From The Australian, Entrepreneur: Detailed research and some great timing has paid off for this niche market player, writes Ed Charles
THE secret of a successful product is that it must be something that people want. And it must be something that a lot of people want most days in their lives.
For businesswoman Ivone Ruiz it turned out that homemade yoghurt was exactly what Coles felt that people wanted to see on its shelves.
It started when she discovered creamy homemade yoghurt while eating breakfast in a Sydney cafe. Returning to Melbourne, she craved something similar. But Ruiz couldn’t find what she regarded as a decent substitute. It was then, in mid-2004, that she decided to make yoghurt herself.
She says: “I saw a bit of a hole in the marketplace. There were not any rich gourmet yoghurts in the supermarkets or little cafes and delis that I wanted for myself. I thought, well, if I want it, other people want it as well.”
Key to getting her business off the ground was detailed research. She started visiting trade shows and manufacturers to build up her knowledge of what was possible in terms of manufacturing and packaging. She spoke to everybody she could about the idea. Regularly trawling through the shelves of supermarkets gave her a detailed insight into the shortcomings of the competition. Ruiz found most yoghurt was mixed in with fruit and few were preservative free. They tended to use opaque packaging.
Her innovation was to present creamy yoghurt in a clear container with a dollop of a mildly pasteurised fruit puree. She says: “The key point is that it is completely natural. The fruit is as natural as it possibly can be without having preservatives in it. It is 100 per cent fruit.”
The downside of the preservative-free approach is that her products have a shelf life of 28 days compared with 45 for products with preservative. But this hasn’t held sales back.
Everything in the product was devised to give it a point of difference over the competition. Ruiz says: “I really wanted to do something that was quite different. That’s why I chose the clear tubs where you can actually see the product.”
By December 2004 she had samples of her product. And on December 23 she sold her first batch to Balaclava Fruit in Melbourne’s St Kilda — 40 tubs featuring seven flavours: raspberry, passion fruit, mango, mixed berries, pistachio and berry, cinnamon, and natural.
Initially, the idea was to target only niche retail outlets such as cafes, delis, fruit shops and IGA stores.
Then a contact at a packaging company told Ruiz that Coles was looking for niche products and gave the name of the dairy buyer at the supermarket chain. They met in April 2005 at a time when Ruiz was supplying 1000 to 2000 pots of yoghurt a week to niche outlets.
Her preconception was that supermarkets weren’t keen on small brands and that smaller suppliers had to pay for prime position on shelves. She discovered that this was not the case and that every supplier has a slightly different deal, hers involving payment for warehouse space and distribution.
Ruiz says: “Coles was looking for premium brands, specifically a gourmet yoghurt. It was just perfect timing.”
In May 2005 Coles test marketed the product in 60 stores in Victoria and 60 in NSW. And in September the product went national (excluding West Australia). Ruiz’s first official delivery was 10,000 pots. And Coles asked for first refusal on any new products, which are about to come on stream.
Now with access to Coles’s shelves and distribution network, Ruiz is making up to 30,000 to 40,000 tubs a week, selling 1 million pots annually through some 650 outlets — including 350 Coles and Bi-Lo outlets. Her turnover is $2.5million.
Initially, Ruiz funded the business through $50,000 she saved while running a restaurant and bar in the Melbourne CBD. To minimise costs she had a very small factory. She handled all the sales and deliveries herself. She even recruited her mother, Maria. “It was very small to start with,” Ruiz says.
Success became a challenge in itself as demands on her time increased and the logistics of distribution became more complicated. Meanwhile, more yoghurt and packaging needed to be sourced and funded. She says with orders from Coles, the banks have been helpful.
The Coles deal meant Ruiz had to invest in a larger manufacturing plant and new machinery and take on staff.
Ruiz managed her exponential growth through outsourcing most functions, including manufacturing and merchandising. She estimates that 100 people work with the business but she employs just 15 people packing and dispatching yoghurt.
Ruiz is continuing to focus on innovation. Additional flavours and light yoghurts have been introduced. And she is about to introduce a range of preservative-free nut spreads. The idea is to extend her brand with premium products that contain no additives. She says the problem is not finding ideas but selecting the right ones to back.