How this entrepreneur risked her home deposit to start a $6 million business providing healthy snacks for children
Tuesday, January 12, 2016/
Melbourne-based entrepreneur Monica Meldrum started her food manufacturing business Whole Kids with her husband back in 2005.
The pair put their house deposit on the line to fund the company and quit their day jobs, but the risk paid off. Today, Whole Kids is on track to turn over $6 million by the end of the year and supplies its products to the likes of Jetstar, Qantas, Woolworths and Coles.
SmartCompany spoke to Meldrum to find out why she put everything on the line, and what’s in store for Whole Kids in 2016.
I was fortunate enough to lead a team of Australians to Indonesia a little over 10 years ago to deliver an aid program. I had worked in a number of manufacturing businesses and had completed an MBA.
I got to Indonesia and the experience challenged the assumptions of my career; it stirred in me a passion of how to make a difference in children’s health.
When I returned to Australia, I could see an abundance of over-processed foods and a rise in health-related allergies and illnesses.
It really bothered me. I could see that big food companies were over-processing foods but marketing them as healthy.
I started having a look overseas at what was happening in the space and did a lot of research into organics. I spoke to quite a few organic growers in Australia and worked with a dietician at the Royal Children’s to understand what some allergies were.
I came up with a range of products and at that point my husband and I went up to the inaugural organic expo in Sydney.
We decided that was the line in the sand. If the response was good, I’d quit my job and go with it.
We had a range of samples and parents loved them. It took us three months to get the product out but we knew we had the market.
Because I spent two to three years researching the market, I understood what ingredients were available and what product gaps there were. It enabled me to launch the product and minimise the risk.
My MBA and corporate background gave me really good discipline and work ethic. An MBA gives you a really good grounding to look at things in a different way.
But a lot of that needs to be undone when you start your own business as it’s so fast-paced and you’re learning as you go.
We funded the business with our house deposit. We had the attitude that we could always go back to work if it didn’t work out. We just wanted to give it a go.
When you’ve got so much to lose, you’ve got to make it work. When everything’s on the line, you can’t turn back.
But I wouldn’t have done it if I hadn’t constantly researched or knew there was an opportunity worth going after.
We’re pretty focused on having quarterly objectives. We have the higher vision, of course, but around that everything filters down to quarterly objectives.
It simplifies things; it helps us focus and move closer to our vision.
For us, the biggest deal we pulled off was the deal with Qantas in our second year.
I pitched against some of the largest FMCG brands in the world. I talked about how our brands were aligned and how we were a small Australian business and did something unique.
I walked away thinking they thought we were a great businesses but that we couldn’t compete with the other brands. But we got the phone call the next day.
It was a moment where I realised we could make a difference and people were taking us seriously.
The first five years when you’re starting a business are really hard. That’s when you’re still figuring things out.
We immediately thought we needed a warehouse and needed a good distributor and took that on ourselves but it stretched us really thin. We realised there were other businesses that could oversee that side of the operation better than we could.
At the five-year mark, we realised we could do things smarter so we could focus on the marketing and the products and leave distribution to someone else.
At the end of the day it’s as important to have good relationships with your suppliers as it is your customers and for them to understand your vision.
We had some suppliers that didn’t really get what we were about; the concept of a social business was strange to them.But there are others that get it and understand and that’s an opportunity that comes with values and purpose.
Seasonality and cash flow is a big issue for our business.
But the other thing is I just have so many ideas that I’m stretched really thin. It’s about being able to empower your team and delegate to free up your time.
One of the other challenges we’re constantly overcoming is the huge advertising budgets of the big companies. It’s about being smarter and having our voices heard so that parents know there is a healthier alternative out there.
For us, because we’re in the kids’ health space, word-of-mouth is our best marketing. Parents get to know the brand and then refer it on.
At the moment, we’re continuing to develop our product lines. One of the fun things we do is focus groups with the kids because they’re really honest.
We’re also looking at different channels into the market. Currently we’re in Coles and Woolies and doing a lot with schools.
We’re also getting a lot of exporting enquiries as we export into China, Malaysia and Singapore.
We will also definitely be doing a lot more with our community grants program. We’ve taken over sponsorship of Little Athletics, which we’ve been advocating for for some time.
That’s really important for us going up against the big junk food companies and then contributing back to children’s health and development projects.
We give 1% of quarterly sales revenue, so the team sits down and decides who to give the money to.
It’s the reason why I started the business.
It’s all about challenging yourself and putting yourself out of your comfort zone. It just keeps things interesting and exciting.