Funny-bone business model
June 27, 2011
by Steve Krut
Martin Luther is always looking for unsuspecting customers. The owner of Luther’s Smokehouse Inc., in Leroy, Kan., is always anxious to share with them the humor of his in-store gimmicks, like his cowboy boot tree or the flying manure spreader, better known as the “crap duster.”
“Life’s a bit too short not to have the opportunity to smile at something every day,” Martin explains. “And when I can get customers laughing at something, I’ve become more than just another businessman – I’ve become a fun experience for them.”
Luther plies his trade in the 550-resident, Central Kansas community where his operation once represented about the only place in town to get breakfast, lunch or dinner. Not far from the jerky processing plant, Luther’s retail building houses a 100-seat restaurant, convenience store, jerky and smoked meat factory outlet.
Leaving behind a career that started in the 1960s as a retail meat cutter, Martin bought a meat processing and slaughter plant, which he operated until 1979. He decided it was time to get things simpler and moved almost exclusively into the jerky-processing business.
The entire operation is on a block-sized property themed like an Old West town that has become a destination for tourists, biker rallies, fundraisers and the unsuspecting customer.
Everything about Luther hints that by-standers may be part of his next humorous plot. Out of the blue he might offer a customer a ride around the shop on his Segway, or share one of his eight different novelty business cards. He might even offer “free tickets”…not redeemable for anything, just free.
Luther and his wife, Shirlee, also maintain a flourishing mail-order business under the name JerkyUSA.com. Offerings reflect the down-home, slightly cornpone, knack he has for making his bread and butter products seem worth buying.
In the name of transparency, the Luthers keep everything about their business out in the open, even to the point of letting customers know how they can make their own jerky and processing equipment. It stands as kind of an offer to customers that this company has done it right and would help anyone enjoy quality jerky even if they didn’t make a penny on it. Jerky makes sense
His original jerky formula is called the Old Fashioned and comes complete with a nutritional statement, promising no carbohydrates. He offers pork, turkey and beef versions, including teriyaki flavor solid-muscle jerky, and a variety in popcorn sizes. While most selections come in 3- and 7-oz. packages, Luther moves a lot of product with his Variety Pack featuring five different jerky choices in 3 oz. bags.
But unlike most jerky producers, Luther offers an absolute guarantee for his products.
“I call it ‘The Dog Stole It’ guarantee,” he says. “I’ll make sure my customers are pleased 100 percent for any reason, even if they tell me the UPS man left it on the porch and the dog got into it.” UPS normally covers this type of claim, but Martin sees a funny side in every corner of life.
Another top seller is the firm’s Midnight Special, a lean ground pork jerky with country ham flavor, along with his Cowboy Pocket Food, which turns out to be cured and dried pork shoulder ground with sweetened cranberries. The Pemmican-like snack is a big hit in the re-order department.
For variety, the Luthers provide a line of meat snack sticks and summer sausage products in their grocery and mail order divisions. But it’s clearly jerky that is the most popular at their shop.
Ironically, it was a nearby nuclear plant that helped them power onto the jerky scene in such a huge way.
“They were building the Wolf Creek Nuclear Power Plant not far from us,” Luther confides. “I thought the workers might like some good snack food during their breaks and I took a nice supply down to the place where they ate. It started to move off the shelves and even after the main construction project was completed, we kept getting requests for more of our product.”
As a result, the former locker plant was replaced by a 5,000-sq.-ft. jerky processing facility in 1990 where Luther could devote efforts toward refining that product and developing new methods of having fun with his customers. Within 10 years, even that building was outgrown and a new 7,000-sq.-ft. jerky factory sprang up. The old factory became the retail store and restaurant.
Those getting into the restaurant early might get Martin’s favorite booth, a pendulum-type table swing. A Paul Bunyan-sized rocking chair outside provides a natural photo opportunity for customers, as do old wagons and other Western-themed memorabilia on the property. Martin refers to them as “yard art.” Who else boasts of an eight-animal metal petting zoo?
With only nine employees and an economy in a sharp downturn, Luther found sales from his website were declining. He immediately hit the road with samples of his jerky for small convenience stores in a 50-mile radius. His approach was that he guaranteed to the proprietors that his product would outsell the competition’s jerky within 30 days if given a fair chance. Most accepted that shot and began promoting Luther local fare permanently. His efforts more than made up for the decline in Internet sales.
Luther is a firm believer that there is always room for another processor who makes a good product that is better than the competition.
“You need to be set up with the right equipment and building for producing in a volume quantity,” he offers. “Because of the economy, we have found in the last year or two, convenience store owners are taking notice of the decline in their sales and are more open to quality products from smaller producers. These doors were not as open before.”
With an eye on the future, Luther has been mentoring an employee, Brad Pankey, who was recently promoted to CEO. But for now, Luther would still like to remain in charge of such hilarity as running tours to the two-seater outhouse that has doors for men and women, but no partition between.
But the real showpiece is the jerky plant, with 16 trucks of smokehouse, modern vacuum-packaging equipment and a production line that is designed to make…serious money.
Ever hear the one about the guy who laughed all the way to the bank? Steve Krut, an industry veteran, is a contributing editor writing exclusively for Meat&Poultry, specializing in small business issues. He resides in Marietta, PA.