Raglan food co

You've probably seen the friendly face of Raglan Food Co on their signature range of coconut yoghurt throughout New Zealand supermarkets. You may not know the amazing story behind their success, as unlikely as it seemed. Tesh Randall found her partner Seb was intolerant to dairy, so she concocted a glob of coconut yoghurt in her Raglan kitchen, made some for her friends, and now over 100,000 jars a month fly off the production run. 

But as you'd expect, there's years of hard work, commitment and care along the way to be one of the biggest employers in Raglan with about 30 staff, and the proud owners of a new, purpose-built factory on the outskirts of town.

Some of the challenges Tesh and Seb had to solve included: 

• Managing how hungry a business is for cash. One of the key insights was reinvesting in the business every step of the way. 'We ploughed every cent back into the business at the start' said Tesh, 'and at first expanded out of cashflow. If you're starting a business I'd recommend to be as frugal and resourceful as you can'. 
  
• Balancing priorities. 'It's always a juggle', says Tesh, 'to budget for marketing, staff, premises, branding and distribution which all have legitimate needs. We chose to focus on making a better product first, as if sales grew, we could sort the rest out later'.
• The increase in shipping costs. 'Our freight prices have been at all-time high in the last two years', explains Tesh 'which hit us twice. Once when importing our coconut ingredients from Indonesia and second when exporting offshore to our markets in the UAE, Hong Kong, Singapore and China. We tried to ride it out, thought about diversifying away from coconut, or finding new suppliers, but we love the Indonesian coconut taste. Finally we were forced to increase our prices. It's tough for everyone'. 
• Getting raw product. With containers arriving less regularly, there was an issue having enough inventory to maintain production. Tesh's solution? 'First we stockpiled, initially at Mainfreight in Hamilton, drawing down when we needed to. Then we committed to investing in a new double size warehouse in Raglan, allowing us to buy larger quantities and store locally'. 

Sustainable goals

One of the initiatives Tesh is incredibly proud of is their B-Corp status, which signals their commitment to being sustainable in every part of the process, from ingredient sources, packaging, community involvement and employee well-being. 'For us', says Tesh, 'it gives us a way of measuring that we're living up to the highest possible standards. B-Corp is less known in New Zealand, and I can't specifically point to a sales bump, but there were benefits that surprised me. First, it was an awesome training programme, stepping through a bunch of things we'd never considered. The best coaching tool you could devise. Second, our team bought into the values, so there's an internal cultural bonus making us a happier place to work'.

Opportunity came knocking when fans of their yoghurt contacted Tesh to ask if they'd be interested in expanding to the US. One of those people is now their GM in New York State, where they've set up production with a local manufacturing partner and are preparing to launch mid-2023. 'B-Corp status is better known in the US', says Tesh, 'So it'll give us one extra advantage over our competitors who don't comply'.

The decision to raise capital

Tesh wasn't seeking to raise money to grow their business until they were approached by an investor at Pioneer Capital. 'We're always open to new ideas', says Tesh, 'and thought we might benefit from adding more experience and resources to the team. About a year later, they invested. We're using the funds to introduce new products, accelerate marketing, improve operational efficiencies, and expand into other countries'. Tesh advises to take your time and make sure you get the right partner aligned to your culture, rather than the first cab off the rank.
 

Raglan Food Co have also benefited from other funding sources such as the NZTE International Growth Fund and the Akina Grant. 'We're extremely appreciative for all the support we've received as we grow our business beyond New Zealand', says Tesh, 'not just funding, but the advice, support and networks of similar businesses seeking to make the world a better place'.
 

'The team at ASB, who have been our business banking partner the whole way, helped us structure our loan to buy the land and build our new factory out here at the Nau Mai industrial park', says Tesh, 'and we are so grateful to be here. They support us with all our banking needs and have helped us level up along the way‘.

Tesh's final advice
 

If you're looking to build your business, Tesh has some sage advice:

• If you want to sell into the supermarkets, start with the independents to prove your product. Once you have a track record, you can approach the supermarkets with a clear proposal backed up by in-market evidence of demand.
  
• Tap into the external expertise that's around you. We have a board who we rely on for advice, including our Chair Leon Clement (former CEO of Synlait). Your board could be other business owners in your network you can talk to.
• Have a sense of humour! Seb and I value authenticity, making things happen, having a sense of playfulness and personal learning and development. I think this has influenced our work culture here and the type of people we've attracted into the team. 
• Look beyond your current horizon. Our main strategy at the moment is reaching flexitarians, which caters for those who are wanting to increase their plant-based meals, but allows meat products in moderation. It's a much bigger market than strictly vegetarian or vegan.
• Don't overthink things especially in the early stages when you're setting up. Action is more important than over-analysing your decisions in advance. Self-correct as you go.
• Make sure you have a business partner who balances out your strengths and weaknesses. Raglan Food Co wouldn't work without Seb and my different skills sets.
   

Tesh suggests treating the journey like one big learning experience. Everyone makes mistakes, then learn along the way.