6. The Progress
As we approached 2016 and got settled into our new facility and process, we had a huge opportunity come our way … during that summer Intuit (QuickBooks’ parent company) created a competition among small businesses where they would give away a free super bowl commercial, worth $4.5 million!
All you had to do was enter so I did and didn’t think any more about it. A few months later I actually got a call that we’d made it through the first round. I didn’t actually remember what they were talking about when they first called…but then we made it thru the next round, and the next until GMommas was one of the top 10 business out of 16,000+ that entered.
Next thing I know we’re getting PR requests from all over the country, Intuit is sending Bill Rancic to Selma do some filming with me, and I would be flying out to San Jose for the Intuit conference where they would announce the winner of a life changing prize. Some of the other companies included: Chubbies, Death Wish Coffee, and 7 other awesome companies.
Long story short, we didn’t win …if we did I probably wouldn’t be writing this sad story :), but it was a great experience and we got some great media coverage from it.
As I headed back from San Jose and into 2016 I was feeling good about the future. We weren’t profitable yet and we were having to make major adjustments to our production, but we’d just received a lot of media coverage and we’re picking up 400 Walmart stores across the Southeast in a few months.
Going into our new facility meant we solved our current issue of packing the cookies, BUT it added a lot of overhead (i.e. rent, power, insurance, employees, maintenance, etc.) — and we were hit with a large price increase from the bakery. The avian flu hit a large portion of the chicken population so egg prices went through the roof… all that work getting our costs down by packing the cookies ourselves was basically wiped out for a period of time.
I didn’t have much of a choice but to keep going so I turned my focus to becoming profitable and the key to that would be volume… sell more cookies!
2016 was a blur! We only grew by 20%, but we made changes and progress in some key areas to help us (hopefully) take things to the next level.
A few things we did…
We scheduled and executed a GMP (Good Manufacturing Practices) Audit, and scored a 96 out of 100. This was a huge investment of time to put together and pretty stressful. If we didn’t make a 90 or above some of our largest retailers would no longer purchase our products. It was a huge accomplishment to be able to do this in such a short amount of time.
We adjusted our case box to get more product on a pallet — which cut shipping costs per bag considerably. We also just got better at our operation….basically increased our packing speed with small tweaks to the line, etc.
We also changed our sales strategy by letting our current broker group go and hiring a new group. They would help us manage and grow our business with our 2 largest distributors, KeHE and UNFI.
The new broker group also helped bring some additional volume with some obscure discount stores such as TJ Maxx, Marshalls, Home Goods, etc. It wasn’t the greatest business in the world as they beat you down on price, but it helped get our volume up to improve our economies of scale.
About the same time Cracker Barrel unfortunately kicked us out of their 800 store chain, which they claimed was because our sales were lower than their expectation. We later found out that that may not have necessarily been the issue…either way it was a massive blow to our business
I now needed to hustle and find another customer(s) that would make up for the sales we just lost.
I decided I would pursue any and all channels in my “own backyard” as it was the “path to least resistance” I thought. We’d seen our product do really well in a few cost-plus 10% stores and so I decided to pursue Associated Grocers of the South and Piggly Wiggly of Birmingham. These wholesalers sold to independent stores around Alabama and Panhandle of Florida. The retail price was much lower than chain retailers and the order volume was good. Another key fact is that larger retailers have scheduled times during the year when they review certain categories of products …but these wholesalers don’t …so in other words I could pickup the business now instead of waiting for another retailer’s category review.
We also wanted to pursue the C-store Market and to do so we’d purchased a Form Fill and Seal Machine with hopes of being able to produce a smaller grab-n-go size bag. The machine I ended up buying was originally built in China, refurbished in Canada, and had no manual. I have never seen a form fill and seal machine in operation and neither did my ops guy ….so we were basically in over our heads. We watched a million youtube videos and then eventually ran across a local guy that worked on these types of machines to come help us get it running.
I could spend a few pages telling you how many things we tried but I’ll save you the time. Basically finding the right relays and wires to communicate with another a totally different machine software / electronics….without a manual took an insane amount of time.
We also picked up a copacking project for a coffee company out of Bham. We packed roasted coffee beans into 2 oz bags and shipped 12,000 orders over the course of 2 weeks for them. It was a one time deal, but it helped us get our feet wet in co-packing and was pretty profitable as well. My plan was to continue pursuing this going forward.
Even with all the changes and production challenges as we headed into 2017, we felt we were ready to go to the next level.
Here were some of our goals for 2017…
- Expand our store count within Winn Dixie, Publix, Piggly Wiggly, and other Independents
- Attend food shows to grow our retail customer partners
- Reduce our costs of goods and production costs to increase our profit margin
- Kickstart and grow our C-store channel
- Introduce a new flavor
- Improve sell-thru velocity in Walmart
2017 was going to be our year!
Next: The Growth
If you want to read them all now here are the links: