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, John and Leah Garrad-Cole, founders of Love Child Organics, describe how the organic baby food business they started in their kitchen in 2011 has landed major deals with Wal-Mart and Dragons’ Den investors.
Leah: “It really started with the birth of our daughter, Poppy. We had moved back to Canada from the U.K. I’m from here, but John is English.
“When I became pregnant with our first child, we decided it was time to move back here so that we’d be closer to my family. When we launched last February [2013], Poppy was just over three, and our son was nine months old.”
John: “I saw coming to Canada as an opportunity to do something for myself. I had been in the corporate world for some time and it built useful skills. I wanted to build something of our own.
“After our first child, we quickly realized that baby food options in Canada lagged behind other markets, particularly the U.K., with which we were more familiar. We started it in early 2011 but spent 18 months developing the product and brand and packaging.
“We were certain we wanted to be 100% organic. In addition to that, there’s a a strong nutritional focus in the brand – not just leaving out bad things, but including as much goodness as possible in terms of ingredient choices, which is why we add ingredients like quinoa and acerola fruit.
“The branding and the packaging has been very important with us. That really seems to resonate very strongly with retailers and customers. They love the packaging and the look of it.”
Leah: “We also give 1% per pouch to a children’s charity. I think people now appreciate companies with a social conscience. When moms buy our food, they are helping other children, and that appeals to them.”
John: “There were two challenges – firstly raising the capital to undertake that first production run. We remortgaged our house and got external investors.
“The biggest challenge was the size of the minimum productions runs. Without a big retailer commitment, it would have been foolhardy to take the risk of actually going ahead with the production. We needed to start with a big retailer to underpin it.
“We first approached major Canadian retailers, including Wal-Mart Canada, in mid-2012. Wal-Mart expressed considerable interest and went on to become our first customer, with the first purchase orders being received from them in January 2013.
“We went [on Dragons’ Den] with the goal of getting exposure for the brand. We’re a small business with a limited marketing budget. We also did need to raise money. We went in asking for $300,000 for 10%. In the end, David Chilton and Arlene Dickinson gave us $300,000 for 7.5% as an interest-free loan.
“After the show aired, the [Wal-Mart] opportunity crystallized more quickly, which meant we needed more capital. So we went back in to meet with David and Arlene, and we ended up doing the deal with them for $750,000 as a pure equity investment.” •
