#asktheindustry - Amanda & Steve Smith, Pulse Dips
#Asktheindustry, Amanda & Steve Smith, Co-founders of Pulse Dips
In our #asktheindustry series, we’ll be speaking candidly to UK businesses about the unique challenges of operating in their industry sector. From household names operating on the international stage to start-ups planning to get there, we'll be going behind the scenes with some truly unique UK businesses.
In this first edition we'll be shining a light on the UK food and drink industry. We cover topics such as how to get your product out there, manufacturing at scale, distribution, financing growth, recovering from a recession, building a brand and staying motivated.
How have these businesses built their brands and successfully scaled? What challenges have they faced along the way? What lessons have they learned? What advice do they have for anyone on a similar journey? For all this and more, join the conversation at #asktheindustry.
In this instalment we speak to husband and wife team Amanda and Steve who launched Pulse Dips from their kitchen table in 2016. Now they are stocked in Planet Organic, Wholefood Markets, Co-op and 70 other independent UK retailers. In this interview they tell us about the challenges of working with a chilled product in a competitive market and the best ways of getting
What is pulse?
A: So pulse is a hummus and made with lentils instead of chickpeas. Because it’s made with lentils it’s about 50% less fat and 30% more protein than regular hummus, which is why we like to say that it's like hummus but better!
Where did you get the idea to start the business?
A: Pulse started a couple of years ago when we moved from Toronto to Porto for Steve's work. I was just making hummus one day and I didn't have any chickpeas, but I did have lentils and I figured why not? Then I showed it to some friends and family to see what they thought and I got some really good feedback and kind of came to the realisation that this could be the idea that I was looking for. So it kind of all started from there.
S: One advantage to the business was that I'd been working in grocery retail for, I guess, the best part of my career to date. So I was quite well placed to be able to essentially support and guide Amanda, particularly in those early stages when we were trying to formulate the idea and a bit of brand identity. I guess most of my time has been spent with customer data. So I'd always been helping grocery retailers and FMCG suppliers to understand more about the customers, essentially getting more value out of the data. So I could really look at it from understanding the customer and understanding the category and we could see that hummus was in significant growth and we could see that there wasn't much variety outside of chickpea hummus. In fact, there was very little, certainly no-one was doing lentil hummus. So that information, I guess, helped solidify that we've got an idea here that we could essentially take to market.
Where can we find your products?
A: We are stocked at places like Ocado, we are in the Co-op, in about 30 to 40 of their central England stores, we're in Whole Foods Market, Planet Organic, Vegan Kind supermarket and in lots of independent stores across the UK. I think currently we're stocked in somewhere around 75 to 80 stores.
What has been your biggest challenge so far?
S: I think we could probably do a whole interview on challenges. One is around scale. So just having scale in terms of how much we produce because we have minimum requirements with our producers. Every time we produce, we have to produce at least a hundred kilos and then we're obviously responsible for making sure that a hundred kilos gets sold.
Then I guess with scale comes the ability to reduce your costs and particularly your price point. One of the things we're constantly challenged with is our price point versus our competitors. Unfortunately it's one of the most important things that customers look for is price when they're making their purchase decision. So we have to take a hit on our margin to be more competitively priced, but naturally the more that we can grow the business, the more that we can sell, the more that we can essentially lower our price and be more competitive and start to compete with some of the bigger brands that have that scale.
Then the other one really is the fact that we're a completely natural chilled product, and we don't use any preservatives as that is something that's really important to us. And it kind of goes to the ethos of the brand around, you know, producing healthy products. But naturally we are under pressure, right from the product being produced for that reason. We need to make sure that it gets distributed and on the shelves of retailers and ultimately in customer's baskets as quickly as possible.
How did you first get your product out there?
S: Initially we utilised my network and that worked fairly well, particularly in terms of getting our foot in the door. It led to listings with the Ocado through an ex-colleague who worked there. He introduced us to the buyer. I think we were always very confident when we get in front of a buyer that we've got a good product with a unique selling point. But there's any number of reasons as to why your product may not be right for a buyer, timing is a very important one, they're all very risk averse. Despite being very progressive in terms of the attitude, when it comes to the reality of listing you, they're quite risk averse in terms of sticking to what they know works, or sticking to the suppliers that they know work. So they're more likely to go to one of their regular suppliers and say, right, we'd like you to create something for us as opposed to bringing in a small brand, there's just a lot more risk involved.
A: In terms of initially starting out and how to initially get onto the shelves, a lot of it was just cold calling, and you know, finding the email of the buyer for Planet Organic for example, emailing them and just trying to get them to try your product and get a meeting. And even with the smaller retailers it's just cold calling, knocking on the door saying, hey, here's my product, would you like to try it? A lot of smaller ones are definitely open to trying a new product. They want to have different products that aren't in the big supermarkets. So they'll often at least give you a chance.
So the steps from, I guess, moving from our home kitchen into a production facility was just doing research around who could do that for you, who can produce your product. There's only a couple of producers in the UK, certainly ones that are close to us in London that produced hummus. So it was a case of calling and setting up a meeting, in a very similar way that you'd approach your retailers. Call them up and say, I have a product that I need to move out of my home kitchen because I can't kind of meet the demand.
There was a whole process to replicate the product in large batches. I think I was making one kilogram at the time. It was the max that my home mixer could do and you're moving up to 100 hundred kilograms and trying to replicate your recipe on that scale.
S: And there is a balance as well, because the producer's not going to take you on if you haven't got the orders. So it wasn't until Amanda had her listing with Planet Organic and Ocado secure that the producer actually agreed to take us on. Even then we had a reduced volume size for three months and within three months we had to get up to 50 kilograms, to be able to be a viable business for them to take on.
I think the smaller the retailer the more flexibility, you're probably going to have a good three months, at least to kind of prove the worth of your product. And you can also have quite a big influence in terms of supporting it. You can get into the stores and sample, you can put point of sale on the shelf to help drive awareness of the product and when customers are shopping things like that. In the larger retailers you often have to to prove the worth your products more quickly and probably have to hit a certain run rate, selling so many units per week per flavor. Uh, and if you hit that threshold great. And if you don't, you'll be out. So it's very hard to get your product listed and then even harder to keep it on the shelf.
A: One thing we have found really beneficial for launching and establishing the brand is the sampling. I think that is really important for us as a small brand, just getting in store, meeting the customers, telling them about the product. And a lot of the time they're really surprised to find out that the people sampling them are actually the founders. I think that gives us a bit more credit and they and they feel a bit more of a connection as they can tell it's your brand and you're passionate about it. And they can ask any question about the product and you've got the answer.
I think the proudest moment or most satisfying one was the first time that I saw our product on shelf and it was so nice to like something that started in our kitchen being in the store and people buying it. It was really satisfying.
What’s next for Pulse Dips?
A: I think it's really two-fold. We want to grow the brand beyond a single product and develop maybe complimentary products for our lentil hummus, and also better establish ourselves in the current retailers that we are with and hopefully grow and get into some larger regions.
What advice would you give to anyone looking to start a business in this sector?
S: The biggest piece of advice that I could give to someone would be do your research and understand the market that you're going into. What are your USPs? What benefits do your products and your brand have versus the competition? I think it’s critical really that you need to have a point of difference if you want to peak the interest of, firstly, the retailer, and, secondly, the customer, you know, especially as a small brand competing against bigger brands.
Secondly, it's about having runway - so making sure that you have enough finance to be able to give your business the best opportunity of growing and developing, because at the beginning you're probably not going to make any money, or little money, and, worse still, you may even lose money at the beginning. So it's really important that you have the finances in place to be able to, I guess, bring your brand tomorrow.
What’s it like being a husband and wife team running a business together?
A: Well that comes with its own challenges… no, it's been really great because you can give somebody feedback and you know that you both want the best for the business, you're both on this scene, you have the same goals, you're working in the same direction, and thankfully we have complimenting skill sets, so we're not stepping on each other's toes. We've got our areas of the business, but of course it's going to be challenging. When we first started working together, initially we were going to work in the same office and I think after about two days, I was like, right, you're downstairs, I'm upstairs. We just needed some separate space. Because you're living together, you're working together. You've got to create that balance.
I think one of our other challenges is not talking about the business all the time. I think there's been times over dinner when it's like, “Right, no - no more talking about Pulse, we have to end our work day, this is personal time”, because that line really gets blurred. A lot of the time it does just become your life.
S: I think also the benefit is that you can be very candid when you're husband and wife, similar to in a start-up where you're just dealing with co-founders. You don't have to worry about treading on eggshells. If one of us doesn't like something it's pretty obvious to the other person. So I think the ability to be candid and share your opinion is probably what’s helped for so long. And I think Amanda’s right, we've got complimentary digital skills, so we naturally lean towards different parts of the business. We still obviously have our moments, but, you know, people always have their moments.