Solve the complexity and your customers will love you


One of the most important lessons I’ve learned from years of working with successful entrepreneurs is that if you can solve an important problem for a B2B customer more efficiently than they can, you can take that difference all the way to the bank. In 1985, New York City’s elite restaurants had such a problem. Their kitchens were taken over by young, uncompromising chefs who wanted to bring European-quality ingredients to the table: farm-grown pork, traditional foie gras and the like.

The problem? America is not Europe. In the 1930s, Americans ate an average of about 80 pounds of meat per year. In 2010, that figure was over 180 pounds. To keep up, the agricultural industry, well, industrialized. It bred turkeys with breasts so large that they could not mate. It pumped antibiotics and hormones into animals to make them grow faster, and it consolidated into huge factory farms, slaughterhouses and conglomerates. In a sense it was a triumph of capitalism: four million largely family-owned businesses disappeared in the US between 1948 and 2015, total production more than doubled.

When Ariane Daguin, now CEO of distributor D’Artagnan, first arrived in New York City from her native France, there was no such thing as “farm to fork.”

“I come from Gascony, in southwestern France, where everything revolves around food,” explains Daguin. “We live to eat; we don’t eat to live.”

Agriculture there tends to be on a much smaller scale and animals mature more slowly in open pastures than in pasturage, meaning they consume more over their lifetime. “The slower you go, the better results you’ll get,” she says. “This is what farmers who respect livestock farming have been doing for centuries in my part of France.”

Her first impression of American chicken: “Mushy and tasteless. Sometimes it even tasted like fish,” she recalls with a shudder.

But back to those cooks. In the 1980s, the American culinary scene was on the cusp of a revolution, a backlash against commercial farming that prioritized heritage breeds, traditional, humane husbandry, and knowing where your food came from.

When D’Artagnan started delivering meat and poultry from the Hudson Valley farm in a rented truck, the response was immediate. Chefs began to design their menu around D’Artagnan products. They would place weekly orders on Mondays and have them delivered on Thursdays. “And there were no substitutions, no freezes, and no out-of-stocks allowed,” explains Daguin.

As you might imagine, it took complicated logistics to get an animal that bellowed or clucked contentedly in a country field onto a plate in Manhattan in four days.

The rapid growth, she recalls, “almost killed us. One of us was driving the truck, the other was on the phone, picking the product from the warehouse or putting out fires. I had a partner in the beginning and there wasn’t a day when one of us wouldn’t say to the other, ‘That’s it. Take my 50%. I’m going home.'”

Not exactly a scalable business model.

Still, in 2005, D’Artagnan reached $5 million per month in sales, reaching the upper limits of its seat distribution system. Chefs now expected overnight delivery and access to popular cuts of meat on a regular basis. For every Chateaubriand he sold, D’Artagnan had a whole cow of less popular meat to move.

Check out Andy Wertheim, who brought much-needed marketing and operations experience to D’Artagnan as president in 2006. To give the company a point of sale for its unsold products, Wertheim launched a direct-to-consumer e-commerce site and began distributing it to supermarket chains.

That made the distribution even more complex, but also gave it a Zen-like balance. Carefully portioned fresh pieces went to the restaurants. Supermarkets received products with the longest shelf life. And the remaining meat was quickly frozen and cry-packaged for dropshipping to avid foodies. All this in a symbiotic dance that now brings in over $150 million in annual sales.

There are many lessons to be learned from Daguin’s 37 years at the helm of D’Artagnan: Find an untapped need. Do what you know and what you love. Start small and build organically by reinvesting profits. Focus on value. But the one I like the most might be “keep innovating”. Daguin never wavered from her mission to bring traditional French ranching to America, but as D’Artagnan grew, she found new ways to achieve it. As a result, she has built up something of a paradox. In a world of industrial-scale agriculture, she’s found a way to scale the unscalable: bringing small-batch, high-value (and highly perishable) niche products to an ever-expanding market she’s created herself. How do you innovate to scale your operations?

To see more of Ariane’s story, click here to visit how i did it.


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