Scott Mahon says his family business made a pivotal turn in 2009 when it decided to take control of its own creation – Wowbutter.
“The best thing we ever did was coming out with the Wowbutter brand. We came up with the name because people would try it and the first thing they’d say was, ‘Wow’, so we called it Wowbutter. It’s a name that kids and parents like.”
The spread is made from roasted soybeans by the Mahon family in Staffa, Ont., northwest of Stratford. But back in 2009, the family wasn’t happy with how private labels were marketing their peanut- and nut-free product.
Mr. Mahon, president of Hilton Whole Grain Millers Ltd., says the family sat down together to figure out whether they wanted to stay in or get out of the food business. It was a low point, as sales were at a minimum and regulations for food safety were ramping up.
“It wasn’t until we made the decision to go with our own brand that things started moving forward,” Mr. Mahon says. Once the family decided to dig in their heels, Mr. Mahon says they changed everything, reinvesting in their facilities and food safety.
Barry Mahon, Mr. Mahon’s father, started the business in the early 1990s to add value to his own crops by making an end product for the consumer. He put in a process line on their farm to make rolled oats, which he then sold to high-end hotels, such as The Royal York in Toronto. Today the company, which now makes millions of jars of Wowbutter a year as its only product, has total domestic and export sales well over $5-million, with exports mainly to the United States, and employs four family members and eight full-time workers. Barry Mahon is still doing a lot of the farming.
Scott Mahon, 44, has been involved with the family business all his life, working throughout high school and returning on weekends while studying mechanical engineering at Waterloo University. After graduating, he worked briefly for a design firm in Toronto, but came back home when he recognized an opportunity for roasted soy as a product. He thought the peanut-free spreads already on the market were terrible, so he designed a unique roasting process for the beans, installed the necessary equipment and got it going, testing extensively.
After the move to their own brand, the next challenge was how to sell Wowbutter in a tough retail market. Their plan to introduce it included a lot of sampling at various events to help kickstart sales.
“We knew our go-to market would be people with nut allergies who needed and wanted a spread-type product like ours,” Mr. Mahon says. “We tried to focus heavily on the school market, which worked a little too well. Some schools started pushing back a little and restricting the product.”
One reason for the ban on nut-free alternative spreads by some schools and school boards was that the spreads were confusing for teachers because they looked and smelled so much like real peanut butter. Mr. Mahon says they countered as best they could by introducing peel-off stickers that come with every jar so that parents can identify their child’s sandwich as being made with Wowbutter and not peanut butter.
“The stickers have helped significantly,” Mr. Mahon says. “A number of schools reversed their decision and started allowing Wowbutter. In hindsight, I wish we had launched the product with the stickers, but we didn’t realize there would be a potential controversy at the beginning.”
The company has also introduced factory sealed to-go cups for dipping veggies or crackers that make it easier for parents to put Wowbutter in their children’s lunches.
“The to-go cups are fully identified and labelled so there’s no question about what it is and where it came from,” Mr. Mahon says. “It just launched this school season so it’s too early to gauge its success, but we get a lot of good feedback through e-mail. People appreciate that we’re trying to create as natural, clean and simple a product as possible.”
Mr. Mahon says their continuing challenges are expanding distribution in a crowded market and building consumer awareness. While they may not have the financial resources of big corporations, they’re doing what they can to actively educate consumers, such as through their school allergy awareness programs.
Mr. Mahon not only takes pride in the company; with three children of his own and eight nieces and nephews, he likes the idea of continuing on. The company is adding a new 28,000-square-foot warehouse and office to improve supply movement in and out. Customers include Walmart, Sobeys, Loblaws, Metro and many others, including online sales through Amazon.
“You never know what the future will hold,” he says. “My six-year-old son has already requested an office in our new headquarters.”
David Simpson, director of Ivey Business School’s Business Family Centre at Western University in London, explains that, while experts generally preach diversity as a mantra, some of the wealthiest families became rich by being digging deep into one particular sector. Companies that do something unique tend to be valued more than multifocused companies. However, he thinks Wowbutter could use its competitive advantage to expand its product line.
“They could layer something on that doesn’t change their distribution channels and extends the life of the product more by being innovative,” Mr. Simpson says. “A lot of companies bite into their own market share by adding products B and C that are similar but add a new twist just to keep it fresh. It’s better that they do it rather than someone else.
“They’re doing it already with to-go cups. Next could be Wowbutter and crackers or Wowbutter cookies in packaging sealed and labelled peanut-free at the manufacturing source. Bars on the go are a really big growth segment right now. I’d get Wowbutter into a power or energy bar. That gets them a whole new market where you don’t have the problem of the school saying, ‘I can’t tell whether this is peanut butter or Wowbutter.’ ”
Mr. Simpson notes that the steps they took to be a proactive company with their stickers show that they’re building a trusted brand.
“Any expansion should go along the lines of, ‘Here’s what we did to create trust in this market, so Wow equals trust,’ ” he says. “They could use the opportunity to explain their story.”
He also suggests playing up the family business side because people trust that families care. In fact, he says, family businesses actually outperform any other form, mostly over the long term. But there is one caveat.
“There’s very little difference between a rut and a groove,” he warns. “Family businesses sometimes do things the way granddad did to a fault. The pitfall is forgetting about being an entrepreneur. Make sure you change with the times.”