Muncie entrepreneur seeks to expand barbecue sauce business – Inside INdiana Business

What started as a hobby for Muncie native Lathay Pegues—recreating his grandfather’s barbecue sauce recipe—has become a burgeoning Indiana business.

Pegues is now the CEO of JohnTom’s BBQ, which he founded in the mid-2000s, and in the last decade, has seen its products sold in stores throughout Indiana and used in major venues in the Midwest, including Lucas Oil Stadium in Indianapolis, Notre Dame Stadium in South Bend, and at Churchill Downs for this year’s Kentucky Derby.

“I couldn’t have imagined that this business would go the route that it did,” Pegues said. “And that was really just a result of planting seeds years ago, meeting the right people, cultivating relationships.”

As business continues to grow for the company, Pegues is now looking for even greater distribution both regionally and nationally, with plans to bring more people on board.

Origins of JohnTom’s BBQ

JohnTom’s BBQ is named after Pegues’ grandfather, John Tom Branson, who developed his own secret barbecue sauce recipe. Branson died when Pegues was 11, and since he never wrote it down, the recipe was thought to have died with him.

But Pegues said he got the idea to try and recreate it while studying at Indiana University.

“As a family, we knew ingredients he used, but we just didn’t have a formula. So I thought it would be cool and fun to reverse engineer his recipe,” he said. “And so this started this hobby that I carried many years. It took me about four and a half years to develop what people know as JohnTom’s Original.”

After graduating from IU, Pegues became a TV news broadcaster in Quincy, Illinois and later Milwaukee, Wisconsin. He continued to make his grandfather’s sauce and even created a second flavor, known as Sneaky Hot.

Pegues would give the sauce to friends and neighbors, who began planting the idea in his head that he should start selling the products. Then, a major moment in his career happened.

“We actually received the news that we were all losing our jobs because they were closing down the news operation at my station. And that’s when I really started considering doing something with the sauce. So I thought about it. I researched, where could I make the sauce? Where do you get bottled, all that stuff, and realized that it was actually quite possible.”

After a conversation with his wife, Pegues decided to move back in with his mother in Muncie and start his new venture.

Slow beginnings

Pegues tapped two people close to him to get his company going. First, he contacted his cousin, Terrell Cooper, who was living in Orlando and working in marketing. Then, his close friend and fraternity brother, Rodney Robinson, came on board.

The trio found a kitchen incubator in Madison where they learned how to upscale the manufacturing of their barbecue sauce products. In July 2006, just as his job in Milwaukee was coming to an end, the company prepared to introduce its sauce at the Indiana Black Expo in Indianapolis.

It was a hit.

“The exposition hall was open Friday, Saturday, and Sunday, and by Sunday morning, we had sold every bottle that we had except [one] of each flavor that we wanted to keep. It actually almost turned into a live auction at our booth, but we said, ‘No, we’re going to keep these bottles,’” Pegues said. “And that’s when we really knew that we have a product. We have a marketable product that will sell.”

The next hurdle, Pegues said, was figuring out how to sell the product at a larger scale. The company had been selling bottles to friends, but they didn’t know how to secure accounts to expand their presence.

“From 2006, those first years were, we were just kind of treating it like a hobby. We were all still in our careers. I ended up working for the local newspaper [in Muncie], and those guys are still in their careers,” he said. “In November 2014, I walked away from my career, and I jumped into this full time, and probably a month later, we landed a deal with Ball State University.”

At that point, JohnTom’s BBQ had one solid account: Rick’s Cafe Boatyard in Indianapolis. But Pegues knew that working with Ball State University would be a turning point for the company. However, the university’s executive chef said he wanted to use the company’s sauce, but they needed a distributor.

“He actually reached out to one of their distributors, Piazza Produce, told them that they had a local sauce here that was great. They want it, but we don’t have a distributor. He said, ‘If you picked them up, we promised to buy X amount of cases from you a year,’ and Piazza absolutely jumped on it. And now we have a distributor, and that’s when we really start to see things turn around.”

Cultivating relationships

Since securing a deal with Ball State, JohnTom’s BBQ continued to add accounts, and Pegues said much of that is due to establishing relationships with hospitality company Levy Restaurants and food service and facilities management company Sodexo.

The company’s sauce is now made at a co-packing facility in Indianapolis, and in just the last three years, JohnTom’s products have been used at Lucas Oil Stadium and Gainbridge Fieldhouse in Indy, as well as the Indianapolis Zoo and at Notre Dame and Purdue University.

Just last weekend, the company’s sauce was rolled out at Memorial Stadium at Indiana University, and it will also be used at the new Fishers Event Center when it opens later this fall.

Pegues said the growth in exposure is the result of the chefs that he has met over the years, who have bought into the company’s product.

“At the Fishers Event Center, the chef that’s bringing us in there was the chef who was at the Indianapolis Zoo when we started with them.” said Pegues. “That was the case also with with Lucas Oil Stadium. The person who brought us in there had been at Notre Dame. The relationships are just key. They’re important to maintain, and it’s really been the reason why we’ve been able to grow to where we are now.”

Looking ahead

Pegues has lofty goals for JohnTom’s BBQ, with the ultimate goal being to turn it into an international brand.

To start off on that journey, Pegues knows that he needs to add more staff. The company currently has two employees who travel to various farmers markets, trade shows and other events to promote its products, and Pegues recently hired a Ball State student to handle the company’s social media marketing.

“The challenges that I’m facing now is that our business has ramped up, and it’s getting a bit much for me to handle by myself. So we are at that point where we need to figure out a couple positions that we need to hire some people just to take the load off of me, and really to be able to do some things that I’m finding difficult to do, because it’s just me.”

In addition to the major sporting venues, JohnTom’s BBQ products are sold at stores such as Kroger, Target and Fresh Thyme throughout Indiana.

But expansion is still top of mind for Pegues. The company has started to see its sauces used at venues in Ohio, Kentucky and Illinois, but he is targeting national distribution next.

“We are in discussion with an outfit that could give us very strong national presence. Of course, there are a lot of details that have to be worked out, but we have very good conversations going on with them. Hopefully this time next year, we can boast that we now have a strong national presence.”

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