Why Clorox Turned to Kickstarter to Help Fund Venture With Startup

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Clorox Co.'s Soy Vay has teamed with Three Jerks Jerky on a Kickstarter campaign behind Veri Veri Teriyaki
Clorox Co.'s Soy Vay has teamed with Three Jerks Jerky on a Kickstarter campaign behind Veri Veri Teriyaki Credit: Kickstarter
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Clorox Co. may not be the biggest packaged-goods player, but with $5.8 billion in annual sales, it could easily scrape up a five-figure cash investment anytime it wants. So why did its Soy Vay brand turn to Kickstarter recently to help fund a new venture with startup Three Jerks Jerky?

"It really starts with the strategy of our Emerging Brands Group," said Adam Simons, who heads the unit at Clorox, including Soy Vay. "One of the pillars of the strategy was trying to align our emerging brand with others in the marketplace. There's so much going on in food and beverage today, but all the interesting stuff is happening at the under-$25 million companies – all the trends, all the interesting flavors, all the interesting business models."

Mr. Simons and his cross-functional group wanted to partner with a jerky brand on a Teriyaki flavor. Three Jerks, an emerging brand based not far away in Southern California, "was the only company at the top of our list that made sense," Mr. Simons said. "The Kickstarter thing just kind of naturally evolved, where we said it made sense as an awareness driver, as a way to build one-to-one connections with consumers in a way that's very important to us and, frankly, as a way to cut against the grain of typical product launches in CPG."

It's a novel approach for consumer packaged goods, but some big players in other sectors have tried crowdfunding, too, as an alternative model for launching ventures. General Electric's FirstBuild unit, for example, raised $2.8 million from more than 6,000 contributors on Indiegogo in 2015 to launch its Opal Nugget Ice Maker.

As of Feb. 16, close to the end of their effort, Three Jerks and Soy Vay had raised more than $28,000 in pledges from 715 people. But as Mr. Simons sees it, "It's less about we don't have the cash. That was way low on the priority list." The idea was to help foster a mindset of running as "entrepreneurial and scrappy, very much like the startup within the company."

For similar reasons, Soy Vay is the first Clorox brand to go all in on direct-to-consumer selling, recently launching a program to sell branded prepared meals through its website, delivered to people's doors within 48 hours, through a partnership with Chef'd. That's part of a broader effort aimed a merging "content and commerce," Mr. Simons said, more like other emerging brands and less like the "heritage of mass communication" of Clorox's big established brands, most of which fall into the category of "maintenance brands."

Soy Vay actually has a fairly long history itself, founded in 1982 in Humboldt County, Calif., by a couple who brought their Jewish and Asian heritages together to develop a line of sauces that combined two cuisines. Clorox bought the company five years ago, and it became a charter part of the Emerging Brands Group when Clorox formed it around three years ago. Mr. Simons, a veteran of Clorox's corporate business development unit and its Glad and Brita business, who has also worked in strategy and insights roles with Diageo and Publicis Groupe, became head of the unit a year ago.

Its name aside, Emerging Brands is also bringing in some of Clorox's long-established brands, or projects from them, either to nurture new product lines or nurse declining businesses back to health. One of those is KC Masterpiece, once a $100 million brand, but now "below that," Mr. Simons said. Another is a new line of food products soon to be launched by Clorox's Kingsford Charcoal.

As for Three Jerks, they were after Clorox for the sauce, not the dough. The relationship grew from a chance meeting with people from Soy Vay at a trade show last year and "a mutual admiration for each other's products," said Three Jerks co-founder Jordan Baroccas. "We wanted to make a teriyaki jerky," he said. "But we didn't want it to taste like a generic teriyaki."

Three Jerks already had gotten a marketing boost in 2015 from an appearance on ABC's "Shark Tank" and a $100,000 investment by Shark Daymond John, who appears in the Kickstarter video. But the company was never looking to hit up Clorox for money, Mr. Baroccas said. "That's not us. We are a young company. We're very entrepreneurial. I think that's something Clorox realized and valued."