In 2004 two young entrepreneurs burst on to the health juice scene with a fresh premium fruit juice and big ambitions. They were determined to take on Nudie, which had in 2002 taken on the established juice producers and fruit juice bars with an innovative super-premium bottled fruit juice and a fun, irreverent branding campaign.
Entrepreneur Emma Welsh, founder of Emma & Tom, predicted her Melbourne-based company would make sales of $3 million in its first year. It was a big call, especially as the giant Berri decided to launch its own premium fruit juice a month after Emma & Tom.
Two-and-a-half years on, Welsh has been finding the going tough and doesn’t even want to talk about revenue, saying original first-year predictions were way too optimistic. Yet Welsh, now 41, is still determined to build a big business and is set to launch a range of new products.
“When Tom (Griffith) and I started Emma & Tom back in 2004, we were very focused and had a very clear plan. Both of us had come from corporate backgrounds and done a variety of jobs.
“I was an agricultural scientist but always wanted to run my own business, so I deliberately did a wide range of roles through my 20s and 30s in preparation, working in large corporations during the dot-com era.
“We had enormous confidence. We didn’t take venture capital; instead we used $500,000 of our own savings. After a year of research, looking at what was available in other countries and making juice in my kitchen, we had a product that tasted fantastic, packaging that looked good and appealed to the consumer.
“We were very clear on who the consumer was. We had found cafes and delis that would stock us and worked out our price point ($3.50) which was more than the price points of cheaper products ($2.50).
“Our brand and bottle looked different and we had added botanical ingredients, which appealed to health conscious consumers.
“We started walking the pavements, presenting every shop with a six-pack holder and asked them to taste it, returning in three days. We focused on selling into stores owned by people like ourselves. That way we could have direct interface with the customer and it was good brand association.
“We also gave away free samples at amateur sporting events such as fun runs, ocean events and gallery openings. It was difficult to guess the results but we felt that if we gave away juice to 2000 runners we knew than every single one of them had tasted it; if we put an ad in the paper it was far less targeted.
“We did use the media. We felt we didn’t have good media contacts so we used a PR firm and had them on a retainer that cost about $1500 a month.
“We have let that lapse and if you are not reactive you go off the radar. So we have make the effort to be newsworthy again as we have to keep the brand visible. We also had to work out which of our point-of-sale pieces worked. We thought our look wasn’t shiny but our brochure got lost on the counter so we laminated it, made it shiny and now it looks good on the counter standing upright.
“In a way we were lucky. It was also easier to get into the stores where Nudie had been. They had raised a lot of venture capital and spent it feverishly which gave them a lot of brand awareness and they trained the route trade to keep juice like milk. But what they didn’t do was execute well and we made sure stores didn’t run out of our products.
“We made lots of mistakes. You have to be really careful about spending lots of money. There are lots of proposals and we learnt to judge each one on its merits. We are still a young company and need to do a lot more work building the brand.
“We are in 1000 stores at the moment and we estimate there are another 1000 stores we can target. We are cash flow positive, as long as our suppliers pay on time. Our business model is working. We have four employees and outsource everything else, including printers, graphic design, web design, photographers, manufacturers, distributors. We are really a hub co-ordinating a lot of contractual and casual staff. While it lowers costs, you don’t have 100% control so you need to depend a lot on relationships to stay in touch.
“Two-and-a-half years later? Nudie is moving into groceries (joining with Nestle to do ice creams and yogurts) while the two products Berri launched have been withdrawn – at least, I haven’t seen them. So that has left us focusing on the premium café market
“In two months, we are launching a range of iced teas. Some companies use extracts but we are making ours from a brew.
“As any entrepreneur knows, there are ups and downs and it is the potential disasters that worry you. At a talk the other day, I listened to an entrepreneur with $100 million turnover and he said he still felt he was on a wobble board about to be pushed off.
“People say it takes twice as long and twice as much money to build a company. It actually takes three times as long – and triple the money. But entrepreneurs are optimistic by nature so we have to think it will go well. But do I wish I was back in a large corporate? No. What I have now is freedom. Besides if we weren’t doing this we would be running another business.
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