The Supply Side: Fayetteville-based Natural Way lands on Walmart shelves

Brothers and business partners Quinn and Austin Simkins of Fayetteville, founders of Natural Way Food Group, have been selling homemade peanut butter products in retail since 2017. But after success with candy confections, the brothers reshuffled their business strategy in late 2019 to focus on a sustainable nut butter that uses olive oil instead of palm oil.

Quinn, 27, said the family business was having some success selling its candy confections in 250 Walmart stores and other retailers in 2018, but that’s about the same time the brothers sought to pivot their business toward nut butter. Simkins said the company was already making peanut butter as a significant ingredient in the candy. He said the brothers began to look at the nut butter category and saw an opportunity to fill an unmet need.

“Nut butters are on trend and a protein source and snack consumers are looking for, and we saw most of the products were made with palm oil. Our product is made with sustainable olive oil, certified non-GMO and gluten-free, which was very important to us,” Simkins said.

He said that in 2019 they had a meeting with the gluten-free buyer at Walmart but were told the company was too small for Walmart. Simkins said the brothers sought to grow the Natural Way nut butter brand through other retailers to build nationwide distribution.

In 2020 as the pandemic was spreading, the Simkins brothers continued to work on getting the Natural Way nut butters into stores. The product was sold into Sprouts in all 390 stores, with sales to Safeway and Albertsons in the West and Winn Dixie in the South. Springdale-based Harps Foods also brought nut butter products into Northwest Arkansas stores. Simkins said the brand was also picked up by U.S. military commissaries, Whole Foods and Central Market in the Dallas metro area.

“We felt really good about the pivot to nut butter but essentially had to start all over growing the distribution channels which was challenging during the pandemic,” Quinn said. “We have battled each and every day to overcome the rise of the cost for shipping, input ingredients, and other costs. We have battled a new retail environment. We have battled the struggle of hiring and retaining employees. Even with these challenges, we have grown Natural Way every year, and we are on pace for our best year yet in 2022.”

LOCAL PRODUCTION
Natural Way is a family business that uses a peanut butter recipe the brothers gleaned from their grandmother as a tradition they shared with her as children.

“We have been making peanut butter for years, first for the candy we sold, and now nut butter, peanut and almond are the main events. We handle all the production in a 12,000-square-foot space we rent in west Fayetteville. That goes from sourcing the peanuts from Georgia and the almonds from California to grinding them into butter on-site. We love making the product ourselves, and our mom recently retired to help us with the office work,” Quinn said.

Quinn said that once the butters are thoroughly mixed, they are emptied into the filling machines that distribute the nut butter into the plastic jars, seal the lid and affix the label. He said that after the nuts are ground, they are dumped into large mixers where salt and olive oil are added. For the sweeter varieties, the brothers add honey.

In March of last year, the company moved from its 900-square-foot space on North College Avenue after securing a $1 million capital infusion from private investors with Tusk Private Investment Group and Cadron Capital Partners. Quinn said they needed the capital to expand production and automation as distribution expanded to 1,400 U.S. stores with various retail customers.

Quinn said Natural Way will make 175,000 jars of nut butter in 2022 to be sold to retailers and customers. He added that the local processing center is running at about 70% capacity. Since getting a deal with Walmart, Natural Way has seen sales increase 102% this year over last.

Quinn said the company has no immediate plans to raise more capital but continues to focus on the best use of the money it has on hand for further distribution and automation.

PERSISTENCE PAYS
Despite having some success with Walmart on other products like the peanut butter poppers, the road into Walmart for the nut butters took a bit longer. Quinn said they met with Walmart buyers a few times to pitch the nut butters. He said that in 2021, they were accepted by the gluten-free buyer who saw the product as a good fit for Walmart. He said building out sales with other retailers helped their case with Walmart. He said the use of olive oil had made a difference, and Walmart also liked that the product was certified non-GMO and gluten-free. Natural Way nut butters are deemed more sustainable because they do not use palm oil as a stabilizer like many other natural nut butter brands.

“We have met with just about every grocery retailer in the U.S. and would like to continue expanding our distribution, but we were elated that Walmart finally said yes,” he added. “We are on our third buyer with Walmart, and that has had its challenges too. But overall, we are very pleased with the 155 stores we got to start.”

Quinn said it makes sense for Natural Way to ease into Walmart, which seems willing to grow the store count as demand warrants.

“We continue to self-market our four products, and Walmart took all four of them, so that’s great,” he said. “The bestseller is the honey-sweetened peanut butter, which sells for $6.97 per jar at Walmart. The non-sweet peanut butter sells for $4.97. The almond butter also comes in a honey-sweetened variety and sells for $9.97, while the no-added-sugar type is $4.97.”

Quinn said Walmart has the best prices, but sales are still good on Amazon as the Natural Way products all sell at roughly $9 per jar and are also tagged as Amazon Choice products.

“I would be lying to say the timing of the new product launch hasn’t been a tough one. We launched the product in late 2019, and within months, the world was completely different after the start of COVID. We have learned and sacrificed a lot through the past couple of years and are a stronger business because of it,” Quinn said.

Quinn said he and his 31-year-old brother are excited about opportunities to grow their business with Walmart and other retailers over the next couple of years. He said innovation remains essential to the business duo and continuing to grow the business it already has on the books.

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.