DURANGO, COLO. — How do you turn bar snacks into a viable business? Being the former personal chef for Oprah Winfrey doesn’t hurt.
Paul Gelose, who served as Oprah’s personal chef from 1996-1997 and held several other chef positions, started Ricky’s Lucky Nuts in 2006; he first served the peanuts at his Durango, Colo., business, The Palace Restaurant, after his sous chef, Rick Jensen, showed him a recipe he had for a dry-roasted, seasoned peanut. They kept the nuts out on the bar as bar snacks.
“Over time, people came in and started asking if they could just buy the peanuts,” said Jim Vaughn, chief executive officer of Ricky’s Lucky Nuts. “The Palace does a lot of Christmas parties, and one of the big requests at the Christmas parties was, ‘Can you just have a whole bunch of peanuts?’ So Paul and his wife Carolyn decided, let’s make a run at this and see if we can turn this into something commercial.”
Mr. Vaughn’s parents were longtime friends with Mr. Gelose, so their private equity investment company, Vaughn Capital, L.L.C., became investors and majority owners in the company in 2013.
|Jim Vaughn, c.e.o. of Ricky’s Lucky Nuts|
“It kind of passed on to us a little bit to take the wheel and run forward,” Mr. Vaughn said.
Sourced from Texas and manufactured in Colorado, Ricky’s Lucky Nuts offers six varieties of seasoned peanuts. Flavors include black pepper and sea salt, coffee, spicy chili chipotle, sweet and smoky BBQ, sweet chai, and Thai red curry.
In an exclusive interview with Food Business News, Mr. Vaughn shared insights into the business and an inside look at the company’s innovation process.
Where does the name Ricky’s Lucky Nuts come from?
Mr. Vaughn: Rick Jensen, the sous chef who first made the peanuts, is the Rick in Ricky’s. And as for the lucky part … we’re darn lucky to be able to create what we think is the world’s greatest peanut for people to enjoy, and we think that our customers are very lucky to be able to have a peanut experience unlike any they’ve ever had before.
What’s the reasoning behind sourcing all your peanuts from Texas?
Mr. Vaughn: One of the things that really differentiates Ricky’s from a lot of the competition is that, we are chef-inspired — that’s something that’s very core to who we are — and Paul’s not going to put out a recipe or peanut that he doesn’t think is the best possible peanut that he can create. Our chef has chosen the Texas Jumbo Runner as the perfect peanut for what we want to do. It gives us a lot of surface area so we get as much crunch and as much flavor on the peanut as we possibly can. It holds up well during the manufacturing process, and we think it gives us the best possible product.
Why does Ricky’s focus on sustainability, non-G.M.O. and clean label trends?
Mr. Vaughn: Sustainability is one of the core parts of the company, and you see that kind of ripple through. We’re non-G.M.O. focused. What happens to the peanut in the manufacturing process is where our focus on a simple set of non-G.M.O. ingredients separates us from the other products on the market. We want to provide a complete non-G.M.O. product to the health-conscious consumer, not a non-G.M.O. peanut that is then covered with powders and chemical additives that deviate from that promise.
We like all natural, organic to the extent possible. Everywhere along the chain that we can do what’s right and responsible, we’re going to try to do the best we can.
There’s a lot of focus in the market on more natural foods, on non-G.M.O. foods, on putting things that are better for us into our bodies. We have a very simple ingredient list … if you look at our list of ingredients, you know, there’s four items in our salt and black pepper peanut. There’s four ingredients. That’s it. So it’s very consistent with our approach to things. Let’s keep all the 27-letter chemicals out of there and let’s focus on the best ingredients in the world to make the best peanut in the world.
How are your products different than others on the market?
Mr. Vaughn: If you see our product, it looks very different than the competition. If you open a can of Planter’s peanuts, you know, their chipotle peanut, it’s dusted on, it’s powdered. At the bottom of the can, there’s a whole bunch of powder at the bottom of the can. Our product is not that way. Our seasonings and the flavorings are actually roasted onto the peanut. So it kind of gives it a coating that is very unique. It’s a unique process, and not everybody can do it. Anybody can dump a bunch of powder on a peanut.
How do you develop new flavors and decide which ones to implement?
Mr. Vaughn: Having a chef as the founder of our company gives us a tremendous amount of flexibility in what we do. At any one point in time, Paul’s got probably 20 or 30 flavors that he’s played around with. So we keep our ears very close to the ground in the market and what the new and exciting flavor profiles are.
Paul does a great job kind of monitoring the food scene, although we don’t really see ourselves as foodies. He monitors the food scene very closely to say, okay sriracha is a very popular flavor right now. What can we do for a peanut that matches that trend? We spend a lot of time paying attention to what’s going on in the food market and spend a lot of time in grocery stores just walking up and down the chip aisle. You can see what Lay’s thinks or what Frito-Lay thinks is the new trend there and then we can try to see if we can apply that to a peanut in a way that works and meets our standard.
How do you test the new flavors?
Mr. Vaughn: It’s a fun deal for us because Paul can create a cool new flavor profile and send us up a bunch of samples and we can all try it, we can give it to our families and our friends and see what everybody thinks. We are very conservative about releasing new flavors, but we always want to have a stable of new and exciting flavors that we can bring to the market. We also work very closely with our customers. We’ve got some customers that we can sit down with and say, ‘Hey look we’ve kind of prototyped this flavor profile. What do you think?’ I think through all those various sources, we get a pretty good read on the flavor profiles that we think will be successful. We’re the toughest critics of the flavors … the people in this office. It’s the people that live and eat and breathe this stuff every day that have to say, ‘yeah that’s good enough for what we need to do.’ To be quite honest, mediocre products don’t even get past Paul. There’s some we don’t even get to try because he’s like, ‘I can’t make it work and I’m not going to put this product out.’ And that’s great. That’s what we want.
You recently underwent a packaging redesign – what was the reasoning behind that?
Mr. Vaughn: When we came in as investors, we wanted to jump-start and start anew with the company. So we basically looked at every piece of the company from top to bottom, and while the previous packaging was very good, the message was maybe a little lost in the design.
We wanted to take a step back and say, ‘How do we create a packaging that matches the product, the excellence of the product inside?’ We worked a lot with a local design and marketing firm and went through dozens of different iterations of potential design. We wanted it to be fun. We live in this interesting world where we make a gourmet peanut but we’re not foodie people. We wanted to come up with a design and package that said, hey this is a fun product but it’s also a high quality product.
How has the public responded to the change?
Mr. Vaughn: Every show we go to, every customer we come across, they love the packaging. It’s clean, it’s vibrant, it stands out on the shelves, the retailers love it. So I think we are extremely successful in what we did there. We created a template for how we can draw people’s eyes to a Thai red curry peanut that they might not have ever tried before. It looks new and it looks exciting and it stands out.
What kind of consumer are you targeting?
Mr. Vaughn: We target somebody that is interested in a healthy snack option. We seem to do extremely well with moms who are looking for things to put in their kids’ lunchboxes that aren’t full of fat and fried. Somebody looking to just grab a protein option along the way and who appreciates the lack of complicated ingredients and the non-G.M.O. We look at ourselves as people who want a great quality product that’s healthy, but not pretentious. That’s the person we’re looking for, too: somebody who appreciates that hey, yeah it’s a peanut but it’s a great peanut that’s loaded with protein and not packed with a bunch of garbage.’
Where can those customers find you?
Mr. Vaughn: We’re all over. We’re in lots of grocery stores, Cost Plus World Market, we’re in Ross stores, we’re in some Albertson’s stores, we’re in Vitamin Cottage. We’re kind of all over the place, but we do a lot of our business in more of the natural specialty stores and chains.
What’s up next for Ricky’s Lucky Nuts?
Mr. Vaughn: We’ve prototyped a pumpkin spice flavor that we think is very, very good, so we’re very early in that testing process, and we’ll see how that plays out. It’s obviously an extremely popular flavor particularly this time of year, so we want to try to tap into that trend. We think if we can create a product that’s good enough that people will enjoy, we would absolutely release a Pumpkin Spice peanut.
We’re very cognizant of not only the ingredient list but the types of ingredients, so one of the things we’re looking very hard at right now is coming up with a natural sugar-free option for our product line. There’s not a ton of sugar in our product, but there is natural, non-G.M.O. sugar, so we want to give people an option that works that is a sugar-free option. We are in the process of testing all of our product lineup with a sugar-free option, and even some new flavor profiles with sugar-free as well.
Do you have any plans for expansion into any new stores in the future?
Mr. Vaughn: Every day. As we continue to get our product out there and get it into peoples’ hands and into their mouths, we see our adoption growing almost by the day. Somebody will come to us and say, ‘Hey, We want to give your product a try.’ We are aggressively out trying to expand our reaches as far as we can and as makes sense.
Any last thoughts?
Mr. Vaughn:I guess the last parting shot message would be … take a chance on a new product that is unique but familiar. If you look at our flavor profiles, everyone knows what a peanut is, but they might not have had a chipotle peanut, or they may not have tried a coffee peanut. Our coffee peanut has half a cup of coffee’s worth of caffeine in it. So I can go to Starbucks and get a latte or I can have some protein and do something great for myself.