Hard Choices (Vol 1)



Sometimes I feel like I'm running two companies: the one I intended to run, and the one I'm actually running. I was told very early on to appreciate the pivot and if I've learned anything from my prior life in finance, it's to focus on your strengths. That is, if I've garnered a certain audience with a certain product using a certain message - double down on that. 

So after seven months of being in the market, it's time to make some hard choices. Originally, my intention was to focus on the diabetic population by baking sugar free cookies. I could go into the potential market opportunity, but that's a whole other post. Bald Baker's Chief Cookie Officer took my rather bland tasting and ugly prototype and turned the Frankenstein into a Frankerfine cookie by making it grain-free and vegan in addition to sugar-free. With great products, the question turned to who to sell them to. Our summer was spent trying to answer that question along with the corollary, how. 

At the outset, I realized that despite my original intentions, I was no longer solely in the diabetic desserts market; I was in the grain/gluten-free market and I was in the vegan market. Depending on where I was actually selling that day, one of those messages was prioritized. For example, at Ryerson University market, the vegan-ness of the company was what sold the cookies. At our uptown market, it was a split between sugar-free and grain-free. I found myself at two very high-profile vegan food festivals this summer where the exposure (and sales) was great. Oddly, I did not find myself at one single diabetic event this summer, or indeed, since starting the company. 

In the spirit of transparency, a value this company holds dear, I want to highlight some of the choices that I'm currently faced with - it'd be great to get some feedback. I try to make well-reasoned and well-informed decisions whenever I can. So, here goes:

Canola vs. Coconut Oil. I've been going and back and forth on this one for a while now. Coconut Oil has recently been the recipient of some bad press. As Huffington Post notes, it's complicated. The American Health Association (which in my opinion sways which ever way the wind blows) released a pretty scathing report that blasted coconut oil, primarily due its relatively high saturated fat content. Once the direct correlation with cardio-vascular disease was established, coconut oil suddenly became vilified. Canola Oil's rich supply of Vitamin E and Vitamin K cast it in a much more favorable light than Coconut oil. On the business side of things, coconut oil is roughly 4x - 6x more expensive than vegetable or canola oil, both much lower in saturated fat. SFGATE did a comparison of the two and noted that, "The unsaturated fats in canola oil lower cholesterol and its omega-3 fatty acids reduce inflammation throughout the body." So far, it looks like Canola Oil for the win. BUT, unrefined coconut oil is high in anti-oxidants and imparts a great aroma and flavor.  Our understanding of the pros and cons of saturated, unsaturated, polyunsaturated, monounsaturated, etc., are elementary, if not evolving constantly. Every dietitian, nutritionist, healthy and/or culinary-savvy individual I've come across has applauded my use of coconut oil. Who am I to listen to? The people who have supported my business directly; the same people I set out to understand at the beginning of the summer? Or the scientists publishing reports? Or the economics of the day-to-day ingredient purchasing?

Maltitol or Sugar or .....We have an issue with our co-packer that is creating larger ripple effects than it would imply. It stems from our chocolate chips but it's leading me to question how 'sugar conscious' the company truly is. The chocolate chips we have been using are delicious and are sweetened with erythritol and stevia, just like all of our treats. They are produced in a facility that is certified kosher, but specifically, kosher dairy.  Our production facility is considered kosher pareve, which allows anything that is produced there to be eaten before, during or after any meal - it's not subject to the kosher dietary restrictions of milk and meat. Our chips cannot be brought into our facility. After a thorough and exhaustive search, I have been unable to find a kosher pareve, sugar-free chocolate chip that isn't sweetened with maltitol. Quite a few studies, noted in an article by Livestrong, substantiate the claim that moderate dosages of maltitol can lead to flatulence, diarrhea, bloating and other gastro-intestinal side effects that as you might imagine, are not the kinds of effects I'd like to associate with our brand. I can probably keep searching for the unicorn product, and indeed I am hopeful that it exists, but at some point, I have to move forward and that self-imposed deadline has got me thinking about my definition of sugar conscious. I believe that single term is what differentiates our company from all the others and it has played very well in the marketplace. I am proud to say that it means that we don't use any sugar in our products. So that I can keep moving forward, can I use sugar-sweetened chocolate chips? It bars me from making the above claim, but still allows me to say that each cookie is substantially lower in carbs and sugars than our competitors. Or, should I lower our standards and start using maltitol chips? Or should I hold out and redouble my efforts to find the unicorn? I'm trying to get creative to find a company that will fee-for-service produce my chips, but that could take months. For today, the hunt continues, but there is a hard choice that's going to have to be made unless there is another alternative that I'm not seeing. 

Finally, and this is the big one, how important is my vegan audience compared to my grain-free/gluten-free audience, compared to my diabetic audience? As an entrepreneur, I should focus on where the most positive reception (read: sales) has come from. Vegan is hot right now. It's a clear trend that is clearly growing in popularity. The sheer number of 'certified-vegan' or 'vegan-friendly' products in stores and the number of restaurants and cafes opening reflects that growth. Gluten-free was, and to a degree still is, a mainstay in the marketplace, as evidenced by the number of mainstream products (cereals, sauces, etc.) declaring GF status. But my original assertion is that NOBODY is targeting the largest population of them all: diabetics. There simply just aren't any high-quality, low- or no-sugar products on the market. So, question for me is if I should stay true to my original intentions and attempt to be a market leader, or follow the money? Not that entering either the GF or vegan markets is an easy task; rather, those markets are established whereas the diabetic market isn't (for reasons unknown to me). 

As a barely-funded entrepreneur, it's very easy to justify making every attempt possible to cut corners and maximize my margins through cost-cutting measures. Then again, why did I become an entrepreneur? It wasn't to make cheap products, but to make great ones. While the answers to the questions above seem rather self-evident, at least from a values point of view, striking the balance between product and corporate development and economics is challenging. I love this challenge, but I don't want to stay a non-profit for ever!