Principals: Preet and Amarit Marwaha
Location: 1829 Quebec Street, Vancouver
Business venture: Organic, raw vegan, sustainable, fair-trade restaurant and food manufacturing business
Business lesson: Be clear what kind of business you want to run and then don’t be afraid to stick with it without compromising principles or values for the sake of growing the business.
“I changed my diet radically. It was from one extreme to the other,” said Marwaha, who is now 40 years old.
He completed a diploma in computer engineering at Southern Alberta Institute of Technology then studied psychology before opening a couple of convenience stores in Calgary.
A few years later, he passed the stores to his family and pursued a career in telecommunications working at various Calgary companies before moving to Vancouver seven years ago to work at Radiant Communications Corp.
Soon, however, he realized that his passion was organic, healthy food so he pumped about $500,000 of his own money and that borrowed from family and friends to launch, in 2008, what was originally an online food seller. It then morphed into a warehouse and a restaurant and food manufacturer.
- how to get funding to expand the business to a size large enough to boost economies of scale so that prices could come down and the customer base could grow;
- how to reliably source organic, fair-trade, sustainable ingredients; and
- how to attract customers to eat vegan raw food.
Solutions: The Marwahas spent a lot of time seeking sources of capital but the task was made doubly difficult because of their own high standards for whose funding they would accept.
“We went down the path of exploring vulture capital and that kind of thing. It just wasn’t enough,” Marwaha said. “We needed a partner that understands the business, understands what we’re doing and understands the importance of organic, sustainable food. It took us a long time to find that.”
Networking led to billionaire philanthropist Frank Giustra, who made his money from mining and movie ventures but is best known for creating the Clinton-Giustra Sustainable Growth Initiative with former U.S. president Bill Clinton. Giustra donated US$100 million plus half of what he makes in the resource industry for the rest of his life.
Giustra instinctively understood the need for organic sustainable food and shared the same values as the Marwahas.
Giustra agreed to inject capital into the Marwahas’ business so the couple has the capacity to build a new facility to manufacture products. They are currently seeking that facility in Vancouver.
Current wholesale customers include Whole Foods Market, Capers Community Market and Lifestyle Markets.
“A new facility will enable us to meet the demand we’ve created in the marketplace for our products. Prices will absolutely be able to come down,” he said.
The cash injection will also help the Marwahas source a direct supply for their ingredients.
“In Thailand, we have our own macadamia nut farm going now,” Marwaha said. “We are also going to start growing a supply of vegetables in the [Fraser] Valley.”
A solution to overcoming the challenge of luring people scared of eating vegan food has been to put more attention on the fact that the food is healthy and organic, not that it is vegan.
“Most people don’t know what they eat. They buy things in packages or cans and simply don’t know what is in their food. We have a whole educational focus around food and helping people understand what food is and how important it is to their health and well-being.”
He believes that the key is to first grow slowly by serving its core vegan customer base well enough that word of mouth will attract nine people for each core customer.
Those additional customers will not be as close to the hard-core vegans or vegetarians but serving that next group well will make that group be the company’s “ambassadors,” Leung said.
It is a much better strategy than trying to target mainstream customers first, he added.
“That smaller group is who they need to focus on, not the million people first. When they service those 1,000 people well, then those 1,000 people become their ambassadors and then it becomes 10,000.”
Lululemon CEO Christine Day, however, has explained to Business in Vancouver that Lululemon does not actually target its core customer.
The first customers Lululemon aims to sell to in a new market are those whom Day calls “attractors” – healthy and active women around 32 years old.
“We know that when we build and design our stores toward her and around her, that the brand is attractive to the core customer who is slightly older and a bit more affluent, but who wants to be that 32-year-old,” Day told BIV in 2009.