There is a saying that goes, “It’s not the destination that matters, it’s the journey.” Meeting Spencer Stackhouse, co-owner and head chef of On Tap Kitchen, you quickly realize how relevant the phrase is to food. When Spencer and his partner Ian Blasco formed the company two years ago, he focused on changing a classic soft pretzel, which has a limited shelf-life, without changing the core attributes that makes that product so enjoyable: shape, texture, and how well it compliments a quality beer. On Tap Kitchen’s core product, pretzel bites, were born.
They’re still extruded sticks. That’s not an exciting product. A stick is not a pretzel.Spencer Stackhouse, head chef & co-owner
Each pretzel bite starts life as a dough, then is proofed, rolled, twisted into a pretzel, dipped, baked, then finally torn by hand, seasoned, and re-baked. It seems like a lot of trouble, but On Tap Kitchen believes it’s worth it, and customers agree. The final shape was based on, “people’s expectation… it should look like a crouton. Part of that is the mechanics of eating it; the crumble, the crunch.” However, just having a product doesn’t make a business, but Spencer knew where to go to find their first customers.
On Tap Kitchen targeted breweries very early on, a place where customers were paying for high quality, local beverages and then eating uninspired big box prepackaged foods. That disconnect made little sense to Spencer. “There is a large overlap between people who care about high quality food and people who go to microbreweries,” said Spencer. This decision provided benefits and limitations for the young company.
Breweries are limited by their licenses, since most don’t maintain a retail food license due to the costs of additional requirements. That means food must be shelf stable, require no refrigeration, and come fully prepacked and sealed. Expanding On Tap Kitchen’s product line early on was a learning lesson in these limitations, as mustards and peanut butter dips became more expensive to develop and maintain than sales supported. “What can we do to diversify? Oh, we can have different flavors and maybe down the road team up with someone who makes mustard.” Fast forward to today and On Tap Kitchen offers 5 additional flavored pretzel bites beyond their original seasoning.
It was really easy to start working with some of these [breweries]. They are really excited to support other local businesses.Spencer Stackhouse
Without regular deliveries from distributors, the burden would be on Spencer to setup a delivery schedule and handle distribution directly. The process, while time consuming, lead to some revelations about the types of businesses and business owners he was now supplying. “Chefs are competitive and mean to each other. Within the brewing community they are very friendly to everyone,” said Spencer with a broad smile across his face. However, it still took some coaxing to encourage breweries to order more product less often, reducing delivery costs. To incentivize customers, On Tap Kitchen offers discounts on case purchases rather than delivery fees.
As the summer season is getting into gear, Spencer is focused on the Boulder farmer’s markets to generate benefits for the company. When asked about the primary benefits of farmer’s market sales, revenue didn’t make the top 3. “The money is great, I’m not going to lie about that, but better than that is getting feedback and marketing; being able to sample to thousands of people.” It’s common for consumers to try the product at the farmer’s market and then pick up a bag when they see it again at the store or at a local brewery, because they’ve already had a first exposure to the product. They come back to share their story with Spencer at the farmer’s market the next week.
That’s the the focus of most food businesses and definitely On Tap Kitchen: create fans of your product by introducing them to a delicious, well-crafted snack so they can make an informed purchase decision later, becoming repeat customers and helping to spread the word about the product. Building the company on that foundation is what inspired Spencer. “I want a better snack. I can make that, so I’m going to make it.”