How I Started A $8.3K/Month Business Selling Craft Granola
Note: This business is no longer running. It was started in 2017 and ended in 2023. Reason for closure: Shut down.
Hello! Who are you and what business did you start?
Hello, my name is Ashley Chase and I am the founder of Birdseed Food Co., a super-healthy, more fun, less sweet, a craft granola brand that I started March 3rd, 2017.
My flagship products are my three granola flavors: Original, Toasted Honey, Goldenola; Turmeric and Ginger, Oat-Free and Kasha Crunch.
I currently distribute my products via retail markets, Amazon and direct-to-consumer. On average I am bringing in $8,300 a month in revenue.
What's your backstory and how did you come up with the idea?
Fall 2016 I moved to Bend, Oregon as a way to clear my mind and figure out what I wanted to do with my life. I had done some college, worked in management and also in a hospital but still wasn’t clear on what my “passion” was.
During this time I was reading books such as The 4-Hour Work Week and realized the power in selling a product online; I knew I wanted to sell something online and build a brand but didn’t know what yet.
I took a job as the manager at a coffee shop and would bring my own granola to work in the morning and one of the employees saw it in a mason jar and was like “Why do we have birdseed?” I replied, “That’s my granola!”. He even made a funny Snapchat video saying, “Ashley, you’re eating birdseed!! What are you doing??”
At this trendy coffee shop/plant store we would make all of our own syrups and sauces and it was requested by the owners that we have our own house-made granola. I offered my birdseed granola and the owners loved it! They even asked for it to be called Birdseed Granola on the menu.
Two weeks after having it on the menu, it was requested to be sold at another restaurant in town. At that point, the light bulb lit and I thought… “Maybe this is my product!?” I threw together a logo on Canva, made a stamp and found some cute bags via Google.
Take us through the process of designing, prototyping, and manufacturing your first product.
I started making granola after being diagnosed with Celiacs in 2013. I couldn’t find a gluten-free option that I liked so I made it myself. In using random ingredients from the bulk section, I discovered kasha, AKA buckwheat groats. This was always an ingredient because it gave the granola a nice crunch and was loaded with prebiotic fiber and plant-based protein.
When the restaurant asked for it to be on their menu I took action to make myself legitimate: I got an Oregon Business license, issued an LLC and a friend who owned a bakery in town let me use it as my commercial kitchen.
I would only make about 10 lbs a week so I just bought my ingredients from Amazon and Natural Grocers.
At month 4 I was sold in 5 locations around town and found out the product was told to be taken off the shelves from the Oregon Department of Agriculture.
Uh oh! Turns out I didn’t have an ODA license to distribute. I then was required to pay $340 to keep my business a business. This small investment urged me to give this idea a real shot.
Describe the process of launching the business.
I grew my accounts more and more and would spend about 8 hours a week making the product and 8 hours a week stamping and sticker-ing bags. I figured how to get UPC codes, nutrition facts, and started an online store via Shopify. This was all after working my usual 40 hours a week managing the coffee shop.
During that time, I was listening to many podcasts. I listened to How I Built This story of Cliff Bars, Lara Bars, Boom Chicka Pop and more. This showed me what the potential of the company could be - to build a brand to sell to a larger brand.
Upon listening to these stories, I realized I had an authentic story behind my granola: I started making the product for myself, “scratched my own itch” if you will, and also had an authentic story-name behind it.
June of 2018 I was awarded a $50,000 small business loan that enabled me to take things to the next level.
I sketched out on a piece of paper what I wanted my packaging to look like and found two graphic designers to help me make it happen.
I then sought out how to get a “manufacturer” which I later found out is called a co-packer.
The process of passing the baton of making the product did not come easy. About 4 months of visiting the co-packers every three weeks and trying to get things done right between their busy schedule of working on other products.
But then……..Product recall. I had made an ingredient error in my fancy new packaging that resulted in an FDA product recall. My mistake was broadcasted on 7 news channels throughout the US.
Super shaming yet oddly flattering a little bit because all these news channels thought I was this big company. This resulted in the FDA visiting my co-packers facility for 5 days, which then made them not like me too much.
Delayed responses and being last on the agenda became the norm.
June - August I was back to making the granola myself. But now I had about 3x more accounts than I did when I did it all before.
Throughout this entire process (even when I did have the co-packer) I was in a constant state of panic that I couldn’t fulfill orders, oftentimes being late to fill them because I did not have inventory.
End of July I got a 2,000 unit order from Freshly and concluded I needed a co-packer again. I secured a new co-packer and finished my first order with them at the end of August. They are a larger co-packer and had a minimum order of 5K LBS of product.
This wiped my capital and I almost lost my company. After 4 months of not knowing if I was going to be able to come up with the money, Craft3 finally approved to extend my loan. Boy oh boy was that stressful time. This leads to where I am at today.
Since launch, what has worked to attract and retain customers?
Attracting and attaining customers feels a lot like dating.
When approaching grocery buyers, be interested and persistent but not annoying. Be charming and to-the-point. Find ways to connect with buyers and ask them for advice. They then become invested in your brand and believe in it!
Also, give it time. Don’t give up. It can take a year of correspondence for them to finally say yes and bring you on.
I am selective with the kinds of grocery stores I approach- ones that will reach the right market and the product will likely be sold. Higher-end markets, boutique and trendy markets where my product’s price won’t be over the top.
Birdseed Granola is currently distributed to over 75 locations, mostly in Oregon and California but also a few throughout the US.
For direct to consumer, it seems to come in waves. I need to put more time into this because this is where I make the most profit.
My Instagram is pretty dang cute if you ask me. Check it out: @birdseedfoodco
As for Amazon, what a mysterious process. As per usual, I figured out how to do FBA on my own and had no idea if I was doing it right. It seems to be going well, it launched about a month ago and I already have sold 20, 2-packs and have 5, 5-star reviews.
How are you doing today and what does the future look like?
My sales have quadrupled throughout all of this craziness this year but that said my profit margins have dropped. I am working to bridge the gap of being a small company that is able to turn a profit and a big company that can actually make money.
Also, be patient. Things seem to move slow because you are always waiting on someone to give you an answer or get the thing done but it’s okay. Control what you can and give patience to the rest.
I am in need of an investor to make this happen. Either that or I will have to scale way back and focus on direct to consumer and local orders.
The food industry isn’t an easy category. I’ll tell you that. Industry-standard includes 30% margin to grocery, 25% margin to the distributor, 5% to brokers, cost of shipping, and then actually making the product and buying the ingredients.
I only have one distributor at this time for my accounts down in LA but those accounts aren’t making any money. I’m breaking even but that’s it.
Through starting the business, have you learned anything particularly helpful or advantageous?
If you aren’t failing, you aren’t trying hard enough. ;)
Being an entrepreneur requires you to be okay with failure, realizing maybe you didn’t make the best decision and continuing to move forward.
Also, be patient. Things seem to move slow because you are always waiting on someone to give you an answer or get the thing done but it’s okay. Control what you can and give patience to the rest.
One thing to watch out for, being “chosen” for something you still have to pay money for. I was “chosen” by Women’s Health Magazine for small ad space and was somehow convinced to pay $2,000 for it.
What platform/tools do you use for your business?
Quickbooks, Shopify, Constant Contact for email marketing, Planoly for Instagram, and that’s about it.
There’s so much out there it’s overwhelming and I have yet to barely tap into it! I would love to though! Automation and delegation are everything.
What have been the most influential books, podcasts, or other resources?
My favorite books:
- 4-Hour Work Week, Tim Ferriss
- Purple Cow, Seth Godin
- The Alchemist, PauloCoelho
- Slight Edge, Jeff Olsen
My favorite podcasts:
Advice for other entrepreneurs who want to get started or are just starting out?
Don’t be afraid to just START. You don’t have to have everything figured out. Fail, learn, take the next step. One thing at a time.
When at an event such as a panel or conference, during the Q&A, ask a question! You’re not only asking the panel the question, but you’re also asking the entire audience. People LOVE to give advice and you don’t know who will come to introduce themselves and give you either a good connection or feedback.
Wear your brand! One of my favorite things about having my own company is making it soo me. I put my logo on everything and people always ask me what it is. I even met the founder of Bear Naked Granola because I was wearing one of my logo shirts.
Are you looking to hire for certain positions right now?
I’d love to bring on an intern or five. ;)
Also always down to send the free products in exchange for a review or photos! DM me on Instagram. :)
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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