Posted: June 01, 2012
Checking in with Colorado Companies to Watch alumni
Candy, beer and tea – and steady growthBy Mike Cote
A candy maker closing in on its first century. A craft brewer celebrating its 15th year in business. A specialty tea maker that marked its fifth anniversary last year. These three Colorado Companies to Watch alumni are helping expand the "Made in Colorado" brand beyond the state while providing jobs and a financial boost to their communities.
Now in its fourth year, the Colorado Companies to Watch program has celebrated 200 second-stage companies that represent the state’s burgeoning entrepreneurial climate. Hammond’s Candies (2011), Oskar Blues (2010) and Bhakti Chai (2011) all have made a mark in their respective industries. We recently visited these companies to check in on their progress and to capture the excitement of manufacturing for a series of video profiles that can be viewed at cobizmag.com.
The Colorado Companies to Watch program has celebrated a diverse group of companies that represent a wide variety of industries statewide, from Front Range information technology companies – like Associated Content (2010) that got snatched up by Yahoo! for a cool $100 million – to niche manufacturers in rural parts of the state, such as Montrose-based Colorado Yurt Company (2009), a maker of yurts, tipis and canvas bungalows.
What executives with Bhakti Chai, Oskar Blues and Hammond’s Candies have to say about second-stage companies has universal appeal. Whether they’re trying to grow a business that provides services or one that makes things, high-growth companies all share common challenges.
Hitting second-stage at 90 years
Hammond’s Candies CEO Andy Schuman was among a group of investors who purchased the iconic company – the largest maker of hand-made hard candies in the nation – five years ago. He and his partners had a tough ride shortly afterward when some of the company’s inventory went bad.
"It really hampered our borrowing ability with our lender," Schuman said during an interview at the company’s retail showroom inside its Denver factory headquarters. "We’ve since been through four banks. In 2010, we hooked up with Colorado Lending Source and FirstBank, and we were a recipient of stimulus funds, close to $200,000 over a five-year period, which was a significant savings for us. It allowed us to move banks, lock in better interest rates, and now we’re really on a great path in terms of our debt structure."
Among Schuman’s greatest challenges was to retool the company to meet the modern marketplace.
"I took over a company that had been doing the same thing for probably 85, 86 years, and to change that culture was a little tough," he said. "But with determination, with hard work, perseverance, hiring good people, we’ve been really able to be successful."
Since Schuman and his team acquired the company, they’ve doubled revenue and added 40 employees, bringing the headcount to 120.
"Our goals are pretty lofty. We want to grow the company to $25 million through organic growth as we stand right now and through acquisitions," Schuman said. "Give it five years, and I think we can be there. Slow, steady growth for us is what we’re looking for. We’re not looking for a big hit real quick."
The Companies to Watch program has helped a national player get a little more local love, Schuman said.
"We’ve been in Colorado for 90 years. However, we’re not as well-known in our backyard as we are in other parts of the country. It brought a lot of recognition to us on a local basis, which has been nice."
Oskar Blues: Beer, blues, bikes, food and farm
Oskar Blues owner and founder Dale Katechis first brewed his company’s iconic Dale’s Pale Ale in a bathtub when he was in college. Two years after he opened the company’s flagship restaurant and music venue in Lyons, he began brewing it there. Oskar Blues, which pioneered putting craft brews in a can, makes its beers at a new plant it built two years ago in Longmont, where it opened a second restaurant around the corner. Katechis has proposed building a third restaurant in Boulder on the site of a historic train depot.
While the Oskar Blues brand has become widely known by craft beer fans in Colorado and in the more than two dozen states where it is distributed, recognition in the Colorado Companies to Watch program brought a special cachet, said Katechis, whose bootstrapping in the early days meant maxing out his credit cards.
"We take a lot of pride in building a small company, being grass roots and starting it from nothing," he said during a talk at the company’s Longmont brewery and "anti-corporate headquarters" (as a sign outside the entrance denotes). "Having the rest of the Colorado view you as a leader has been really important."
Oskar Blues ended last year up 43 percent, and began building its 2012 budget with similar expectations. But that didn’t last too long.
"First quarter, we were up around 60, which is our slow part of the year so we’re having to re-adjust and purchase equipment because we see that we’re going to end the year up over 60 percent," said Katechis, who employs 230 people. "That means you’re in a constant state of construction. Great problems to have, but they’re adjustments."
Oskar Blues’ related businesses include a high-end mountain bike manufacturing company and a farm in Longmont where it raises hops for beer production, and vegetables and cattle for use at its restaurants. It uses grain by-products from the brewing process to feed the cows.
"The bike business and the music business and the farm have all been passions that we’ve been fortunate to grow inside all of the brewery and the restaurants to help create a big circle," Katechis said. "I don’t think there’s any reason we can’t continue to do some of these sustainable side projects that keep people engaged – especially me."
Bhakti Chai: Not just a tea but
Brook Eddy was inspired to create Bhakti Chai in 2006 after visiting India, where she fell in love with a spicy tea she could not find in the United States. She began brewing her own on her stove in Nederland and soon had friends and local cafes hooked. The Boulder-based company makes its organic ginger-based tea in a small plant in Longmont.
"Here we are five years later, and we’ve got our brewery, and our corporate office on Pearl Street in Boulder," says Allison Salvati, who handles marketing, promotion and events for the company. "We’re in 16 different states and shipping nationally."
Last summer, Bhakti Chai launched an iced drink made with 80 percent of its concentrate and 20 percent organic soy from White Wave, another company that got its start in Boulder. Overall, the company is on track to grow 85 percent this year and expects to increase hiring by 35 percent, Salvati said.
The Colorado Companies to Watch designation has helped Bhakti Chai expand its reach both locally and beyond, she said.
"It’s been incredible exposure for us, growing as a brand in Colorado. And obviously as we look to become a national brand, it’s been a great feather in our cap," she said.
Bhakti Chai has thrived during the economic downturn by making sure it focuses on its mission. Eddy and Salvati spend much of their time publicizing the brand at local and national events, such as a recent yoga festival in Santa Monica, Calif., and a dog walk fundraiser in Boulder.
"I think the biggest thing that Brook has focused on is not raising prices, and continuing to target our core demographic and really getting to know them and connect with them, and also building relationships with retailers and distributors," Salvati said. "We have a big passion for giving back, and so we’re making sure we’re still connecting with nonprofit grantees."
Bhakti Chai focuses on staying prepared for what comes next, a constant for second-stage companies.
For Salvati that means "making sure you’re really staying connected with your customers and building infrastructure that can sustain itself because once you have the pull and people are into the brand it can really take you to the next level."
Mike Cote is the former editor of ColoradoBiz. E-mail him at firstname.lastname@example.org.