ANDY: To launch Amy's, we borrowed against Rachel's car, and I sold a watch and some gold coins -- that raised about $20,000, enough to get us going. When we ran through that money and went for a line of credit, almost every bank turned us down. Only our local bank finally approved us, for $20,000. I learned later that when the loan officer reviewed – more... our application, he was so impressed with our product that he predicted we would be the bank's largest customer someday. He was right, and we still bank with them.
A few months after our launch, we had too many orders and our bakery couldn't keep up. Its owners gave us 30 days' notice to find another site. We couldn't locate one that used quality organic ingredients, so we worked out a deal with that first bakery to let us cook potpies in the kitchen that we'd been using as an office. Then we ran a help-wanted ad in a local paper, which brought in five bakers, three of whom are still with us. Rachel, her mother and I all cooked together, with me carrying Amy around.
We could make just a few hundred pies a day by hand, and we had problems distributing ingredients evenly among the pies. I called the engineering department at Swanson -- one of the nation's oldest frozen-dinner brands -- and asked how they made potpies. I told them who we were and what we were doing, and they didn't feel threatened -- it's not like I was asking for recipes! Swanson's solution to the problem was a complex mechanical system, but the company helped us think about the process and the equipment needed. We couldn't afford a system like theirs, so we hired two extra employees for the assembly line. And when we finally bought a used pie machine from a dessert company, our output immediately increased to about 2,400 pies a day.
Our first real disaster hit in year two. Our freezer died, and our inventory started to thaw. When we checked on our pies, only the tops had defrosted; they didn't look soggy or freezer-burned. We went ahead and shipped them. A few weeks later, distributors from all over the country were complaining about moldy potpies. The tops had turned black! Fortunately, the pies hadn't reached stores yet, but we had to throw away our entire stock. Thank God it was early enough in the life of the company that our total inventory was only 100,000 potpies. I think 200,000 would have killed us.
We had been pitching regular supermarkets for years, but it wasn't until big chains such as Kroger started carrying frozen health foods in the late 1990s that our business really took off. Sales grew 73% in 1998, to $32 million, after King Soopers in Denver and other grocers started placing orders with us.
We expect to be a billion-dollar company in five years. We're introducing about two new products annually, and we're looking to open an East Coast distribution center that will help reduce shipping costs. Our daughter Amy, who's a junior at Stanford, will have the opportunity to take over. e've been approached a few times to sell, but we always say no. We want this to remain a family business, one that supports our values and pays Amy's tuition. – less – More from ZoomInfo »
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