This time it’s not hot, spicy or fiery, but bittersweet. That’s the word CaJohns Fiery Foods Founder John Hard uses to describe the sale of the 22-year-old business he built from the ground up.
Charlotte, North Carolina based Hot Shots Distributing acquired Hard’s Westerville company earlier this summer, moving production and operations south with it. However, it’s certainly not the end of CaJohn’s edibles and Hard’s presence in Central Ohio.
Several factors had Hard thinking about the future of CaJohns over the past handful of years. Hard came out on the winning side of a 50-50 chance to survive a fight against tonsil cancer.
“When you go through something like that, it kind of opens your eyes,” he says.
Hard’s outlook on life wasn’t the only thing that was changing. So were food laws with the advent of the Food Safety Modernization Act. No stranger to federal regulations having worked as a fire protection engineer (cue the jokes) before building a hot sauce empire, Hard saw things changing and not always for the better of small businesses.
As Hard puts it, there were things he no longer wanted to deal with and other things he wanted to do, so he and his wife, Sue, began exploring a “rent-to-own” option for the company: find an investor to come in around 35 percent equity, work with them for three to five years, then sell the remaining percentage of the operations.
Hot Shots Distributing – CaJohns’ largest customer with which they’ve had a relationship for nearly two decades – already had the wheels turning in another direction. The specialty foods distributor saw small businesses without exit strategies come and go – meaning the loss of quality products in their portfolio. To solve the problem, Hot Shots created a program to become that exit strategy.
Before the Hards could finalize the numbers for their initial plan, Hot Shots came in with an offer to buy the company outright.
“Us being one of the premier small batch sauce makers in the world, let alone the country, they jumped at it,” Hard says.
He thinks the final agreement couldn’t have gone much better.
Hot Shots was not interested in the North Market location, so the Hards will retain ownership under Sue’s name. The tables will turn, with the Hards buying CaJohns products from Hot Shots to stock the stall. CaJohns Westerville location within its production facility will close with the move, but Hard doesn’t rule out a future presence in the neighborhood.
CaJohns connoisseurs need’t worry either – Hard says Hot Shots plans to continue manufacturing the entire line of about 120 products. He recognizes the rarity of finding a buyer that wants to nurture the business and move it forward largely in the vision CaJohns has always had. That’s not to say there won’t be some new additions. Plans are underway to expand the line of products to include pickles, cheese dips and flavored popcorns.
As for what’s next for Hard, there’s plenty of hot sauce on the horizon.
“It’s not a situation where we’re slamming the door and walking away and moving to Hawaii or whatever,” Hard says. “We are going to stay here.”
He will continue to work with Hot Shots during the transition, consulting and being the face of the brand for trade shows. Hard will also ramp up his new consulting enterprise, working with other local, small, food-based businesses on projects.
“I get to go forward doing what I love to do – the creative side of it,” Hard says.
Taking his second trip around the block selling a business, Hard has a few words of wisdom for business owners for now, and when it’s time to sell.
Early on, Hard fought for the value of the product CaJohns delivers. Demanding a higher wholesale price than the hot sauce market typically asked in its early days of distribution garnered the curiosity of CaJohns eventual buyer.
Creating and delivering on a quality product the likes of which was unavailable before CaJohns entered the market ties in with another of Hard’s tenants of business: be creative. Ghost chilis, Trinidad Scorpions, Carolina Reapers – CaJohns was the first to have a full line of products incorporating the spiciest of the spiciest.
Just a Hard built his reputation as the “Godfather” of the hot sauce industry, “Be and stay your own public face,” he says. “Most people get into speciality niche product because of passion. You’re the only one that can deliver that passion.”
If a business owner does decide it’s time to step away from that passion, Hard says they can’t just walk away, an entrepreneur should spend time making their business attractive.
“You get what you put into it and you get what you put into it from the day you started,” Hard says.