In episode 77 of Amplify Your Business, Lance welcomes Andrew Kinnear back to the show to talk about his non-dairy frozen dessert business - Yellofruit! Derived from bananas and entirely plant-based, Yellofruit wants to meet the needs of people who are looking for an ice cream product that is entirely vegan and nut free. Watch as Andrew shares his story of founding Yellofruit, his unique approach to managing strategic partnerships, and how his business encouraged awareness and trial during the COVID-19 pandemic.
(0:55) What is Yellofruit?
Yellofruit is a non-dairy frozen banana dessert. We're an entirely plant based ice cream, and our goal is to meet the needs of people who require a different ice cream product. Not everyone likes or can eat the other options on the market (coconut and cashew-based products, etc). Being one of very few banana frozen products out there with three great flavours has enabled us to carve out our own niche in this category.
(2:09) When did you get started?
We started a few years ago, by experimenting in our home with frozen bananas as food for our young children. We added other things over time, and started to realise that we had a great idea for a business on our hands. The truth is, there's a lot of science that goes into making ice cream! Dairy is easy to work with because it has a lot of the chemical components needed to make ice cream, but bananas don't have that. We had to find a plant based version for each of the components in ice cream, which required us to work closely with food scientists to take our idea to the next level.
We first launched in about 100 stores in April 2019, and have been selling since 2018. Two years before that, we spent a lot of time developing the product, building our brand, raising money, and learning. I was also working full time during this period. While this works out to about three years of development, the work ramped up a lot once we had stores put Yellofruit on their shelves.
(6:14) What kind of lessons in product development and ideation did you learn during this process?
We learned a lot around running a business. Get great help where you need it - find an accountant that you can connect with and who can explain things to you clearly. Get a good lawyer - you don't need one on retainer, but you should at least have a number to call! You don't have to know how to run a business, but be prepared to learn those things early on and bring on professional help where you need it.
We also learned a ton about product development. When starting a food business, you need to decide what hills you want to die on. We wanted to be sugar free, nut free, and really do everything, but we realised it's more important to us that our product scoops like ice cream and feels good to eat than doesn't have sugar. Compromises like this will come up all the time, so pick which ones you want to fight for carefully. Another lesson is that once you start spending money on your business, you're committed. If you slow down, you can miss opportunities and the landscape may change. Stay focused and on a direct path.
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(10:18) So you went into 100 stores when you launched in April 2019. What was that moment like and how did you prepare for it?
It was a huge win! We actually had a "yes" already, but for a later launch. When we got this offer from FreshCo. we were thrilled, but it didn't change as much for us because we were already preparing for a launch. I think this goes back to the lessons we learned about not missing opportunities - when we pitched to these stores, we were pitching a product launch. I let buyers taste our product and experience our brand, but I prepared for the time they would need to make a decision by saying "here's our amazing product, we want to launch it in the spring", for example. I didn't want inventory sitting in a freezer waiting for a yes. We sold the dream first, and then scaled up.
(12:00) How do you "sell the dream"?
This involved lots of in-person meetings. I was fortunate enough to make connections that enabled us to get meetings with buyers, where I provided samples (in plain packaging) and presentations that introduced our product. For that initial deal in April, I was presenting to the category director of natural foods in that market division and some members of their staff. I'm sure everything has changed a lot since then, but back then it was all about sharing the marketing we were going to do, the benefits and advantages of our product, and having them try the samples in person. It was very friendly and conversational. After this, we got into the technicalities around distributing and selling our product.
We were also fortunate to already have a great distribution partner with experience in the industry who helped us learn the ins and outs of the business. I cannot stress enough how instrumental partnerships were to our success. Don't just find good partners, but be a good partner.
(14:34) Can you expand on that? What does it mean to be a good partner?
I try to add a layer of "business empathy" to our partnerships. In the case of our distributor, this meant understanding what challenges they faced, what makes their life hell, and what is great for them. I then took this into account when building Yellofruit, because their success translates directly to my success. Of course, that empathy is going to be very different depending on the partner. For our manufacturer, empathy with them is all about storage. They didn't have as much storage space on site, so we went and found easier storage for them. This has helped me maintain positive relationships and elevate everyone's business along the way. The more I understand my partners, the better customers we can be and the easier it is to ask for help when we need it.
(17:25) Let's fast forward to the beginning of COVID. What pivots did you need to make?
Our biggest challenge was awareness and trial. Getting new people to hear about our product and try it out became incredibly difficult, especially because we operate in a niche category in a niche market. Prior to COVID, events and sampling were our most effective tactic. Of course once the pandemic hit, this got squashed, so we needed a new approach. This led to Freebruary!
We spoke to Andrew about Freebruary in episode 75 of Amplify Your Business. Watch that episode here to learn more.
(24:15) Would you ever consider getting into other retail locations like scoop shops?
I won't rule it out, because it's always good to have options. This is a common strategy for artisan brands - hand-makers often use scoop shops. Our strategy is very different from that. Everything we do is built around grocery stores. It's unlikely you'll see us in one of these shops because that isn't how we run our business. From a trend point of few, I do think you'll see more dairy-free options in these stores, but this isn't something we're looking at right now.
(26:07) We're seeing a lot more plant-based products across the board in grocery stores. As this gets more attention from larger brands, does that pose a risk to your business?
Nestle and Unilever are the big players, and they already have numerous sub brands in this space. The risk would be if they decided to make a banana-based dessert - we would be finished. I think their focus is more on capturing a larger audience, so they're creating lots of different flavours.
The total category size of ice cream is actually declining. Plant-based ice creams are growing, but only as one slice of a wholly declining category. This is resulting in businesses driving their most profitable products and dumping their underperforming products for new ones. Larger businesses also have more tools in their back pocket that help them to combat inflation and the other concerns of our time.
(28:30) How do you factor those external considerations into your business strategy?
In 2019 we were actually preparing for a US expansion! Now, that's not at all feasible. Instead, we're focusing on growing our presence here in Canada, improving our distribution, and getting more loyal and repeat customers. These are basic things, but it's easy to lose sight of them in the dozens of things that a business owner needs to care about. It helps me to focus on one task: sell more Yellofruit. That guides my actions and our business strategy in these confusing times.
You can learn more about Yellofruit at yellofruit.com. Yellofruit can be found grocery stores across the country.
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