[00:05:06] Josh Sharkey:
Yeah. I mean, it's a, it is pretty interesting that hasn't been disrupted, which is just a perfect opportunity for, for a business. I think it actually started way before McDonald's as well, I think in the 40s is when Simplot started this thing and then, but that, obviously Ray Kroc sort of proliferated this whole new, like, scale of frozen, of, you know, of these frozen french fries, but I didn't realize that like, I think like 30 percent of all potatoes in America become french fries, and, and we even supply China with about 70 percent of all of their french fries, I was blown away.
[00:05:38]
I mean, I knew we made a lot of french fries, but this is a massive market. I think Americans eat like around 30 pounds of french fries a year. Anyways, needless to say, it's a huge market. Why has nobody tried to try to disrupt this? Or have they? And have there been others in the past that have tried to?
[00:05:55]
So disrupt the incumbents and I think the incumbents are simple out lamb Weston. What's the what's the other one
[00:06:01] Jesse Konig:
McCain out of Canada? They're the other
[00:06:02] Josh Sharkey:
McCain. That's right. Yeah. Yeah.
[00:06:04] Jesse Konig:
There's also I think Cavendish is one but really there's it's like three companies That's where I've owned the entire industry and I think that's kind of why there hasn't been any competition around it because It's sort of a weird like oligopoly where there's their competitors, of course, but they're all kind of doing the same thing.
[00:06:21]
And I don't know exactly the timeline last 30, 40 years. They've rolled up all the midsize manufacturers. So unlike a lot of other businesses, like if you have an idea of like, Oh, there's a stale category, I'm a chef. I'm a, you know, an entrepreneur. I want to start this new thing for a lot of businesses.
[00:06:37]
You can. reach out to a manufacturer, find a partner who has the infrastructure to get this up and running, and test it out. And maybe you need a pretty big order size to make it work, but you can sort of like work through the system that they have. Franchise aren't that because at this point Simplot, Lam Weston, for the most part, they've bought all these mid sized manufacturers.
[00:06:57]
So there isn't this infrastructure that already exists. And in our mind, like the big guys don't have the incentive to change because they're all public companies, quarterly earnings. They don't want to rock the boat if they don't need to. And then from the bottom, it's really hard to break into this thing because you need to own your manufacturing, which means you need to sort of like beat this supply demand thing.
[00:07:21]
So for us, we were sort of lucky that we stumbled into it because we had a restaurant that needed fries. So we already had like an anchor customer. And then we saw this opportunity with the consumer packaged goods going into grocery stores, started testing that out, and then realized that we could sort of marry these two, you know, the restaurant and the consumer packaged goods side to do two different things, but sort of work together with a similar process.
[00:07:43]
But to your point about just what the potato industry looks like, 85 percent of the french fries that are made, actually go into food service, not like grocery stores, which isn't that surprising for I think someone who's a chef. And especially when you mentioned some of those things about the international exports that are going on.
[00:08:00]
So it's really interesting as we've learned a lot about it. It's just sort of this boring business that I think not a lot of people think about and didn't really think there's a better way to do it. And this sort of goes into just our story generally in food is we never really knew the right way of doing things.
[00:08:18]
So it was always sort of like, Alright, that sounds like not a great answer, maybe we should try something different and see what happens. And when you get into the habit of doing that time and time again, it gets easier and you sort of build this muscle around, Hmm, that doesn't sound right. Let's go try and see if we can figure something else out.
[00:08:37]
And we've certainly failed a lot of times doing that. But you know, in this case, I think we learned that there was a way we could make a really good house cut frozen fry. That tasted like the real thing. And now we're learning how we can get that to sort of be available at scale, which has been a really fun challenge to solve.
[00:08:54]
Are you primarily focused on food service or retail or both, or like you're just testing out both right now? It's been a bit of both, but they're sort of like helping each other out. I think at the end of the day, the bigger opportunity we see in the short term is around giving people a clean label French fry that tastes like it's coming from a restaurant at home.
[00:09:16]
Which doesn't really exist and there's sort of this opportunity and speed to market thing when it comes to launching something in a grocery store and becoming a national sort of household name and there's just a lot of value associated with creating like a brand around those things. I think for us, the food service is sort of where we cut our teeth and learn that there is an opportunity here.
[00:09:35]
And we were genuinely solving a problem for our restaurant first, that's how we even stumbled into frozen potatoes. So I think we've realized that that's this really interesting thing because we can actually help chefs and restaurants solve a problem that we've experienced. And French fries are used a lot at a lot of restaurants, as I'm sure you know, it's like a restaurant that's not crazy busy and has multiple sides can be going through 20, 30 cases of fries a week.
[00:10:00]
So, you know, just on the East Coast, there's tons and tons of restaurants that are looking for something more premium. And I think for us, we think there's like a spectrum. They're sort of the top end top 5%, top 10 percent Michelin star type restaurants that they would never. Consider outsourcing something like this.
[00:10:17]
Like, you know, they've got the magic touch. They have their own recipe and process. There's the bottom 10 percent of I order off the U S foods or Cisco catalog. I went to Lionflow cheapest fry. I'm just gonna make sure it's hot and they dunk it in ketchup anyway, I don't really care, I'm like, driving that to the bottom line.
[00:10:33]
And then there's this huge group in the middle, which I think, you know, many of the people listening to this probably fell into, it's that you care about quality, and you're trying to figure out what makes you special, and when you really dig into it, it's like, having house cut fries that you're doing and punching yourself in the back, probably isn't the thing that like, makes someone go across town and go eat with you over somewhere else.
[00:10:56]
It might be your hospitality, it might be, you know, your specials, it might be, you know, just generally how you've set up your space and your menu, and just having a really good taste like it's made from scratch french fries, sort of that thing you're trying to check the box on. So that's what we've been really focused on, is we've found this niche in the food service world where it seems like we're genuinely solving a problem, and we're really focused on that in the short term because it allows us to have this base foundation of buying lots of potatoes.
[00:11:23]
keeping our factory busy that we're building out, getting better as economies of scale, investing in equipment. which allows us to do a better job on the grocery stuff as well. So in the short term, we're definitely focused on the food service and it's sort of this tactic that's going to allow us to build our whole business sustainably and not on the back of just raising a ton of money.
[00:11:43]
And I think what we just get excited about is like, it's genuinely solving a problem when we go and taste it with chefs and we sit next to them. You know, you sort of see their eyes light up because they've all been like, I've tried the other frozen fries. Why doesn't this taste like those? And the answer is we're doing this the same way you would do it in your back of house.
[00:11:59]
We just do this all day, every day. And we have a whole team doing it. And when I think people that sort of like breaks their brain a little bit when they taste it and see the difference, and it allows us to, you know, just use that goodwill and use that sort of one at a time interaction, build a foundation.
It's going to allow us to have a business that can grow.
[00:12:19] Josh Sharkey:
I had a bunch of restaurants that we made that made a lot of fries and. Holy shit is a pain in the ass. Not only is it time consuming, uh, and maybe everybody does it differently. We, we used to soak the fries, uh, overnight in, in like a ice, ice water, really help with like the, just a better texture, but the space it would take up in the walk in.
[00:12:38]
We would have like almost an entire walk in space just for fries. Yep. And, and then you obviously like the amount of prep time it does, it takes to, to prep the fries and the potato changes throughout the year too. So you have to adjust for that as well. So taking that off of. Off of someone's plate, it's huge.
[00:12:54]
I am curious, like you said, you guys do it like we do in the restaurants, not like, you know, when you're buying one of these sort of a typical frozen commodity potatoes. How do they, how do they do it? What's their, what's their process typically for, for making these frozen fries?
[00:13:09] Jesse Konig:
Yeah, generally they're all using a pretty similar process to each other from what we know.
[00:13:15]
And it's sort of by design because a lot of these making the same spec products. So for example, McDonald's, they don't just work with Simplot or Lamb Weston. They sort of like keep both options open. Cause of course, just like if one's running low or to keep each other honest, they have, you know, multiple.
[00:13:31]
Um, at their scale, multiple vendors for these types of products from our understanding these big guys, they're obviously very focused on efficiency and profitability when they're doing this and they're getting beat up by people like McDonald's. So they're, they're really have thin margins are working on, they're building factories that can cost 200 million and they're using some of this most state of the art technology to keep these things running constantly.
[00:13:55]
They're making a million pounds of like frozen fries a day. Which is an insane number when you think about, you know, how many loads of potatoes that is going in and out of a factory and how they move all that stuff. There's a lot of logistics. But from just the actual side, my understanding, it's like maybe a 10 or 15 step process.
[00:14:15]
And what they're doing oftentimes is they're buying potatoes out of the field because the best price they can get, they can just buy all the potatoes in the field. With that, you're getting like dirty potatoes of different sizes. So there's a lot of stuff in their factory where they're sorting these potatoes, they're washing them, they're de stoning them, they're peeling them, they're then bringing them into some sort of like water blanch type of thing.
[00:14:37]
And the interesting thing we've learned recently is it seems like one of the ways they standardize their process is they try to cook out all the sugar, because as you know, as a chef, like the sugar is going to cause browning. So they're trying to control for that. So a lot of times they actually try to cook out the sugar through this process and then they add it back in, usually using dextrose or some sort of a wheat.
[00:14:57]
How do they do that? I don't know. I just have heard it. We had an advisor who worked at one of these big potato companies for like 16 years and he was explaining the process a little bit. My business partner, Ben, does more of our sort of like back house and operations. So he's a bit more technical knowledge.
[00:15:11]
I just know they somehow get all the sugar out to standardize it and they sort of add the sugar back in and then they're just moving really quickly. So they're doing a similar process where there's some sort of water step, you know, probably hot water blanching, steam blanching, something like that. And then they're going to be then putting in oil.
[00:15:26]
They're trying to do sort of like the minimum amount of time they can do. And one of the most bananas things is if you look at the ingredient list on a McDonald's fry, for example, which I know we keep talking about them, I think everyone has nostalgic memories of nostalgic their, their fries being sort of the gold standard.
[00:15:41]
It has 19 ingredients in it, which is sign of a wild thing. And it's like, how do you even get 19 ingredients into a french fry? That should just be potatoes, oil and salt, maybe, uh, like a vinegar or something like that. If you really wanna get crazy. They have all these ingredients in there. So I don't know at what point some of these things are added in, but they're using all sorts of hydrogenated oils.
[00:16:01]
They're using dairy and wheat additives to make it taste like beef tallow. They're using all sorts of crazy stuff in there. And then obviously, as most chefs know, there's also these like technological innovations around things like lamb West and stealth fry. We use a stealth coating to give you better deliverability.
[00:16:18]
We use this coating to do this kind of thing. And they're trying to solve a need, but when you actually get into the brass tacks of it, it's like they're using, they're stripping out everything from the potato. They're taking all this sort of like pillowyness, flavor, you know, that, that stuff you're talking about, why you're soaking overnight in ice water as a chef, they're taking away a lot of these things, trying to add stuff to cover it up and then give you a product that like the cheapest price that they think will kind of work for you.
[00:16:44]
On the other hand, when you're looking at a back of house fry, kind of house cut fries you probably made in your kitchen, how we've sort of started making them and have slowly just been ramping up to more industrial, it's, you take a potato. You cut it, you soak it in water, or eventually you use like a hot like water blanch of some sort, just speed up
that process.
[00:17:02]
You're doing a low par fry at a lower temperature to get you sort of like that locked in that pillowyness, cook the middle, and then you're pulling that out and you're trying to cool it off as soon as possible so you can get that crust on the outside that you're then going to deep fry, flash fry, get the nice crust on the outside, nice and pillowy on the inside, that's sort of like that Belgian style twice fried fry.
[00:17:21]
That's exactly what we're doing. But we're utilizing, you know, a little bit larger equipment and we're using freezing to instead of having that walk in refrigerator kind of like casing that you sort of get naturally when you cool something down. By doing it in the freezer, it's happening faster and there's actually more of a barrier there that can fry in the fryer.
[00:17:42]
So we've actually found that for us, at least. You know, the frozen fry that we made at our commissary was performing better than the house cut fries we were making on our food trucks in our first restaurant location. And a lot of it was because of that. It was, they held a little bit longer because that crust would hold up and be more crispy, but they still tasted really potatoey and like mashed potatoey on the inside.
[00:18:03]
So. Yeah, it's like hard to explain, but what we usually do when we go to a chef is like, Hey, let's get your fry out, cook it. Let's cook our fry next to it. Let's try them right out of the fryer and let them sit for eight minutes. And let's try them again. Because as every chef, if you're trying to plate something up or put something in to go bag, like inevitably, there's going to be something sitting in the pass and it's not going to get to the table when it's like, you know, we're super hot.
[00:18:26]
And if you get a really hot French fry, you know, I'm not like a snob. I grew up in New Jersey. I love pizza, but like every pizza is pretty good. French fries are similar. If you get a hot french fry that's salted, and you dunk it in ketchup It's pretty good no matter what, but like, how does that fry taste after five minutes when it sits out of the fryer and the one from like the, these big processed commodity potatoes, they taste like cardboard versus you try a real house cut fry.
[00:18:50]
It tastes like a potato. It tastes really like that mashed potato a deliciousness. And I think that's what customers appreciate. It's like, you're going to have something, even if it's a little bit cold, even if you had to bring it home, even if it got delivery, it still tastes like a real French fry. And we found that our restaurant, like people love it.
[00:19:06]
Our attachment rate for fries is like really crazy. I think. 98 percent of our orders or something like that, people are ordering fries, and that's not by accident, it's because people know that it's just like a consistent french fry that they can, you know, have and enjoy no matter if it's piping hot or if it's been sitting for a little bit longer.
[00:19:22] Josh Sharkey:
Yeah, it's so true, the, like a cold, a cold McDonald's french fries, pretty, pretty nasty. I just pulled up the uh, the ingredients, I'm gonna read them for us real quick, cause it's pretty crazy. First of all, I didn't even know there was wheat in there. First ingredient's potato, so that's good. And, uh, I just wanna, I wanna read this, cause I had never even seen this before, but it's pretty crazy.
[00:19:41]
Potatoes, vegetable oil, which is a mix of canola, corn, soybean, hydrogenated soybean, natural beef flavor, wheat and milk derivatives, whatever that is, dextrose, sodium, acid, pyrophosphate. That maintains color, apparently. Salt, natural beef flavor, which contains hydrolyzed wheat and hydra What is hydrolyzed milk?
[00:20:07]
That's a, that's a starting ingredient. I didn't realize there's actually milk and wheat in these potatoes. That's nuts.
[00:20:16] Jesse Konig:
Yeah. And that is to try, they were trying to make their fry taste like the French fry they built their brand on. And the French fry they built their brand on, like there's this book, it's awesome.
[00:20:26]
It's called behind the arches. It like goes through the whole history of McDonald's and really like great detailed information. And they were like out in the fields, you know, learning about potatoes and testing their own potatoes. Like they were intense when they first started. They actually McDonald's, they're the reason that they standardized ground beef, like 80 to 20 ground beef.
[00:20:45]
That wasn't a thing before McDonald's, according to this book. Like, they were the ones that sort of like standardized ground beef, so it wasn't just the butcher putting random bits and odds and stuff. They wanted to standardize beef. And they would use specifically something like 83 percent grass fed beef and 17 percent grain fed beef, and they had a very specific spec for their burgers when they first started.
[00:21:07]
All that to be said, they were frying their fries in tallow, and it was like their main star of their menu. So when they made the switch in 1990 They were had the foresight to say we need to make sure this tastes the same and they knew that taking a bland Conventional, you know potato has been merged this process and then frying it in like canola oil or soybean oil in the restaurant Isn't gonna taste the same and they start adding in these derivative wheat and dairy products somehow But yeah, I never knew that either and so we started digging into this stuff and it's Insane when you think about some of the allergies people have and stuff nowadays.
[00:21:43]
It's like you can't go and just order a french fry and not have it have dairy or wheat in it. Yeah, I don't know. It's in some of that stuff like the sodium, the sodium pyrophosphate and sodium bicarbonate and some of these things, those are pretty standard ingredients used by these big guys. Like if you look at Or right at the grocery store or Alexea or some of these brands, they're using similar stuff that you can't pronounce, which is just doesn't make a whole lot of sense.
[00:22:12] Josh Sharkey:
I have no idea what that is. I'm like Googling it right now to see what sodium. OK, it's a white crystalline powder or granular substance with many uses. It's a leavening agent, a buffering agent and a stabilizer. Oh, I think they actually use it in the baking powder. So they call it SAPP. Anyways. Um, Oh, it's also a corrosion inhibitor and non food use as well.
[00:22:37] Jesse Konig:
Yeah, you gotta love when they're using stuff in your food that's also like petroleum based. What about the oil? Oils, oils are something that we've gone really deep down the rabbit hole on. It is really interesting and it's like borderline conspiracy theory as far as like some people think of it this way.
[00:22:53]
So hopefully people don't get lost in this stuff, but there's definitely a bit of a controversy around seed oils because. It's something that there's a lot of fear mongering around. I think there are people that make a lot of claims around it and the sort of like scientific nutrition community, which I might challenge sort of like a little bias because a lot of the money is being thrown around by some of the big food companies.
[00:23:17]
They discredit a lot of stuff around this because they say there's not science to back it up. It's sort of like more common sense and people having first hand experiences, but here's what I've learned about it. So the seed oils like that we talked about, like seed oils, generally that means canola, soy, vegetable oil.
[00:23:33]
It's essentially like stuff that you would never like squeeze and make oil with. And it creates these that they're called polyunsaturated fats. And I'm sure you guys know like saturated fats, that would be more like animal based products. The thing I've learned about like the easy way to distinguish a saturated fat is that at room temperature, it's going to be solid.
[00:23:51]
So think like tallow, butter, ghee, coconut oil, they're all saturated fats. Then there's monounsaturated fats that sort of sit between. and that's like avocado oil is one of those, olive oil I think fits in that category. The main thing has to do with stability of the oil, so a saturated fat, it's, there's no like chinks in the armor of the amino acid profile, so it's less likely to break down, it's super stable.
[00:24:15]
Mono unsaturated fat, mono is one, there's like one part of this chain that there's like a small like, You know, instability there, um, where it can break down, but it's much better than polyunsaturated fat, which is like many, and there's many ways that thing can break down. And the really interesting thing is around this idea of like oxidative stress is this like researcher term,
more like just normal way people think about it is what is that?
[00:24:41]
What does that mean? So, oxidative stress, my understanding of it, there's a really great book by Dr. Kate Shanahan, it's called, I think, like, Dark Oil or something like that. The idea of oxidative stress is that just like, It's like oxygen exposure, I believe is causing, um, you know, certain things to like change and transform in the body, but generally it's causing stress, which can lead to disease and a bunch of issues.
[00:25:05]
But a lot of it comes down to like inflammation is what a lot of people point to with seed oils. And now, right now, almost every processed food has some sort of seed oil in it. from these large companies. You look at the back of almost any bag, there's going to be canola oil, there's going to be soybean oil, there's going to be sunflower oil.
[00:25:23]
They're going to be just like kind of pumping this stuff in there because it's super cheap and it's just become a part of how things are done. And what's crazy about these oils is they also go through this like 19 step process to be made. And one thing that's fascinating, a story I heard was that when they first introduced these, I think, uh, Crisco was like cotton oil and, you know, some sort of vegetable oil mix together.
[00:25:44]
Hmm. And when they first were trying to bring these oils to the market, this was like the 1940s or 50s, it was like very much in the time of man goes out to work, woman stays home with the family. So housewives, when they were shopping for this stuff, they tried to get it into households and the housewives, when they were cooking with it, it stunk, it was really terrible.
[00:26:02]
So no one was buying it and it sort of tanked. Instead of realizing, Hey, maybe this isn't something we should be using in our food. You know, something that's sort of like almost a lubricant or like a, you know, like petroleum based thing. It's like part of this system, maybe not a food product. They added deodorizing as a step and basically took the smell away to trick, you know, the evolutionary things we've got going on as humans and be like, Hmm, this smells funny.
[00:26:25]
I shouldn't eat it. So when you use like a soybean oil or canola oil, it comes in a big 35 pound jib, you know, it's being really heavily processed. They're using deodorizers in there. So it's like tasteless and smelless. They're just using bleach typically. And there's a solvent called hexane that goes in there, which is really problematic because it's part of like what you'd use in producing fuel or something like that.
[00:26:46]
A lot of controversy, a lot of people are trying to avoid these oils for one reason or another. And like, maybe you can make the case that if some grandma was making sunflower oil in her kitchen and is hand pressing the stuff somehow, which I don't really know how you do that. But. It's probably not that terrible, but when you look at the processing and the chemicals and these agents being added to like the conventional seed oils, there's just a lot of problematic stuff going on.
[00:27:12]
So there's this big movement towards trying to use more animal based things or at least monounsaturated fats. And that's kind of where like the beef tallow comes into play. That's where duck fat fries are kind of a fun thing. I know that has like a big prominence. That was a big thing in the chef world for a while.
[00:27:29]
Avocado oil. There's also some newer alternative oils. For example, Zero Acre Farms is one company. There's also a company I think called Algae Cooking Club. And they're trying to make new types of oils that are essentially going through a fermentation process similar to like kombucha. And they are creating this oil that has a really healthy, you know, profile around linoleic acid and omega 6 and omega 3, which is how they measure some of this stuff, which is really interesting.
[00:27:57]
Interesting. But. It also could be argued as going through some bit of processing more than something like beef tallow where you're just rendering fat. So all that to be said, the world of oils is a really deep rabbit hole and I think most people who spend time experimenting with pulling these things out of their diet and then reintroducing them in some way, you feel really bad.
[00:28:21]
And as we learned about this. Both with our restaurant and as we were thinking about this fry business, we realized that there was one, a big opportunity to like create a product for these people in the grocery store that are looking for an unprocessed version. When you read the back of our Jesse and Ben's fries in the grocery store, one of our skews is tallow and sea salt.
[00:28:41]
It's just potatoes, grass fed beef tallow and sea salt. There's no sodium bicarbonate. There's no like weird stuff you can't pronounce. It's just those three ingredients. We also have one with potatoes, avocado oil, and sea salt. We also use rosemary and garlic powder for a third flavor. So it's super simple, super clean ingredients, no seed oils is like the main value proposition.
[00:29:01]
But on the food service side of things, it gets a little bit complicated because most chefs are using, you know, soybean, canola, some blend because it's cheap, and that's what they grew up using, and that's kind of like the way things are, and that's what's available. But there is a movement of more people going towards using some of these other oils.
[00:29:19]
So it's really interesting to see how it's going to progress because I do think consumers are actually interested in looking for these options that are using non seed oils. And it seems like there's some early adopters and chefs and restaurants that are making that a prominent part of what they do and are having a lot of success.
[00:29:35]
So I'm really interested to see where this goes. But I think from just like a flavor standpoint, it tastes as good or better from a stability standpoint. Like we talked about the saturated versus unsaturated fats, the stability of a saturated fat in a fryer holds up better and it doesn't break down as quickly.
[00:29:54]
So from a changing your oil perspective. Even though it's more expensive, you actually can get more life out of the oil, and using something that's better for people's health, generally, which is a nice thing too. So I think there's like, a very interesting case to be made for more restaurants to go this direction.
[00:30:09]
I just don't know what the timeline's gonna be, because of course, There's that chick in the egg game of having a premium that customers are willing to pay versus the premium you're paying as a restaurant when you've already got thin margins. I've seen some people do it to very serious success so far and it's been cool to see.
[00:30:26] Josh Sharkey:
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[00:31:35]
I would have never thought to look at ingredients in code. Oil. Yeah, jib. I actually think, uh, I started looking, yeah, I, I started just googling and they, they also don't put all those ingredients on there, which is a bit of a pain in the ass as well. Like if you look at a lot of the boxes of canola oil, it just says canola oil.
[00:31:54]
Maybe they don't have to like represent what else is in there if they're, you know, if it's just being processed with those things, that's crazy. So you guys use mostly tallow or?
[00:32:00] Jesse Konig:
So we actually in our restaurant, we started out using sunflower oil. We also didn't know any better. We thought that was a better option because it just sounded better.
[00:32:12]
And we knew like in and out used it on the West coast. And we thought it might be better than soybean canola. As we learn more about this, especially as we were approaching this fry business, we realized that it was pretty problematic. And we maybe like early this year switched to we use avocado oil for our fries.
[00:32:30]
which is consistent with what we do in the grocery store. We probably would have used tallow, but we also have fried chicken sandwiches on our menu, and we thought in a city like where we're at in Washington, D.C., it might be weird for people, or if you're a vegetarian or something, to have a tallow fry with a chicken sandwich.
[00:32:45]
And then we actually used that zero acre oil for our chicken fryer, because we found it performs really well and has a good shelf life and stuff. But we're still always kind of experimenting with this stuff and trying to find what's best. I think the hardest thing is if you're trying to pull these oils out of everything on your menu is that similar to the grocery store.
[00:33:04]
There's just not options or we're using a great local bakery. They do so many things really well, but they have a tiny bit of canola oil is like one of the last ingredients on their thing. And they'd never thought about it the same way. Most chefs haven't for things like mayonnaise and sauces. Almost every mayonnaise is using some sort of vegetable oil.
[00:33:23]
There are a few that use avocado oil, but a lot of times they taste a little bit like acrid or like some sort of liminess to it, which if you're trying to like have some sort of base flavor that you can mix in and make your own house sauce, that's sort of problematic. So we're trying to solve for that right now.
[00:33:40]
But yeah, it's really interesting because I think consumer demand seems to be heading in this direction and very qualitatively as we like hear from people since we're now in this world. It just seems like everybody who tries to pull this stuff out of their diet and starts eating this way and then tries to go back to more conventional like oils and just processed stuff.
[00:34:00]
You notice a big difference, just like feeling different. And I think there's something to that, that people want to feel good and feel nourished after their meal. And. It's something it seems like everybody can agree on once they've tried the differences for enough of us to sustain time. Where you have sort of eliminated the craving or the almost addictive nature of some of the stuff that's just like crammed into our diet without us knowing it.
[00:34:25] Josh Sharkey:
Yeah. Avocado oil is great. It seems like it's not cheap. It must be. It's expensive. Yeah, it's I'm assuming you have to buy a lot of that to get the kind of price point that you need.
[00:34:34] Jesse Konig:
Yeah, I mean, it's like, right now we're probably Not filtering it as well as we should have, especially at the price it is.
[00:34:41]
But for that reason, we're buying a lot of it. So that helps for us cutting the cost on that type of thing. So yeah, it's a bit of a challenge to figure out like the sourcing and supply chain, but I think like anything, it's sort of. As demand goes up, there'll be more options at a better price. And I think, yeah, yeah.
[00:34:56]
We found that especially if you're focused on quality across the board, for example, like for us using our fries, that you taste like a house cut, really good fry and using an avocado oil as a little bit of cost of that. But we're, you know, think that it's worth paying an extra 50 cents versus. Getting a lamb Weston stealth fry.
[00:35:13]
You can get anywhere fried in canola oil. It's been sitting in there for five days and it's kind of dark and doesn't taste very good. Oh yeah. That, you know, people are willing to pay. Everything's expensive now and it's unfortunate for, you know, a lot of people's wallets, which is hard, but if you're going to go out to eat and you're going to spend already something that's sort of expensive, you might as well pay an extra 75 cents or 2 or something per person and get something that's like really nourishing and delicious.
[00:35:37]
And we've always focused on affordability. When we. Launched our first restaurant in D.C. Unfortunately, we signed our lease in 2019 to open it in May, 2020. So it wasn't a great timing, but when we opened that restaurant, we were really focused on trying to do like an affordable, really focused on sourcing version of like an in and out on the East coast.
[00:35:56]
So we were doing super streamlined menu, regenerative grass fed beef, local buns, fries, super simple, like a drink menu. And we want it to be like 10 bucks. You can get in the door with a $10 bill and get something. A double cheeseburger was $6.50. the best beef you can pretty much buy. We were grinding it ourselves in house, we were buying chuck rolls from Joyce Farms, regenerative grass fed beef, grinding it, doing it fresh, doing all the things the right way.
[00:36:19]
And as we started doing that and just kind of like realizing what was important to the customers and trying to build this thing out, we realized for us to deliver on an experience that's like sustainable as a restaurant in a city like D.C., and we don't have the volume of maybe like a New York City with so many people, We needed to create a little bit more diversity on the menu and give people more options.
[00:36:40]
And with that loss of efficiency we had to raise our prices a bit, but we've always been focused on trying to figure out how do we make this high quality food affordable for people. So it feels like a really good value. And it kind of goes back to like that same idea with the French fries is that when we are grinding our meat in house, it felt really good to us.
[00:36:57]
We love that idea. It was a really good product, but as we got down the rabbit hole of doing it, you know, When your number one meat grinder's called out for the day and you got somebody else trying to figure it out, it's a little bit inconsistent, or you get a chuck roll that's a little bit lean and you don't have enough, like, fat to sub in and you're trying to figure out how to make it work.
[00:37:13]
It just became this, like, sort of constant puzzle and, like, loss of focus that we otherwise could have spent on better customer service, more consistent ticket times, all the other stuff that made our restaurant special in this kind of, like, fast food environment. We feel like it's the same thing with our fries for chefs.
[00:37:29]
It's like, we found a great Packer in New Jersey that has like European 350,000 machine that does this fine chopped ground beef for us. It's amazing. Same farm, same beef shows up to us already ground. We just have to scoop it instead of grind it. We're like, okay, this is better. It saves us time. It actually saves us money and it's better for the customers.
[00:37:49]
They don't care that we ground it in house. We cared, but like, they didn't really care. They just want something that tastes good. We feel like for French fries, it's very much the same. It's like, if your best prep guy, who's your potato guy calls out. And now your shift level manager, your sous chef is now cutting potatoes.
[00:38:05]
Is that a good use of time? Is that what makes your restaurant special? Is that why people are coming in and sitting and filling up the, the tables? Probably not. It's like probably your service is probably, you know, your mise en place being set up. It's your specials. It's the stuff that you do uniquely well.
[00:38:20]
So we're like, you know, why can't we just be an outsourced back a house for people to give them, maybe 99 percent as good as like the best fry they could make. Right. If they were doing it themselves, but the reality is you as a chef are not making every batch of fries. It's your prep cook who might, you know, leave and you got to train a new guy.
[00:38:37]
And sometimes you get the potatoes during the mid season to your point you said earlier. And now you've got to adjust your times and temperatures to adjust for new crop versus old crop. You're not getting that same exact potato and french fry that you can make on your best day. So why not take something that's consistently 98 percent as good from people that actually care about quality and that are doing it the way that you would do it, uh, it just seems like sort of a win win and it allows us to continue to buy more potatoes in bulk and invest in equipment and continue to make our product better and more efficient, which is just sort of like allowing us to get to more places in the country and drive our prices down and be sort of competitive with the big guys.
[00:39:14] Josh Sharkey:
Yeah, dude, I totally agree man, and you know consistency is the most important thing in any restaurant over everything else I think because people freak out if they come back and it's not the same and there's enough things you have to get right with your food anyways, and I love the idea of being able to trust, you know, someone else to do this, do this high volume exercise in fried potatoes that, yeah, to your point, it is, it's the same as grinding burgers, and, you know, I had to deal with that for many years as well.
[00:39:42]
The thing is, is that I think, you know, there's certain foods that one, have to be, have to be right and consistent with All the time, more so than other things, and then burgers and fries are definitely two of those things, and there's a, just a perception of the cost of those things that you can't really skate around, and the amount of time and energy and skill to make that burger and that fry consistently the same way every time.
[00:40:07]
means either you gotta charge a lot of money, which most people won't pay for, or you gotta, you know, outsource to make sure that it's consistent and someone else is able to do it, you know, consistently for a ton of people. So I think this space you're in is super smart, man, because there's, there isn't any other options right now.
[00:40:25]
And I think a lot of places A lot of places, to your point, like, in that, like, just below the top 5 percent and above the, the, the bottom 5 percent would, would love to have another option than, you know, than the, than the commodity. Cause it is, it's a pain, man. It's a pain to do that stuff consistently.
[00:40:43]
Right now in your restaurant, I mean, you have this fast casual spot in, or I don't know if you call it QSR, Fast Casual, in DC, Swizzler. I'm curious, what you're seeing right now, is that the biggest driver of. Well, both of like cogs, like what ingredients driving the most cogs for you right now? And also like, what, what is the hardest thing to keep consistent?
[00:41:00] Jesse Konig:
Yeah, it's a great question. You know, we have had the luxury of a lot of our vendors we've worked with for six or seven years at this point, at least the core items, the bread, the beef fries, obviously in potatoes. So we've been able to build pretty good relationships across our supply chain and keep those costs stable.
[00:41:18]
And unfortunately, I think like most other restaurants. You know, we had to raise prices over the last couple of years a little bit more than we wanted to. So we've been able to keep our cogs pretty consistently in that sort of like sub 30%, sub 55, 60 percent prime cost with labor. Type of like where you need to be for the QSR fast casual world in terms of sort of controlling and consistency around cogs.
[00:41:43]
I do think a lot of it just comes down like that portion control and that consistency of experience all the time, which is such an underrated piece of what you do, because I think the natural tendency for someone who's working in hospitality and in food, if you're not given a lot of oversight and development work is like, oh, yeah, like I'm hooking it up for somebody.
[00:42:02]
I'm giving them a bigger order. I'm doing this a little bit my way. And what people don't realize is like, okay, you hooked it up for them this time. That's great. You gave them these extra fries. But next time when they come back and get our normal spec portion, they're going to feel like they got ripped off.
[00:42:15]
And people are like, Oh, I didn't think about that. I thought I was doing them a favor. It's like, no, you're doing them a favor by letting them know exactly when they walk in the door. What are they expecting to get? And hopefully it's so good that they feel like they got this amazing value and that's exactly what they want next time.
[00:42:31]
And that's why they're going to tell their friends, that's why they're going to keep coming back. So we've worked really hard to streamline things as much as possible so our team can focus on the stuff they do uniquely well. And there's still stuff we do in house, like we're making fresh squeezed lemonade because it just tastes way better and we haven't found a better way to do it outsourced.
[00:42:48]
We are still making our sauces there, we're cutting fresh produce, that kind of stuff. Things we can outsource are flour for our breading. We found a company that could co manufacture that for us. So our breading comes in pre mixed, ready to go, um, so it always is consistent every single time and our team's not just like getting facefuls of flour and cayenne pepper or whatever they're doing in the back.
[00:43:08]
You know, our, our beef, we're still scooping it because we're not at a volume where we can get a spec patty that's the right size for us. But we're getting it coming in ground ready to go exactly from the sourcing partner we want to, which is great. Um, our bread comes in fresh every day. Eventually we want to maybe do like a par baked thing that we could just improve and bake in house.
[00:43:27]
We think that'd be cool and maybe add to the experience. But all in all, it's really just comes down to that consistency and having a great team. And we've been really lucky that, you know, since COVID and sort of like all the shifts that happened during that time, we've been able to have a very consistent team over there, especially at a leadership level.
[00:43:44]
And it just sort of pays dividends. We've also gotten to, I don't think we got into this, but not only the fast casual world, but also concessions. So we're in, you know, three of the major sports venues in Washington, DC, uh, inside Nance ballpark and FedEx field, for example. I think I just changed the name of that one, but that's also a very interesting thing to think about consistency of the experience and how you can dial in your supply chain, because that's super high volume.
[00:44:10]
You have a seasonal team that's not been with you for a ton of time. Yeah. And you're working within somebody else's space. So you're sort of limited. And I think that was a really interesting exercise because it forced us to figure out how do we keep the essence of our brand concept the same in a slightly more streamlined, constrained way in a, in a stadium.
[00:44:28]
So I think we learned a ton of lessons from that and we were able to go and apply some of those principles to our restaurant because it's tempting, you know, to add different things to the menu and to do the specials and the LTOs and all these things. And for some people, that's what makes them unique and special.
[00:44:42]
And they should keep doing that all day. For us, we realized we were trying to create this sort of like Americana, fast food style experience just focused on really good ingredients and sort of hit the classics and do them well. And we didn't need all the fluff and all the like the viral trends and the smash burger tacos or whatever it was going to be.
[00:45:00]
We just wanted to keep doing what we do every day. And, you know, we sort of just like muscled through COVID, muscled through that first 18 months and just has incrementally been building. Just your word of mouth and sort of being like a one of one in DC have been able to build a really great brand and We just want to keep doing that day in day out and it just comes down to being consistency and knowing what we do well. yeah, it's smart.
[00:45:21] Josh Sharkey:
I mean you gotta you know, you have to play the right game I think that's super smart. You have these concessions you have the restaurant you have the the CPG Like do you think about sort of fast forward 10 years? What does this look like for you?
[00:45:33] Jesse Konig:
Yeah, I mean we've thought a lot about we try to use this framework, which I think is a good one for other people to use too.
[00:45:39]
It's like sort of A, B, Z. It's like, you need to know what Z looks like. Like ultimately what you're trying to build at the end of the day. And you need to know where you are today as A. And you need to know where your next step is with B. But we try not to get too bogged down with like, what happens the next 2, years.
[00:45:55]
Because you can't control it. You need to be nimble and adjust. One thing we made a pretty concerted decision on this past year is that we wanted to really focus our energy, at least Ben and I, on trying to grow on this franchise side of the business. We just think there's just, you know, a really big opportunity.
[00:46:11]
We can make a big impact on the supply chain. We can help a lot of restaurants. It just seems like really timely and something we can do. And at the end of the day, I think you look at a story like Shake Shack, they were in their first location, maybe their first brick and mortar and their Madison Park location for I think seven years before they opened a second one.
[00:46:28]
And then, you know, very quickly, they became this national brand, public company and all of that. So we look at that and we say, you know, we think there's a big white space, even though it seems crowded in the burger world for just like really good quality, really good sourcing. But there's nothing we're doing right now that can't be done five years from now or eight years from now or 12 years from now.
[00:46:47]
So we feel like we just want that thing to run really well as a one of one in DC and be opportunistic if a cool opportunity comes up and we have the bandwidth for it. You know, we may actually try to find like a partner to come in and help us grow that side of the business. Whether it's through like franchising or corporate owned stores, we don't really know.
[00:47:03]
But if we found someone who, was really aligned with the vision and was a really great operator and brought things to the table. You know, we're, we're open to bringing in some sort of partner on that side of the business because it's set up to scale. Like it has the right unit economics and all the stuff you would need, but you need to have like somebody full time driving that business.
[00:47:20]
And we've learned over the years, it's really hard to do multiple things at once. And we're already kind of doing two things at once with the food service and the consumer package goods for Jesse and Ben's. So we've, we've realized our limitations, I think. Wisdom comes from some hard earned lessons throughout the last 10 years in the food industry.
[00:47:37]
So we've sort of set that thing up to be one of one unless, you know, a cool opportunity or cool partnership comes up and then we're totally open to, uh, seeing what happens there.
[00:47:47] Josh Sharkey:
Yeah, no, super smart man. Like, what's the Z for, um, you said A, B, and then Z. What's the Z for this fry company?
[00:47:54] Jesse Konig:
That's a good catch. I didn't even realize I glossed over that. So, yeah, Swizzler, we're not really sure. Z could be, it's just 10 years from now and we're still crushing it with one really awesome location and some concession stuff. It could be something completely different. We'll see what happens there. With the fries thing, there's a pretty clear path, we think, to
be setting a new standard in a very stale category.
[00:48:16]
And I think we very consciously were trying to make a brand, especially on the grocery side, that wasn't just like potato brothers fries, you know, we wanted to be something that could be sort of like more of a curation of high quality junk food. Like, we think the real opportunity here is taking these like nostalgic, craveable, delicious things people love to eat.
[00:48:40]
and make them the best way possible, not using bad ingredients and processed stuff. And if Jesse and Ben's, you know, the guys behind the fries can sort of like be the curators of really good food that uses really good ingredients, we feel like it's a brand that has a ton of potential and we want to be laser focused on fries for a long time, but eventually We could see Jesse and Ben's doing potato chips or, you know, chicken tenders or sauces.
[00:49:02]
Like there's a lot of things in this all American, you know, quote unquote junk food category that we kind of think of as joy food when you do it the right way. So we think there's a ton of white space there and that's kind of, we see it being a household name and a really big brand. I know, especially recently, I'm not sure if you saw the news about Siete Foods, the uh, the company based out of Austin, TX that does CPG stuff got bought by Pepsi for 1.
[00:49:25]
2 billion. And there's all this outrage around people saying, Oh, they sold out, they're gonna change everything, they're gonna be so much worse. I don't think that's true or hasn't been proven how. You look at Primal Kitchen got bought for, I don't know, 200 million or 400 million by Kraft Heinz. They've stuck to their guns.
[00:49:42]
Their team is still running the show. They're getting more points of distribution. They're coming up with new innovative products that are true to their mission. Epic provisions was doing, you know, regenerative grass fed beef meat bars and got bought by General Mills and they're still a great company doing cool stuff.
[00:49:55]
So I think there's a lot of examples of that. These big global corporations have realized their limitations and they realize that when they're buying and acquiring a company. They're not trying to like milk it for an extra couple percentage points and ruin the magic. They're buying something because they want to see it continue to grow.
[00:50:15]
So we feel like there's definitely an opportunity for one of these larger companies eventually to, I don't know if absorb us is the right word, but sort of take us under their wing so we can leverage their network and their supply and all of the stuff that they have going on to continue to make this food more accessible to more people while maintaining, you know, at least 95 percent of the quality of the ingredients at a better price and more points of distribution.
[00:50:37]
And I think the food service fries is kind of a similar vein. Like we're committed to making sure that these fries are the same quality house cut fries that we started on our first trucks. And in our restaurant, we use our same fries. Like if you get, if someone gets our fries through Baldor or us foods or PFG or whatever it is, you're getting the exact same fry that we designed and still is served at Swizzler in DC.
[00:50:59]
And we're committed to make sure that that fry stays. As good or it continues to get better, honestly, over time as we get more equipment and can invest in that stuff. So yeah, I don't know exactly what that business looks like. It could be a, you know, 100 million food service business for all I know, as far as it's like working backwards.
[00:51:15]
The math isn't that crazy. It's like a restaurant might buy 50,000 worth of fries each year. And, you know, back of the napkin, it's not that many restaurants when you think in the grand scheme of things of how many restaurants serve french fries and how many are probably looking for a better fry. So we don't know.
[00:51:31]
I mean, we're trying not to get. Again, too ahead of ourselves, but we feel like we're solving a real problem, both for cleaner, seed oil free, better products, and letting chefs serve really high quality fries without the headache of cutting potatoes all day themselves. And we want to just kind of keep following those things for the next six months or year and get over the next hump and pick our heads up at that point and see like, all right, what's on the horizon now, where, where are things kind of shaking out and how do we do our best with the information we have today?
[00:52:01] Josh Sharkey:
Yeah, well, I'm stoked, man. I'm stoked to see it grow. I think it can be far bigger than a 100 million company. And I totally agree. These companies are smart. The ones that are buying. You know, when you're buying a better for you company, it's because of that, not so you can sort of roll it up into your commoditized other products, you know, they get it.
[00:52:19]
And yeah, you do need that scale to do things, to continue doing the right way for more people. I think that's something that I learned early on, you know, when I first started Bark is, it takes a lot of resources to do the right thing for enough people. You know, you can do, you know, like the right thing for a very, very, very small group of people and, and figure out how to make it work.
[00:52:39]
But if you want to actually do it at scale, that's kind of the only way to actually have a big enough impact on the planet anyways. And that doesn't happen, you know, uh, bootstrapping, you know, at some point you have to really scale. And look, that could be, you know, it could be going public, but it, but oftentimes it does mean, you know, one of the incumbents, you know, comes along and, and funds it.
[00:52:56]
And sometimes that means, I mean, you saw Chipotle, they got bought by McDonald's and then bought back. You know, there's tons of opportunity, but I'm stoked for you, man. I think it's a really, really cool business and I totally agree. It has hundreds of legs to keep, to keep growing. I love that you're staying so focused right now.
[00:53:12]
Well, I mean, look, I know we, we met through a, that CEO group. That's how we know we met before that.
[00:53:19] Jesse Konig:
Didn't we? I think we may have gotten like really briefly connected on like an email or something like that, or maybe like a 30 minute call and then we ended up meeting in person to the group. Yeah. Not a lot of hot dog, uh, OGs who started their career doing that.
[00:53:30]
So I think that was through Spencer. We got connected and chatted and then we were at that, uh, that thing in Arizona for a while. You brought up such a good point around the idea of, you know, I think a lot of people get into this thing and they're like, have big ambitions and dreams of how they can make an impact.
[00:53:46]
And we were definitely that way. And then you realize from a scale perspective, like, okay, we're buying, you know, 120 pounds of beef a week with one location. That's great that we can support a local farm or a local this or you know these type of things But if we really want to like shift the supply and demand curve and get people to you know Or you know suppliers to look at this and see there's an opportunity to invest in better in quality ingredients Like you need to be thousands of restaurant locations That doesn't happen when you're trying to do everything the perfect way for one location Like you have to make some sacrifices sometimes in the short term, but I think a lot of it just comes down to baking in the sort of like values from day one to say, Hey, as we get bigger, we're going to get better.
[00:54:29]
We're going to get scale. We're going to get efficiency and we're not only going to just be as profitable as possible. We're going to like start where we can start. We're going to do our best. We're going to be committed to getting better as we grow. And with that type of mentality, you can actually get to the scale and level where you can start making more of an impact, or at least showing that there's a way to do it through a model that could be replicated by other people, which I think can be equally impactful.
[00:54:52]
But yeah, no, I appreciate the kind words and definitely have loved watching your journey and all this stuff that you're doing. And I think chefs have one of the hardest jobs out there. And whether it's, you know, great software that makes their life easier for training and consistency, or if it's, you know, great French fries that are super consistent and take one thing off their plate.
[00:55:10]
I think, you know, there needs to be more resources for chefs and restaurateurs to have a great life, make good money because everyone loves eating out and enjoying delicious food. And yeah, it's a really big luxury that we have today that I try not to ever take for granted when I go out to eat.
[00:55:25]
It's like somebody's back there working every Friday, Saturday, Sunday, and it doesn't just happen. You know, that delivery order through Uber Eats does not just appear. There's a lot of people. touching things from the farm to the warehouses to the restaurant. And it's always a good reminder that, you know, it takes a lot of hard work to prepare food and give us the conveniences that we all sort of take for granted. Yep.
[00:55:47] Josh Sharkey:
That, that it is, man. Well, this is awesome. I appreciate you taking the time and I'm going to keep following along, but we also got to catch up, you know, both in DC and when you come to New York.
[00:55:57] Jesse Konig:
For sure, man. And just one quick plug, I guess would be if anyone's listening and vibes with these things and, you know, wants to try some french fries, I'd be happy to ship you a sample so you can.
[00:56:07]
not take my word for it, but can actually try them side by side and see if it's the real deal. My emails like Jessie@JessieBen's were easy to find, but yeah, it's been great. And anyone who's hung out this long, hopefully you'll come join and meet up with us when we're in New York, eating some burgers and fries together.
[00:56:22] Josh Sharkey:
All right. Jesse at Jesse and Ben's. You heard it. Everybody get some samples. Thanks for tuning into The meez Podcast. The music from the show is a remix of the song art mirror by an old friend, hip hop artist, fresh daily. For show notes and more, visit getmeez.com/podcast. That's G E T M E E Z.
[00:56:43]
com forward slash podcast. If you enjoyed the show, I'd love it if you can share it with fellow entrepreneurs and culinary pros and give us a five star rating wherever you listen to your podcasts. Keep innovating. Don't settle. Make today a little bit better than yesterday. And remember, it's impossible for us to learn what we think we already know. See you next time.
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