Sonoma entrepreneur Jon Sebastiani writes new chapter with repurchase of Krave beef jerky brand
Jon Sebastiani is embarking upon the next chapter in an eclectic and storied business career before he turns 50 next month, the likes of which hasn’t been recently seen in Sonoma County.
To recap: Sebastiani was part of the fourth generation of the legendary Sonoma Valley wine family, serving in his 20s as president of his parents’ Viansa winery until its sale in 2005 in the aftermath of their divorce. He then set out on his own in his 30s on the risky venture to create Krave beef jerky. It became a top seller based on its high-quality meat and unique flavors, providing a fresh alternative to the greasy and heavily processed jerky typically found at truck stops and convenience stores.
Five years ago, he sold the brand to the chocolate giant Hershey Co. for an astounding $232 million, which triggered an arms race in the meat snack sector. Not too content to rest on his laurels, Sebastiani took his profit and formed Sonoma Brands, a food-and-drink fund that has made investments in everything from the hip New York-based Milk Bar dessert chain to Sebastopol’s environmentally conscious Guayaki Yerba Mate drinks.
And last month came the latest twist: Sebastiani announced he bought Krave back from Hershey five years after he sold it. He didn’t disclose the sales price but termed it a bargain after the brand became an afterthought within a corporate bureaucracy focused on chocolate and candy.
“This was really an emotional and monumental part of my life. When you build a brand with my fingerprints all over it, it is like a child. You kind of handed the child off and you are very protective of it,” Sebastiani said in an interview.
Sonoma Brands is ramping up hiring for Krave, moving its offices back to Sonoma from the Hershey-mandated move to Austin, Texas. It is bringing back some former and new staff such as Matt Grebil, who served as vice president of operations at recently shut down Three Twins Organic Ice Cream in Petaluma.
“The intention here is to build a Navy SEAL-type team - highly potent,” Sebastiani said.
The Krave rebuilding is part of the latest effort by Sebastiani, who has a unique perspective on the food-and-drink sector that is a major driver of the Sonoma County economy. He grew up in the wine industry, where family traditions of the vineyards are often cherished over the latest consumer trend. But Sebastiani has found success in the food sector by thinking of unique concepts, capturing consumers via strategic marketing and a strong brand identity that provides his businesses a big upside for potential growth.
“Jon had something to prove. And he decided to prove it in an adjacent space after a not as successful venture before (with wine),” said Steve Blank, a lecturer at UC Berkley’s Haas Business School, who served as mentor to Sebastiani and also invested in Krave because he was impressed by the business plan. “Like all great entrepreneurs he was relentless, he was driven and he had a vision and he built a spectacular company. It was a classic come from behind when no one believed it could be done.”
Blank is still bullish on Sebastiani, noting that “he basically reinvented what beef jerky means,” and believes with Krave that “he will make the brand rise again.”
To speak with Sebastiani is also to gain insight into a highly competitive food sector where the mergers-and-acquisitions activity and the influx of outside funding is much greater than compared to the North Coast wine industry. For example, after Hershey bought Krave, General Mills bought rival Epic for a reported $100 million and others jumped into the market, backed by investor funding.
While Sonoma Brands has only six people, the company now has more than $200 million in assets under management with equity stakes in 14 companies that have more than 5,000 employees. Some are just minority investments, while others are products it created such as Smashmallow, a marshmallow made with non-GMO ingredients and organic cane sugar, and Medlie, a healthy vegetable drink line that ranges from a kale-avocado drink with collagen to a 2-ounce carrot-ginger-?turmeric immunity shot. The firm has a board seat on every investment, which has up to a 10-year target for claiming its return.
“He connects things on levels that other people don’t connect. He’s very focused on the health segment and quality segment of the business and I think he got that at his training at Viansa and his family business and background. He looks at food trends and he looks at national focus and he sees things farther out than a lot of other people do. He is a serial entrepreneur,” said Pat Roney, CEO and founding partner of Vintage Wine Estates, which owns B.R. Cohn Winery in Glen Ellen, Sonoma Coast Vineyards in Bodega Bay and Cosentino Winery in Napa.