MINI-CASE STUDY:
Effie’s Homemade/Effie’s Corncakes
In what year did your company begin operation?
Effie’s Homemade officially launched February, 2008. Before then we made small batches that we sold at holiday fairs. From the fairs we started to build the beginnings of a loyal fan base with our first product, Effie’s All-natural Oatcakes, giving us the confidence to take the product to the next level. We introduced our second product, Effie’s Crispy Corncakes, 15 months later.
How do you define success? Are you “there” yet?
We have different levels of success – product, sales and financial. We knew right away that we found a niche with our slightly sweetened biscuits that could cross the cookie and the cracker categories. It helped to have a unique and wonderful product from the start, but neither of us had any food retailing experience. That was our biggest challenge. We decided to grow organically and began by focusing on direct sales to independent stores. Within a year we were in 200 specialty food retailers. Today we are in more than 500 stores and can build on that success to start discussions with large, high-end retailers and distributors.
How long did it take to be successful?
We are still in start-up mode and keep looking forward to reaching the next goal. Every so often we take a breath and look back to appreciate what we have accomplished. We pat ourselves on the back before moving forward again.
How long did your initial roll-out for the above product line take (months or years?) and how much did it cost? ($5,000? $20,000?)What kind of funding was available to you?
We spent about one year testing the market, creating a business plan, and designing our brand and packaging before we were ready to launch. Our main challenge was scale a homemade product for large volume production. We spent a lot of time looking for the right equipment to do that. We also knew that we did not want to build our own commercial kitchen, and early on we decided to use a co-manufacturer model. Our start-up expenses were around $100,000 which we financed through loans from family and friends in addition to our own capital investments.
Please share your insights and advice for new to industry companies.
Do a business plan and really work the numbers. Be realistic about your expectations. The numbers don’t lie; there were a few times that we did not like the results of our financial model. We had to change our assumptions which in turn changed our priorities and helped us make some hard decisions.
Also, find people who have produced products in your category and ask them for advice. We benefited from the wisdom of a few special people who walked the same road to great success. People are willing to help so don’t hesitate to ask for advice. That being said, there’s no magic answer. Everyone has to find his or her own path eventually based on individual resources and situation.
How would you define your “vision”? Where do you want to be in 5 or 10 years?
In addition to creating high quality products our vision has a social purpose. We want to help bring people back to eating real food. All people deserve access to simple, unprocessed, nutritional food, but today it seems that only the wealthy can afford it. Making real food affordable to all is the greatest challenge with today’s food system, and it’s an integral part of our mission as we strive to balance our financial goals with social purpose.
