Husband and wife team Sarah and Scott Butler set up their organic grocery delivery business, Organic Angels, from their spare room.
The couple converted to organic food after the birth of their son and quickly realised they could do a better job than existing organic grocery delivery businesses.
Organic Angels weathered the financial crisis unscathed and now turns over $700,000 a year with Sarah and Scott capitalising on growing demand for internet shopping and organic food.
How did you come up with the idea for Organic Angels?
Scott: We couldn't find a proper organic delivery service here, and I was reading an English newspaper about a London company called Abel & Cole, which does organic deliveries. I got inspired and said, “Yeah, let's do it!” so that was the start.
There was a service out there already in Australia but it didn't have great customer service, it didn't have a great website, and the produce wasn't that great, so we just thought that was something we could improve on.
How important has the internet been for Organic Angels?
It's been vital for our business. We've been on the crests of two waves; we've been on the waves of internet shopping and on the wave of organic food, so in a way it's kind of benefited both of those.
A few years ago, when we first started, people weren't that confident in online shopping, they'd go on Google for a local store, whereas now they'd go on Google and search for organic and find an organic internet delivery company.
They realise, ‘Oh, I can just order this stuff online without having to go to a shop.’ So it's been vital for our business. Most of our business is online purchases from new customers.
About 75% order online and the other 25% are on direct debit with us anyway so we put in their order, and we maybe only get one or two customers a week that actually would call in their order.
It’s hard to compete on price with supermarkets and bigger retailers, you just need to find something else to compete with, and we compete on our excellent customer service.
We know we might be more of a premium product and slightly more expensive, but our customers are happy to pay that money if they are getting that excellent service and excellent produce as well.
How did your background help?
My background is in information technology. I used to design websites and worked as a systems analyst in IT. That was all very important for setting up the website. My brother is a graphic designer, so he assisted with the website as well and I'd say we saved a lot of money initially, being able to get all that ourselves.
I'm also quite entrepreneurial, so I'm always looking out for the next big thing and I think that helped. Both Sarah and I are full of ideas and have had lots of ideas for businesses but this one stuck.
Before we actually opened the doors to the business we spent a year of planning just to get the business right.
Initially Organic Angels was actually a business for Sarah to just do one day a week part-time around looking after our baby Charlie, who had just been born, but then as we set it up, we just realised that it was going to be taking a lot more than a day a week.
As the workload increased I resigned from my job and got part-time work for a little while and then was able to actually go into the business full-time. Now we employ six casual staff together.
Tell me about the “wave” of organic food.
Sarah: I think what has changed is the quality and the perception of organic food. Ten years ago the quality wasn't that great, and you'd end up paying for something that was just going to fall apart in your fridge.
But there has been a lot of stuff in the media about organics in the last five years or so, just this big shift I think in people's awareness. Not just in what they eat, but where the food comes from and trying to source things locally and trying to have that convenience.
Also the supermarket prices on conventional produce has jumped up quite a lot as well, so people are starting to think, ‘Well I'm spending all this money on conventional produce that has no flavour and has all this chemicals and sprays all over it, apples that have been in cold storage for twelve months and there's no flavour.’
I think people are becoming more conscious of where their food comes from and where they want it, and I do think it's that convenience of home delivery that has been such a big key as well.
We can say that we've been at the market this morning, selected the produce, packed your box this morning, and it's probably on the customer's doorstep already. In terms of food mileage, we can tell the customer exactly where the produce has come from, what farm, what section of Australia and all that kind of stuff. I think people actually really like that sustainable kind of feel-good feel about purchasing organic, as well as the health benefits and the flavour.
How have you found working together as husband and wife, and the overlap between work and family?
We've realised that we do work really well together otherwise we probably would've divorced by now.
But I think the initial struggle was having the business at home and that was a lot of pressure because the business was growing so fast. When we moved and got a separate office, then that helped.
We've had to put those boundaries in place and not bring work home so there's time for the kids. We've got two kids and another one on the way, so we say, ‘Let's not talk about work now; let's just spend this time to talk about other stuff.’
I think we've also learned not to be control freaks over each other, and we've balanced each other out in many ways and learned to let to go of some things to make room for the one of us who's good at it to just to get on with it.
Who would your typical customers be?
Scott: I guess our main sort of target market is someone who is female, thirties or forties, the main purchaser and preparer of the food. She's usually got kids or a double-income with no kids. They're probably higher-income and they're very environmentally conscious.
How did Organic Angels go during the financial crisis, did you find that business dropped off or did it continue?
The business has always been growing. Over the past year or two it's been growing a lot quicker. Even during 2008 and 2009 it was still growing, so for us we didn't really experience a downturn.
We grew 20% in that time. It might have had an impact if we were a more established business, but because we're kind of a new business, more and more people were still hearing about us. If there were people dropping off because of financial reasons, there were still new customers coming in to replace them, so it wasn't a very big factor for us.
If the financial crisis wasn't such an issue for you what have been the challenges so far?
Sarah: I think the challenges have been actually keeping up because we grew so fast in the first initial stretch.
As we've grown, the systems that worked at certain levels don't work once you've grown a little bit, so there has been a constant change in systems and processes. We've been pretty lucky with staff so that thankfully that hasn't been a big issue.
The challenges are like any business owner: the long hours and that it's always there; it's kind of wanting. That creates a bit of pressure, because you don't want to drop the ball and you want to make sure that you're always doing a good job making sure that customers are always looked after a certain way, and boxes are always going out looking good.
What are your plans for the future?
Scott: Our plan is to keep growing. We feel that Melbourne has a population of 4 million, and we do about 300 boxes in a week, so there's still so much potential to grow in Melbourne.
Actually, last year, we acquired a smaller organic delivery company that was doing 50 boxes a week and that helped with our growth and worked so well that I think that we'd look at doing that again in the future.
We would acquire another, smaller company and put our processes in place and our products in place. That could be in Melbourne or it could be in another city or town. There's so much room for growth at the moment and that's what we're hoping for and expecting as well, really.
Sarah: I think Australia's still a few years behind the States and the UK with the whole organic thing, they've got such a humungous range over there. We're lucky in Australia because all of the produce is Australian whereas I'm sure in the UK they can't get everything locally.
In terms of what you can buy in the supermarket and the organic availability of everything, when we lived in the UK six years ago there was a whole aisle at Tesco's dedicated to organic products whereas here you're lucky to find a quarter of an aisle of organic products.