There are times when the creative mind of an entrepreneur needs to rely on the business savvy of their partners. Meet the man who can do both, CEO and founder of Zilks Foods, John Anderson, whose company has far more to offer than a tasty rendition of the chick pea.
So what’s the big idea with Zilks Foods?
John: Zilks started as a hummus company. We primarily manufacture viscous food products including dips, sauces, and some specialty beverages that we process and ship directly out of this facility. We’ve also worked with Whole Foods in selling our specialty dips. Beyond the Zilks label, we’re contracting with other restaurants and retailers to provide them with our manufacturing services. These are private labels that have a recipe, design, and a proven product, but don’t have the capacity to do it themselves. These companies come to us in a number of different ways, but the most common are those who are working out of their kitchens, and need to move from pots and pans to creating 300-gallon batches. We are able to take these small-scale operations and help them with product development and reformulation to scale their businesses.
How do you measure growth?
John: The two channels that we’re primarily targeting right now are contract manufacturing for other brands and food service. I see a huge opportunity in specialty food service. As the United States adopts a more diverse culture, we’re also seeing a huge proliferation of ethnic SKUs (Stock Keeping Units) in grocery stores. We’re also seeing a huge upward trend of the “better-for-you” products. Organic, non-GMO, Paelo, you name it, there’s a category for it. So all of a sudden, hummus by itself isn’t its own product. And in terms of manufacturing and production, these small, regional companies are looking for a service like ours because other large manufacturers require such a large minimum production run.
When you look at the metrics for your business, how do you measure own success?
John: Right now, we’re at an inflection point where we’re investing a lot of money ahead of the growth because we have a manufacturing facility. We’re currently operating with less than 20% utilization, which is great because we can use that to grow. But, the problem is that in a manufacturing facility, if you’re not operating at a high-utilization rate, you’re not making money. So while dollars-in, dollars-out is the eventual measurement of success for us, I think today it’s a volume game.
Let’s jump into you as an entrepreneur. Is this your first company?
John: It is. I graduated with a degree in Finance, Accounting, and Mathematics, so you can imagine I’m extremely left-brained. I worked for Goldman Sachs out of school, and I did that for three years. Afterward, I went to work for the Hunt family in Dallas, and I also worked for a large private equity fund for a few years. The latter several years of my financial career were all food and beverage, and consumer products, so that was my foray into this. As a numbers guy, the finance industry made sense for me because that’s what I was good at. Stepping outside my comfort zone and taking a leap of faith into this entrepreneurial world was totally out of character for me. In this case, we bought a small company that was already in existence, so I may be more of a capitalist than an entrepreneur. Again, I lack the creative side of my brain that most entrepreneurs possess. Most are these creative geniuses that need the business people to help them. I’m more of a business person looking for that great idea to build around. That’s why our business has really morphed and changed over the last several years.
When you were working in Corporate America in the various jobs that you had, you mentioned something about wanting to do something on your own.
John: I love the transactional world. I was able to buy and sell companies, and work with management teams at a very high level. However, at the end of the day, all I was doing was making rich people richer, and I didn’t feel like I was really able to roll up my sleeves and dig into the operations of a company. I had the advantage of looking at businesses from a very high level and a strategic perspective, but never got to touch it, and that’s what I ultimately wanted to do. I wanted to create something tangible that we could be proud of. When starting this process I had a macroeconomic thesis and an industry-specific thesis, which over time has really proven out. But, I also had this lifestyle thesis that when I became an entrepreneur I’d have a much better work-life balance. Totally wrong. Yes, there’s a level of flexibility that I have to today that I didn’t necessarily have in the financial world, but I’m working hard and my brain never shuts off.
What’s the best advice you would give someone when starting a business?
John: It’s going to be a lot harder, and take much more time and money than you think. Also, hire people smarter than you. I think I’ve finally reached the point where my team that I work with is a lot smarter than me, and I love it because it’s challenging. It’s great to know that I can take time off and feel confident that this place is going to survive without me. This allows you to step back and work on your business, not in your business. It’s the quintessential business cliché, but it’s so true. If you’re working in your business, you’re never going to be able to grow and have it be successful. You’ve got to be able to hire smart people that can help you execute the plan.
What do you love about being an entrepreneur?
John: What I love and what can also be difficult are probably the same answer. People. I love working with very talented people, and I love seeing them grow into bigger roles within the organization. At the same time, working with people can be extremely challenging. Nobody will ever care about your business the way that you do, and you just have to understand that dynamic.
Where do you see Zilks being in five years?
John: In five years I expect us to be doing manufacturing services. I don’t even anticipate that our name will be Zilks at that point. I would love to try and build the brand to a level that we could sell the brand, and we would make manufacturing our primary focus. I think the brand is a distraction for the company right now, but a necessary one given the opportunity to try and monetize all the work we’ve put into it.
Do you have anyone who inspires you or anyone that motivates you?
John: I’m part of an organization called Entrepreneurs’ Organization, and there’s a local chapter here in Austin. Within that group, I’m part of an eight-person forum that meets regularly and I look up to all of them. In particular, Steve Miura has created a very successful financial planning business. But I don’t just admire what he’s done with the success of his business. Steve has not only created a sustainable financial model that he’s implemented with his own family, protecting their long-term financial health, but also is able to give a substantial amount of money and time back into the whole Austin community. He’s super-successful, extremely humble, and he gives a lot back. Another is Kevin Burns, who owns a company called Urban Space here in Austin. They do residential and commercial real estate – he did the Seaholm project and he’s doing the Independent right now. Kevin has worked his tail off, and meanwhile finds every moment he possibly can to spend time with his family. It’s just really cool to see success explode in such a short period of time, and also see how it affected him in a very positive way.
Is there someone out there that you would like to meet?
John: I would love to meet one of the former US presidents. Being from Texas, I think George W. Bush would be more interesting for me. As president, you have to make a lot of unpopular decisions. And while you may feel absolutely convinced that it’s the right thing to do, half the people are going to love you for it and the other half are going to hate you for it. I think that is something that I struggle with. I want to please people, I want to make people happy. I would be really curious about what they go through.
What do you do for fun?
John: I recently got into aviation, which has always been an interest of mine. A friend flew my wife and I up for a football game last fall, and I think that experience was the catalyst for me to say, “Okay I better do it now, otherwise I never will.” So I did. I carved out time for training and studying, and I got my pilot’s license in about four months. I think there are a lot of parallels with flying and business, maintaining focus on what’s in front of you and having a vision. I love it. There’s something very free about being up in the air.
