Fort Morgan, Colorado
Industry: Supply Chain
Products: Organic and natural food and beverage ingredients
Nicholas Erker, president of the family-owned company, forecasts $40 million in sales for 2018.
An importer and wholesaler of organic and natural food and beverage ingredients, Smirk's now supplies hundreds of different products to customers in the snack food, baking, grocery, brewing, and distilling industries.
Erker's father, Mike, originally founded the company to import candy-coated sunflower kernels from Malaysia for retail sale, but the catalog has grown markedly in the years since. "We work with over 300 different items today," Erker says. "At any given time, we probably have 3,000 to 4,000 pallets of different products on hand across the country."
Though headquartered in Fort Morgan, the company currently maintains warehouses in Kearny, New Jersey; Rancho Cucamonga, California; and Denver.
Smirk's wholesales products from domestic as well as international suppliers. "We're currently bringing in ingredients from over 30 different countries around the world," Erker explains. "We have products coming in from every continent except for Antarctica and Australia."
The range of ingredients Smirk's imports is astounding. Though Erker says the company's top three items are sunflower kernels, pumpkin kernels, and chia seeds, he adds that "We have some really strange things, too -- things like jicama root, goji, and acai powder." Coconut products are by far the broadest import category with Smirk's wholesaling every coconut product except fiber and water. "We sell coconut water powder though," Erker says.
Among the company's craft brewing and distilling customers, popular products include coconut and hibiscus flower. "A lot of the smaller and regional craft brewers and distillers are working with natural ingredients to provide flavors to their beer and spirits," Erker says. "We also have malters who are malting different seeds and grains as a base for a distillery or brewery, things like buckwheat, sunflower, or millet."
That said, the grocery and food manufacturing industries remain the source of Smirk's largest customers. "We have strong relationships with one regional grocery chain and several national grocery chains," Erker says. "And we supply several national brands with the raw materials they need to make their products."
In 2017, the company's sales volume increased about 125 percent, and Erker says they're on track to increase another 140 percent this year with total sales of $40 million. He attributes some of this rapid growth to industry consolidation and a reduction in competition. However, the company's philosophy is responsible for most of its success.
"We specialize in finding the source of products, visiting that source, choosing the best supplier, and then partnering with them to bridge the gap between them and the customers, namely manufacturers and processors here in the U.S. that need the ingredient," Erker explains.
Smirk's is committed to providing full supply chain transparency and traceability on all the ingredients it wholesales. "It has kind of been up to those of us in the industry to figure out what the FDA's Food Safety Modernization Act means," Erker says. "What we took to heart is that the end customer needs to be able to know where everything in the product that they are consuming came from and be able to verify that it is safe for them to consume."
To that end, Smirk's verifies and tracks every step in the supply chain, from auditing the supplier factories to processing, packaging, shipping and delivery. "Because of this validation process with our suppliers, we can guarantee that what we're providing is accurate," Erker says. "We supply all of this documentation to our customers. Most of our competitors do not because it could allow their customer to find a way to the supplier. But we don't worry about that. If we're buying 50 containers from a chia supplier, we're not concerned about one of our customers calling them up to buy two pallets. The supplier isn't going to do that business."
Challenges: Smirk's faces a number of challenges, ranging from managing the structure of the growing organization and cross-training its staff to transportation of its products.
"In December of last year, the Department of Transportation implemented electronic logs requirements for truckers," Erker says. "They aren't allowed to manually track the hours they are driving anymore but have to have a computer in the truck to track it." This firmer enforcement of the maximum 10-hour driving rule has reduced the transportation capacity of trucking companies. "At times, it can take us a week or even two to find a truck to actually move goods to our customers," he continues. "That has been very frustrating, but at the end of the day, I always remind myself that if this was easy, everybody would do it."
Opportunities: The relationships Smirk's builds with its customers are a big opportunity according to Erker. "We really strive on finding the ingredients our customers need," he explains. "They might ask us if we can get them this or that and we'll reach out to some of our partners to find it. Ultimately, we want to make their jobs easier so that they can do what they do best, we can do what we do best, we all make a little money, and everyone goes home happy at night."
Company culture is another one. "Our team does a fantastic job," Erker adds. "We're constantly working together to solve problems, and everyone knows what they do is important and that without them we wouldn't be able to succeed. They are all very self-driven, motivated, and compassionate about it. As a result, this culture of growth and support resonates through everything we do all the way down to our customers."
Needs: "We need time," Erker laughs. "We're always running out of time. I never know where the day goes. But I don't really think time is anything we can actually get more of. We just have to find a better way to manage it on a daily basis."
One of the ways Erker is looking to better manage time is through new ERP software. "We switched over from QuickBooks to SAP in 2015," he explains. "SAP has provided us with a lot of wonderful tools and information, but the SAP reseller we were with the last couple of years was the wrong fit for us. We've identified a new SAP reseller and are going to bring the software into our office so that we have more flexibility."
The new software should enable Erker to significantly reduce the 20 to 30 hours a month it takes to manually reconcile the company's inventory and calculate their borrowing base for their financial partner, Bank of the West. "We really hope the improved functionality of our ERP software from our new SAP business partner will take care of this need," he concludes.