Despite launching to a pear-shaped start, Tim O’Sullivan was able to convince the likes of IGA and Foodworks to stock his first product business Bae Juice just 18 months after first developing the idea.
‘Bae’ is Korean for pear, and the juice is a traditional remedy for hangovers in Korea, as O’Sullivan discovered while accompanying his partner and co-founder Sumin Do back to her hometown in 2018.
O’Sullivan found generations of South Koreans boasting of the restorative properties of pear juice, and experienced the pick-me-up effect himself as he and Do caught up with her friends over Korean soju.
Upon his return to Melbourne, O’Sullivan struggled to find a steady supply of the juice domestically, so he decided to import it directly from its native source, and introduce the drink to Australia.
Although the process of importing the product was relatively smooth, O’Sullivan tells SmartCompany it wasn’t long after launching that he, Do and co-founder Liam Gostencnik realised they had rushed the branding and marketing.
“Our marketing was pretty mediocre at the start because we were so focused on bringing the product to you and building everything,” O’Sullivan says.
“It was great having the product, but if we wanted to be in the store, we needed some nice shelf packaging and a nice presence with a nice colourful box to explain the product.
“In the first few months, these were the things we didn’t know about.”
Ironically, the team won more shelf space and media attention once they decided to scrap their marketing consultants and traditional advertising strategies.
In its place, Bae Juice now relies mostly on old-fashioned practices such as relationship building and hand-delivered sample giveaways.
And after a steep learning curve, these strategies are paying off, with the juice business racking up thousands of dollars in sales each month.
Juicing his time for all its worth
Apart from the original shipment of products from Naju to Melbourne, Bae Juice has so far been bootstrapped by the three co-founders.
O’Sullivan, also a co-owner of a cafe in Melbourne’s inner-north, says the new business was developed as the co-founders worked in their other jobs.
“It was difficult because we had to give away our paychecks every day for six months,” he says.
“Even now, really.”
This became a problem in the first three months of launching with an outsourced marketing team. The marketing company proved largely ineffective and O’Sullivan says the founders were “burning ourselves financially”.
After three months, the co-founders replaced the professionals with skilled friends who helped them with everything from packaging and branding, to setting up their online store.
During this time, the co-founders also took the time to write their own press release. As the media picked up their story, their sales figures finally spiked, O’Sullivan says.
“It’s about credibility and media curiosity for sure,” he says.
On the ground, O’Sullivan and Gostencnik took to the streets between work shifts, offering free packs of 10 samples to grocery stores and cafes.
“We gave them the full margin on those 10 free samples, which would make them an easy $30 to $40,” O’Sullivan says.
“Honestly, after that, they followed up quite often.
“They reordered and they’re still reordering today as well.”
He estimates the pair handed out 15,000-20,000 units doing this. In time, this door-to-door salesmanship paid off and the two co-founders now spend more time delivering their products to restock the 54 physical locations that offer Bae Juice, usually around midnight and sometimes even at 2am.
And thanks to a busier Christmas period, O’Sullivan says the co-founders were recently able to bring a distribution worker onboard who will — literally — take some of the load off their hands.
Handshakes without shake downs
According to O’Sullivan, the co-founders’ willingness to roll up their sleeves aligned their work ethic with their suppliers in Naju, who he says are the largest producers of Korean pear juice in South Korea.
“Korean business is still very hand-shakey, not so much emailing and contracts,” O’Sullivan says.
“We text and call them all the time, chat about things, give them updates.”
Despite setting up shop in a new market and having a rocky start, O’Sullivan says the positive relationship with the suppliers never flagged. In fact, it was quite the opposite, with the South Koreans offering support and selling the product to the co-founders on their terms.
“We actually paid them in Australian dollars,” O’Sullivan says.
If that hadn’t been the case, “when the dollar fluctuated, especially when it was doing so poor, it would have really hurt us,” he adds.
On the other hand, O’Sullivan says their experience was the exception, rather than the rule.
For the past year or two, O’Sullivan has been trying to learn the language and says his attempts to drop phrases often surprises the local businessmen, who appreciate the show of effort.
However, O’Sullivan credits the healthy relationship to Do and her father who, being a businessman in South Korea himself, continues to touch base and grease wheels in the co-founders’ absence.
His efforts include the “traditional thing of making everyone tea in the meetings, making the calls, and doing the old school hustle with the gentleman at the suppliers”, O’Sullivan says.
“If a foreigner came in and tried this, it would probably be a bit harder,” he adds.
Luck be a lady
In fact, it was also Do’s father who gave the co-founder the loan that enabled him to ship the first order of 50,000 units of juice down to Melbourne.
“That was only the second time I met him and he gave us $25,000,” O’Sullivan says.
The first time was only a couple of months earlier, and incidentally the same time he came up with the idea of Bae Juice.
Having met online when she first arrived in Australia, O’Sullivan followed Do to South Korea on her first visit to her hometown since she’d moved to meet her parents.
“I kept having these shocking hangovers until the third or fourth night when one of her girlfriends suggested I drink some pear juice because apparently it helps with your hangovers,” he says.
Finding it effective, O’Sullivan began drinking it every day and began asking grandparents and young partiers about it.
The hangover remedy “was just common knowledge”, he says.
“They didn’t know much science or reasoning behind it but it was just more traditionally known.”
When O’Sullivan returned to Australia, he discovered the CSIRO had already made the discovery, so he bought out a local Korean supermarket’s stock of pear juice and tested it on his cafe’s clientele.
On Fridays, he served a pear juice to “anyone I knew who was going out or going to the races … and told them to have it to help them with their hangovers”.
The positive feedback gave him the confidence to return with Do to South Korea, where her father introduced them to their supplier.
Bae Juice’s history can be split into three distinctive chronicles: the set up, the learning curve, and the co-founders finding their feet.
According to the team, in the last phase, sales increased by 282%.
With solid branding and their confidence bolstered by Bae Juice’s rising success, the team decided to circle back to their first instincts. Recently, they started using paid ads on Facebook and even hired a PR agency.
“In December, we did $20,000 online,” O’Sullivan says.
“That was only our second month of advertising online.”
With a global vision in mind, the co-founders started stocking shelves in Queensland and Sydney, and have plans to roll out across Western Australia and Adelaide in the near future too.
You can help keep SmartCompany free for everyone to read
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany Supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.
And it’s not all one-way traffic either. SmartCompany Super Supporters get to dial into our monthly editor’s meeting and attend a monthly, invite-only webinar with a big-name entrepreneur.