Spreading the jam Stonewall Kitchen grows from farmers’ markets to $34 million

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YORK – When they first started peddling their wares at farmers’ markets 15 years ago, Jonathan King and Jim Stott almost gave their enterprise the down-home name of Jim’s and Jon’s Jams and Jellies.

Millions of people now know their products under the Stonewall Kitchen label as the business has grown from a mom-and-pop venture to a high-end specialty food manufacturer and retailer with $34 million in revenues and 270 employees.

It’s a far cry from the days when they packed their jams, vinegars and marinades by hand and sold them off a card table.

But King and Stott have no plans to slow down. In fact, they’ve set their sights on growing to $100 million in sales in the next few years. “To not grow at that rate would be to say, ‘let’s slow down,”‘ said King, the company president.

Stonewall Kitchen’s growth comes in an industry known for small homespun businesses, not big profits. Seventy percent of the nation’s specialty food manufacturers have annual sales under $1 million, according to the National Association for the Specialty Food Trade.

And while the specialty foods industry has grown to about $25 billion in annual retail sales, and from 400 manufacturers in 1976 to 2,400 today, most companies serve local and regional markets – not national ones.

That’s not stopping King and Stott from taking their company to where few in their industry have gone before. Their business model even grabbed the attention of Harvard Business School, which did a case study on them last year.

Growing from $25 million – Stonewall Kitchen’s approximate revenues when it launched its expansion plan – to $100 million in such a short time is a daunting task, said Eric Siegel, who teaches entrepreneurship at the Wharton School of the University of Pennsylvania.

But even if King and Stott fall short, they should be commended for building the company to where it is now, Siegel said.

“If these two guys grow to only $80 million, I would say, ‘Guys, that’s something you can feel pretty darn proud about,”‘ he said.

Stonewall Kitchen got its start in 1991 when King and Stott made up a batch of cranberry orange marmalade, packaged it in jars from a local farm supply store and hand-wrote the labels. They named their enterprise Stonewall Kitchen for the graceful stone walls around the farm where their business began in Hampton, N.H.

They went to a farmers’ market in New Hampshire and, to their surprise, made $200. They began traveling to other farmers’ markets through the Northeast, often ringing up sales of more than $5,000 over a weekend, all the while waiting tables to supplement their incomes.

King and Stott knew little about business. King, who is 40, studied psychology in college. Stott, who is 51 and is vice president, studied theology and philosophy. They had worked varied jobs at hotels and ski resorts, in construction, in clothing design and in a greenhouse before becoming food makers.

“I tell people ignorance is our best friend,” Stott said. “If we had MBAs and knew what lay ahead, we might not have done certain things.”

Their big break came in 1995, when they went to New York to the Fancy Food Show, a trade show that draws about 25,000 people.

There, they won two prestigious awards, Outstanding Product Line and Outstanding Jam, taking them from obscurity to the national spotlight.

Orders flooded in from specialty food and gift shops, and in time they had more than 5,000 wholesale accounts, including Williams-Sonoma, Crate & Barrel and L.L. Bean. By 2000, they had sales of $13 million and a national customer following. California is now their top sales-producing state, King said.

They built a retail store in York, created a catalog, launched an Internet site and expanded their product lines into home, garden and bath categories. They made products for Martha Stewart, and King appeared on the “Martha Stewart Living” TV show several times.

While all of that may sound impressive, King and Stott say they haven’t lost sight of what their business is really about: High-quality food.

Stonewall Kitchen has hundreds of food products ranging from bourbon molasses mustard and chocolate peanut butter sauce to lobster pot pies and paddlefish caviar. The food better be good when you sell a jar of jam for $7.50 or a dozen chocolate-dipped strawberries for $49.95.

“Specialty foods is like fashion. A few years ago we couldn’t make enough products with sun-dried tomatoes, but now it’s kind of fallen away,” King said. “Then roasted garlic became huge. Now wasabi is super hot and pomegranate is hot. Part of our job is to create those trends.”

After focusing for years on growing its wholesale accounts, the company now sees its greatest opportunity in retail.

There are now seven Stonewall Kitchen stores in Maine, New Hampshire, Massachusetts and Connecticut, with an eighth to open in May in Avon, Conn.

In the next few years, the plan is to have between 25 and 40 stores in the Northeast, each between 3,000 and 5,000 square feet, King said.

To prepare for the growth, the company opened a 110,000-square-foot warehouse in New Hampshire last summer. This year it plans to open a third production line.

Stonewall Kitchen’s success is due in part to its ability to transform itself from solely a manufacturer into a retailer, said Ron Tanner, vice president of communications at the National Association for the Specialty Food Trade. Most specialty food makers, he said, are content to remain as manufacturers only.

And as Stonewall Kitchen has grown, it has managed to continue acting like a small company, Tanner said. King and Stott put a premium on creativity and collaboration and are committed to maintaining a balance in their lives.

King and Stott like their down-home image, even when they’ve got big plans ahead.

“We love the idea of being the guys who started at the farmers’ market,” said King. “But we’ve become very strategic.”

On the Net:

Stonewall Kitchen: www.stonewallkitchen.com

National Association for the Specialty Food Trade: www.nasft.org