Sonoma Brands’ SmashMallow, Napa’s WineGlass Marketing make Inc. 5000 California fast-growth list
Two North Bay companies have made a national list of up-and-coming new private companies.
SmashMallow, a Sonoma-based maker of marshmallows, gummy and crispy snacks from natural ingredients, debuted at No. 193 of the 250-company on the magazine’s second annual Inc. 5000 Regionals: California list with 78% growth in 2017–2019, the qualifying period. Napa-based WineGlass Marketing moved up to No. 237, with 52% growth, from No. 250 last year.
Stephanie McGregor, general manager of SmashMallow, also known as just Smash, said the coronavirus pandemic forced many brick-and-mortar retailers to rethink their in-store strategy and assortment. That, she said, has impacted many brands’ ability to gain new store distribution and store expansion and resulted in a lot of retailers “rationalizing” what’s on their shelves to focus on execution and optimizing resources internally.
Smash has seen sales growth 30%–50% at retailers where its products have “everyday” placement, meaning on the shelf, according to McGregor. With e-commerce partners, primarily Amazon, growth was over 100% growth in 2019–2020 and has been more than 60% in 2020 and so far in 2021.
“Being a nostalgic brand, SMASH is perfectly positioned to be a product that people have reached for in times like the pandemic as they’ve looked for ways to get creative at home and connect with their families,” McGregor told the Business Journal by e-mail. “We certainly have seen a rise in the baking usage and expect a very large summer s’more season as people return to travel and enjoying the outdoors (whether away from home or in their own backyard).”
The company expects consumers will be eager to return to pre-pandemic “norms,” but some current behaviors such as preparing meals at home will become permanent. Makers of snack bars such as the SmashCrispy line have suffered from schools being closed during the pandemic, but the company is “bullish” on the return of lunchbox snacks and has updated its bars and chocolate-dipped items.
“One of the biggest concerns we have is not in production, as SMASH owns our own dedicated and proprietary equipment, but more in the pent-up demand from consumers that will stress the supply chain — freight in particular,” McGregor wrote. “And we are working on solutions now to ensure we are able to deliver our products and keep shelves full. All in all, we are extremely excited about the continued growth and resonance of our products with consumers as an on-trend, modern, fun, yet accessible platform of sweet treats.”
SmashMallow is a 4-year-old venture by Sonoma Brands, a food and beverage investment firm started by Jon Sebastiani soon after the sale of the Krave jerky brand in 2015 for $232 million. Sebastiani bought back the brand last year from Hershey for an undisclosed amount.
Now it's part of a brand and investment portfolio that includes Guayaki Yerbe Mate energy beverages, Katherine Power and Cameron Diaz’s wine label Avaline and a stake in Vintage Wine Estates, a Santa Rosa-based vintner that plans to go public this year in a nearly $1 billion special purpose acquisition company deal.
Sebastiani told the Business Journal at the time of the SmashMallow brand launch in 2017 that he got the idea from the premium flavored marshmallows he ate in France, and he wanted to put a natural-product spin on that for the U.S. market. He leveraged the Krave brand distribution connections to get the treats into thousands of stores nationwide quickly.
3-prong plan for wine marketing
While the past three years have seen sizable growth for WineGlass Marketing, the past year was a year that allowed the 9-year-old company to become more of what founder Susan DeMatei intended it to be.
“It was a big exploratory year,” she told the Business Journal. “I don’t think we increased the number of clients more than rearranged them.”
Hit by the closure of tasting rooms and restaurants that are key revenue sources for small wineries followed by wildfires around harvest time forced the firm to be flexible with some customer payments. Even still, revenue rose to $1.5 million last year from $1 million in 2019.
The firm serves about 60 clients, many in the North Coast but some in Washington and Oregon plus one in Texas. Since last year, the staff has expanded by five to 23 on the addition of a new media department, with content creators, media buyers and two marketing strategists. The firm already has a creative department and a couple of technologists that handle setting up clients on social media and analytics platforms.
“We’re doing more branding work on the why of wines more than just the cost and other attributes,” DeMatei said. The firm also has been coaching clients on diving into new marketing channels, namely developing social media influencers on platforms such as Instagram and in buying a lot more online advertising through Google.
Her vision for WineGlass is to be a three-prong firm, with an ad agency focus that handles marketing tasks, a data-intensive marketing agency focus that knows where to deploy resources and how to legally talk about wine, and a brand-building focus that understands archetyping and mission-statement centering.
The Inc. 5000 Regionals rankings are offshoots from the publication’s annual Inc. 5000 list of that many fast-growing private U.S. companies, launched in 1982 as the Inc. 500. This year, there are regional lists for California, District of Columbia metropolitan area, Florida, Midwest, New York metro and Texas. To be eligible this year, firms must be privately owned, for profit and not a subsidiary or division as of the end of 2019. The rankings are based on 2017–2019 revenue, with minimums of $100,000 and $1 million in the beginning and ending years.
This year's California list had 55 newly founded companies and 65 repeat honorees like WineGlass Marketing. The state’s firms on the list had added 17,666 employees in 2017–2019 and had revenue of $6.7 billion, with median growth of 137%.
Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at email@example.com or 707-521-4256.