Neil Dudley: Ladies and gentlemen, welcome to the Pederson’s Farms podcast. We are so excited you’re here. We appreciate you joining us. And we look forward to sharing these conversations with thought leaders from our industry. They’re going to paint a picture from every perspective – consumer, customer, vendor, employee, and peer – that I think is going to be super valuable, and we’re really excited to share. So, thanks for tuning in. Remember don’t tune out, and grab life by the bacon. 

All right, everybody, hey. Mr. Shannon Duffy is in the house. We’ve just had a great dinner. I had a rib eye steak. What’d you have? 

Shannon Duffy: I had a Buffalo ribeye. 

Neil Dudley: He had a Buffalo ribeye. 

Shannon Duffy: Oysters, bone marrow. 

Neil Dudley: Red wine, all those things that go with a great meal. Now we’ve decided, Shannon has been gracious enough to come be a part of the podcast. So, everybody welcome. We’re telling the story of what I think is a beautiful industry of all-natural food, protein, bacon, sausage, ham, from the perspective of consumers, customers, vendors, employees, and peers. Mr. Shannon Duffy is the co-founder of Tender Belly. And we’re going to get all into that story and where that comes from, the name, especially, I want to hear where’d y’all come up- how did that name actually come about? I think it is a brilliant name. And just tell you guys how a peer in the industry operates. You guys are a tough competitor. We appreciate that. I think consumers appreciate that. That makes the reality of a consumer better. They get better choices. They get companies trying to make themselves better because they know they have a tough competitor. And I think that’s really valuable. So, Shannon, tell us the story of you and Erik and Tender Belly, and maybe start with just you guys as kids. What was that like? 

Shannon Duffy: Well, first off, thanks for inviting me. This is flat out, this is something I probably would never do myself, but just having dinner with you tonight, a competitor, I’m a fairly competitive person, I think kind of like you are. It’s not something I’d think about doing first, but now that I’ve just done this tonight for the first time, I’m totally good with it. So again, thanks for having me. Thanks to the Pederson’s family and everybody else that’s doing this. Erik and I, he’s 22 months younger than me. I’m the older brother. You guys can play into that whatever you want. We grew up like the idyllic Midwest kids, just having a blast in small town Iowa and building forts and getting in fights with the neighbors and then going to a school with 150 kids in a class. And it’s- I love, we loved growing up in the Midwest. So, it was a good time. My brother and I have a really good relationship. He’s the one that came up with the Tender Belly bacon recipe and- 

Neil Dudley: Timeout. You just said the keywords: Tender Belly.

Shannon Duffy: Tender belly. Yeah. 

Neil Dudley: Where did that come from? How did y’all come up with Tender Belly? There is a recipe. People tattoo it on themselves. Like, so how did, where did you come up with Tender Belly? 

Shannon Duffy: Tender Belly, I mean, he and I were standing around my house when he was moving to Arizona to start Tender Belly, but we didn’t know it was going to be Tender Belly yet. And I had gained a little bit of weight around my midsection, and it was tender. And I go you should call it Tender Belly. And he and I both can call out the exact spot where we said those words. And he goes, you know what, I think that’s a good idea. And that’s how it came about. I was driving around the whole Western US, trying to sell stuff, and I got a little portly, and my belly got tender. I literally pointed to my belly and said you should call it Tender Belly. And that’s the fact how it happened. 

Neil Dudley: And consumers, how many people really know that story? I hope that somebody- 

Shannon Duffy: Yeah, it’s a little embarrassing quite honestly, but you know what, life’s full of a whole bunch of little embarrassing things. 

Neil Dudley: A little embarrassing, but also super beautiful. Like we talk about as a company, Pederson’s looks at Tender Belly as a place we want to pay attention to. You guys, the dry rub bacon, your systems. 

Shannon Duffy: You guys as well.

Neil Dudley: And, I mean, not to just sit here and pontificate on each other’s, I guess, successes or strengths in the market, but that helps us. It really does help us at Pederson’s. We’re out selling. So, we’re selling against you to any, just pick any customer, retailer, chef, whatever. So, in those conversations, they will say, well, Tender Belly showed us something really cool, can y’all do something like that? And we’re like, well, shit, we got to learn about Tender Belly. I think that story could be true for a million other industries, a million other brands, just think about it across the landscape. And that’s part of what this podcast to me is all about – it’s telling that story, giving consumers the insight into the reality that buy Tender Belly, buy Pederson’s. I really would prefer you buying Pederson’s. But if you buy Tender Belly, I know you’re getting a quality product that’s safe too. 

Shannon Duffy: Yeah, I think both of us, both of our companies are in this for a better-for-you mentality towards the earth, the animal, and the consumer. So, if they’re in our realm, we’re winning there for the long haul. We can go into the, hey, buy ours instead of theirs, because of what, I don’t know your business, we don’t- the thing about Tender Belly, we don’t talk crap about anybody. We just, this is what Tender Belly offers and this is how we do it. If you don’t like it, there’s other people in there. But I truly think, as two companies in this space, if people are buying, spending the $2, $3 more a pack for better-for-you bacon, we’re winning the game. 

Neil Dudley: And we both talk about bacon a lot, but there’s other products out there. I mean you guys are in the sauces space, you’re in the ham space. We certainly aren’t. And that paints a picture I think consumers should know about. Like both of us as companies have to care about the pig as a whole. Like just making bacon is not particularly sustainable, especially if you want to drive change in how animals are raised. Because if you can’t market the loins, the pulled pork or pork butt or the hams,  then there’s so much waste. There’s so much of value lost.

Shannon Duffy: Yeah. I mean, most people listening to this, they’re going to be in the, especially right now, they’re in the biz. As you gain more popularity with this, you’re going to get people that don’t quite understand, but the whole thing in this game is that you got to sell the whole animal. They’re not going to harvest an animal just flat out, they don’t kill a pig just to sell the belly. They got to sell at least 60% of that animal’s weight. And that’s why you make ham, sausages, loins. So, it’s a big deal to put an animal down to feed somebody else. 

Neil Dudley: Yeah, I think it’s disrespectful if you aren’t paying attention to that whole animal, caring about it. Now, so let’s spin it a little bit and go to what was it like building Tender Belly? I could tell the story of what it was like building Pederson’s. I was there. I mean, I was on the trucks and those things. Tell everybody what y’all did.

Shannon Duffy: It was a blast. I mean, literally Erik and I, we just wanted to make just a minimal amount of money literally making the world’s best bacon that we thought from the best ingredients and best sourced raw material. And then he and I working together and not having any other bosses, we’re hard-working dudes, but we don’t always like to take direction from somebody else or do it somebody else’s way. And we knew we could have the customer service and quality product. So, I mean, for the first two years, it was he and I slinging pork out of the back of our non-refrigerated truck. We had a cold storage in downtown Denver, and we were able to get to the restaurants that we’re selling to quickly. And we’re not going to serve bad product ever, but it was literally fun slinging pork, go knock on the back doors of restaurants saying, hey, here’s a hundred-dollar sample because we can’t bring a case. But we think it is going to pay off for you. And we’d hit anywhere from five to ten restaurants a day until we had them all blanketed. And not everybody bought our stuff, but everybody in Denver at least knew about it. And that’s how we got known. It was expensive. We couldn’t sell it at a discount. But it was better than what was available through most distributors and most of these big box guys. 

Neil Dudley: When you say better, what thing-? 

Shannon Duffy: Taste. Yeah, we’ve got all the attributes with heritage breed, ABF, all that. A restaurant, in the end, if it tastes like shit, they’re not going to- they don’t want to put it on the menu. So Tender Belly I think became associated with taste. And if something tastes good, it trumps everything else. 

Neil Dudley: We said it over dinner – a friend will buy from you one time, but they won’t buy from you because your friends. They won’t buy from you multiple times if it’s not good. I mean, because at the end of the day, the truth is they have to deliver to their consumers.

Shannon Duffy: You’re in business. Your job as somebody selling is to make that person you’re selling to make them more money with what you’re selling them. If they’re not making more money or making their customer happier so they come back and spend money, it’s not going to pan out. 

Neil Dudley: Capitalism at its best. It’s just the truth. It’s the truth. All right, so let’s follow this string a little bit. So now you’ve built a- you built it out of the back of your truck, let’s say. What’s the next steps? Like for people who are interested, what was the next step for Tender Belly? So, when did you start thinking, wow, this is a real company?

Shannon Duffy: We first started selling only bacon for the first three months. Then the restaurants were, hey, do you have butts? Do you have loins? Do you have hams? And we were like, yeah, we know how to make that and get that to you. So, we became a whole- we were nose to tail. We would literally make sure that we’re utilizing the animals as much as possible, selling only Berkshire pork. Then Berkshire was a little too much for all restaurants, so got into the Duroc line as well. And we were selling to only high-end restaurants in Arizona, Colorado, and Texas, just literally knocking on the back of restaurant doors. And we had refrigerator trucks then; we grew to about I’d say 600 different restaurants in those three geographies, and then slowly but surely, everybody’s putting our name on the menu, but then slowly but surely, we got into retail, to like these ma and pop three- and four-star chains in all those regions. Nothing with any real velocities, but like known grocery stores that people like to be associated with and they’re paying a lot for bacon. So, then we got to like I’d say critical velocity with how many restaurants we could service. And then like what’s the next step? I mean, any entrepreneur, anybody in business kind of- there’s hard times, they figure it out, and then they say what’s next? And then that whole timeframe or scheme just keeps like repeating. What next, what next, what next? So, eight years in is when we were like, hey, we want to, we think this is a retail brand that can go at a national level, but we don’t have the experience, set of people around us that have been there and done that or money to do it. So that’s when we started looking for investment, and we found a really good private equity firm with people that we liked and could work with. And that’s where we’re at now. 

Neil Dudley: That’s a great piece of the story. It is one I’ve not experienced. Pederson’s has been able to grow, our ownership is of the sort where we’ve been able to just do what we do internally. Like we didn’t go out for VC capital or even those relationships. We were allowed the time to just learn it, figure it out. Like you didn’t necessarily have that luxury. Like we’re going to the next level, we need to do it today. Also, I mean, when did you start? When was Tender Belly founded?

Shannon Duffy: May 28th, 2010.

Neil Dudley: Okay. So, you’ve been in the market, so you’ve been doing this thing for 11 years now. I’ve been in my position or working for Pederson’s for 20 years. So, I had like the 10 years- let’s say 21 years, just for good math, I had 10 years prior to Tender Belly’s founder foundation of me just figuring it out. Because even the market, even the consumer base for what we do was growing; it wasn’t even fully developed. That’s kind of a nice thing. So as an entrepreneur, if you’re out there and you’re thinking I see a problem I can solve, go after that thing, even if- 

Shannon Duffy: Timing is never perfect. Just go.

Neil Dudley: That’s right. And sometimes the learning you have over the 10 years as you’re getting to the point of what I call critical mass, where the consumer base is big enough that it can really handle what you do, there’s so much learning in there that’s very valuable for you.

Shannon Duffy: I mean, time in market is huge. You can get lucky with a fun name or a taste profile, but you got to spend the time in there in the trenches, like giving a chef like a free case of bacon or pork because you were late or it was out of temp. You just got to- I like to call it paying intuition. You got to do the time and make things right for your customers like every single time. 

Neil Dudley: Customer service. I’m telling you, Shannon, that is such a valuable piece of advice. We have to live that now, today. It never goes away. Every customer expects that. I expect it as a consumer. I want brands to take care of me. I want people that I spend my hard–earned money on their products to value that enough to make it right when it’s wrong. I think that’s one of the kind of just lucky cowboy basic things is like you always stand behind your product, you always make it right. And that’s paid- That’s really just done well for Pederson’s, and it sounds like it’s done well for Tender Belly too. All right, what’s the- like, so in today’s world, I think this will be just a timely question to ask. The December theme here at Pederson’s is Our Table and how do we include people? What’s Tender Belly’s take on that? We mentioned over dinner that I was thinking about partnering with some vegetarian products, and you were kind of like, hmm, I don’t know if that’s in our wheelhouse. Let’s explore that a little bit. What’s your thought process?

Shannon Duffy: You mean December, bring them to the- just in general, for Pederson’s-

Neil Dudley: Pederson’s is taking a- so we kind of put out this marketing theme monthly. November was something. December is going to be Our Table. This interview is probably going to go in conjunction with that idea of Our Table. We want people to feel like they’re included in Pederson’s brand, whether it’s bacon, sausage, ham, race, sexual orientation, any of those things. Like we don’t have any reason to exclude any group. What do you think?

Shannon Duffy: I mean, in today’s age and time with everything going on, you can’t even name everything, excluding anybody right now is probably not the smartest thing in the world. We’re big fans at Tender Belly of being who you are and not making excuses for who you are. And you can’t be everything to everybody, but you can be amazing to your group. So, I think I’m talking in circles right there. 

Neil Dudley: Not really. I mean, be amazing to your group. Like there’s also a thread of reality in-

Shannon Duffy: You don’t have time to please everybody. 

Neil Dudley: That’s right. You will not. And if you expect as a company or a brand to please everybody. We want to talk about also, like so Pederson’s is just interested in saying we may not understand it, but we want to include people. It parlays in my mind also to this conversation, you mentioned earlier Berkshire pork, then you moved to Duroc. I say this a lot: We’re doing the best we know how to today. That doesn’t mean we don’t figure out a better way tomorrow and say we’re going that direction. It can go also the other way.

Shannon Duffy: Look, you got to stick to what got you there. And you can’t- the bigger you get, the more you kind of get specialized, which is, I mean, hopefully everybody that gets into business under- you start off with all these- entrepreneurs have all these little ideas and cool ideas, and then you get knocked back to life, like, dude, you got to stay in the lane; this is how you succeed and make money. Yeah, again, I don’t know where I was going there with that. 

Neil Dudley: But hey, the other truth is making money is part of business. If you can’t figure that piece out, you’re in big trouble.

Shannon Duffy: Yep. Getting rid of people because something that you did as an owner didn’t allow you to make enough money to pay them, so you had to get rid of them, that’s a super humbling experience that you don’t want to have to go through. 

Neil Dudley: Absolutely. Now, what is it like selling an item that is just more expensive than everybody else? How do you battle that pull towards doing it cheaper? 

Shannon Duffy: I mean, you’re always looking for efficiencies and buying power, but to compromise the actual quality of the product, it’s something that we don’t do. This is where the turtle beats the hare in the race, like you just, you keep beating people down. Erik and I started the company in 2010 selling $7 a pound bacon where most people were used to buying $3 a pound, $3.50 a pound big brands that I don’t have to name. And we’re like, hey, ours is better. Like twice as much? Like, yeah, try it. And then one guy bought it and the other guy bought it and the other guy bought it. And we’re probably a pain in their ass for some of these big guys, but we’re not even a rounding error for these big guys. But it’s a movement and enough business going on now that they’re looking at us. 

Neil Dudley: Oh yeah. We’re watching you at Pederson’s. Like we’re competing in the market for similar customers, the same customers. 

Shannon Duffy: It’s fun selling the most expensive stuff because we think it’s better because it tastes better. And you know what? Yeah, you can get something cheaper, but cheap things are expensive. Cheap- not yours. I’m going to, we’re going to stop doing this like, hey, I’m not mad at you. Like we’re a business here. You’ve got good product. Ours is different. So, it’s black and white. Like ours is more expensive because we take out 15% water weight and there’s not enough there. So that’s going to make it more expensive. You add on top of it all the price we pay for our spices and how long it takes to make it, there’s the other part. 

Neil Dudley: Look, I wanted you on the podcast because we look up to you guys. Pederson’s appreciates what Tender Belly does. We want consumers to hear this story, and I hope this platform puts it out there. I mean, at the end of the day, that’s what this is about, highlighting somebody I think is super awesome. And the truth is we’ve known each other now maybe two weeks. I mean, we’ve really just talked to each other. I called Shannon and said, hey, let’s do a podcast. And he’s like, well, that’s interesting. 

Shannon Duffy: No way, dude. I don’t like you.

Neil Dudley: What’s your ulterior motive? I mean, because you kind of, in business, you’re always wondering that. The truth is you guys do a great thing, quality product, great brand. And I think it’s important for consumers to hear about that story. So, speaking of the story, where would people find out more about Tender Belly and just to come learn about you?

Shannon Duffy: Yeah, I mean, tenderbelly.com, you can go there. Everybody wants more information on a website. We think we’ve got a good hit there. Our social feed is kind of fun. We’re kind of irreverent. We’d like to be- we sponsor snowboarders, triathletes, pro surfers, skateboarders. I think we went a little different route because those are all activities that Erik and I like to do, but we didn’t turn into pros where you could make money at it and we had to run a bacon company. And our whole model behind Tender Belly is you could be an idiot and eat three pounds of bacon every day and not move too much, but our motto behind the Tender Belly is you honor the animal, you make very good pork and very good products, and then the families and the people that eat this stuff, they eat a couple of slices a day after doing some amazing sporting event, or they’re out with their family doing something cool, and they sit down and break bread with amazing pork. And that’s the essence of what Tender Belly is about. 

Neil Dudley: I love it. That’s the perfect spot to call this interview, this podcast, this conversation done, great. Thank you for sharing all that. Everybody go check out Tender Belly. We’re really proud of them. We appreciate them being in the space, pushing us to bigger and better things. Love you. Come back next time. We’ll be talking to somebody else that I guarantee will have good information for you.

Hey, everybody. Thank you so much for listening to this episode of the Pederson’s Farms podcast. It’s been a blast bringing this to you, and I sure hope you enjoyed it and found value. If you did, tell a friend, share it out on social media, hit that subscribe button, or go check us out at pedersonsfarms.com. We sure hope you do. And thanks for being here.