Bakery pushes own brand after years of white-label production
One way to counter the effects of the recession is to start a retail brand. That’s what entrepreneur Karen Trilevsky did.
The founder and CEO of FullBloom Baking Co, a 22-year-old natural foods bakery outside San Francisco, started rolling out her own line of branded snacks in 2008, after years serving as the behind-the-scenes regional baker for big customers like Whole Foods.
Trilevsky, 54, admited it’s been tough to create a market for new products in the crowded natural and organic foods space, which commands premium pricing –- sometimes as much as 50 percent –- over conventional grocery items. With all the belt tightening, she said customers are often reluctant to try new things.
“The grocery stores seem to be much more reticent to make changes,” she said. “There’s no risk taking going on.”
Even so, FullBloom has been able to carve out shelf space for its products, offering up snacks customers can’t find elsewhere in this premium niche of food retailing.
“By having these products more unique, it does enable us to price them where they belong,” said Trilevsky, whose lineup includes items like Kuko Bites, a chewy wheat and dairy free snack resembling macaroons, and Toasted Oatmeal Bars, which include whole grains, cherries and raisins.
Will chocolate chip cookies make the branded cut? No way, she said.
Betting the farm on your customers
Organic dairy farmer Dante Hesse is hoping the customers who lap up his milk by the quart at local New York farmers’ markets will also invest in his future.
What started as a series of “low key” one-on-one conversations with customers at local farmers’ markets near his Ghent, New York farm, has escalated into a serious attempt to raise $850,000 – in as little as $1,000 increments – directly from his dairy-loving consumers.
“I learned pretty quickly that there was a lot of interest, but I also needed to find some council who could tell me how to do this legally,” said Hesse, who founded Milk Thistle organic dairy farm with his wife, Kristin, three years ago. He intends to use the bulk of the money to build an onsite processing plant that will help him ramp up production and diversify into making other milk-based products like yogurt, butter and ice cream.
“If it has to be 850 people at $1,000 each then that’s what we’ll have to do and I think we could get it,” said Hesse.
Hesse knows the math behind the milk and feels if he’s properly capitalized, he can move into more “value-added” products like butter, yogurt and ice cream, where the gross margins are 20-30 percent higher.
According to the Organic Trade Association, sales of organic milk in 2007 totaled more than $1.3 billion in the United States. While organic accounts for just 3 percent of the U.S.’s total milk sales, it has been growing at an annual average rate of more than 20 percent over the past decade (last year it dipped to 10 percent).
A smart out of the box thinking entrepreneur, what a clever idea to use your products to build trust in the business and to raise cash.
