How to Become a Food Manufacturer: From Recipe to Entrepreneur

Grocery business. It's a number, it's a volume game
Lisa Proter: Grocery business. It's a number, it's a volume game. Because think about it, it's a penny business. How much can you sell a pint of ice cream for? Not that much. So the only way you can make money is by doing huge volume.
Mirav Ozeri: Hi, I'm Ira Vazeri and welcome to the entrepreneur corner of how much can I Make? If you're dreaming of starting your own business and looking for inspiration and ideas, you came to the right place. We're going to hear all about the ups and downs of building a business from the ground up to an industry success. So listen on today, our guest is Lisa Proter, the co founder of Organic Nectars, which was the first to market dairy free sweeteners and ice cream when it wasn't popular at all yet. So we're going to hear all about the challenges and how they brought an idea into reality to a thriving business and a success. So let's dive right in.
Organic Nectars is the Hudson Valley's first all organic food company
So first, thanks for being here.
Lisa Protter: Oh, it's my pleasure.
Mirav Ozeri: And sharing, uh, your experience. Tell us a little bit, what is Organic nectar?
Lisa Protter: Well, Organic Nectars is a manufacturing company. We are the Hudson Valley's first all organic, all vegan food company. We make vegan ice cream, cashewtopia out of cashews, we make chocolate bean to bar chocolate and we sell alternative sweeteners, healthier sweeteners and some cacao ingredients.
Mirav Ozeri: When did you start the company?
Lisa Protter: About 20 years ago. 21 years ago.
Mirav Ozeri: So that's why I'm asking, because it wasn't that popular then. Vegan, dairy free, all of that stuff,
Lisa Protter: it was just kind of, I mean it was just kind of starting to get traction. The raw food movement was starting to take, take hold in the city. And my partner Steve, who's a food scholar and a world cuisine expert and a self taught nutritionist and a great
Mirav Ozeri: cook, I mean, yes, yeah, he's a
Lisa Protter: great cook and he became sort of fascinated with this raw food cuisine, which if you know anything about raw food, it's basically fruits, vegetables, nuts and seeds. That's it. But if you know how to use these ingredients, you can make gourmet meals that you won't even believe. You're not eating meat, just doing really great things. Making nut pates, making cheeses out of nuts, making pasta out of coconut.
Mirav Ozeri: What?
Lisa Protter: Uh, it's incredible. So we both became fascinated with it. But I'm not the cook, he's the cook and he became a certified raw food chef and basically said this raw thing, this raw movement is powerful. We should really do Something. So I wasn't really sold on it. I spent my career in tech and entertainment, so food seemed a little boring. But I did love the idea of a growing trend. And I believed in this way of eating and was so blown away when I saw these delicious healthy meals that you could make using raw food. Uh, they tasted great and they were healthy and they were delicious. So I was fascinated with that. So we, we started actually importing agave syrup. That was our first product.
Mirav Ozeri: Wait. He had an idea. He knew the royal, uh, movement is a big trend and it's going to be here. Uh, how? From just knowing and having the idea and the understanding of the market. All of a sudden you're ordering agave.
Lisa Protter: The ingredients that you use when you're cooking raw food, they're all. Everything's plant based. Um, it's arguably a much healthier palette of ingredients. And one of the ingredients that he started to use a lot was agave syrup, which 20 years ago, very few people knew what it was. So the agave plant, which is what tequila is made from, if you don't make tequila, you can make a delicious sweetener. It's a fructose based sweetener. It's just a single ingredient sweetener. And it has a delicious taste, a slightly lower glycemic index than sugar. And it was kind of all the rage. It was kind of becoming this cool sweetener that people wanted to use. And it was not widely available at all.
Mirav Ozeri: You ordered it from Mexico?
Lisa Protter: We ordered it from Mexico. We ordered it in big totes and we started decanting it. We literally would be in our garage decanting it into smaller containers. And, you know, I went to Sunflower here in Woodstock and I said, hi,
Mirav Ozeri: did they sell it?
Lisa Protter: They selled it. And then to my surprise, they'd call and reorder.
Mirav Ozeri: Wow.
Lisa Protter: We really didn't. I wouldn't necessarily recommend to start a business the way we did most. I would recommend that you have a place plan and you put a business plan together and a financial picture. We did not do anything like that. It was more or less just.
Mirav Ozeri: You did it very organically.
Lisa Protter: No pun intended. Right. It was a weekend hobby. You know, we were just kind of doing it on the side and it just kind of started to take off. And I guess about maybe a year or two in is when I realized, I think we might have a business here. So I stopped doing my other work and Steve stopped doing his other work. And we decided to focus 100% on organic nectars. So.
Mirav Ozeri: But you only had the agave.
Lisa Protter: Uh, the first product was agave syrup. Then we started to branch out slowly into other things.
Mirav Ozeri: Are you still working from your garage?
Lisa Protter: We were working out of the garage. Uh, well, okay, so we turned our downstairs, our basement into our production facility. We, you know, we brought in a commercial kit, uh, you know, commercial kitchen sink. We put a bathroom in. You know, we made it into a business and we had employees. And. And then about, I want to say maybe five years in, four years in, I can't really remember. We then took a, A space in Saugerties. We now have a, A warehouse, a large warehouse.
Mirav Ozeri: And a factory.
Lisa Protter: And a factory. Yep. Yep.
Mirav Ozeri: And how m. How many employees do you have now?
Lisa Protter: Oh, uh, we have five employees.
Mirav Ozeri: Wow.
Lisa Protter: Yeah, we're still, you know, we're still very small, but we've become much more efficient. We actually had more employees years ago because we didn't quite know how to do everything as efficiently as we do now. You know, you do something over and over again, you figure out how to do it a little faster, a little smarter. And, um, we've gotten pretty efficient with our current production process, so.
Okash Utopia came close to bringing in investors eight years ago
Mirav Ozeri: Sounds like you didn't have to raise any money. You just went from one step to the next.
Lisa Protter: Well, that's a really good. That's a loaded statement. Um, we have not raised any money. I'm not sure that was the wisest move, though. Um, we actually came close to bringing in investors, so six, seven, eight years ago. And, um, we did not for several reasons. You know, when you get involved with investors, it can be a complicated, uh, relationship. And I wasn't really sure that the investors we were talking to were really the right partners for us. In hindsight, sometimes I regret that because had we taken on investors, we would have had more money to grow. And the challenge in manufacturing is when you don't have deep pockets. You have limitations. You have limitations in terms of the marketing you can do, the equipment you can buy, you know, so we do have limitations. And sometimes I do regret not taking on those investors. But no, we are completely self funded, which, you know, at least, uh, we don't have to worry about arguing with investors, you know.
Mirav Ozeri: Right.
Lisa Protter: Which is nice.
Mirav Ozeri: And also having to perform to a certain level that an investor will expect from you.
Lisa Protter: Correct. Yeah.
Mirav Ozeri: But I go to New York City. I'm, um, here in the Hudson Valley and I see Okash Utopia everywhere.
Lisa Protter: Uh, well, I think it's just maybe where you're going. We are not. We're not everywhere, but we ship everywhere, you know, with Since COVID as you know, people will order a bottle of ketchup online now. So what's happened in the grocery business is it's not. You don't necessarily have to be at that brick and mortar store anymore. People are ordering their groceries online. And that's good news because it's very competitive. The challenge with the grocery business is it can be very expensive to get in and stay in. Uh, it's competitive. So you can get in the shelf, you can get in the freezer, but if you don't have money to pay for advertising and merchandising and sampling in the store, there's always another product right behind you.
Mirav Ozeri: What do you mean by sampling in the store?
Lisa Protter: So when you have a new product. So Cashewtopia was the first cashew based ice cream that I'm aware of in this country. So imagine 15 years ago when this product was launched. It was such a weird idea. Ice cream made from cashews. Nobody understood it. So it was really critical that we be in the stores giving people tastes.
Mirav Ozeri: Oh, I see.
Lisa Protter: Because it sounds weird, it sounds gross even. So now it's not quite as unusual. People understand what nut milks are.
Mirav Ozeri: A new ice cream is better than a regular ice cream. I've had it.
Lisa Protter: Thanks.
Mirav Ozeri: Yeah, delicious.
Lisa Protter: Thank you.
To get into the store, do you go through a distributor or do you sell directly
Mirav Ozeri: To get into the store, do you go through a distributor or do you sell the stores directly?
Lisa Protter: Yes. It really depends.
Mirav Ozeri: Yes. To which one?
Lisa Protter: All of them. There's no one way to do it. When we started, we just literally knocked on stores doors and said, huh, Hi, would you like to try this product? Would you like to sell this product as you go into chain stores, stores that have multiple locations, a lot of them don't want to buy direct from the manufacturer. They want to buy from a distributor because it's easier.
Mirav Ozeri: But does it mean that you have to give the distributor a price below your wholesale price?
Lisa Protter: Yes, it does. Because they have to make money, right? So when you go through a distributor, you make less money. The reason why you would ostensibly go through the distributor is because you get more business in the grocery business. It's a number, it's a volume game. Because think about it, it's a penny business. How much can you sell a pint of ice cream for? Not that much. So the only way you can make money is by doing huge volume. So that's why it's critical in the grocery business to keep growing if you want to keep your profits expanding.
Cash Utopia is a plant based ice cream made with agave syrup
Mirav Ozeri: So, but let's back up for a second. So you had the agave syrup, you Moved to a factory. And how did the Cash Utopia idea, this ice cream, I know some people that are addicted to it. By the way. How did this come about?
Lisa Protter: Actually, the Cashewtopia happened while we were still manufacturing downstairs in the basement. So one of the things, one of the big questions we'd hear all the time from consumers is, wow, what do I do with this agave? How do I use it? How do I substitute it for sugar? How do I use it as a sweetener in my foods and beverages? So one of the ideas Steve had was because agave is a liquid sweetener, it's probably easier to, to substitute it in products that are liquidy, let's just say, because when you use a solid, like a sugar, a solid sweetener, it not only provides sweetness, but it can provide bulk.
Mirav Ozeri: Right.
Lisa Protter: Agave won't do that because it's a liquid sweetener. It's a syrup. So he thought ice cream would be a good product to experiment with. Not only because of that, but also at the time, the only plant based ice creams on the market were rice based and soy based. This was even before all the coconut ice creams.
Mirav Ozeri: Wow.
Lisa Protter: So there was, I, uh, think Rice Dream Soy Delicious before they changed their name to so delicious and dropped the soy. So Steve in his wisdom said soy is going away. It's not a good ingredient. It's not something. Processed soy is not something that we would recommend. So what can I do? How can I make a frozen dessert out of better ingredients and using agave? So he experimented. In fact, our first frozen dessert was made from young Thai coconut. You know those coconuts that look like a little white house that you get in the right. So we would buy trays and trays of these coconuts and have our folks downstairs hack them open, scoop out the meat. It was such, it was so labor intensive.
Mirav Ozeri: Were you making money?
Lisa Protter: I'm gonna say that probably not from that product. Uh, we were making money from agave sales and ingredient sales. But the ice cream was not a profitable venture for us. Ultimately, we changed to Cashew. It was easier to work with. Cashews are great because it's a creamy nut. There's a good amount of fat which you need when you're making a frozen dessert. And it's got a neutral taste. It doesn't impart a very strong flavor.
Mirav Ozeri: Correct.
Lisa Protter: You want a neutral base. When you're making chocolate, vanilla, strawberry, you want to be able to have a neutral base to work from. So we switched to Cashew. And, uh, haven't really looked Back. So, so that's when Shootopia was born.
Mirav Ozeri: And that's when you moved to the warehouse that you currently have, which is very big.
Lisa Protter: Yeah, we moved to the warehouse. Uh, I think it was probably around 15 years ago, 14 years ago.
Mirav Ozeri: You were very early to the market with all of that dairy free stuff. What difficulties did you have breaking into a market with something that wasn't a trend yet, that uh, was probably Chinese to some of the people.
Lisa Protter: You know, it was challenging in many respects because of that, because people didn't understand what's cashew ice cream? What's agave syrup? So the primary base, our primary customer base was health food stores, right? Because those health food stores have the customer base that's looking for these new products, these healthier products, these local, organic. So that was a really important customer base for us as, uh, organic and vegans started to expand in their exposure. People like Gwyneth Paltrow with goop suddenly, you know, the yuppies and everybody in Hollywood is talking about plant based and it's becoming more and more popular. So we started expanding. Now suddenly supermarkets and other types of stores, corner grocery stores, who wouldn't normally take these, what we would call fringe products, suddenly they're interested in these products because they want to capture more of the customer's pocketbook.
Mirav Ozeri: What's your best selling product today?
Lisa Protter: I, I would say our agave syrup is still one, is still one of our top selling products. I mean, you know, we have different types of products. Like I said, we make chocolate bars, we make cashew topia, we make ice cream. But I would say our agave syrup and our coconut syrup also has become quite popular.
Mirav Ozeri: I can see coconut becoming very, very popular.
Lisa Protter: It's delicious and they're easy to work with.
Right now I'm working with an agency to grow our online business
Mirav Ozeri: So you now run the factory, right? And the distribution. What is your day like day to day? What do you do?
Lisa Protter: Well, uh, it's not always the same. Depends on what's going on. I mean, right now I'm working with an agency to grow our online business. I'm working with an agency that focuses on marketplace sales like Walmart.com, amazon.com, and some of these other online marketplaces that are exploding. So I'm working with someone to help me really grow that business. And that involves everything from, you know, creating the listing for each product, the photography, writing the description, the keywords, you know, everything that goes into marketing a product on a grocery marketplace, grocery online marketplace. It could be, uh, selling. It could literally be going out and knocking on Doors.
Mirav Ozeri: Right.
Lisa Protter: You know, trying to get sales. It could be operational issues, um, maybe equipment needs to be replaced. Right. Repaired. We recently had to completely dismantle our walk in freezer because we needed a new floor put in. We needed a door. So everything from finding another freezer locally who could store our products, I mean, you name it, everything. Anything that could happen.
How do you stay competitive in the marketplace like this
Mirav Ozeri: Talking about freezer, you said before that Covid changed a little bit and you start shipping your stuff. Isn't it highly expensive to ship frozen goods?
Lisa Protter: It is, because you have to get dry ice. You have to have a thermal shipping box, but customers are willing to pay for it. You know, I must get several calls a week from people all over the country. Hi, I've heard about your Cashewtopia. Or I had your Cashewtopia when I was in New York. How can I get it? Well, we don't have a store near you, but you can order it. And by the way, you know, other, there are other frozen desserts. You can buy ice cream online and that's what's, that's what's cool. Since COVID you can buy so many things that you never would have thought you would order online and have shipped to you.
Mirav Ozeri: Now the market is a bit saturated with all the dairy free and healthy food and all of that. How do you stay competitive in the marketplace like this?
Lisa Protter: Boy, you ask all the right questions. That is hard, especially when you don't have big marketing budgets. Uh, you know, for us, I mean, this is a subjective answer. I like to say that our products still remain excellent. And I think, you know, maintaining quality is really critical for us because we don't have the ability to compete with, you name it, Ben and Jerry's plant based ice cream. They have huge budgets. Uh, they can produce product at a lower cost than we can. But I would argue that if you do taste test comparisons between ours and other plant based ice creams, for example, there's no comparison.
Mirav Ozeri: I agree with you 100%.
Lisa Protter: It's a great product. They really are good products. I mean, there is a comparison. It's not like it's terrible and ours is amazing, but it's still is. And um, that's really what we focus on, is excellent.
Mirav Ozeri: Are, uh, you coming with new products all the time or you will?
Lisa Protter: We don't this point. Uh, we have probably too many products for a small.
Mirav Ozeri: How many SKUs do you have?
Lisa Protter: Well, so we have six flavors of cash Utopia, but we offer it in pints, four ounce cups, gallons, two and a half gallons. We have agave light. We have agave dark. Four sizes. We have coconut syrup. We have syrup. So we have probably, uh, about. I would say we probably have about 40 products and each one is available in multiple sizes.
Mirav Ozeri: Wow, that's a lot.
Lisa Protter: Not only do we sell retail, but we also sell, uh, consumer, uh, size, but we also sell to manufacturers and food service facilities.
Mirav Ozeri: So we sell so m. Manufacturers. Like what? Like who?
Lisa Protter: So, for example, if someone is. We make a chocolate chip. For example.
Mirav Ozeri: Okay.
Lisa Protter: If someone is making an energy bar and wants our very specific chocolate chip product. Oh, they might buy a pallet of our chocolate chips. Uh, we have chocolatiers who buy our chocolate coverture. So we actually grind the chocolate. We make the chocolate. We don't just buy someone else's chocolate and turn it into a chocolate bar. We make from bean to bar the chocolate. So we might sell that to a chocolatier. We might sell a pallet of agave syrup to. It could be a hotel. Um, I believe, um, uh, is it Blue Spirit? Is that the name of Jeff Bezos rocket ship company? They placed an order not too long ago for some of our. I can't remember what it was. One of our sweeteners. And I was like, yeah, we're going to space.
Mirav Ozeri: That's amazing. Um, do you also utilize social media for, um, marketing?
Lisa Protter: We need to do better at that. We have social media. We have not been active on it. We had been much more active years ago. I found that while it was fun and we had fun posts and they were good, we had somebody doing it for us. It didn't move the needle sales wise. It wasn't affecting the bottom line. And I gave it, you know, a year. So, you know, I have to get back into it. But, you know, when you're small, you have to be really mindful of where you spend every dollar.
Mirav Ozeri: Absolutely. Absolutely.
It took a while before we were profitable, Steve says
How long did it take you to become profitable? You and Steve draw salaries, Very small salaries. Okay. But you draw something.
Lisa Protter: We do. It took a while, I would say, before we were profitable. I would say seven, eight years.
Mirav Ozeri: That's kind of normal.
Lisa Protter: Yeah.
Is there anything you wish you had known before you got into that business
Mirav Ozeri: Is there anything you wish you had known before you got into that business? Oh, yeah.
Lisa Protter: Oh, my gosh.
Mirav Ozeri: Open the book. Read it to us.
Lisa Protter: Uh, oh, my gosh. In fact, if I knew then what I know now, I may not have done it. Um, yeah, there's a. There's a lot to know. Some. You know, it's funny, sometimes it's great to go into something so naively because you're not limited by knowledge or fear or fear. So the world is your oyster. You know, uh, screw them. They don't. They tell me I can't do it, they can't tell me. And you just do it.
Mirav Ozeri: Right, exactly.
Lisa Protter: So there's a lot to be said for that. If I had it to do all over again, I would have been, uh, I would definitely create a business plan. I would be much more thoughtful about the products that we launch and how we launch it. Be much more strategic about that. And I would have raised money, big money right from the get go so that I would have the ability to support growing sales.
Mirav Ozeri: Are you trying to raise money now? You think it will be beneficial?
Lisa Protter: Not at the moment. There are some other priorities that I'm focusing on before I do that.
What advice would you give someone who wants to get into food manufacturing
Mirav Ozeri: What advice would you give someone who wants to get into food manufacturing?
Lisa Protter: Oh, I get, I get a couple of inquiries a year. You know, I get a couple people saying, oh, I've got this great recipe for something. I'm going to start a food company. You know, the great news about starting a food company is the cost to enter cheap. You can start in your home kitchen.
Mirav Ozeri: Correct.
Lisa Protter: You know, you've got a good chocolate chip recipe, you can do it in your home kitchen. But it's scaling and growing because you're not going to make any money really doing it in your home kitchen. You might have fun going to farmers markets on the weekend, maybe you'll get a handful of stores, but you're not really going to make any money doing that. You just have to have a really great idea. Try to find something that's new, that doesn't exist, but that, you know, meets a growing demand and have funding to do it. Because whatever you think it's going to cost, it's going to cost three or four times that, if not more.
What's your prediction for the dairy free market in the food industry
Mirav Ozeri: What's your prediction for the dairy free market in the food industry?
Lisa Protter: It's going to continue to grow. Veganism, vegetarianism, plant based sustainability. It's definitely going to grow. Strangely enough, there's a little bit of a backlash however in the ice cream space, believe it or not.
Mirav Ozeri: Too fattening.
Lisa Protter: No, no. I think things can sometimes be cyclical. Like there was a period of time where dairy free ice creams were just explod, but now I think they've leveled off a little bit. I have a feeling, uh, you know, there'll be another spike at some point. I don't think dairy's going away anytime soon, but it's the, the dairy free world is definitely exploding as certainly millennials are more and more Aware.
Mirav Ozeri: What about Gen Z?
Lisa Protter: Gen Z, Global warming, carbon footprint, just animal activism, animal rights activism. It's um, it's exploding. It's exploding.
What's biggest misconception people have about the food industry? Food manufacturing
Mirav Ozeri: What's the biggest misconception people have about the food industry? Food manufacturing.
Lisa Protter: Food manufacturing.
Mirav Ozeri: Right.
Lisa Protter: I, I, I will say this. What most people will probably be surprised by is that packaged food that you buy, whether it's a can of soup, a bag um, of potato chips, a pint of ice cream, that brand name that's on there, they're not making it. Most food is made at a contract manufacturing facility, a co packing facility, some 200,000 square foot warehouse in the middle of the cent United States and somebody's making it there and they're slapping the brand's name on that label. Very few brands actually make their own product and that's one thing we are proud of. We, we make, we don't use a co packer, we make it ourselves. And I think that helps with quality control too.
Mirav Ozeri: And how do you deal with food poisoning issues and stuff like that? Do you have to deal with that?
Lisa Protter: We have never had an issue and I think, I think part of the reason why we've been fortunate to not have an issue is because we are so small. We have such an incredible team. Our staff has been with us, each employee we have has been with us for at least 10 years or more.
Mirav Ozeri: Wow.
Lisa Protter: So everybody is so good at their job, so focused, so diligent. You can't get anything by our people. When you hear of food contamination, food issues, it's generally at very large companies with, you know, there's a crack here, there's a slip here, uh, there's just too many people. Stuff can happen. You know, we're so small that I think we have a greater ability to pay attention to some of this stuff than, than bigger companies.
Mirav Ozeri: Right.
What's the most rewarding thing about your business? I would say
What's the most rewarding thing about your business?
Lisa Protter: I would say, uh, when I get an email or a call or a post on social media from someone saying I have some celiac and I haven't been able to eat ice cream in years and I found your gluten free product is, doesn't upset my stomach and it's absolutely delicious. You know when you get feedback like that, which we're so fortunate to get, that people absolutely love your product. It's, it's really cool. It's really gratifying.
Mirav Ozeri: I can see that. Of course. What is the big dream at the end? To have an exit, to have an investor. What's the big dream?
Lisa Protter: I think at this point we've been doing it a long time. We're getting older. I would say it would be nice to bring in investors who could help take some of the load off and help grow the company or ultimately sell the company. You know, there's only so much you can do. Like I said earlier, when your pockets aren't that deep, you can't do big things. And it would be nice to see someone else with deep pockets and a similar vision, maybe even a better vision than what we have, you know, come in and take over and take the company the next level.
Mirav Ozeri: Are there agents that go and try to sell companies like yours?
Lisa Protter: Yes, there are. There are. We get calls all the time from, you know, agents saying, hey, when you're ready to sell your business, give me a call.
Mirav Ozeri: And did you try any?
Lisa Protter: No, not yet. Because we're. We're not ready yet.
Mirav Ozeri: Why? Are you emotionally attached to the business?
Lisa Protter: Well, sure. I mean, we were really emotionally attached for the first 10, 15 years. You know, now it's like, okay, I've been doing this a long time. Maybe, maybe, um, my emotions are a little less m. Not quite as strong anymore. But, no, there are just some certain things I want to try to accomplish, to grow the business a little bit so that, you know, maybe we can have a bigger exit.
Mirav Ozeri: Hope for you.
Lisa Protter: Thank you, Lisa.
Mirav Ozeri: Thank you so much. It was so interesting.
Lisa Protter: This was fun. I know. You made me think about things, and
Mirav Ozeri: I didn't know all of these things. I know your products. I use your products. My friends use your products, and I never knew.
Lisa Protter: We count on it. Thank you.
Mirav Ozeri: And I didn't know all of this. That's very interesting. Thanks a lot.
Lisa Protter: Thanks. Thanks for making me think some of these things again. Haven't really thought about some of these things in a long time, so there you go.
Mirav Ozeri: You need me for that.
Lisa Protter: I do. I do. Thanks, Merav.
Mirav Ozeri: Thank you.
If you have a comment or question about a certain job, please let us know
Okay, that's a wrap for today. If you have a comment or question or would like us to cover a certain job, please let us know. Visit our website@howmuchcanimake.info we would love to to hear from you. And on your way out, don't forget to subscribe and share this episode with anyone who is curious about their next job. See you next time.