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The Business of Mongering: Pastoral Artisan Cheese, Bread & Wine

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Greg O’Neill is the co-founder of Pastoral Artisan Cheese, Bread & Wine (with partner Ken Miller). We spoke with him at the end of 2013 about launching and growing three stores, a bistro, a catering business, and local food service cheese distribution enterprise.


pastoral-artisan-sidebar-300x900Culture: What experience did you have before opening Pastoral?

Greg: We’d both worked in restaurants, and Ken is a trained chef who worked under David Waltuck at the award winning Manhattan restaurant Chanterelle (now closed) and is a soft ware developer. I have an MBA from Duke and worked in global marketing for a bunch of consumer product companies like Colgate-Palmolive.

Culture: How did you find your first spot? Did you scout the areas? Did you do demographic studies?

Greg: When we lived for a while in Germany, we got used to, and fell in love with, market shopping. We had met in Chicago, so we decided to go back there. And we realized that Chicago had a good food restaurant culture, but not, at that time, a good food market culture – no market shopping. We saw that as an opportunity. But, as to the specific locations, we did our homework. You have to. We did pedestrian counts, and sensitivity analysis, meaning, what if we had an average $15 ring up vs $25. What if we had 25% less customers. And, we worked with a good real estate agent who didn’t steer us toward cheap rent because something was on a side street.

Culture: So, what is your average ring?

Greg: At first, it was $17. Now it’s north of $25.

Culture: What’s been your biggest success thus far?

Greg: Growing during the time when the economy was in the toilet. We hired quality people all during the economic downturn. We just kept soldiering on. We started with 5 employees (including me). The company couldn’t support both Ken and I until we opened the second store. We were lucky that Ken could do what he did for Pastoral (finance, IT, physical plant) after he worked all day!

Culture: What’s been your biggest challenge?

Greg: When we opened our second store, it hit the perfect storm. Prices were going through the roof (Milk, Fuel, Wheat and Foreign Exchange) and we weren’t prepared. When we ordered products we weren’t informed that the prices had gone up until they had been delivered, sometimes as much as $3/lb!, and we were afraid to push back. We were ‘too small, too new…’ We actually lost 5 gross margin points in a single quarter. It almost killed us. We needed to institute bottom line mentality on top line business. So we told our vendors we needed a 15 day price increase notice. And we still have to keep reminding our supply chain of this.

Culture: How do you find new products, especially if they are local and small-batch?

Greg: You can only find so much at a large show like the FFS. We go to the Good Food Show, and we do retailer visits, and we keep our eyes on Farmers Markets. Everyone at Pastoral does this. We are a team.

Culture: How do you market Pastoral?

Greg: We don’t actually do much advertising, other than as good corporate citizens in culture and Edible Chicago. PR is huge now for us, and social media amplifies it. We are a regional retailer, but we want a national brand presence. But one thing I won’t do, and actually hate it when I see it, is advertorials. I think it cheapens the editorial and the advertising to mix them or put them right next to each other.

Culture: What’s next?

Greg: We took the last year off. We’re thinking about next steps but we have a restaurant, three retail shops, a bistro, and we distribute cheese to 85 restaurants. We can’t grow every one of these businesses. So, we are looking at the optimal way to profitably grow the business for the foreseeable future.

One thing that is interesting is that our original location is growing 20% this year, because of its proximity to our cheese and wine bistro. But, running a restaurant is sexy, yet a pain in the butt. We’re working really hard to have a team culture across all lines of business. And it’s also interesting because we now have a business portfolio where if one business is down, another may be up. For instance while our first shop is growing this year, another has lower customer counts because there’s huge construction in the area. There’s nothing we can do about that. It just is.

Culture: Any advice for fellow mongers running a shop?

Greg:

  1. Do your homework. Know your market, the customer, and who you are.
  2. Differentiate. Don’t become your competition. Stay focused on who you are and double down on what you do best. Stay on your game.
  3. Be realistic. You cannot run a business and work yourself into the ground ‘til your passion and ingenuity are gone. Don’t take too much on yourself.
  4. Do it with a partner, but do it with a partner with complementary skills. If you’re gaga about the esoteric, or you’re all business skills with no street cred, you’re in trouble.
  5. ACCRUE! Don’t believe you’re going to make a big bubble payment sometime in the future. That’s going to be a hardship for the business.
  6. You have to entertain the downside. If you won’t look at it, or talk about it, it’s still there. You have to think about what you want and what might happen.
  7. Business is stressful on a relationship. We {Ken and I} made the decision early on that we would rather have a successful relationship than a successful business. You know, it’s kind of funny…we never thought we’d be the kind of people to launch a business. We’re actually both pretty risk-adverse.

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