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Most kitchen experiments end up as unedible dead ends.
But every now and then something new captures a niche and graduates to grocery stores all across America. That is the story behind Margaret Coons, founder and CEO of Nuts for Cheese. Coons, an English literature grad talks through her journey with Ivey faculty member Dave Simpson, on how a young vegan chef selling products at farmer's markets grew to managing Canada's leading artisan organic plant-based dairy manufacturing company, which recently became the second best-selling plant-based cheese in the United States.
The Entrepreneur Podcast is sponsored by Connie Clerici, QS ’08, and Closing the Gap Healthcare Group, Inc.
Transcript
Eric Morse
You're listening to The Entrepreneur Podcast from the Western Morrissette Institute for Entrepreneurship, powered by Ivey. Most kitchen experiments end up as unedible dead ends. But every now and then something new captures a niche and graduates to grocery stores all across America. That is the story behind Margaret Coons, founder and CEO of Nuts for Cheese. Coons, an English literature grad talks through her journey with Ivey faculty member Dave Simpson, on how a young vegan chef selling products at farmer's markets grew to managing Canada's leading artisan organic plant-based dairy manufacturing company, which recently became the second-best selling plant-based cheese in the United States.
Dave Simpson
Margaret, we call this a fireside chat. But that does not mean it's a hot seat. We want you to be comfortable and relaxed. You started this business very young, you started your personal passion about vegetarianism or veganism very young. Can you walk us back to say, what was the genesis for why you got excited about this area first? And then we'll move into why it became a business. What was that passion for you?
Margaret Coons
Absolutely. So, I started my journey as a vegetarian around the age of 12. But I started my business just after graduating from Western when I was about 24. So, I was never a huge meat eater. When I was a child, I stumbled upon a PETA video around the age of 12 that really kind of set my course towards a vegetarian, plant based diet at a young age and became very passionate about cooking because I was not in a vegetarian family. My parents did not, you know, have the intuition or desire to learn how to cook a lot of different vegetarian meals. And so, I started cooking my own and discovered that I really love food. I love sharing food with others, I love creating new recipes. And so when I was attending Western I had a dream to work at the vegan restaurant downtown on Richmond Street, it's no longer there. But it was a restaurant called Veg Out. And it was my absolute dream job to cook there. And I would go eat there very regularly. And every time I was there asked if they were hiring. And eventually they gave me a job working in the kitchen, prepping brunch on the weekends. And I ended up working there through the rest of my undergrad, and for a couple years following graduating and worked my way up through the ranks. I took their culinary program, following my undergrad and ended up becoming the head chef at this restaurant, being able to create different menu items for the restaurant and doing lots of different things like cooking demos on Rogers television, and cooking at different veg fests and getting you know the opportunity to be in front of people and share my love of food.
Dave Simpson
And, so, hands on, you knew how to cook. And that started in most of us when they go to university, that's your first time away from having mom and dad cook for you. And most know what happens, we eat really poorly. But you dove into it the vegetarian lifestyle, and you learned how to make different recipes. How did that twist into the cheese product that, that you came up with.
Margaret Coons
So, there was not a lot of high quality dairy free alternatives available, you know, 10 years ago, believe it or not, and so there was a lot of really kind of plasticky starchy products that didn't taste very good, kind of what people would have assumed with vegan food, you know, and the 90s or early 2000s. And, I saw an opportunity to create a product that was made with whole food ingredients, that was fermented that actually made you feel good, that was something that you wouldn't have to eat because you're a vegetarian, but it's something that you'd want to eat. Whether you're a vegetarian or plant based or flexitarian, or just a mediator who happened to be lactose intolerant, or, you know, had any reason to try it.
Dave Simpson
I want to ask how your friends reacted to around campus when you're tinkering with ideas. One of the challenges of when you have artisanal talents, is you make something good and your friends say, "you make fantastic pies, you should go into the pie business." And that's usually you know, when you have an entrepreneurial seizure and you decide you want to do that, but most people don't realize the pie business is about supply management, paying HST, getting things operational. They don't have that experience, but you had actual kitchen experience and you've loved it. So the the fury that goes on in the kitchen, you knew that's what you'd be into if you started a product. Is that true?
Margaret Coons
Absolutely. And I mean, I thought I wanted to be in the restaurant business originally, actually. So my plan, first of all, was to take over this vegan restaurant when the owner retired. So, I was attending– I think I always had the entrepreneurial spirit in me, because I was attending different seminars, I would go to Toronto and take seminars on how to own your own restaurant, when I was, you know, my early 20s, and very happy that that's not the course it took. But, you know I did have a lot of friends who were eating food that I made all the time and definitely, you know, encouraging me to do something with it. I lived with five girls in my second year of University, and I was always the one cooking lots of food.
Dave Simpson
And they were looking for better choices too?
Margaret Coons
No, they were they were
Dave Simpson
They were mac and cheese.
Margaret Coons
Yes, exactly.
Dave Simpson
But, you started throwing things at them, and they gave you proper feedback.
Margaret Coons
Exactly. Yeah.
Dave Simpson
Mom and Dad, let's talk about mom and dad. Because whenever we hear from an entrepreneur who starts something pretty young, we say, well, did they give a thumbs up? A thumbs down? Were they disappointed that they sent you away to university? You and I talked about Ridley college, that's a proud family tradition. And then coming to Huron college. What did the parents say when you say, "I want to open a restaurant business," or "I want to open the subset of a restaurant business," because as you say, at the time, that's the niche of the niche of the niche. How does supportive parents respond when you tell them that?
I will say my parents were always very supportive. And I think partly, I was so young. It's not like I had, you know, a storied career for 15 years, and then told my family, "I'm gonna go to a farmers market. Start a vegan cheese company." It was really, you know, I was trying something new. I was an English major when I went to Western. And so, I didn't really know what was next for me, I thought about doing, you know, a grad school program, I thought about this restaurant industry, you know, opportunity to continue to work as a chef or to own my own restaurant. And I think they were just happy that I was, you know, trying something new that I was passionate about. And honestly, my mom's been one of my biggest supporter since day one.
Dave Simpson
They are a business family? Like you would say they have business knowledge, so they knew it's not just about having fun, making a recipe. Business is a hard thing. It's a process. It's an operation. So they were supportive of that?
Margaret Coons
I do think they appreciate that. My dad's family has been in the insurance business forever. And they used to own a family insurance company for years and years that a lot of the family has worked at. So I think that they, they did have that kind of appreciation for what it takes to build a company.
Dave Simpson
So, being a hands on worker in the business, left her the night shift to be able to tinker. So when you're trying to start a business you're trying to find where can I try things out. And that's often a hard thing, finding a ghost kitchen, or, you know, makerspace that we would call here at the university. But you use the restaurant you worked at to say, "Hey, let me make my stuff as a nice side hustle," I assume at the night. How was that received?
Margaret Coons
Actually, the woman who owned the restaurant is, to this day, a good friend of mine, and she was super supportive. So, she let me rent the restaurant kitchen after hours for 25 bucks an hour, which as you're saying is a real challenge. When you're starting a food business, if there's not a food incubator, or a space like The Grove now has, which is incredible that London has that space for food entrepreneurs, there really wasn't anything like that at the time. And people were renting, you know, church basements, or, you know, different opportunities there. Something that was technically certified as a commercial kitchen. And so I would cook dinner Friday night at the restaurant, Thursday night at the restaurant, I would go home, get my vacuum sealer, my bag of cashews, bring it to the restaurant, cause you need to produce in a certified kitchen space that's inspected by the health unit. And I would make product until about four in the morning, I would you know, get friends to come help me wrap it in saran wrap and put stickers on it for the farmers market. And then I would go to the farmers market the next day. O yeah, those are my first team members or, you know, good friends who, I would bribe with some wine to come help me label cheese. You're friends came and helped you do all that?
Little, a little bit of wine and cheese. So you're kicking things off. And to me, a couple of things jumped to mind. When I talked to young entrepreneurs, they talked about whether or not they're passionate about something. And passion has a double edged sword. As most of you know, sometimes we make pretty poor decisions when we're passionate about something. But passion also keeps you working all night saying I'm going to get that done. To me, the most important thing though, is to find passionate customers, right? You gotta like business and go find passionate customers. When you first went to those farmers market experiences? Did you get smiles on people's faces, saying "finally somebody gets it." And were there enough to sort of commit yourself to say, "there's enough of these people. It's not just me, there's enough people looking for something, let's go do this." How did that start for you?
We did have really incredible receptivity kind of right off the hop. So, you know, I didn't do a ton of promotion. I didn't have a business plan until I was about a year and a bit into running the business. And, I hadn't really thought too much about what I was going to be doing with it long term. But I made a social media page for the company. And I started, you know, letting people know that we were going to be at the farmers market and on that first farmers market day, we sold out by 1pm of everything that we brought. And you know, there, like I said there really wasn't a high availability of products like this in the market. And so I used to also attend every single Veg Fest that used to happen. So, there used to be these things called Veg Fest, they still kind of exist, but in the you know, the early days, 10 years ago, it was where people would go find vegan products. So, there's you know, vegans are very diehard consumer base, and they're very loyal. They have a lot of fanfare, and they really want to find products that they can't find, it's a you know, it's not a mainstream consumer. And so there's people that will drive for hours to attend Veg Fest and stock up on products, and between Veg Fest and the farmers market that's how I funded the business for the first two years.
Veg Fest. Everybody understand there's a Veg Fest. Alright, so now I'm past the artisanal stage, people have verified that this product is good. It's a very different thing to say, I'm going to keep going Saturday morning to the farmers markets and do just fine. How did you make the decision to say, "you know what? Because it's going, Okay, I have to do some things differently." Because small craft based businesses, yeah, you're you're calling in your friends and putting those stickers on things and showing up at the farmers market. When, how far into it did you say, "I should get a production facility," or subcontract that, get proper packaging. We can actually grow this thing and talk to more than just the Veg Fest crowd that comes to Saturday markets.
Margaret Coons
So, because it was such a unique product at the time, we did have restaurants and retailers and grocery stores actually starting to reach out to us pretty early on, asking if they could carry the product. And that was some of the impetus to really keep growing it, is that there was that demand. And once that started to happen, I kind of figured I was onto something. And so I would start looking up a region, like say Waterloo or Hamilton, I would find every single health food store in that region, I would call them all, I would say I'm going to be in your area next week, can I drop off samples with my product, can I email you a sell sheet with some information about the products that we make. And I did that in pretty much every region of southwestern Ontario, and I would actually hand deliver our products for the first year and a half. I would load my Toyota Corolla, up with a bunch of coolers, drive to Toronto twice a week and deliver to the 15 retailers that carry out our product. And a lot of retailers like the Loblaws of the world, some of those bigger customers are looking to those more artisanal grocery chains, the smaller natural food stores to see what's trending and what's hip because, they don't want to be left behind. And they want to carry unique products. And so, if you're doing well at some of these independent health food stores, you may have an opportunity to expand into the bigger chains, and it kind of started flowing like that. And we had, after I left the restaurant kitchen, in the middle of the night, a little eight by 10 booth at the farmers market, like not much bigger than this podium, became available that was technically a commercial kitchen space. So, we were there for a year. And we were selling to about 30 restaurants and retailers out of that tiny space. There was about four of us working in this little booth couple days a week to make product. And that was when I kind of realized, you know, we need something bigger, and we moved into our first production space, was out in near Lambeth in the south end of town.
So, growth is a positive problem, right? The challenges of growth, change, maybe the love you had for tweaking ingredients. So now you gotta manage people, gotta manage supplier relations. Tell us a little bit about, was that a frustrating thing? Or did you bring on partners that had different skills to augment your team and your own personal passions? What was the growth phase like?
So, to this day, I'm still a solopreneur. I have, you know, investment partners, but I've always been a solo founder. But I have, you know, built a really incredible team around me over the years. And so it started small with a number of people helping me in production, actually, my first production manager is here. And we, you know, grew really organically, we had at our first production space, really small amount of footprint. So we had about 1000 square feet. And we would do production during the day, we ended up doing packaging at night because, I had two people that were willing to package in the middle of the night, having young children, which worked out really well because we didn't really have the space to have everyone working at the same time. And so really those first team members were people that were physically making the product, helping me at these trade shows, these veg fests and kind of traveling around, you know, being spokespeople for the product. And eventually, we started to build out some, you know, quality, some supply chain, some salespeople, some marketing team, you know, things like that. And, you know, now we're a team of 39 today.
That's what mom and dad would say, "We're a real business." Real businesses, I've been an entrepreneur for 40 years, and I always tell my students, you are not an entrepreneur until you've been sued. So talk to us about who comes at you. Because this is a unique product that I know the dairy community in Canada, takes shots across the bow all the time at people for using the word 'milk' and things. For people using the word 'cheese; and things, and we're 'Nuts for Cheese,' and it doesn't come from a dairy product. So who's taking shots at you? And how do you interpret that when you get those?
Margaret Coons
Well, I like to always say that we're, you know, we're real cheese, but we're made from nuts, you know. So it is a dairy free product. It's never our intention to mislead a consumer, we really want people to think that they're eating a non dairy product that holds its weight and can stand up to a dairy cheese as an alternative. But you're right. And the early days when I was even naming the company, I had some communication with the Canadian Food Inspection Agency to say "Can I call this brand Nuts for Cheese?" because it's not technically cheese. In Canada there's these things called the Standard of Identity Act, where you can't put 'milk' on soy milk. It has to be called 'soy beverage,' for example. Or, our product, even though our trade name and our trademark is Nuts for Cheese, our product was actually called 'fermented cashew product.' So if you look at the package, you have to have a product identifier that doesn't use the word 'cheese.' And so you have to do things like put cheddar in quotations, call it like a 'cheddar style' and all this kind of stuff. So we did have about a year and a half ago, the dairy farmers of Canada decided they were going to challenge my trademarks, because they're doing this to hundreds of companies at all times. And the, in the plant based space, because you know, they are a bit of a bully and, you know, feel threatened by the kind of rising tide of plant based products. And I do feel very proud that we stood our ground because our trade name was very important to us. And eventually they backed off. But these kinds of things definitely do happen in both Canada and the US. And I will say, I think Canada is just a little bit behind the US in terms of loosening some of those regulations, because the US has kind of been through this journey a couple years ago. And I think it's softening a bit on the Canadian side as well.
They're getting around to this is more common. We're not confusing anybody. Everybody understands what we're doing here. So, it seems to me, our curve has now gone, that we're a full fledged operating business, meaning real change, real distribution opportunities across the United States. Talk about the pivot, Canada versus the United States. Have we made that jump into America, and how's that going for you?
It's been great. But, I didn't know that it was going to be like this. I mean, we had been selling in Canada for about five years, we'd run our distribution through distributors, and through major retail chains where, you know, national was Sobeys, we Loblaws and Farmboy were our first major direct customers that we shipped directly to their warehouses, for example. And we decided it was time to launch in the US right when COVID was about to hit. And so we actually booked a trip to go down to attend a show called Expo West, which if you're unfamiliar, it's like the Olympics of natural food. It's this wild trade show in Anaheim, California, 80,000 attendees, it is just absolutely bananas. It's a big marketing experience for plant based and natural food brands. And so we were on the plane on our way down to Expo West when we started getting you know, word from other folks on the plane also heading to the same trade show that the show is being canceled because COVID-19 is becoming you know, a real threat. And by the time we've landed, the show was canceled. And we had a week in California with you know, no plans any longer. So, ended up posting on LinkedIn, like, you know, we're here, we're still gonna be here for the next week. Does anyone who's come to the show, and isn't attending any longer want to meet up with us. And a little grocery store in East Hollywood, reached out to me called Besties Vegan Paradise, and said, "Can you please come by, we'd really like to meet you." And they actually became our first US customer. So we were shipping direct from London, Ontario to Los Angeles, California, little shipments of cheese, that was our first US retailer. And from there, we really grew it kind of store by store. So similar to how we did in Canada, but the challenge with the US is like the freight and the shipping is so much more of a hurdle and so much more expensive. So that you really need to build up enough distribution for it to make sense to send a pallet of products. So over time we opened up we you know, kind of one warehouse at a time through distributors across the US that majorly sell natural food products. And now we're shipping to about 36 unique warehouses across the United States.
Dave Simpson
Geographically, are we all over the place?
Margaret Coons
We are in all 50 states. Yeah.
Dave Simpson
All 50 states. So California, as you know, has more people than all of Canada. So when you're trying to figure out how to grow a business, don't give up that opportunity to leave Woodstock, Ontario and say, Let's go to Woodstock, New York. Woodstock, California. There's Woodstocks everywhere. That's been a learning experience for you, though. The reception in the United States, for the actual product, are they on a different timeline of, we now understand the natural market more than in Canada? Or how do you find the differences?
Margaret Coons
I think just because there's more people and more products in the US there is more competition for sure. And we're not the only you know, market leader the same way that we are in Canada. So in Canada, we're you know, absolutely the market leader for artisanal vegan cheeses specialty products made from cashews in the US. Actually, I just learned yesterday, we got our new spins, data drop that we're now the number two brand in our category in the US, which is great. And we're super excited about it. But you can see that there is more, you know, to overcome when you launch into such a larger market. And so the receptivity has been great, we started in the natural channel, same as we did in Canada. So we've opened up you know, kind of actually by calling every single natural food store in the US same as we did in Canada to say, here's who we are, we're from London, Ontario, we make this product, can we send you a sample where you give it a try and get people to bring it into their store, we opened up over 2000 points of distribution through that method alone. And then you know, continued to grow chain by chain after that. So once you kind of have your initial foothold and a little bit of proof and some data, then you can start approaching the larger market. Isn't
Dave Simpson
that very uncommon to just walk down to the United States and don't say, hey, sorry, we're awesome. Because we all tend to be shy, but they've got a great product and weren't shy about selling their story. And with social media LinkedIn, we've got a good product, please try us Americans do it all the time. And I'm so proud that Canadian and half American. So there you go, Hey, London, Ontario has been good to you though, you can build a brand that goes all over the world in a wonderful little place like Linda Terrier, so speak to us about the support you've had from the community or the financial community or the mentor advisor community, have you been doing okay in this era, because I know you've got a nice new production plant. Tell us a little bit about where you're at there.
Margaret Coons
So I'm from the Hamilton area originally and came to London when I attended Western and started the business here. And at one point, in the early days of the business, I actually thought maybe I should be moving this back to Hamilton be closer to my family be closer to Toronto, and I'm so happy that that's not what happened because the London business community has been incredibly supportive. And, you know, the LEDC, the Small Business Center tech Alliance, like we've received incredible support from Western from, you know, from every different, you know, organization and institution in the city. And we're actually heading to the tech Alliance limitless awards after this because we're up for an award with those folks. But it's, it's been a really great place to grow. It's a really great place as a manufacturer to source talent, because there's so many manufacturers in the city, you've got Dr. Oetker, you've got Cargill, you've got Maple Leaf, you've got Nestle, like there's all these huge plants with really incredible talent that's been drawn to London, or people that have, you know, gone to Western and decided to stay that we've been able to build a really excellent team. And just geographically it's really nice to be so close to the 401. And really close to the border. So it's a, it's a really good spot to have a manufacturing business that you're going to distribute to the US in particular and across Canada.
Dave Simpson
Yeah. And the egg, egg related manufacturing, Critical Mass is coming here an awful lot. I want you to sort of sell it from the point of view of what's a great day for you. What do you love about being an entrepreneur and your business? What's a great day,
Margaret Coons
I was thinking today that like a lot of my days are very multifaceted because I do a lot of different things in the business because I'm, you know, the founder and the CEO and the chief innovator and I work in the sales team, I work with the marketing team, like I really get to wear a lot of hats. And it's really a lot of fun. And, you know, today's a great day because I got to have a number of meetings with customers with my team with different retailers. And then I get to come to a speaking engagement and I get to go to a gala after this. You know, I think today's a great example, yesterday I was on the floor and the production facility producing new products. So working on new innovative items that I'm looking to launch this year, and getting to work with the team that actually is at the manufacturing plant every day. And I get to travel quite a lot as well. And so I'm at a lot of different speaking engagements, I'm at trade shows, I'm at customer meetings across North America. So I think every day is a little bit different. But I think the best days are days that I get to work with people that I really admire and respect. And I feel very fortunate to have so many of those folks on my team. So awesome.
Dave Simpson
Now we can't take all sunshine and roses, right? So what's a bad day look like? What? What's the thing that is hard for you to get over? Sometimes you say I'm on this trajectory, it's fun, I'm enjoying it. I have these great days. Tell us though, there are some bad days. So what is a bad day? What kind of things happen to you?
Margaret Coons
You know, I think as an entrepreneur, you're gonna have no shortage of challenges, like some days you're gonna have every single thing that could possibly go wrong, go wrong, you're gonna have you know, a customer say they're delisting one of your products, you're gonna have another customer not taken a new product and a meeting, you're gonna have a piece of equipment break down, you're gonna have a challenge for the team member, there's going to be so many things. And then there's always the stress of like, you know, how are you going to fund this for the next two years, you've got to like you're thinking about all these things all the time. But I think what you really have to do is kind of like take those lumps and keep moving. Because if you get stuck in those bad days, then that's when you start to lose momentum. And I think there's, there's never just sunshine for sure. But I think you gotta keep moving forward as if there's always going to be more than,
Dave Simpson
you know, the sunny disposition attracts people to you, though. Nobody wants to see an entrepreneur, you know, beaten down by the world and glum, saying, Would you like to buy my product? Like who Yeah,
Margaret Coons
I also feel so fortunate that I get to do this, like I get to wake up every day and like, go make vegan cheese and sell it to people and talk to awesome people. And it's, it's a lot of fun.
Dave Simpson
So the company is in your image in the sense of the stuff that you make you like. So does that include tweaks to the recipes given you been a hands on chef? You're the one that's trying that? Do you take feedback from friends and production managers say, wouldn't it be cool if we had this? Or for me, you know, I'd like a bacon flavored cheese. What is it that you do to interact with people on that front? For sure.
Margaret Coons
I mean, I think all the time. We're trying to tweak and improve our products and to make new products that are speaking to the demands of the consumers and come up with new innovative ideas. And absolutely we do. So for example, actually, just this past week, I made a bacon out of rice paper at home for recipe for our social media channel. So if you guys don't follow us, we're at nuts for cheese follow us. But we made a recipe using rice paper bacon, because that was, you know, something that was kind of trending online, and we wanted to try it, or hurt in the process with our product, but we do a lot on social media, we do a lot of consumer surveys, we have a lot of interaction with people through trade shows and events. And, you know, always kind of welcome feedback from people that could say,
Dave Simpson
they're gonna get a royalty, if someone comes up with a great idea. And you are, you're gonna keep it. That's your IP. All right, I'm gonna throw it out to you, folks. After one more question here. Where do you see yourself going now? Because, you know, you're a young lady. But you've been doing this surprisingly, for nine years, you told me, Oh, nine years of growing a business. That's a significant chunk of time. So where can we get to? From the point of view? Does it still fit your goals and passions? Or do you step back and say, I'll be an owner, but I'm going to have a new recipe person? Or what's the process of your thinking there, and maybe it's too early. But just tell us a little bit about where you think you're going?
Margaret Coons
Yeah, I mean, I think for where I'm at today, I'm really enjoying growing the business, there's always something new happening, we're still opening up a ton of new distribution, partnering with new retailers, we're getting new products onto the market, and I get to make all of those products, I'm really passionate about creating new concepts and getting them out there. I think, in terms of my own personal development, I'm definitely a person that wants to continue to grow and evolve every day. And so I've been able to, through building a team and through being able to let some of my responsibilities go participate in some other opportunities, like I've been asked to join a couple of boards this year. So I sit on the L LEDC. board and I sit on the CGL CC board as well. And I've been able to do some more volunteer work, I've been able to do some more mentorship and just kind of developing myself as a founder and an entrepreneur to continue to grow and take on more. But I think there's no shortage of work to be done in the world. If there's space
Dave Simpson
to grow the business, though. Absolutely. You We just scratched the surface. Are there more competitors now that realize, hey, you've done something pretty unique? There
Margaret Coons
are for sure. And I think it's interesting, because it's still such a nascent category that a lot of people still are pretty unfamiliar. Like, how many of you have tried plant based cheese? But you're gonna see, there's still so many people that are brand new to the whole
Dave Simpson
the whole it? Yeah, this is a fantastic presentation. And I saw three hands out of the 40 people. How many have tried this product? One? No, you don't count? So this is excellent. Yeah. Because you have an opportunity to grow with how many of you who didn't put up your hand would be amenable to trying something like that? Yeah. So you're not you're not angry carnivores that don't want to do anything like this. Right? You're so you use social media to get the attention of folks like this. You still do product samples at shows and things to try to get them excited. So if your disposition is, I'd be interested. There's no shortage of opportunities to find your product. Now, would that be true?
Margaret Coons
For sure. And I think a lot of people like even grocery stores like they're so new to figuring out where to put the product in store. So sometimes we sit in the deli case, sometimes we're in the plant based vegetarian set. So it's really kind of a still a very emerging farm boy was over the deli and the cheese there, I found that and a farm boy, that works great. It doesn't work as well at other retailers. So I think there's still not a consistent strategy across the way you
Dave Simpson
don't have total se on that, right? You got to deal with your shelf space fighting is a is an entirely different ballgame. So hey, let me walk out there because I want to get you guys engaged and involved here. Who's gonna start us off? You've been eager? Are you drinking a plant based product there? Okay.
First of all, thank you, Margaret, for coming. It's great hearing your story. For someone who might be interested in pursuing a career in entrepreneurship, but hasn't had an idea they've started since first year, it has been a part of Morissette and many Western Ivy students do where would you recommend starting?
Margaret Coons
I guess it depends if you're thinking about more of like a product or service based business and I think it's just, you know, one thing I've heard a number of times, actually, is to look at, where you spend most of your resources. And if you find that you're spending a lot of money on food, or you're spending a lot of money on travel, then you know, you know kind of where your interests lie. And I think, you know, like we were hearing it is so important to be passionate about what you're doing. I think that is the one thing that kind of keeps you going so finding something that you're passionate about there's so many unique opportunities and also like we're hearing like the number of entrepreneurs that are planning to retire I think that there's so much room for for a new business but I think it's you know, important to kind of ideate with things that you're you're passionate about and start their
Dave Simpson
personal passion that people you're around you see what problems they have where frustrated consumers where do we get solutions by the way, I the in business students versus English degree. How did your English degree He helped you in business
Margaret Coons
tell us write a really good email. No, I mean, it's interesting because I did not have a business background at all. And sometimes I really think that that actually helped me because I didn't write a business plan to start, I didn't overthink it. And I think that that's something that people struggle with a lot. Like I do a lot of mentorship for people that kind of have an idea or they like, don't really know when they want to get started. And they think like, I need to put a whole business plan together before I can launch. Honestly, like I launched with products wrapped in Saran Wrap with stickers I printed on my home printer, like you don't need anything, you don't need a business license to really kind of get your idea going. You don't need any of that, you know, kind of red tape to start. And I think that that's like the biggest hurdle for people is they have an idea or they are passionate about something and then they feel like they need to do all this pre work before they get going. You
Dave Simpson
get out there and sell, sell, sell. That's your first and best feedback. One more here.
Hi, Margaret. My name is Saanvi and this is my best friend Yasmina. We're both ha students and we're both foodies. So we, yeah, we're big foodies. We're always sending our meals to each other every single day, she'll text me Saanvi, open Snapchat, I just made something really good. So you're really speaking to us today? I had a question for you. So he was teaching a lecture for me last week. And he talked about how London had no idea about this is a huge test market. A lot of brands have launched here. So I was just wondering, how has London been a test market for you, because I hate to say it. But when I came to London as a student, like there was a very different perception of what the city is like. And I'm finding out there's a lot more to it. So I'm curious to hear your experience.
Margaret Coons
Yeah, I do think that that's super interesting that products are tested here to see if they're going to kind of hit elsewhere. And I feel fortunate that that was the environment that I kind of tested my products. And I think London has such a diverse demographic base, especially outside of like the Western bubble, like when I went to Western, I didn't really leave campus or the downtown area. And I remember when I was getting one of my first apartments, and it was looking east of Adelaide, and I was like that is so far, how am I ever gonna get anywhere. And you know, it's now I've moved just slightly outside the city. But I think that there are so many different, you know, tastes and experiences and people that are living in all different parts of the city. So there is a unique opportunity to access a really wide variety of folks and different experiences. And so the farmers market for me, was a really great way to get in front of all kinds of different people that happened to go to the Western fair, but they don't necessarily live in the East End of London, they may go to Western, they may take the bus down, they may be from the north end. And I think that any kind of community event like that, where you can get out in front of people, and that's why those veg fests were like obviously a very niche opportunity. But it still had people coming from all over the place from different economic backgrounds, from different, you know, occupations and things like that. And, yeah, I think, you know, London also really does attract a lot of great businesses in terms of like different diverse types of businesses, a lot of manufacturing, but a lot of tech as well. And so there's I think a lot of diversity in terms of the people that come to London decide to stay.
Dave Simpson
She's she's referring to the very first McDonald's was on my street, I went there in 1967
Margaret Coons
tested that based burger at the London Argyle mall, McDonald's location for every trade it went.
Dave Simpson
It didn't go something like that. Much.
Hi, Margaret. Um, I just had a question regarding what you said that you were still a solopreneur. I'm sure as you've gone along your entrepreneurial journey, you've probably heard, like, if you want to go fast, go alone. And if you want to go far, go with the team. And I was just wondering, in your own experience, as an entrepreneur, how has that adage, maybe come true for you? And if you were to go back, would you want to do it with somebody else? That's
Margaret Coons
a great question. Yeah, I think, you know, I've been very fortunate to have really wonderful team around me kind of since day one. But I think to your point, it is really hard. It can be really lonely, it can be a very alienating experience running a business and being the one who at the end of the day, everything is going to fall to you. And no matter how much your team cares, really, you're kind of the one who's going to live or die with it. And I bootstrapped the company. For the first seven years, I didn't take any outside capital from investors until year seven, which was very challenging, very, very stressful, especially having manufacturing, having a lot of team members, you know, every single week, I was like, Can I pay for cashews this week? Or can I do payroll? It was like, really, really hard and scary for some time. And I think looking back, you know, it's, it's important to grow your business to a certain size before you take on investment. But I do think I feel fortunate that I didn't have a business partner from the outset. But I feel very lucky. The investors that I brought in are very aligned with the mission and they've been really wonderful to work with. And that's not always everyone's experience, especially if you take capital early on. And so I bootstrapped the company to about 5 million in revenue before taking capital and that was a very terrifying experience. And I'm also really happy that I've had that experience because now I really know how to be scrappy. Yeah.
Hi. So I, you mentioned you've been a solopreneur. My question is around production. And it seems like from what you've mentioned so far, it's very in house, you've maintained it in house.
Margaret Coons
Can you speak into the mic?
Can you hear me now? Yes. Closer. So you mentioned you're a solopreneur. And even it sounds like the production that you've maintained it in house and so on. Most recently, you've built your own manufacturing facility and things like that. But during the early growth phase, or at any point in time, did you consider potentially outsourcing the production so you could focus on the business? And if you did, and didn't choose that path, you sort of look back and think could have helped with growth? Or could you speak to that at
Margaret Coons
all? Yeah, I think when I first started, I didn't know about manufacturing and CO packing as a opportunity of something that I couldn't even access. And so I thought, when you start a business, you have to make something yourself, you take it to the farmers market, and you know, kind of bootstrap your way up the chain there. But I also created a product that would be really challenging to have a co manufacturer produced for us. So our product is like made from nuts is fermented, it has a multi day steps of preparing the product it and requires aging and a lot of like different hands on touches. So we've been able to automate a lot of it, but it's still very artisanal and handcrafted to this day with a lot of team members touching it. So it's not something that for our flagship line of products has ever really been an opportunity, even if I had known about CO packing as something that we could do. I have thought about it for future product clients in terms of you know, if we wanted to make something really unique, but we don't want to introduce certain allergens to our plant, or we don't have the equipment. And we don't know how it's going to go do we send this product to co Packer first to test it before we invest in the manufacturing framework to make it happen.
Dave Simpson
By the way, the critical mass that we're talking about, Ilana, that's an important piece, because you get more CO packers, when you start figuring out that we've got a critical mass in our city to do a lot of different things. So Right.
Good afternoon, everyone. My personal opinion is that the US has a richer culture in terms of starting businesses, supporting startups. And I am continuing to compare between the US and Canada. Do you see that changing in Canada moving forward? Or do would you say Canada already has a rich culture as well as to encouraging persons to start businesses? And secondly, I sitting and listening to your story, and wondering how do you deal with scalability? Because it's one thing to start a business, but it's another to Okay, decide what products to launch? How to Grow? How do we not grow too fast, and move to market too quick with certain things. And you mentioned that yesterday, you were on the production floor and working on different products that you're going to be launching this year. So I really wanted to know as well. How do you deal with that?
Margaret Coons
Yeah, I think I'll start with the second question. First, I think the scalability piece, you have to make a lot of mistakes. And I think you have to make really calculated mistakes, you're not always going to make a product that's going to hit immediately. And I think you kind of have to just test and learn as you go within reassignment, some tests are going to cost money, and they're going to be costly mistakes, and it's not going to be what works out in the end. But I think that you need to keep trying stuff. And kind of no matter what the more you try, the more you learn, the more mistakes you make, the more you grow. And, you know, we have never discontinued a product, but we do have products that I love so much that are not our best sellers. And you know, I still feel very committed to them and very loyal to them. I don't want to you know, cut them out of our lineup. But it's it is hard when something's like your baby, and you feel very passionate about it. And it's not necessarily going to be the thing that's going to be your supermarket success. And I do think that that's why sometimes having someone come manufacture product for you can be a relatively safe way to test something instead of investing in equipment. But really, I think also if you can rent equipment or rent space for food, for example, it's you know, different for different industries, but there's ways to kind of mitigate your risk. But yeah, I think you know, if you are kind of passionate about something and have your your heart in it, it's going to have a way better chance of succeeding whether or not it's going to be the long term commercial product that carries you through or it's something that gets you started. So I think that's what I would say about that. And then in terms of Canada versus the US, I do hear this all the time. I think it's challenging, particularly for Canadian manufacturers to find equipment to find funding to find, you know, all kinds of different resources that seem to be more readily accessible across the border. And I do think that that is a challenge. I feel like personally, I've been fortunate to find the partnerships that I have, but I do Hear from other entrepreneurs quite regularly that they go to US investors, they can't get capital in Canada, they, you know, buy equipment from across the border, they source their ingredients from elsewhere, things like that, that I do think that there's an opportunity for, you know, more economic development and in Canada in London, but
Dave Simpson
I would add, sales are your best source of funding, right? So not having to go to investors, but having a legion of followers that put a purchase order in, that gets the attention of the investment community because it is true in Canada. When you go for investment. Sometimes I'll go to a building in Toronto. And the first question is, how did you get into this building? What school did you go to? Who do I know? As opposed to in the states you walk and say, what problem are you solving and some little little bit that way? They're, they're uncomfortable that so. So keep going for sales, make sure you got committed and you can prove to somebody that you're getting money, not just your friends who say, that's really cool that you're doing that business, you know, pat you on the head, that's who's pulling money out and saying we'll do it.
One of the fears I have starting a business is distribution. So I was wondering, what is your current distribution process? And how has it evolved since you started?
Margaret Coons
When I first started, I literally like I was saying was loading coolers off in my car and driving my product to stores myself, I don't fully recommend that for a long term strategy. And we moved from there to using couriers doing overnight shipping, and insulated shipping containers. And after we had about 60 to 70, restaurants and retailers carrying the product, we had enough critical mass to attract distributors. And so we started working with a small regional distributor called Gianluca nail, they're based out of tobacco, they were one of our first kind of regional distribution partners that they still sell our products, but they sell to, you know, majority of the grocery stores in Ontario. And from there really, it becomes it's a little bit of like chicken or egg, which is not a very vegan metaphor. But you know, it's, it's about having a retail chain that's committed. And if you have a large enough commitment from a retailer, any distributor will sell your product, because they're really just moving boxes. At the end of the day. Some of them have their own sales team and can be really great partners. But their job is to move the product from your place to the retailer. And I think you know, from there, to get into national distributors, we really did have to have national commitment from Sobeys was our first major national chain that carried our products. And that opened up unify Canada for us. In the US, we opened up unify and k here are two primary distributor partners in the US and we opened up those warehouses one by one. So we would get about 25 stores around a warehouse that was going to pull at least, you know, five cases a month of each product. And then we would say to the distributor, hey, we've got enough interest. And here's the stores that are pre committed to buy the product and then you have to kind of chase it and build it like that until you get a national chain like sprouts is our largest customer in the US they have about 400 stores across 30 states ish. And that opened up every day warehouse in the US for us. So it's a little bit you know, cart before the horse and navigating that. Oh, thank you, uh, Marguerite, it's really an inspiring story from a your experience. Most people talk about your previous success and how you just happen to discover that opportunity. So I have a question that is because you just find the opportunity, your niche niche niche market. And so as your enterprises, you know, growing expanding into large markets, and when more businesses find it is really profitable, they will also rush into the market, and they will certainly take shares from you. And when you think of that prospect, I mean, are you going to find new opportunities using your current eleifend and your technology and your supply chain to dig into to find and dig another niche market, or you will just keep digging this market until it has been, you know, further exploited. Couple things, I think when you're starting a business, it's important to kind of identify some sort of niche, it doesn't have to be as niches you know, vegan people that are looking for cheese, for example, but you know, some kind of target that's going to be come like your fans and gonna become those people that really champion you and are excited about what you're doing. I think as we've grown for sure, we've had two challenges. One is to find out how to educate consumers about the products that we make, because so many people like a have never heard of vegan cheese, or they think it's gross. And so like, we have to cross those two hurdles of like, hey, we make this and is made from real food ingredients, it's organic, it's tasty, whatever, and get people to actually put it in their mouths and try it. So that's kind of challenge number one. And then challenge number two is to increase our use education because we have these premium plant based products that are, you know, sold in some retailers for upwards of like 12 or $13 a unit and people buy it and they say Oh, I'm going to save this for Thanksgiving or I'm going to save it for my next special family occasion. And, you know, we really want to have products that people eat every day and can provide more turns for the retailer because that's something that becomes a Turkey have to chase when you're in retail is how many units per store per week for flavor are you selling, and that's something that you get graded on. And that kind of determines whether or not you continue to expand. And so we have certainly kept that in mind as we've created new products in terms of like, we just launched a cream cheese product, I think it's in one of these bags. But that's something that, you know, we figure people will consume more regularly. And I do think about that as for launching new products, for sure. Not necessarily going for more mainstream appeal, but more usability and accessibility. And another channel we've been working on is private labeling, because especially with how things have been, you know, in the economy and people's experience of grocery shopping, grocery prices going up, people are shifting to store brands a lot more often. And as a manufacturer, we have an opportunity to produce, you know, slightly more accessible items under a more mainstream brand name.
Dave Simpson
You're doing what your restaurant did for you. Let's use that equipment and private label for someone when it's unused. Yes, break back here.
Margaret Coons
Thank you so much for being here and sharing your experience with us. My name is Aveline. And I'm an entrepreneur in the realm of AI healthcare. So I have a two part question for you, if you don't mind. The first part is that, how did you get your first term sheet from investors? And if you don't mind sharing, what does it look like? And the second part is, how how did you build up your company's value in terms of valuation and finance wise? Thank you. Congratulations on your venture, that's very exciting. Um, you know, I think for me, for a long time, I had investors coming at me that weren't going to be good partners, and they were putting forward deals that were not going to be beneficial to me, and they wanted to own majority share of my company, and I would be an employee. You know, I think that that's something that you'll see a lot in the early stages, I think the best way to validate your business for fundraising is revenue. And that's really hard when you're in a tech space. So I don't think you know, the two worlds are not necessarily alike in that way. But in CPG, you know, we had seven years of sales experience, we had consumer references, we had revenue, we had team, we had manufacturing, and we had all these assets that we could kind of use to justify the investment. But you know, I pitched to nine different groups, primarily Canadian groups, I pitch to one American group ended up working with a Canadian fund that's actually funded by Farm Credit Canada, so they were really great partners, they mostly work in the egg and food space. And so they were very aligned partners for us. And they were the first ones to put a term sheet forward out of the groups that we pitched to. And it was a very fair deal for the business that, you know, really was very respectful of my position as a founder wasn't advantageous, there was no, you know, press Share, there was no liquidation preference, there was really kind of favorable terms for us. And I think it was because I managed to hold out long enough to be able to negotiate something that was in the best interest of the business. So I think if you can really try to prove the concept as as much as he can, and then Yeah, watch out for some of those terms. Because that's where people are very quickly go from founder to employee of their own, could they
Dave Simpson
tell you how long their time horizon was in the term sheet, so you have an expectation of when they want to get out? So can you share that with our students?
Margaret Coons
Yeah, often, it's like seven to 10 years at most, some are quicker, some are gonna have, you know, a lot more intense expectations. Our timeline is roughly six to seven years of return on investment. But again, because I do feel like they're true partners, I think if you know, that timeline came up, when we were all still in it together, we will be able to renegotiate that. Excellent, sir. Thanks so much for sharing your story. So you seem to maintain a number of key relationships, like your distributors? How do you keep them happy? Oh, you know, I'm a people pleaser at heart. So I think you know, with any relationship, it's really important to keep in touch. And I think that that's something that, you know, myself too, like having all of these different partners that we need to keep in touch with all the time, and it does become challenging, and it's easy to kind of let that go. But we have regular business reviews with major customers with all of our distributors, with our brokers, even if there's nothing going wrong. Yesterday, I had a business review with one of our customers, that's it was just all good news. But we weren't like going through anything that was like a challenge or a problem. It was just really like, thank you for all the work you do on our business, how can we be a better partner? And I think that those conversations are really important to have. And to some degree, I think, you know, you are never going to be as if you're in a selling position, you're never going to have the leverage on the relationship. So it's really always about like, how can we better serve, how can we be a better partner to you and how can we, you know, kind of make things easier to facilitate and growing together and I think that that's kind of always the best way to lead those conversations.
Hello, my name is Sandy. And my question is, how do you go are some tips you can share in terms of like securing, I guess the first term sheet or like first loan from the bank? Because sometimes you have an idea you have passion, but sometimes it's hard for them to see it because they only care about numbers for certain, say, and how do you manage, for example, like maybe the first year, second year, like you have some losses? How do you overcome, I guess, the financial challenges?
Margaret Coons
Yeah, I think even more than financial challenge, it can be really demoralizing to keep pitching and pitching and pitching and not hearing. Yes. And so I think that is something that is such a test of character of entrepreneurs, especially pre revenue, entrepreneurs that are trying to fundraise is that you just have to keep going and keep pitching. I know, friends who have really, you know, quite small businesses, but they have an amazing idea. And it really could go somewhere who have pitched to 500 plus groups, and, you know, still haven't heard the yes that they wanted, but the you meet, you may hear, you know, a partial something, you may get some people that come in together. And I think that that's a way to look at it is if someone's not really willing to take a full bet, there's a nice collaborative opportunity for a number of people to kind of share the risk. In terms of banks, you know, I worked with credit unions for the first number of years, and I worked with, you know, banks that were a little bit more tolerable for, you know, higher risk entrepreneurs, there was a great program that we took advantage of the small business financing program and candidate that helped us purchase some equipment, I did a lot of grants, I did a lot of pitch competitions, I spent a lot of time trying to get free money. And, you know, was relatively successful in those early days to be able to get enough to keep us going without necessarily needing an institutional partner. But again, you know, my business is very different from from yours. And so it's, the capital requirements are different when you're a farmers market brand was trying to buy, you know, a new blender versus, you know, invest in technology. But but good luck, and I think keep keep going.
Hi, Margaret. My name is Eva. And thank you so much for sharing your story. I have two questions. I'm just curious more about your thoughts on CP? Je VC firms? I'm sure you've may be approached to some of those firms or have had conversations with them. And also, I'm curious to hear more about failure. Have you ever faced any like, times where you're like, I'm, I'm done. I don't want to do this anymore. Yeah,
Margaret Coons
I mean, for sure. And I think if anyone's interested in like, the groups that we pitched to, I'm happy to share that list in a way that can get out to new folks. But, you know, we pitched to like the Arlene tech and sense of the world, we found like pretty much any fund that was focused on food and beverage, or CPG. That seems like, you know, a fit for a smaller organization and presented to them. And a lot of them were people that were, you know, either connected to or aligned with people that were advising me at the time. So I think it's also very important to have good advisors that know people in the investment community because it is true, like you were saying, like, it is who you know, to some degree, even if it's ultimately not going to be the thing that makes the decision just to get the conversation started, it can be really helpful to have someone who's advising you who believes in you who can kind of vouch for your concept or idea. I'm sorry, it was just like part of your question. failure, failure. Oh,
Dave Simpson
just ignoring that. Yeah.
Margaret Coons
I mean, yeah, I think, absolutely. I think many, many, many times over the years, I've been like, Oh, my God, this is not working. What am I doing, I should have gotten a job. And I think that that's normal, I think it's really normal to have those experiences where it feels like the you know, the world is stacked against you like, Oh, my God, these problems are insurmountable. And I think a lot of that is burnout. And I think it's also super important as an entrepreneur to try to take care of yourself as best you can. Because I spent years not sleeping enough, not eating well enough, sacrificing everything for the business. And I will say I still do that. But I think everything feels really hard when you're not in a space of, you know, being well taken care of. And then you're more likely to feel like Oh, my God, the sky is falling. But I still, you know, if we're not having the month that I want us to have feel like the sky is falling, and it's not working. And then if we're having a great sales month, I'm like, oh, everything's perfect. So I think it's totally normal to feel like that. It's
Dave Simpson
like being a parent, you never stop worrying, right? Even though your baby's getting bigger. A couple of things I want to take us back. passion was talked about a lot here. And we've got a unique combination here. And it's one of the recipes for success. Because I always worry about folks that are really passionate about a personal problem they want to solve, but they're blinded only by that passion. What she's been able to do is say, but I like business. I like solving problems. I like being the leader of my group. So she's passionate about business, and she's able to find passionate consumers, because that's the important part of a business. You can be passionate and you need to be passionate so that you don't have down days, right? That keeps you going. But passion can blind us to keep building a mousetrap that nobody wants, right? So if you're at least open to I want to build a business, I want to scale this thing. And gosh, are we fortunate we have passionate customers, okay. So she shared that with us, which I think is really, really important. The second thing I want to remind you is, you don't have to be a jerk to be an entrepreneur, we see a lot on TV, we see a lot of tech giants that we look at, that are frankly, jerks. Look at that smile on her face. We want to coach here at Western, that you can go out and create a business and be decent with your sociopaths, your employees, your friends, be good to your customers, fight the battles over intellectual property, keep smiling when someone Sue's you and just say not today, Sister, I'm going to take you on third, London, Ontario, you can start a business anywhere, don't get in your head, I've got to go to GTA go where it works for you where it works for your employees. If you want to attract talent, and people were able to create a nice cluster. But remember, some of the biggest companies in the world are in tiny little towns, and they just become synonymous with us that they're a fantastic company. You know, you say Oh, Nestle, fantastic company, tiny village called Vevey. So in a beautiful part of Switzerland, yes. But a worldwide because I make a good product. And I'm not shy about going to the big farmers markets, not the little farmer mark to the United States and all around the world and making distribution agreements you can take on the world from anywhere nowadays. Okay, so please decide to go for it. And the last thing I just want to remind us of why we do this series, people talk about entrepreneurs as risk takers and those that are in my class. No, I say now we're risk mitigators. To me, it was always riskier to have someone else calling the shots for me right? To be an employee that tells me I have to stay up all night to put those stickers on. When it's my baby, I stay up all night to put those stickers on, because I want to go do something tomorrow. Right? So having that freedom, the opportunity to own something, to drive it to build a brand and create some value for our community, for your employees and for yourself. And to make mum and dad proud that you twisted that English degree that they sent you off for and went out and conquered a real problem. That's what makes a great entrepreneur. So on behalf of our friends at Dejardins, I want to thank you from the Morrissette Institute for Entrepreneurship for coming and joining us today. Thank you. Thank you everybody. Got a little gift
Eric Morse
The Entrepreneur Podcast is sponsored by QuantumShift 2008 alum Connie Clerici and Closing the Gap Healthcare Group. To ensure you never miss an episode subscribe to the show on your favorite podcast player or visit entrepreneurship.uwo.ca/podcast. Thank you so much for listening. Until next time.