Jonathan King and Jim Stott didn’t set out to become jam moguls.
But when they met while working at different restaurants in Portsmouth, New Hampshire, they had talents that meshed: King had a gift for gardening, and Scott could turn the fruits and even herbs that came from the garden into delicious jams and jellies. One of King’s co-workers suggested that they sell their products at a New Hampshire farmers market, and soon store buyers were jostling with residents to get their goods.
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Stonewall Kitchen, headquartered in York, has turned into a big business. It has 440 employees, including more than 200 in Maine. The company declined to provide revenue or sales figures, although King said in a 2011 interview that annual revenues were more than $50 million.
Last month, King, interviewed here, and Stott announced that Centre Partners, a New York private equity firm, was investing in Stonewall Kitchen and that one of its partners would become Stonewall’s CEO.
Q: Does Stonewall Kitchen’s existence owe more to serendipity than a strategic plan?
A: If that co-worker had not said that to me, that I should sell the jams and jellies at the farmers market, I probably would not be here today. I graduated with a psychology degree (from the University of New Hampshire) with plans of becoming a child psychologist, and Jim owned a construction company.
Q: How did you parlay the farmers market sales into such strong growth?
A: In the very beginning, we bought what was available and would go to the farmers market and barter with the other vendors. We would trade maybe a case of red pepper jelly for a barrel of pumpkins. We started creating the things that people really wanted. We would use a huge variety of things – I’m an unbelievably passionate gardener and crazed horticulturist – and we were selling herb and jams and sauces. But my herb business never took off.
Q: You hand-labeled your jams and jellies, but made a big mistake early on, right?
A: Our largest customer early on was Crate and Barrel. They discovered us when they were on vacation in Maine and they got a jar of orange marmalade, which they said was the best they ever tasted and they wanted to order so much. But when I did the labels, marmalade was misspelled – it was missing the “r.” I said, “That’s how we say it in Maine.” They thought it was great marketing. They still tell that story at Crate and Barrel. But it was really because I couldn’t afford to take back the whole order and re-do them.
Q: Have you been surprised by the company’s trajectory?
A: It’s amazing how quickly the business grew, but when you’re in, it doesn’t seem to be at that pace. We were selling just at the farmers market and doing it just like you do it in your kitchen, working out of an old grocery store in York. Then we went to the Fancy Food Show (in 1995) in New York – we drove a U-Haul down from Maine – and we won the most coveted award, the Outstanding Product Line award and Outstanding Jam (for roasted garlic onion jam) and got a tremendous amount of publicity.
Q: So how did you manage that sharp rise in interest?
A: At the time, there weren’t a lot of artisanal goods out there, people making crazy things. It just completely took off, but we could not find a bank to lend us any money. We were funding the business ourselves, out of cash flow. We had to control the demand by taking on new accounts only when we could handle it. We literally would call people and say, “You can become a customer now.” We knew nothing about the business end so we hired great people. First were family members, like my sister, who had been a sales manager at the Mount Washington Hotel. She took on most of the sales operation with me and we hired my sister-in-law to take control of the finances and the operations so Jim and I could concentrate on product development and packaging – things that we liked to do. (King’s sister, Natalie King, is now executive vice president, and his sister-in-law, Lori King, is president and chief operating officer.)
Q: What led you to sell part of the company and bring in Centre Partners?
A: Jim and I have been at this for 24 years and the company is financially very strong. The growth is strong. There were two reasons: Jim and I wanted to sell the majority of our stock for our own personal reasons, our own nest egg and future. We also had a plan to retire in the next few years. Jim has retired and I plan to retire in 36 months. We wanted to find a partner that could take Stonewall Kitchen to the next level and grow the company as we have.
The number one issue with the Stonewall Kitchen brand is that it’s hard to find, which is hard for us to believe. But the growth plan is to increase the availability of the brand, and that takes a big company.
Q: What changes do you expect to see?
A: You’re going to find the product more available in the mass market than we allowed in the past. We’ve always protected the brand by eliminating some of the mass retailers. When we started, the product was so special and it’s always been somewhat of a luxury item. But as it’s evolved, it’s become much more of a doable product in, say, a Hannaford, than it would have been 10 years ago. So we see a lot of growth through more penetration of grocery stores and more availability around the country. The Northeast is our biggest area of sales right now, but we see a massive opportunity and huge growth in direct-to-consumer (sales), especially online.
Q: Is it hard to let go of something you and your partner created?
A: It is an emotional decision. The process began a year and a half ago, making the decision to do it, hiring the investment banking firm to find us the right partner, and we had an enormous number of interested buyers. We were overwhelmed by the process. I don’t think we’ve gone through the full stages of bereavement; we may still be in the denial and the bargaining phases.
John Stiker (who will be the company’s new CEO) is an amazing fit with our company and our philosophies. I’m in my same office as the chief creative officer, so I get to do what I really want to do. At the end of three years, I have the option to continue my employment, if I wish. They (Centre Partners) love our management team and everyone is staying on. They have no ideas of cutting people, they only want to grow it. And they can never take away that we’re the founders. When we see our jams, it’s always our names on the jars.
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