Jake Rheude, a junior in marketing and entrepreneurship, believes in what he calls “The Cortés Theory,” which refers to a peculiar decision made by Hernan Cortés during the Spanish conquest of the Aztec Empire.In front of his entire army, Cortés scuttled his ships upon reaching the shore.
“He said, ‘You’re either going to die trying, or you’re going to succeed.’ And they succeeded,” Rheude said. “I have no other source of income this summer, so I’m either going to die trying or I’m going to succeed.”
This theory explains why, instead of seeking internships and fellowships to fill the summer months, Rheude has his sights set on developing his own company, SummerSett Foods.
The Cincinnati, Ohio, native grew up snacking on buffalo chicken dip, which is a simple mix of cream cheese, chicken, buffalo sauce and cheese. Upon reaching Hess Hall during his freshman year, however, Rheude realized he would be unable to make his own dip in the dormitory.
“I only had a microwave and a fridge in my room, so I drove to Kroger because I assumed someone made frozen buffalo chicken dip that I could buy,” he said.
He was wrong; none of the aisles held a microwaveable buffalo chicken dip. He could not even find chili dip, a staple of his Ohio groceries.
“After that experience, I realized that Cincinnati is the only example of companies providing frozen dip in grocery stores,” Rheude said. “Every other dip product is either in cans or in the dairy section.”
An idea was born, and Rheude and his original business partner, Cedric Brown, immediately began developing SummerSett Foods. Their product, Tennessee Bills Buffalo Chicken Dip, provides exactly the snack Rheude searched for as a freshman: a microwaveable buffalo chicken dip. In three years at UT, SummerSett Foods has won or won money from every business competition they entered, including the 2011 Vol Court and the Boyd Venture Fund.
After business competitions came big-time investors, and Rheude secured a $155,000 investment from an angel investor last semester. He is currently in negotiations with Pilot, Food City and Kroger, and plans to have his dip in local stores soon.
“Hopefully in the next two to three months they’ll be on shelves somewhere,” Rheude said. “That’s the hardest part, because once we are on shelves it’s easy to go to competing stores.”
Eventually, he hopes to be acquired by a larger corporation. In the food industry, notorious for frequent acquisitions, small companies that manage to make ripples in the sales of bigger brands often receive million-dollar buy-outs.
Rheude plans to grow SummerSett enough to garner that million-dollar interest.
“It’s the kind of thing where if I can get in 25 percent of grocery stores across the nation, I’ve become extremely sellable to a big brand,” he said. “And that’s the whole goal.”
Pursuing his goal with SummerSett keeps Rheude constantly on his phone in between marketing classes, fraternity meetings and wrestling practices. Though he said classes get in the way of making money, he noted the perspective his marketing classes give him on package design, especially after running into a market dilemma.
“I eventually went to grocery stores and started walking up to random women in the freezer aisle,” he said. “Every single one of them said they would not buy my product.”
The women cited nutrition concerns about sodium, and 90 percent said they would rather showcase their culinary talent with personal recipes.Before Rheude could panic, however, a man interrupted one of his interviews, saying, “That sounds like it would go great with beer.”
“Then he walked over to the hot pockets and started shoveling them into his cart,” Rheude recalled. “That was the light bulb switch; I realized who my target market was. It was these men who needed easy snacks and did their own grocery shopping.”
Adrien Raucoules, a sophomore in mechanical engineering, fits into that market. Although he has a meal plan through UT Dining, Raucoules said his weekend eating options are limited. Upon hearing of the buffalo chicken dip, Raucoules was sold.
“I would totally eat that,” he said. “I would probably eat it right now.”
With guys like Raucoules all over Knoxville and the “Cortés Theory” providing plenty of motivation, Rheude is confident in his future.
“I’m trying as hard as possible to get this generating revenue before I graduate so that I don’t have to go work for someone,” he said.