Hershey buys Krave jerky
He made his first sales by setting samples of his exotic- flavored beef jerky out on card tables in his hometown grocery stores. Five years later, Jon Sebastiani is savoring success after showing that consumers are ready for an upscale, more natural style of jerky.
Sebastiani, 44, was the center of attention Thursday after news broke that his Sonoma-based gourmet jerky company has been acquired by chocolate colossus Hershey Co. While financial terms weren’t disclosed, Reuters reported earlier in the week that Sebastiani’s Krave Pure Foods Inc. would be valued between $200 million and $300 million.
After early morning interviews Thursday with the New York Times, Fortune Magazine and other news outlets, Sebastiani was quick to admit that even he had been “a little skeptical” about how consumers would respond to such products as Black Cherry Barbeque Pork Jerky, Basil Citrus Turkey Jerky and Sweet Chipotle Beef Jerky. He credited his wife, Carol, and mother, Vicki Sebastiani, with giving him the encouragement to see the venture through.
“The first three years were a grind and it was incredibly grueling because I wasn’t sure if it was going to work,” he said.
Now, Sebastiani is about to begin a new chapter as president of a standalone food business belonging to a corporation with $7.4 billion in annual sales.
Krave will remain headquartered in Sonoma, where 25 of its 70 staff members work in offices near the Sonoma Plaza. As president, Sebastiani will report to Michele Buck, president of Hershey’s North American operations.
The acquisition and the decision to keep Krave in Sonoma shows the North Bay is developing a reputation not only for quality wine but also for “really changing trends in the way people consume food,” Sebastiani said.
Krave produces the No. 2 jerky brand in U.S. grocery stores and last summer made the Inc. 5000 list for its three-year revenue growth spurt of 4,632 percent. It generated about $35 million in net sales over the past 12 months and was named to Forbes’ 2015 America’s Most Promising Companies list.
Moreover, its sales are outpacing the competition in a fast-growing food segment. In the past five years, the U.S. meat snacks category has experienced an annual compound growth rate of about 10 percent, according to Hershey. But during that time Krave sales increased at a rate “almost four times greater than mainstream brands.”
Krave is the second high- profile business for Sebastiani, who became a member of one of the most prominent families in Wine Country when his mother, Vicki, married Sam Sebastiani. He served as president of the couple’s winery, Viansa, and presided over its sale in 2005 following their divorce.
Four years later, Jon Sebastiani dreamed up the concept for Krave while training to run the New York City Marathon. Looking for a high-protein, low-fat source of food, Sebastiani turned to jerky. What he found in stores were products that contained enough sodium nitrates to give the dried meat a two-year shelf life and to “mask every possible flavor.”
“It hit me like a ton of bricks,” he said. “This is a misunderstood product.”
Even so, he said, he wondered whether consumers would care if he gave them a more natural alternative. At least a few folks questioned the whole idea.
“People had thought I lost my mind,” he recalled.