Many business owners have their eye on expanding to the US market – it’s our jackpot – but there’s a lot of steps and readiness that needs to take place before realizing those ambitions.
It all started after a year and a half of being unemployed. Thirty-five years old, a Master’s degree, and no job prospects in sight. In 2013, I set out to make good on a promise I had made to myself after I got my political science degree — I wanted to work for an international organization somewhere far away and do some good with my life.
Well, life happens, doesn’t it? I had been job hunting for far too long and was close to throwing in the towel. I took a job trying to help franchise a local health food restaurant to pay the bills. Not my dream job but time was running out to make a move.
That’s where I found Fatso. We were selling it at the restaurant and the feedback from customers was incredible. Fatso, incredibly delicious peanut butter that was enriched with all sorts of good fats including MCT oil, coconut oil, chia and flax, was selling like hot cakes! The name was brilliant, the formulation was a solid concept, but the business owners were not doing it justice.
One day I got a call from a fellow retailer who knew how much I loved the brand. They told me that the business was going under, and this was my chance to rescue it. I snapped up the company (or at least the recipe, materials, list of suppliers, and the name) for the price of a used car. Fatso as we know it today was born, and I started the long uphill climb towards relaunching the brand.
Let me be clear, I had no idea what I was doing. I had no experience in business or peanut butter for that matter. All I knew was that this little peanut butter had legs and I had to make the best of it. Thankfully, I had a solid background in research owing to my graduate degree, so I set off to figure out how to build a business, starting with a Google search: “how to start a business.”
First off was the minutiae of business: the business licence, the insurance, the trademarking, and incorporation. Then I dug into the fun stuff: I reformulated the recipe for scalability with the help of a nutritionist, solidified a co-packer (making it myself was sticky business, to say the least), rebuilt the retail relationships, and launched a new and improved social media presence and website.
For the first two years I learned the ups and downs (there were many downs) of running this business. I demoed my product every weekend for two years straight, knowing that if I could just get this peanut butter in people’s mouths, they would buy it. I was right. The sales began to grow and with the sales came new listings from bigger retailers. Before I knew it, I had a viable and growing business, and I was able to look in my rear-view mirror knowing I had made the right move.
Today, Fatso is a national brand, and it’s still growing. We are in stores right across the country, including Whole Foods, Sobeys, and Loblaws. We now have two nut butter lines, including three peanut butters and three almond and seed butters. It has been 5 incredible years. We still have a lot of work to do in Canada, but now it is time to turn our attention to a new market, the United States.
The US market for a brand like mine is incredibly seductive. The market, the opportunity, and the stakes are enormous. The state of California alone is equivalent to the entire Canadian market. The money to be made in the US is truly what drives brands to reach across the border. Incredibly successful brands like RX Bar, Smart Sweets, and Skinny Pop have hammered the US market and achieved exits that land in the hundreds of millions. All you need is skyrocketing growth, unimaginable success, and no missteps, right? The thinking for many brands is, “if it can work in Canada, it can work in the US.” And, oh, how the mightily ambitious can fail.
The sheer size of the US market is the critical problem here. Supply chain demands can be crippling, massive POs with late payout dates can bankrupt you, and a single misstep, like an ingredient recall or packaging issue can blacklist you in an instant. Canadians continue to see the US market as just a bigger Canadian market. This is truly the first mistake Canadian brands will make. The Pacific Northwest is like another country compared with the likes of Texas. California simply can’t be compared to Pennsylvania, Illinois, or Idaho. Each region must be approached with a unique eye for the market and an understanding of what will work and what won’t work. Has Fatso achieved this? Truthfully, that remains to be seen. What we do know is we cannot superimpose our “Canadian-ness” onto a market like Texas because that simply won’t translate.
However, if you can enter the US and do it well, with an eye to sustainable growth, then the wins are limitless. The ability to grow your brand in one of the biggest consumer markets on the planet offers the ability to fully realize your brand potential. Of course, revenue growth is top of mind, but it also offers the potential for new product development, interesting brand collaborations, and new sales channels.
The US offers a unique opportunity for not just Canadian brands, but brands from around the globe that put all their chips on the table to vie for a spot on their shelves. The US market drives consumer trends, demands, and insights. We continually look to the US for innovation, particularly in the CPG food space, to see what the next big thing is going to be and what is going to drive the future. This is why brands with big ambitions want to test their metal in such a risky market. If you can make it in the US, your work is essentially done. The payoff is huge, the potential is real, and the sense of validation of ‘having made it’ can be found on the shelves in the US.
So, what is next for Fatso? We are among the ambitious, the bold and the risk-takers. However, we are keenly aware that we must take a sustainable approach. Fatso has started with the region that feels most like home: the Pacific Northwest. We understand this market. As a British Columbia- based brand, these are our people! In many ways we understand people from Seattle and Portland better than we do people from Toronto. Our strategy is to start on the west coast and expand from there. The California market certainly puts stars in our eyes, but we aim to grow as sustainably as possible.
We’ve always tried to practice the principle of “Inch-Wide, Mile Deep” — saturate each market before moving on to the next. We can try to practice this principle in theory, but the US market has a way of taking you on a bit of a roller coaster ride. One minute you’re in Whole Foods in Washington state and the next you’re getting listings out of Texas. It can be difficult to reign back in.
We feel that Fatso is ready for a US expansion and that the US market is ready for us. Over the next three years, we hope to move our brand down the coast into California and into parts of the midwest. I don’t know if it leads us to a big exit or if we simply continue to grow as a lifestyle brand and keep it in the family. What I do know is that the journey will be full of excitement, both predicted and unpredicted. We will have missteps, but we will have huge wins too. The only way to find out what the temperature of the water is to dip your toe in.
About the Author
Jill Van Gyn founded Fatso in 2016. She ran the business for a full 2 years as a solo entrepreneur before building her team in 2018. Today, Fatso is a nationally recognized Canadian brand that has expanded into the US through retail and e-commerce. In 2020, Fatso made the Maclean’s and Canadian Business Growth 500 List and in 2021 Jill was Business BC’s Entrepreneurial Lead winner. Jill runs her business from the family farm in the Blenkinsop Valley where she lives with her husband, Chris, and 2-year old son, Remy. She is a passionate advocate for a range of social justice issues and aims to use her business as a platform for change.