Case study: OK! Kombucha

Highlights

  • Mentoring a young company
  • Making a wealth of introductions
  • Creating co-manufacturing opportunities
  • Stimulating sales

Situation

OK! Kombucha is a young company that we encountered in our role as volunteer mentors for Futurpreneur Canada, a national non-profit organization that provides resources and mentoring to young entrepreneurs. Erik and Safa, both in their mid-20s, started the company themselves.

Located in Toronto, OK! Kombucha is a young brewery producing a line of  beverages designed for customers who don’t love the taste of kombucha, but appreciate the health benefits. The result is a line of kombucha drinks with enjoyable, refreshing fruit juice taste profiles.

Erik and Safa are currently producing their kombucha in their very own Toronto facility. Their product is excellent, but the pair needed help mapping out a clearer trajectory to help scale and grow their business more efficiently, especially since the costs of equipment and space are not yet commensurate with sales. They also needed to get connected to the right people!

Solution: Sales

To help OK! Kombucha with their sales strategy, we have a 1-hour conference call every week in which we go through different selling scenarios. We have been making rapid progress. Our long-term goal is to help them to plan their business far into the future.

At the Canadian Health Food Association trade show in September, we invited OK! in to sample their kombucha at our booth. Through the show, Erik and Safa set up meetings with brokers and distributors. We are now in the process of helping them select the right brokers and distributors for their business. Some brokers can help short-term, others long-term: few brokers concentrate both on selling into independent stores and the big retail chains. It’s a tough choice. We have helped the pair to better navigate broker conversations to figure out how brokers can work ‘for’ them rather than taking what is first offered. We’re also ready to set them up with a company that wants to start co-exporting, boosting sales.

One big issue that Erik and Safa found with sales is that the Toronto market is quite competitive. Since a healthy portion of their revenue comes from selling directly to companies who offer their kombucha to employees, we suggested thinking a little outside of the Greater Toronto envelope: Barrie, Ontario is exploding right now and it’s underserved. In the same way, venues such as the Air Canada Maple Leaf Lounge at Pearson Airport offer possibly untapped opportunities.

Solution: Production

We have been helping OK! move in two directions simultaneously with their production strategy. One opportunity is to move OK!’s equipment into a production facility occupied by another client of ours that produces juice. Since OK! already adds cold-pressed juice to their kombucha, it looks like a natural fit.

On the flip side, we have also helped OK! to move towards adding revenue streams. So far, they are on their way to securing a co-production contract with another client of ours that makes a function tea beverage.

The big question that Erik and Safa need to answer in the medium term is whether to take on more co-production contracts like the one they have with the tea company. We are assisting with the cost analysis to help them sort out what kind of business they would need in order to justify taking on co-manufacturing contracts.

A helping hand

Everyone needs a boost when they are starting out, as well as a ton of connections. A consulting relationship doesn’t need to drain your resources when you don’t have many!

If you’re a young growing company and could benefit from our expertise, let us know. Chances are good that we can steer you in the right direction.

Luisella: Not a Nutty Business

Highlights

  • 50% ingredient cost savings 
  • A slam dunk success!

Situation

Patricia Di Chiara, a graduate from the entrepreneurial program at Georgian College in Barrie, Ontario, won a prize for her business plan for a new kind of chocolate spread. After reading an article about it, we reached out to her. The mother of two and recent émigré from Italy let us sample her product, which was delicious.

Months before, Patricia had sent her kids to school with Nutella on bread, as she would do in Italy, and got a letter back from the Principal. Naturally, she went looking for a replacement product, with no success. Bingo! The idea behind Luisella Chocolate Spread was born.

Patricia is also a chef, so with some experimentation, she whipped up a batch made with sunflower butter. Luisella is not only nut-free but also palm kernel oil-free, so it’s more nutritious and better for the environment. With a winning recipe in hand, Patricia set out to source ingredients. She first sourced ingredients through a food services distributor that the College used, which was expensive.

Solution

When The Greater Goods came on board, were able to source ingredients and reduce costs by approximately 50%. We source all the raw materials, negotiate pricing with the vendors, and forecast availability and pricing to safeguard production. 

We also helped with the formulation. Patricia was using real chocolate for the recipe, which tasted fantastic. But nut butter and chocolate have different types of fat, which tend to separate and cause blooming (a white colouration). So we brought in a food science consultant who solved that problem.

Next, we helped sort out manufacturing. Patricia had found her own manufacturer, but after a few conversations, the manufacturer admitted they were not willing to make the necessary
investments in their production line. Leveraging our network, we found a manufacturer who was a perfect fit and very cost-effective. 


 
For sales, we connected Patricia with an international broker to export, and are helping her to get ready for a big-box retailer in Canada & the US 

Results

Production has begun and sales are clipping along briskly. The ingredient supply chain is secure and costs are low. The manufacturer is performing swimmingly.