Business Is Booming for America’s Survival Food King

On Monday, Sept. 25, five days after Hurricane Maria pounded Puerto Rico, Aaron Jackson got a LinkedIn notification on his phone from Michael Lee, supply chain and inventory manager for the Federal Emergency Management Agency. “Contact me right away,” it read, followed by a number. Jackson was at Blue Lemon, a fast-casual restaurant in Sandy, Utah, outside Salt Lake City, eating dinner with his family. He stepped outside and dialed.

Lee needed help, fast: FEMA was running low on food rations. In the previous four weeks, the agency had supplied millions of meals to the Texans and South Floridians displaced by hurricanes Harvey and Irma. Maria had created a third disaster zone with more complex logistics, having knocked out Puerto Rico’s electricity, gutted its roads, and destroyed its markets and ports. Restoring food security on the island could take months. Lee had to procure millions of servings of just-add-water meals to sustain the victims. Could Jackson provide at least 2 million and begin deliveries immediately?

Featured in Bloomberg Businessweek, Nov. 27, 2017. Subscribe now.
PHOTOGRAPHER: CAROLINE TOMPKINS FOR BLOOMBERG BUSINESSWEEK

Jackson is the 42-year-old chief executive officer of Wise Co., a leading brand in survival foods, that is, Mylar pouches of freeze-dried meals such as Savory Stroganoff and Loaded Baked Potato Casserole designed to remain edible on shelves for a quarter century. Over the past several years, the prepper phenomenon—people geared for imminent disaster—has come out of the backwoods via shows like the National Geographic Channel’s Doomsday Prepper and media reports of the very rich and very worried buying and fortifying luxury bunkers. Jackson’s been positioning Wise to feed the trend. During the call, he felt a rush of conflicting emotions—not so much from the prospect of getting a fat government contract while legions of people suffer, but because the windfall could derail his business strategy. A 2-million-serving order will increase his sales for 2017 about 15 percent but stretch his supply more than he’s comfortable with; his answer to Lee was not an easy yes.

Jacson has filled many emergency orders, including supplies for Ebola victims in Liberia and for people in the Philippines devastated by 2013’s earthquake. Carnival Cruise Line has stocked Wise pouches at its Caribbean ports to feed employees when storms rock the region. Just a few days before the FEMA call, the Salvation Army purchased 100,000 servings of Wise products for Florida shelters near areas affected by Hurricane Irma.

Jackson.
PHOTOGRAPHER: MICHAEL FRIBERG FOR BLOOMBERG BUSINESSWEEK

But these last-minute orders aren’t how Jackson wants to define his core business. Since 2013, when he came on as CEO, he’s been trying to move the company beyond the volatile disaster-response industry. “I’m not going to turn down an incredible opportunity,” he says, “but I’m also not after sporadic clients. I want predictability. I want Mr. and Mrs. Smith in Everytown U.S.A. The Walmarts, the Home Depots—those are my golden geese. If a big order from FEMA interrupts our supply to staple customers, that’s a risk I shouldn’t take.”

For someone working in an industry defined by worst-case-scenario extremism, Jackson is notably moderate in appearance and philosophy. Tall, tidy, and well-coiffed, he looks like Clark Kent—but a Kent who’d be content never to don his cape and is facing middle-age metabolic slowdown. When I meet him at Wise’s headquarters in Salt Lake City, he’s wearing a quilted jacket, pressed khakis, and polished shoes that match his belt. He drives a BMW 5 Series sedan and looks like a man who’s comfortable on a golf course, which he is, having played competitively in his youth.

Jackson’s lived in Utah since high school, when his family moved there from a suburb of Los Angeles. After graduating from the University of Utah, he spent the first 15 years of his career selling chicken nuggets and Honey Bunches of Oats, among other kitchen-table icons, first at Tyson Foods Inc., where he specialized in frozen cutlet products, and then at Post Consumer Brands cereals, where he became a vice president for sales and marketing. Now he’s relying on his corporate experience to suburbanize survivalism—a goal that seems at once respectable, preposterous, and, suddenly, attainable.

Jackson first connected with Wise in 2012, when a headhunter tried to recruit him from Post to run the fast-growing startup. He declined the offer, but commenced some research. “My aha! came in mid-2012 when I read that more than half of American homes have first-aid kits on hand, along with fire extinguishers and flashlights. I realized then they haven’t added the food component. I saw incredible growth potential.” When the headhunter extended the offer again a few months later, Jackson accepted the job of CEO and cautiously started to shift the marketing focus to his ideal customer, one who looks less like Ted Kaczynski and more like himself, his wife, who’s an attorney, and their two tweens: someone who isn’t entirely convinced that humanity is hurtling toward annihilation but who’s willing to stock the pantry with a Mylar-fortified food supply just in case. “This is the food equivalent of life insurance—staples that every American household in this age of uncertainty should have,” he says.

A pouch of potatoes and chicken-flavored pot pie.
PHOTOGRAPHER: MICHAEL FRIBERG FOR BLOOMBERG BUSINESSWEEK

Jackson hired a young designer who’d been at the surf company Quiksilver to revamp the packaging. “We’d been selling our products in large, black plastic tubs. We needed something that doesn’t scream doomsday, so we moved to clean white boxes, contemporary fonts, high-quality food images—packaging that makes sense on a Target shelf,” Jackson says. As orders came in from big-box stores, he added a manufacturing facility a 15-minute drive from the office (production had previously been outsourced) that can produce 25 million pouches a year.

In the past four months, the spate of natural disasters combined with the specter of nuclear war with North Korea has pushed up Wise’s total sales 40 percent from the previous four-month period. Concerned suburbanites as well as disaster responders have contributed to the increase. The factory has made it possible for Jackson to meet both sudden surges and steady growth in demand. He ultimately managed to ship the 2 million servings to FEMA in a matter of weeks, with only a brief disruption to his regular customers’ supply.

In four years, Wise’s annual retail sales have more than doubled, to about $75 million. Using his network of former clients, Jackson persuaded Wal-Mart Stores, Target, Home Depot, and Bed Bath & Beyond to carry Wise products. In 2014 he also persuaded Home Shopping Network to feature the company’s wares; the TV network has become its biggest distributor. But at this point, only 2 percent of Americans have bought into survival foods, according to industry analysis. Wise’s two main competitors, Emergency Essentials LLC and Mountain House are, like all companies in the industry, privately held and don’t report sales data, but Jackson estimates that survival food sales total about $400 million annually. Jackson sees the survival food industry today where the organics industry was in the 1950s before Americans got nervous about pesticides—poised to explode. Still, Darren Seifer, a food and beverage analyst at NPD Group, cautions the industry could just as easily “remain on the fringe, gathering dust on pantry shelves.”

Dehydrated chicken in a funnel at the plant.
PHOTOGRAPHER: MICHAEL FRIBERG FOR BLOOMBERG BUSINESSWEEK

The pot-pie room at Wise’s factory in downtown Salt Lake City is a large space with white walls and cement floors, filled with stainless-steel equipment. Machines hum and chuff as conveyors move materials between them. A funnel the size of a back-alley dumpster dominates the room, drawing the eye like an industrial interpretation of Marcel Duchamp’s Fountain. Inside it is a grayish blend of freeze-dried potato chunks, carrot pieces, celery and onion slivers, peas, and whey protein.

When no one’s looking, I dig my gloved hands into the pallid, pebbly stuff, sifting through it like a pile of shells at the beach. It’s oddly weightless—hundreds of gallons of vegetables with the heft of confetti. The mixture slowly flows down from the funnel base through a chute to another device that weighs and divides it. The portions then travel to a machine emitting clouds of beige powder as it dispenses shots of dehydrated milk, celery salt, powdered garlic, and chicken bouillon. The seasoned kibble is then deposited and sealed, one 7-ounce portion every few seconds, inside Mylar bags along with pods of oxygen-absorbing sachets of iron filings, clay, and salt. The bags are labeled, “chicken flavored pot pie.”

This is the first stop on my tour with Jackson through half a dozen rooms. We also visit the “hearty tortilla soup” and “maple pancake breakfast” rooms, where thousands more gold and silver Mylar pouches roll off conveyors into bins. In each room, technicians in white lab coats bring to mind Oompa Loompas as they pull levers, toggle switches, and examine packages for flaws. At one point, to demonstrate a bag’s airtightness, a stocky technician in boots puts a pouch on the floor and jumps on it.

An employee checks sealed Mylar bags.
PHOTOGRAPHER: MICHAEL FRIBERG FOR BLOOMBERG BUSINESSWEEK

The scene evokes Willy Wonka’s factory in part because the workers are achieving Wonkian ends. As a kid, I spent hours imagining the sensations of Roald Dahl’s three-course chewing gum invention “made of tomato soup, roast beef and baked potato, and blueberry pie.” This, too, is an attempt to create an all-in-one meal that bears little resemblance to the foods it conjures—a product that when combined with a serving of hot water simulates a home-cooked dinner.

Wiping a film of beige powder from his safety glasses, Jackson displays his range of products, from a small, 72-hour “survival kit” for $19.99, to a one-year supply for a family of four that goes for $7,999. Each serving is about 300 calories and costs less than $1—a per-calorie cost on par with prices at a McDonald’s.

Jackson’s technology isn’t new. Wise practices a 21st century version of something the Incas started in roughly 1200 A.D., when they placed meat strips on high-altitude stone platforms to freeze overnight and then dry in the sun to make charqui, a proto-beef jerky. Modern freeze-drying methods were created during World War II to preserve blood serum so it could be shipped internationally to treat the wounded. The current processes arose in the late 1970s when concerns over the oil crisis and stagflation motivated millions of Americans to cache food.

Wise has tweaked this decades-old formula only a little: Fresh ingredients are rapidly blast-frozen at temperatures as low as –112F to prevent the formation of ice crystals that could affect food texture and nutrition. The food is then placed in a heated vacuum chamber that causes the ice to sublimate, changing directly from a solid to a gas without passing through a liquid phase. When the foods are rehydrated, pores left from the vanished ice quickly reabsorb water. The process takes almost double the energy used for canning, but can retain more than 90 percent of the food’s nutrients and preserve it for far longer. The higher the fat content of a food, the faster it spoils. In pursuit of rich taste and longevity, Jackson has worked with food scientists to develop ingredient combinations and airtight, light-resistant packaging that extends storage times for most Wise meals to 25 years, from 7 to 15 years. Wise also sells water storage and filtration kits for rehydration in the event a household’s water supply is cut off.

I first heard about Wise a few years ago from a cousin, a former police officer in Zionsville, Ind., who kept a supply of its products in his basement that could sustain his family for six months. Then my stepbrother, an executive who lives in downtown Washington, invested in a stash of drinking water and long-storage food. And my brother, a climate scientist with the Nature Conservancy, began building a supply in the basement of his West Virginia cabin. “I can’t imagine anything worse than not being able to feed my kids,” he says, “and the chances of disruptions in our food supply are by all accounts becoming more likely.”

To me, this smacked of paranoia. My brother, cousin, and stepbrother represent a skewed sample: All are guys, all own guns, and two like to hunt in their free time with compound bows and arrows. Each possesses at least a flicker of the fatalist prepper sensibility that Wise was built in 2006 to serve. Like most survival food companies, including Emergency Essentials, Wise was founded in Utah and began marketing its products to the Mormon community preparing for the end of times, a practice encouraged by the Church of Jesus Christ of Latter-day Saints. (Jackson isn’t Mormon.) But Mormons—and for that matter, male preppers—no longer represent the entirety, or even the majority, of Wise’s exploding market. “Five years ago, our market was more than 95 percent men. Today, we’re reaching about 50 percent women,” Jackson says, “many of them moms—‘guardian moms,’ we call them—worried about a stable food supply for their kids.”

The company’s first customers a decade ago were anxious about inflation, economic collapse, and terrorist attacks; today, the major concern is environmental instability. “It’s not just the freak events. We get calls from people saying, ‘I live in Miami, and flooding is now routine. I’m worried Florida is going to be under water in two years,’ ” he says. “Or from people in upstate New York who experienced a 1-in-a-1,000-year blizzard and couldn’t get out of their driveway for two weeks. People who lived through the California drought, the forest fires of Texas and the Northwest, and who think maybe the government won’t come to their rescue when a disaster hits.”

When he started at Wise, Jackson’s biggest concern was a lack of repeat customers: Most people, presumably, won’t use up their disaster stores. The surprise has been how many of his customers return. “Up to 40 percent of my monthly sales volume is from repeat consumers,” he says. Some buy the products for friends and family as gifts. He pumps up his marketing campaigns around Black Friday and, in the last two years, average monthly sales for November and December have been 20 percent higher than average monthly sales for the rest of the year. And more customers are defining their “emergency” uses of the food in new ways. “If you’re a mother or father of a couple kids and you’re trying to put together a meal before soccer practice—that’s an emergency in its own right. They’re running short on time, low on groceries, so they grab a pouch of lasagna, add water, and have a rib-sticking dinner for four in minutes.”

Wise emergency supply tubs, ready to ship.
PHOTOGRAPHER: MICHAEL FRIBERG FOR BLOOMBERG BUSINESSWEEK

In Miami, some colleges have to stay prepared for food disruptions because trucks are pulled off the road and students are required to stay in their dorms when winds get above 39 miles an hour. Michael Ross, resident district manager of the University of Miami’s dining services, has purchased 64,000 servings of Wise products in the past three years to feed dorm-bound students. His team found Wise in 2013 at a disaster-preparedness trade show and chose the brand after taste testing it against others. Ross used to stock up on less shelf-stable fare when storms were predicted, but if the storms turned, much of the inventory would go to waste. “This we can pull out and dust off whenever we need it,” he says. “The students are amazed. Many have said it’s better than the food they make for themselves and ask to take it home.”

Recognizing the blurring of convenience and emergency, Jackson offers his same product in camping pouches and sells a line of freeze-dried snacks. This accounts for about 5 percent of Wise’s products, which represent a roughly $60 million category, he says. Drafting on the post-food trend, Wise also created a nutrient-fortified protein shake. Silicon Valley’s Soylent raised $25 million last year to extend the reach of its product, a just-add-water vegan powder—baby formula for adults—which has been imitated by Custom Body Fuel, People Chow, Ample Foods, and a half-dozen other new meal-replacement brands that claim to be nutritionally complete and save consumers time and money while reducing their carbon footprint. But the majority of Wise’s sales remain the $129.99 black square tubs (the new packaging is catching up with old inventory) containing an advertised 13,600 calories to keep a family of four fed for a week. If you’re the sole survivor, it’ll last four.

At the end of my visit to Salt Lake City, I whip up a batch of rehydrated pot pie. The result is a tawny gruel. I hesitate, stifle a gag reflex, channel my inner Violet Beauregarde, and swallow. The stuff tastes quite pleasantly of the chicken casserole that was a staple of my childhood. But when I try to imagine consuming the contents of the Mylar pouch in the aftermath of a hurricane, or in a world torn by battles over dwindling, climate change-threatened food supplies, it’s too easy. I lose my enthusiasm.

Am I succumbing to my brother’s paranoia or beginning to think pragmatically? I wonder. Wildfires and hurricanes aren’t the only reasons behind the spread of the survivalist mindset. According to a United Nations Intergovernmental Panel on Climate Change report, warming temperatures will reduce global agriculture yields more than 2 percent every decade, given current trends, as the world’s population surges to 9 billion. Food prices could almost double by 2050. If they do, regional and international conflicts over limited affordable food would likely escalate—further increasing the odds against food security.

“This isn’t about the zombie apocalypse anymore—natural disasters are the new normal,” says Daisy Luther, the blogger behind the website the Organic Prepper and a survivalist in the more typical vein. She thinks we should all follow the adage, “eat what you store, store what you eat,” and has guns to protect her daughters—and her stockpiles—from the lazy hordes who didn’t plan ahead. “Being prepared is now just acting responsibly, especially for moms,” she says. She sells freeze-dried and survival products through her online Prepper Market, but in truth, she has a touch of scorn for the parvenu Wise-buying prepper-lite. “Those just-add-water meals can work in a pinch, but they’re not tasty or healthy long-term,” she admonishes. “You need more than just products, you need knowledge about how to prepare and season freeze-dried foods. You need a culture of preparedness.” Luther, like Jackson, sees a movement arising from the reasonable concerns of citizens who recognize that we’re up against increasing environmental threats on the one hand and diminishing government safety nets on the other.

“Luck favors the prepared,” Jackson says more than once during my visit. I still have yet to invest in this luck, but I’ve begun to consider it. I live in Nashville in a flood-prone region that was hammered by rains when Harvey and Irma swept inland. My friends and neighbors might actually welcome those 72-hour survival kits Wise promotes after Black Friday if I give them as holiday gifts. We can stuff them in the corners of our pantries and hope like hell we never have to add water.

Source:-.bloomberg

Related posts