Business in Vancouver's "How I Did It" feature asks business leaders to explain in their own words how they achieved a business goal in the face of significant entrepreneurial challenges. In this week's issue, Arjan Stephens, executive vice-president of sales and marketing at Richmond's Nature's Path Organic Foods, tells how he launched a new premium granola product, then pulled it back off the shelves in order to perfect it.
"My wife and I developed Love Crunch back in 2009, and were thinking of a way we could give out a favour to our wedding guests. In lieu of wedding gifts, we asked them to be of service to their community. We were so overwhelmed by all the responses that we got that we wanted to give out this cereal that we loved and had made with love. Our guests fell in love with the product and said, 'Where can I buy this?'
"We gave it out to our suppliers and our customers and Whole Foods came back to us and said would you be willing to partner up with us to launch this product.
"We had launched the product and we noticed that there was a range of chocolate inclusions in our product. Some bags had two chocolate chunks, others had 24. We were taken aback because we only wanted to have the best quality product on the market place.
"All our other granolas, they have inclusions in them like flax or pumpkin seeds, but they're baked into the granola, and they're able to be metered in correctly and go into the oven together.
"In this case, we had premium products: we had dark chocolate chunks from Italy, we had organic freeze-dried strawberries and raspberries that were added at the end of the process.
"We had visited some different companies in Japan, and we learned that in the vitamin and nutraceutical industry, they're able to measure exactly how many pills go into each bottle versus by weight. We visited some other manufacturers and we learned from them [that] if you want to measure exactly to the bag, this is the equipment you would need.
"After we had scoped this all out, the tsunami hit in Japan, and some of the parts were coming from Japan. We had to make the difficult decision to not sell the product for a few months until we could get the equipment in.
"We did a whole marketing study, showing that granolas above $4.99 in price drop off in volume and our customers were also saying, 'Organic is at a premium already … Can you offer more value?'"
"But through the test at our wedding, we had people who said, 'I'd buy this for $6 a bag.'
"Quickly we realized that that perception that everything had to be ... a lower price didn't make sense because there was a consumer group that did want to pay more for a premium product.
"We [also] wanted to figure out a way we could give back. What we eventually ended up with was a bag-for-bag program. For every bag of Love Crunch that we sell, we donate an equivalent amount of Nature's Path cereal and bars to food banks across North America. This last year we donated $2 million." •
