Sebastopol entrepreneur led growth in his sauce company amid pandemic challenges

In the three years Justin Gill turned his side gig of selling his Bachan's Japanese Barbecue Sauce into full-time endeavor, the journey has been nothing short of amazing — especially with growth amid a worldwide pandemic.

The 40-year-old has taken his family’s recipe of the salty-and-sweet dressing packed full of umami into a much larger stage. Long gone are the days when Gill used to do drop-off deliveries when he started the business in 2013 and continued while still working for his landscape design business.

Now, it’s all about supply-chain logistics. By last fall, the product ― akin to teriyaki sauces ― was stocked in 2,500 retail locations across the country right before its entry into its biggest spotlight so far. In November, Bachan’s significantly expanded into more Whole Foods Market stores across the country.

That combination of tradition and success has lead a natural foods trade group to award the business for the “new product of the year.”

“This company and this product are really built from the heart and built from the culture of the family,” said Carolyn Stark, executive director of Naturally North Bay.

Even with the meteoric growth, which was a 400% increase in sales growth from 2020 to 2021, Gill said in an interview he tries not to overthink.

“One of our great values is simplicity. We really keep things simple with everything in our business. And that's the business model,” said Gill, who also serves as the company’s CEO.

That stance can be challenging amid the growth that attracted an investment round led by Prelude Growth Partners, a private equity firm that looks for fast-growing consumer brands, in a deal announced Sept. 29. The specific amount was not disclosed, but the firm said in a statement it typically places an infusion from $10 million to $40 million into each investment.

“Rarely have I seen a (product label), much less a condiment, rocket to the top of the category like this in such a short period of time. This is a real deal growth story,” said Walter Robb, former co-CEO of Whole Foods, in a statement.

Robb also was an investor in that November round of funding.

The seed money allowed Bachan to keep pace, and earlier this year, it moved into its new headquarters in downtown Sebastopol, where he was an Analy High School graduate.

The company has a full-time staff of 13 employees and is hiring more as Gill looks toward the future — with a much bigger spotlight that is increasingly being noticed.

“This company and this product are really built from the heart and built from the culture of the family,” said Carolyn Stark, executive director of Naturally North Bay, a trade group for producers of specialty food and natural products in the region.

Her group on Thursday gave Bachan its best new product award as part of its annual awards ceremony. Past up-and-coming winners include some of the most notable food entrepreneurial success stories over the past decade in the North Bay, such as Revive Drinks of Petaluma; Hip Chick Farms formerly of Sebastopol; Miyoko’s Creamery of Petaluma and New Barn Organics that was formerly in Sonoma.

Stark said she is impressed that Gill is focused on growing the company by his own terms and values rather than searching for an exit ramp and an eventual payout.

“That’s really a mark of success as opposed to somebody putting a company together solely for the purpose of flipping it,” she said.

The growth of the company came during the pandemic when many supply chains were disrupted. The company has a co-manufacturer located in northern California that produces the product for Bachan’s The production run is far greater now compared to when he could use a local commercial kitchen to make the sauce.

“If you're having to manufacture and market and sell, it's just a much more complicated business model and also requires much more capital,” Gill said.

He had first sought assurances that the quality of the product would be maintained at the larger scale. He knows by heart the recipe passed down from generations of his Japanese-American family that includes mirin, a type of rice wine common in Japanese cooking but not included in a lot of teriyaki sauces because of its cost.

The company also was able to switch and procure its bottles domestically as opposed from China, which made sure it would not disrupt production, Gill said.

That helped in achieving its growth, especially serving Whole Foods, where it was first stocked about two years ago at stores located in Arizona, Hawaii, southern California and southern Nevada.

“That exposed us to a lot of customers, a lot of great customers, and also kind of validated what we were doing in the natural channel,” Gill said.

Like other food companies, Bachan’s saw an increase in sales as a result of more people preparing meals at home during the initial stages of the pandemic. It also retained more direct-to-consumer sales through digital means.

In 2020, 80% of sales were digital and then dropped to 50% last year with more wholesale production. This year, digital sales should be about 20%, Gill said.

The product is also increasing its reach in Costco stores and has another big grocer to announce in the near future, Gill said.

Another key decision along the way was to bring in additional personnel who had experience in different segments of the food industry. Gill acknowledged he benefited from the strength of the local food industry, which, while lesser known than the wine category, does have a significant economic foothold and network of workers.

A recent report for the Sonoma County Economic Development Board found there were 4,157 jobs within the food manufacturing industry, where the national average that would be comparable for the county’s size and population would be a little more than half of that level.

Those jobs come with an earnings per job of $82,213, which is above the national average of $65,221 for a job in a comparable area in the U.S. The report found the county is “a hot spot for this kind of talent.”

Gill has taken advantage of that and hired Nate Morr as his chief operating officer. Morr formerly worked as CEO at Hip Chick Farms. He also brought in Mike Keefer as his vice president of sales, who held a similar position at Clover Sonoma.

“There’s a great network of people here,” Gill said. “That is definitely one of the benefits of being here.”

Morr noted he and Gill had professional and personal connections that led to a greater discussion of joining Bachan’s, which is Japanese-American slang for “grandma.” It’s in tribute his own grandmother, who showed his parents how to make the sauce. The name is pronounced BUH-chuhn.

“After he got funding, then we were able to put something together and I jumped in,” added Morr, who joined the team last year.

The company intends to do more hiring, especially after it moved into its new headquarters in an office space that would seem more at home in a tech hub in San Francisco with its open spaces and natural light along with modern fixtures.

“We are going to do a lot more hiring here very soon in getting the right people that are the right cultural fit and have the right skill sets,” Gill said.

The ramp-up also will allow Gill to think more of where the direction he would like to lead Bachan’s. That includes new products. The company already has a hot-and-spicy version along with a sauce based on the tart and fragrant flavor of the yuzu fruit.

But Gill said some other attempts didn’t make the cut, such as a black garlic sauce. Gill and his team kept adding more garlic to the recipe but could never get the taste perfected. “We added more and more garlic and we just couldn’t taste it,” he said. In the end, Gill discovered that black garlic was intended to be used for more neutral flavors as opposed to bold ones for a sauce.

There is another contender whose flavor he wouldn’t mention, but any new variety would have to meet his rigorous standards. “That’s how I think about product formulation. We are never going to make chips or ice cream,” said Gill, a father of three daughters with ages from 17 to 9.

“We like to keep things focused and keep things simple. I believe that’s how you build a scalable business. It’s a legacy brand that we are really trying to build,” he said.

You can reach Staff Writer Bill Swindell at 707-521-5233 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.