The Greek yogurt aisle was already pretty crowded by the time Jesse Rudolph started pitching his wares to the market around 18 months ago. But chia - the superfood of the moment - proved to be his secret weapon.
Epic Naturals, LLC, co-founder Rudolph, who is still just in his mid-twenties and admits he felt out of his depth in some of his early meetings with potential customers, was nevertheless convinced he was onto something special with his 150-calorie pots with fruit and hydrated chia seeds at the bottom and thick Greek yogurt on top.
And the 'chia' factor coupled with the appealing packaging, nutritional profile (17g protein, 3g fiber) and brand name - 'The Epic Seed' - also impressed retail buyers and distributors, who gave the brand a shot in July 2013, and have since worked with the start-up to expand distribution to around 700 stores including Whole Foods, Sprouts and Safeway on the east and west coast.
You’ve got to start small and build slowly
But they probably would have balked at the proposed $2.99 price tag had the success of the Chia Pod - a dessert made with chia, coconut milk, and fruit which sells for $3.29 at Whole Foods - not proved that shoppers were willing to pay for this kind of product, Rudolph tells FoodNavigator-USA.
“The Chia Pods kind of primed them if you like, as before that there wasn’t really anything with chia to compare us with.”
As for distribution, while it might seem odd that a company based in Venice, California selected a manufacturer in New York to produce the product, this is not as unusual as it sounds, notes Rudolph, given that his first major distribution wins took him into Whole Foods stores in the northeast as well as his home territory in southern California.
Even major yogurt brands that have a presence on the west coast are still manufactured in New York, he points out, while if things take off in California he could look to work with a co-packer there in future.
“When we started we’d heard that it was sometimes possible to get a national roll-out with Whole Foods from the outset, and that seemed like it would be a really great way to start, but if that had happened we probably wouldn’t still be here.
"You’ve got to start small and build slowly, with small distributors and then larger ones.”
In addition to raising some capital, I want strategy and insight
As for financing, for the first year, it’s been possible to get by with money from friends and family, says Rudolph, who co-owns Epic Naturals LLC with a business partner. But it’s now got to the stage where he’s looking for outside investment, but also strategic support.
“At first I felt like I was in way over my head but now I understand a lot more about the natural food industry.Going to meetings with larger distributors has been super-interesting and I’ve also made a lot of useful contacts from going to trade shows such as Expo East and Expo West.
"But I’m still learning all the time and in addition to raising some capital I want strategy and insight."
After a month, the flavor had changed so we had to go back and reformulate
From a formulation perspective, the challenge has been getting the sweetness right (Rudolph was determined to keep sugar low) and the consistency of the fruit/chia base and the yogurt aligned so that the two don't seep into each other and ruin the appearance of the product, which has clear packaging so shoppers can see the chia seeds, he says.
“We spent a long time with the fruit supplier and the yogurt co-packer on getting the consistency right. As the yogurt is warm when the pots are filled, if the base is too thin, the yogurt runs into it and the base goes up the sides.
“We also spent ages on the sugar. I was very particular about this because a lot of products out there are just way too sweet. Our supplier kept saying 'consumers expect this level of sweetness' and we would go back and say we literally want 60% of the sweetness [in this sample].
“We also found that after a week the product would taste like this, and then after a month, the flavor had definitely changed so we had to go back and reformulate.”
You go in there thinking you’re giving them product and you expect money in return, but you end up owing them money
As for rookie mistakes, everyone makes them, but luckily so far, he’s not made any major missteps, says Rudolph, although he's had a few sleepless nights.
“The thing that worried me was if it doesn’t sell straight out of the gate, how costly is it going to be? You definitely need solid sales from the start.”
Like most entrepreneurs, achieving a work-life balance proved elusive in the early days as Rudolph tried to keep costs down by doing everything himself; at one point he was doing two in-store demos a day in southern California on top of the day job.
Meanwhile, factoring in all the costs when dealing with distributors is a challenge for any start up, he says.
“You go in there thinking that you’re giving them product and you expect money in return, but you can end up owing them money.”
Click on the link below to read about some of the challenges for start-ups from our recent Beverage Entrepreneurs Forum :