customer service. This will save you a lot of money and headaches in the long run. As we were growing, I was overwhelmed by the many hats I was wearing, one of which was HR. Once I figured out which employment agencies understood us and who we were looking for, hiring became a little easier, especially for critical positions. When making the right decisions on hiring, the team stays together longer as it is a good fit for the company and the team. A product is only as good as the company/team that backs it up.
5. Just because a wholesale customer, distributor, or broker asks for the sun, the moon, and the stars to get the business, it does not mean you need to do it. Sometimes you need to walk away. Always do a customer financial background check and make sure your customers are clear on the payment terms, and enforce those terms for every customer.

Can you share your ideas about how to create a product that people really love and are ‘crazy about’?

First of all, ‘crazy about’ products are usually very difficult to develop. ‘Crazy about’ products in my mind would also appeal to the masses, and specialty foods do not always achieve that as pricing can be a big part of what makes that kind of product. I feel that in the specialty food business, the 80/20 rule applies — 20% of your products create 80% of your sales if you are successful. The items that seem to get the initial ‘crazy about’ response are the most unique, with a perceived competitive price point, and must have a great flavor that your customers expect. Unique sometimes creates a big stir at the beginning, like our prosciutto duck or dry-cured lamb, but is so esoteric and expensive that the market niche is very narrow. For a small company, that can be okay since this type of product will not have a lot of competition, but the total dollar volume will be small in comparison to the rest of the product line. For instance, one of our flagship products, developed using my grandfather’s seasoning recipe from the 1930s, did not take off until the 1980s when slow growth wholesale sales started to pick up, and we began to focus on the catalog and web sales. I think some of this was because most of our competition stopped making sausage the old-fashioned way — using natural ingredients, pit type smokehouses, and a natural casing — which we still do. This imparts a flavor that you cannot easily find in our market.

Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?

Besides making donations to charities, Edwards is the first dry-cured ham company in the US to support Heritage Foods. Working with Patrick Martins and the team at Heritage, we have continued to promote the idea that good genetics is a major humane issue for livestock. Bad genetics caused animal suffering, and good genetics were becoming rare. Many of the breeds we cured with Heritage Pork were considered rare, the kind you have to eat to save. These are breeds with rich and long histories that date to a time before factory farms bred animals for fast growth and produced more white meat than natural — for example, the Gloucestershire Old Spot, Tamworth, Red Wattle, and Large Black breeds. Now many people have jumped onto that bandwagon and to me, this is helping to make our part of the world a better place. We could not have done that as a startup, so we relied on Edwards’ established product profits from www.edwardsvaham.com to help get that project off the ground in 2005 and became the largest buyer of Heritage fresh pork in the country.

You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

Two things:

1. This is not a movement but more of a comment on this country’s small food producers’ reality. From farmers to sauce makers, many small companies in the food business are family owned and operated. I believe this is a great concept and can be rewarding and useful for your family dynamics. Being in a family business for 94+ years, we certainly have learned a few things, especially that a clear definition of responsibilities, accountability, regular communication, and respect can create a rewarding career in the food business.
2. Why not support food production that uses sustainable farming, humane treatment of livestock, and fair trade? Please take a look at Heritage Foods and consider buying products from them to support their ideals with the products that you purchase. We are not knocking the large food producers in the US, as they provide the valuable service of feeding the masses. It is not likely that how foods are raised in this country will change quickly. In the last 15 years, we have seen how the Slow Food Movement, Patrick Martins at Heritage Foods, and people like Dr. Temple Grandin have moved and are continuing to push the meat industry in the right direction when it comes to the humane treatment of animals and environmentally sustainable practices.

We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.

Coach Joe Gibbs. He has been successful in two sports arenas; the Washington Redskins, now the Washington Football Team, and Gibbs Racing in NASCAR. In his NASCAR career, he developed a family business and I would love to pick his brain on the nuances of how he handled that, as Edwards is a fourth-generation family business not hampered with knowledge on that subject. I believe he is the only person that has “coached” successfully at the highest level in two pro sports. It is clear that he is a great motivator and leader, and I know I could learn from his knowledge.

Thank you for these fantastic insights. We greatly appreciate the time you spent on this.