the goose

I’ve been a little nervous about getting out and about in the Buenos Aires business community, especially with my still very naescent command of the langauge. I’m glad I headed over to Areatres last night however to hear Frank Almeida talk about how he turned a hobby into a business that now supplies McDonalds, Carrefour and dozens of other Argentine big name brands.

Sugar and Spice started off 7 years ago as a preserve export business but while jam started to go out of fashion, a sideline cookie business started to pick up. Frank’s background in corporate sales obviously forms the backbone of their success. Having initially supplied a few local providers, when McDonalds approached them they actually had to turn the international behmoth away for lack of production capacity. Interestingly McD’s took an interest in the Chicago born entrepenuer and invited him in to explain his plans for future growth. “They literally saved me from making the biggest mistake of my life” Frank told us as he explained how the management in McDonalds helped to edit the designs for what was to become an 800sq m. production facility in the heart of Bunos Aires.

In the early days it was all about building client lists and calling them weekly to see if he could supply product to grocery stores, supermarkets and local newsagents. As time went buy and demand picked up he had to classify the clients by size as it became too much of a strain to call every single customer. The top clients got a weekly call, while bi-weekly and monthly clients got less attention. Nowadays the clients tend to call him but there is still a lot of face to face meetings to keep the ‘old fashioned’ customers happy. “When I stopped calling around to a few stores, I noticed a dip in sales”.  He took on a sales rep to help keep in touch with customers while he turned more of his attention to keeping things running smoothly back at base.

I was fascinated by the the idea of the cookie business because the third party stores provide such an excellent sales channel. When I first saw Levi Roots receive funding on Dragons Den I began to realise what a wonderful business supplying food to supermarkets could be. The value of each purchase is small but it repeats and creates a beautiful cashflow.  Convincing our clients to upgrade or sign up can feel like a hard won battle, person by person, but in this sector, once you are on the shelves, the product literally sells themselves.

If only there was a way to put a website on a supermarket shelve and have people come along pick up copies. Of course there are drawbacks. Getting paid is getting a little trickier than it was as with all businesses that invoice rather than accept payment upfront. He had no regrets though and when asked if he would sell his product online he made it quiet clear he was happy to let his customers deal with the end customers. A short lived cookie home delivery catalogue soon got the boot when he found himself trapsing the streets of Buenos Aires trying to find the house he was due to deliver 2 packets of cookies too.

Branding seems to be the other key to success. While early on, the supermarkets looked for their own branding, now the Sugar and Spice name has established itself. Supporting a number of local charities that Frank himself is involved with no doubt helps to re-enforce this brand. This brand found its beach head market in the local expat community.  Sponsoring local meetups helped to establish demand and Sugar & Spice still sponsor the sweet table at local events to this day.  For the moment there doesn’t seem to be too much in the way of competition for his ‘premium’ cookie. Consumers seem happy to pay up to three times as much for his slickly packaged product as for the cheaper competition.

What I took most away from the talk was undoubtedly how ‘work a day’ they’re success had been. It was obvious that a lot there had been a wide range of marketing activities used over the years, not all of them successful, but in reality it was all about gradually building up the business day by day rather than coming up with some kind of master plan for world domination.

There is still plenty of room for expansion in Buenos Aires but Frank hopes to expand his line abroad in the coming years.