An Anchorage entrepreneur is facing a tough decision as she grows her company.
Heather’s Choice makes and packages dehydrated meals, catering to the outdoor adventure market with an eye toward health and quality.
Founder Heather Kelly recently partnered with a national sales company that represents popular brands like Smartwool and LifeStraw to expand the reach of her products nationally. But Heather’s Choice was already selling 90% of its products to the Lower 48. And Kelly says as they continue to grow, she and her business partner have had to consider relocating.
Heather Kelly: It’s been a really wild adventure for Brad and I because one – we both love Alaska, love living up here, love getting to participate in the community and create good jobs in the outdoor industry. [But] the logistics of sending everything to Washington, having it consolidated, having it barged up here, manufacturing it, and then shipping it back down to the Lower 48, where most of our customers are, is super challenging.
And unfortunately, even though we’ve been really well supported here, whether it’s through Launch Alaska, or the Alaska Accelerator Fund, or just the startup community here, there’s definitely a tipping point at which it’s like, okay, if most of your customers are not in Alaska, it doesn’t necessarily make sense to continue to manufacture here. So that’s something that we grapple with often because we’ve tried intently for years to source more local ingredients besides our salmon, whether that’s onions, or it’s potatoes, or it’s carrots, or it’s beef, or it’s bison. And consistently, we’ve run into roadblocks, either around seasonality, or availability or price. And I wish that I was telling a different story about that. But it’s continued to be infinitely challenging for us to be able to source more ingredients here and cut down on the amount of product that we’re having to import.
Michael Fanelli: It’s good to hear that you’ve tried to source more products here. Can you tell me a little bit more about why that’s so challenging?
HK: So if we take an example like grass-fed bison, there are a small handful of people up here who do raise [grass-fed] bison. One of the things we ran into is if we want to put grass-fed on our label, then those suppliers have to have a grass-fed certification, which costs money. And we consistently have found that those suppliers we’ve reached out to haven’t wanted to take that step. And I think it’s largely because they already have enough demand to support their lifestyle. They don’t necessarily need the additional pressure that our growing business would put on them. So I feel like we’ve consistently run into that with Alaska suppliers, basically saying, “Hey, we have enough business, we’re good with what we’re doing.” And then the other piece is definitely around price. So getting grass-fed bison here in Alaska, Brad would know this more accurately, but if I remember correctly, it was about $13 a pound. In contrast, importing it, I think we’re paying about $6.50 a pound.
MF: Wow – like double basically.
HK: Yeah, double to source locally. And again, if we had most of our business here in Alaska, you know, maybe it would make sense for us to source more local ingredients and then continue to sell here locally. But honestly, as a food business, you have to have distribution.
MF: Yeah, so I mean, as you’re growing, getting in more and more [stores], you’re already struggling with whether it makes sense to be shipping out of here. Are you considering relocating to the Lower 48 at this point?
HK: Yeah, it’s gotten to the point now that it’s not really something I can ignore. And I feel like if you reference back to any other interviews I’ve done over the last nine years, I’ve been really stubborn, really diehard about keeping the business here in Alaska. And now again, thanks to the success we’ve had, I’m having to really look at it and say, as an example, last year, I think we spent $60,000 in inbound freight. Which is $60,000 I would love to spend on something else. And so that’s something that I grapple with all the time as somebody who was born and raised up here wanting to create great jobs for the people you met today, and then having to balance that with the reality of like, okay, there’s essentially an Alaska tax, which is that inbound and outbound freight for doing business up here.