Industry: Food & Beverage
Products: Candy, sweet sauces
Despite early setbacks, business for "Chief Salty Sister" Gretchen Bender and sister Lisa is still sweet.
After a fast start, the Bender sisters faced an existential crisis: cut-back and regroup, or close the business.
"We started off in a sprint and grew really fast", says Bender. "We began in Encinitas, California through farmer’s markets and festivals and special events. Within a year, we had gone from five-thousand dollars in revenue to three-hundred thousand dollars." The two formalized the business in 2012, opened a retail store and production kitchen in Vista, California with fifteen employees. They developed relationships to have their products in stores around Southern California. The hand-made candies are formulated from secret family recipes from each of the partners and were a big hit.
But the business was as barely hanging on. "We made a lot of mistakes," says Bender. "We made the wrong decisions on our lease, on our facility -- all those schools of hard knocks mistakes. So by the time we moved up to Chico, California to save the business, we were out of funds. We decided to scale the company way back, re-evaluate our business model, and sort of just start over."
Compromising on quality ingredients wasn’t on the table. "We weren’t willing to sell out and sacrifice what we’re doing as far as the art of fresh, handmade candy," says Bender. "We make candy. We make toffees and caramels, and we have a line of caramel sauces. We make it fresh to order. When people get our toffees and our caramels, it’s like an epiphany to them, because people forget what real handmade candy tastes like."
Since the move to Chico, the company has re-established a small distribution network of local, independently owned shops and stores. Additionally, several customers around the country continue to order products. Online sales are growing. Also under consideration is a new brick and mortar retail outlet, this time in Chico. "The bulk of our business is corporate gifting," Bender says. "We deal with all sizes of companies that provide gifts to their clients and their customers. They’re getting fresh candy with ribbons matched to their corporate colors, their logo on the gift message, and all of that."
Another revenue stream for the Sea Salt Candy Company is the royalties paid by a different candy company who purchased some of their recipes under a ten-year agreement. "If I had a chance to do it all over again, I would have been wiser about our choice of location for production and our retail store," says Bender. "I would have raised investment money from the very beginning. If we had raised enough money with the opportunity to do it again, we would go back to our original plan to open a flagship store where you walk in and smell the candy being cooked. Customers would see us behind the counter making the candy, pouring it, cutting it, and dipping it. We would want it to be all made right there."
At this point, the company is looking for investors to finance expansion, but only those who understand and appreciate the hand-made processes that differentiate its products.
"In order to get to the next level, there’s kind of a vicious cycle of growing a company, especially a specialty food company," says Bender. "You scale it to a certain point where you’re able to hold on, where you’re able to make ends meet, but not get to the next level like wide distribution, where you can purchase the equipment that you need to make in bigger batches and all of that."
Needs: Growth capital, and maximizing manufacturing efficiency in order to maintain profitability.
Challenges: "The challenge right now is figuring out our way forward, if we’re going to continue to do this on our own, or if we’re going to seek out investors and go all in again," says Bender. The two partners’ balance each other out, as Gretchen is always ready to take a chance, while Lisa is inclined to be more cautious in her approach to expansion.
Opportunities: Bender believes the biggest opportunity for the company is finding the right investor to help move the Sea Salt Candy up to the next level. "Our brand and our product really have the potential to be huge," she says. Despite that desire to expand, both partners agree that if they don’t find the investor to make it happen, they’ll continue on a smaller scale.