War zones to Walmart: Memphis veteran's queso company battles its way into big box retailers
War zones to Walmart: Memphis veteran's queso company battles its way into big box retailers
Arbo's Cheese Dip has landed distribution deals with Walmart, Kroger and Hy-Vee
Ten years ago Andrew Arbogast was in a war zone. Today, he’s in Walmart.
The former apache pilot has landed distribution deals with some of the biggest brands. 200 retailers including Walmart and Kroger carry his queso.
This fall the father of three will roll out his product in Hy-Vee. The Iowa-based business will stock all of its stores with the Memphis-made dip.
Grocers aren’t the only ones gobbling up Arbogast’s spicy, speckled goo. Celebrities like Jelly Roll sing his products praises.
The aviator insists there isn’t a recipe for success. Entrepreneurship is navigating one sticky situation after another.
Deploying the idea
In November 2020, Arbogast and his friends sat around a fire pit. They lamented their lives. Arbogast hated his job. He felt unfulfilled and isolated in his remote role.
“My PTSD worsened during the pandemic,” he says. “I felt more alone than ever.”
One jokingly suggested he quit his job and start selling his fathers cheese dip. He couldn’t get the idea out of his head.
Charlie’s cheese dip was more than a savory snack to Arbogast. As a boy, it was family bonding. He and his brothers crowded around bowls of queso during breaks from boarding school. In college, it was a dorm room delicacy. It drew everyone in and around the residence hall. And in Afghanistan, it was a meal he made and shared before late night missions.
Queso was the connection he was craving.
The next morning, Arbogast mentioned the idea to his wife. He wasn’t “an idiot”. He knew he couldn’t go full time at first, so he suggested it as a side hustle. Erin gave him the green light.
Arbogast commandeered their kitchen and began pedaling his father’s creamy concoction from their front porch. He sold 16 oz containers for $5.
Friends and family were his first customers, but they weren’t his only fans. The then-father-of-two grew a following on Facebook and Instagram. It wasn’t long before two local bars — Carolina Watershed and Zinny’s — also became buyers.
The operation quickly outgrew his home. Arbogast began to look for a new lab.
In April, a “buddy with a breakfast spot” offered up his kitchen. Each afternoon when the eatery closed, Arbogast and his friends descended upon the diner.
The commercial space enabled them to supercharge production. The crew cranked out 200 gallons of queso — enough to fill four outdoor trash cans — each week. It was double the amount of dip they had made inside his home.
There was much to celebrate in May. The 15th was Armed Forces Day. Arbogast enjoyed the holiday and “selling out his first store.” A local Memphis market organized an event to support veteran-owned brands.
The retailer offered Arbo’s a permanent residency.
High Pointe was the first grocery store, but it wasn’t the last. That year, Piggly Wiggly, Food Giant and a dozen other independent retailers added his savory appetizer to their shelves.
“By the end of 2021, we were in about 100 locations total,” he says with a smile.
Operation scale Arbo’s Cheese Dip
The new year brought new zeal. Arbogast was eager to scale his operation. If he was going to grow, he couldn’t continue to “cook underground”.
Arbogast began courting co-packers. He approached fifteen — not one bit. He felt hopeless.
“I wasn’t big enough for any of them to take a chance on,” he tells TENNBEAT.
In August, he met with a manufacturer in Tupelo, Mississippi. The mom and pop shop agreed to partner.
“I remember breaking down and crying,” he says nostalgically.
That month he also went all in on Arbo’s. Four of his friends invested in the company. The seed fund was enough to give him a full time salary and quit his job.
He felt like a champion, and in a way…he was. In November, he won third place at the World Cheese Dip Championship in Arkansas.
Eight months later, in July 2022, he called Kroger. They answered and offered him 100 stores. There was one condition: he had to add two skus.
“Most grocery stores won’t pick up a product unless there are at least three offerings,” he explains.
Arbogast became a mad scientist. He fashioned two new flavors in two months.
Queso Blanco and Spicy joined Original in the Arbo’s food family. Kroger started stocking the products in September — just in time for football season.
Sticky situations
Soon, things started to sour. Product wasn’t moving, and Arbogast was losing money.
“We were selling our dip for $6.99. Market rate was $4.99,” Arbogast explains. “We couldn’t drop the price. Our production costs were higher than most brands because we were working with a smaller manufacturer.”
People didn’t want to pay a premium for an unknown brand.
“Small tags like “local” or “new” cost money. It was money we didn’t have,” he says.
Business went from bad to worse. That winter Arbogast began to receive reports of mold.
“It wasn’t every customer. It was here and there, but it was unacceptable.”
Reconfiguring the recipe
Arbogast knew he wouldn’t make it with the margins or the mold. In March 2023, he made the difficult decision to press pause on production.
He reached out to a Memphis co-packer. The company had rejected his plea to partner two years prior. They reconsidered and helped him reconfigure his recipe, adding a natural preservative to ensure a longer shelf life and quality control.
Larger and more established, the outfit was able to cut production costs. Those savings were passed along to shoppers. Arbogast was able to drop the price by a dollar.
The recipe wasn’t the only revamp. Arbo’s logo got a new look.
“It wasn’t obvious that we were veteran owned. That’s a major selling point,” he says. “People want to support veteran owned brands, but the old containers didn’t communicate that we were one.”
Landing 4 big box retailers
October was super. Four supermarkets — Publix, Harris Teeter, Schunucks and Walmart — agreed to take a chance on his cheese dip.
But Arbogast quickly learned getting into grocers was one thing — selling it was another.
“Someone told me never release in more than one retailer at a time. I didn’t listen and I learned the hard way,” Arbogast says, very self aware. “You don’t have the time or money to invest in multiple launches at a time.”
Schnucks quit carrying Arbo’s shortly after picking it up. It wasn’t selling. Harris Teeter told him they’d be open to ordering again, but they had to put the relationship on ice.
“Each store is different and there are a million variables. Where is your product going to be placed? What products are you competing against? Do they offer sampling?”
Small tags, big difference
He wasn’t exactly winning in the other stores either.
“I was on life support,” laughs Arbogast.
In May, he threw a hail mary. He purchased “new tags” to be placed near his product in Walmart.
“You aren’t just paying for pieces of paper. Supermarkets charge you a separate fee to have them. That fee isn’t cheap” explain Arbogast.
The small tags made a big difference. Sales in Walmart shot up 200-percent in 30-days. He added the tiny but mighty tabs in other stores. New investors made it possible.
“A seasoned CPG (consumer packaged goods) business approached and invested in the company this year,” says Arbogast. “With their partnership, Arbo’s will have its biggest year yet.”
More than money
But for the Commander and Cheese success is about more than money.
“I spent 10 years in the army and did two tours in Afghanistan. I’ve had some really dark days,” says Arbogast with crocodile tears running down his face. “My mission with Arbo’s is to bring people together. People are love, and love is powerful. It can help heal some of the deepest wounds. I know because it’s helped heal some of mine.”
