In 2018, Michael Pan cashed out his 401(k) and took on several loans to officially launch Pan’s Mushroom Jerky. Two years and one Shark Tank appearance later, Pan’s product finished 2020 with nearly $2.3 million in sales—how did he do it?
At our latest FI Live, Michael Pan told The Food Institute about his personal connection to the product, what it took to scale Pan’s Mushroom Jerky, and how he navigated huge growth during the COVID-19 pandemic.
Pan’s Mushroom Jerky makes exactly that, using shiitake mushrooms that yield a delicious umami taste with a meaty texture. The recipe is an old family one that Pan discovered in 2006 while visiting a cousin in Malaysia.
“[My cousin] put a bowl of food on the table and when I reached in to try it, I thought it was meat,” Pan explained, “but I was really confused because I knew my cousin was vegetarian buddhist, and that’s when I quickly found out it was a mushroom.”
That first taste of mushroom jerky opened Pan’s eyes to a culture that had been mimicking the taste and texture of meat for a long time. He fell in love with the product, knowing he had found something he wanted to share with the rest of the world.
Timing is everything
In 2006, when Pan discovered his family’s recipe, the market wasn’t ready for a plant-based mushroom jerky. Pan’s started as a self-funded side business and it wasn’t until 2016, when a perfect storm started to form, that the timing finally felt right for expansion.
“At that time, ‘vegan’ was turning into ‘plant-based’ and becoming more mainstream,” Pan said. Simultaneously, people started seeking out non-traditional jerkys and mushrooms had a sort of renaissance, as their health benefits as a meat alternative became widely recognized.
“It was just this happy natural progression for my own entrepreneurial journey but also with the timing of the market that those three things happened all at once,” Pan explained. “It helped us get out of the gates pretty quickly once I dedicated myself full time to the business.”
Huge growth during COVID
Once he was confident that the market wanted his product, Pan decided to take it to “Shark Tank.” He appeared on the show in November 2020, during the first year of the COVID-19 pandemic, right before the holidays.
The sharks loved Pan’s Mushroom Jerky and the company received a $300,000 investment from Mark Cuban for an 18% stake, in addition to a wealth of positive exposure.
“We ended up selling about $1 million in sales online in about four days,” Pan said. “We enjoyed it for about maybe two days and then we shut the website off.”
Pan’s was a team of only ten people at the time, so the company immediately started hiring. Building a customer service team became an urgent priority to communicate expectations to all of Pan’s new customers while they scrambled to fulfill orders.
While scaling quickly is challenging in its own right, scaling during the height of the pandemic posed entirely new challenges.
“My biggest goal was to obviously keep our staff safe,” Pan recalled, “but also, as a business, it was, ‘how do we do this without shutting down operations?”
Pan’s staff wore masks, they distanced, and tried to isolate people whenever they could. They operated 24 hours a day to spread people out, and it worked—they never had to shut down.
The present and future of Pan’s
Now, as pandemic-related safety concerns have eased, Pan’s is trying to establish a sense of normalcy in a business that grew up during the COVID era.
“We’re not necessarily built for efficiency,” Pan said. “We would actually tell people not to talk to each other, and now we’re actually having to bring them back together… it’s a positive change but challenging nonetheless.”
These days Pan prioritizes checking in with his staff and trying to build trust among a team that was isolated from each other for so long. “I don’t think that ever ends,” he said, “you always want to try and make the work environment as solid as possible.”
Looking ahead, Pan’s plans to stay true to its core values of reducing meat consumption by making delicious and nutritious foods from mushrooms. With a versatile hero ingredient, the possibilities are endless.
“Who knows where we’ll go,” Pan said. “I think that’s what’s exciting.”