Peaceful Fruits: Growing A Fruit Snack Business For A Good Cause

Hello! Who are you and what business did you start?

My name is Evan Delahanty and I’m the Founder & CEO of Peaceful Fruits. Peaceful Fruits makes healthy, delicious, rainforest friendly fruit snacks.

Imagine a fruit roll-up made from nothing but real fruit, produced in a way you can be proud of, and you’ve got Peaceful Fruits. As an award-winning for-profit social enterprise, our specific goal is to give people access to snacks that fit their values - health, sustainability, community - without sacrificing price, convenience, or flavor. Generally, our goal is to make mission-based business (social enterprise) part of mainstream capitalism. We’ve been featured by the National Peace Corps Association and ABC’s Shark Tank - and we think those two groups should spend more time together.

To break it down, we sell organic, clean label, natural fruit snacks with a strong backstory that includes employing people with disabilities here in Akron, Ohio and creating opportunity in the Amazon Rainforest where much of our fruit comes from. We target higher-income consumers with the values and means to vote with their dollars - whether that’s in support of high-quality food, progressive community development, or both.

Though we are still small, we’ve gone from $8000 in sales in 2015, to $25,000 in 2016, to $150,000 in 2017. We are now employing 30 people with disabilities in our production facility and have paid tens of thousands of dollars in wages to some of the most underserved people in any community.

What's your backstory and how did you come up with the idea?

My background is in community development and business management, starting with a BA in Government from Cornell University where I also did the first year of my MBA (2007).

I knew it was time to either start my own business or stop saying that was my dream.

From there I worked in private industry, climbing the career ladder to gain increasing responsibility in a variety of business/operations management functions. Rather than returning to finish my MBA, I decided to take a detour and join the U.S. Peace Corps in 2011. I served as a Community Economic Development in Suriname, a small Amazon-region country on the northeast coast of South America.

When I returned as a well-rounded 28-year-old, I knew it was time to either start my own business or stop saying that was my dream. My problem had always been that I just didn’t know what to start - it was a general dream not a specific one. Coming back from Peace Corps, I took a serious, business school, “whiteboard” approach to defining my goals, resources, and opportunities to create the specific concept for Peaceful Fruits.

My underlying goal was to start a sustainable (including profitable in that definition) business that would continue to create economic opportunity for people in the Amazon region - and to tell their story. With that great, authentic content and without a tech background, I focused on consumer product based opportunities with incremental differentiation based on brand.

I identified a relative lack in premium fruit snacks (only 1-2 players, no strong brands) and focused in on this value-added corner of the snack category as a way to bootstrap and scale organically and where the story connection (fruit snacks to Amazon Rainforest) was of obvious value.

So I moved back in with my parents, put a decent chunk of my savings on the line, and went to work.

Describe the process of designing, prototyping, and manufacturing the product.

Part of why we started with fruit snacks was about low barriers to entry - easy to prototype, low liability/regulatory risk, etc.

The other reason was about opportunity - fruit snacks are something of an overlooked (just $3 billion a year) corner of the snack market, but a good, natural fruit snack can easily branch out into a meal bar, a smoothie pack, a chocolate covered item, etc.

To get there, I started off blending flavors in a small, off the shelf (or out of the basement in this case) Ronco dehydrator. Different fruits, dumped in the blender, and slow dried overnight. Family and friends were the taste testers and I took the winners to a local Farmers Market to pick two flavors to launch with.

From there, it was incremental scale steps as we did market testing and then pilot production. First, it was working with a local food business incubator and commercial rental kitchen to make about 3000 snacks for a small test in a few stores. That helped me get the kitchen skills and regulatory know-how to avoid all the obvious pitfalls.

From there, I went to an organic restaurant and started producing in off hours and throwing extra hours at the staff to help to make the next 5000-10000 units or so. During that incredibly hands-on time, I developed the trade secret recipes, heat and temperature profiles, and some specialized mechanical techniques/molds to improve and differentiate the product.

Then we launched pilot contract manufacturing with a small commercial kitchen that employs people with disabilities. This fit our mission, increased scale and capacity, but also cut costs - both because of professional kitchen management and because of grant dollars that helped with this mission-based employment.

We ended up in partnership with two nonprofits in that space - Blick Center and Hattie Larlham. They folks did a good job at a good price, and that price was further subsidized by grants, so it was a no-brainer - even laying aside the incredible feel-good aspects of providing jobs to people with disabilities who were so incredibly thrilled to work with Peaceful Fruits.

Those partnerships were critical to our success - opening doors to grant dollars and effectively providing zero-interest loans allowing us to benefit from scale purchasing of raw materials/business functions put pay for it one fruit snack at a time. It also created a local, highly visible and emotional component to our mission that made for an even more compelling story.

We spent about $30,000 to get to that point, got set up as an LLC, and trademarked our name for some basic protection. Beyond that, everything we do is about trade secret IP and brand - just the same as Coca-Cola.

Describe the process of launching the business.

From the beginning, we have always focused on digital sales. Besides event marketing, which is tough to scale, it’s the best opportunity to tell a story to consumers - way better than grocery stores.

It’s also easy to start off with free websites, social media, etc. Between a few friends, interns, and elbow grease, we were able to get the minimum-viable version up pretty quickly.

Over and over again, we’ve had to re-learn the lesson of succinct storytelling - focusing in on the core message and how to portray it effectively in stores, website, social media, etc.

From my savings and that of an early backer, we put together the $30,000 that took us through the first 18 months of slow progress - developing the recipe, business plan, story, etc. Once we hit our pilot contract manufacturing partner, I started to focus on the business full time to begin more rapid growth.

Our first big step in that was a Kickstarter campaign - our goal was $10,000 but we ended up raising about $25,000. That was thanks to exhaustive prep work (critical crowdfunding hint - never forget you have to bring your own crowd) and the networking foundation I’d set up that allowed me to get solid media coverage for the campaign.

Between that Kickstarter, a cash prize for a pitch contest (SEAChange - a social enteprise accelerator), and actual sales, we did about $50,000 in total revenue in 2016 - which was enough cash flow, supplemented by the bootstrap funding of about $30,000 - to keep us rolling along.

The biggest success we had, though, was leveraging that winning pitch (available here, though I’m embarrassed to share it!) into an appearance on Shark Tank.

Whether this says something good or bad about me I don’t know, but people have been telling me I should go on Shark Tank since the first time I was sampling the product. I always filed that in the “useless advice” folder, but once we had a a milestone I could stand on - like a $20,000 victory - I decided why not give it a go.

Looking back, the email wasn’t anything special - too long, didn’t lay out a clear value proposition for the producers, etc - but, like the pitch video, it did the job. A couple weeks later, I got a phone call from someone who basically said, “30 second elevator pitch… go.” The next several months were an unending sprint as we dealt with the KickStarter, attended our first national food show, and then filmed with Shark Tank.

Filming with Shark Tank was a truly surreal experience - in Hollywood, in front of the Sharks, at the very top of the game. I have to say, I went in there knowing that it was a long shot to get investment - we were just so small, still are even. But I swung for it as hard as I know how and I knew that, regardless, it was an incredible opportunity to represent myself, my company, and the entire concept of social enterprise.

We didn’t land a shark as an investor, but we did $75,000 in sales the weekend the episode aired. And I think we achieved our other goals too if I’m being honest, though definitely watch it and decide for yourself - Episode 816 “America’s Heroes.”

Barring the spike that was Shark Tank - after which I spent 4 months going 8am-3am to fulfill all those orders - there was no big “launch” or other epiphany. And, though we see a small bump every time there is a re-run, Peaceful Fruits has just been a series of small steps with just enough success to justify continuing to grind. Especially when bolstered by the incredible and moving impact we were having on our non-profit partners in the community.

Over and over again, we’ve had to re-learn the lesson of succinct storytelling - focusing in on the core message and how to portray it effectively in stores, website, social media, etc. Earned media has been critical (from Shark Tank to local newspapers) to continuing the flow of customers in a sector where it’s so easy to be drowned out.

The Kickstarter was critical for that - not only did it begin the process of message discipline (content and schedule) but it created a focus for customers and media.

We are all about making it easy for people to like us - and a crowdfunding campaign is a perfect vehicle for that. With sufficient preparation (1-3 months), nearly anyone has a successful $10,000 campaign in them.

Since launch, what has worked to attract and retain customers?

Content is king and that is one of the key Kevin O'Leary-esque benefits of a social enterprise - we really do have something to say.

Authentic, moving content is rare - and mission-based business has it. There are so many other reasons to incorporate social good into a business model - motivation, productivity, community values, etc - but there is no shame in acknowledging the business benefits either.

For Peaceful Fruits, the strength of our content has given us the breathing room to climb the learning curve for how to tell that story through packaging, the website, and social media. We were often in our own way, but the underlying story shines through.

And, most importantly, it’s important to member that a buyer on Amazon is their customer, not ours. None of the data, no chance at an email address, etc - all of that means lifetime value is a fraction of a customer on our website and the brand ROI is severely impacted as well.

Honestly, on social media we are still struggling to create rapid following growth and conversions - we don’t have the code cracked there yet. That said, we have done a good job of creating a loyal core of supporters. Nearly 40% of customers are repeat purchases and more and more of them join our subscription program - they give us a credit card and we send them snacks each month, and no one has to think about it.

That subscription program cannot be under-valued. Figuring out how to lock in customers and revenue is absolutely critical for us and any digital business.

We only started this program a few months ago and it already has several dozen adherents, and accounts for ⅓ of our revenue from the website. We launched it with a personal appeal to our VIPs (friends, family, fanatics) and then a follow-up killer sale. This is the perfect way for those people that like you - or your business - to actually support you month after month in a busy, distracted world.

Part of how we do that is with our newsletter which, thanks to nonprofit partnerships and earned media, is at a very strong 2000+ subscribers given our size. Our conversion rates there are high and we can have nearly-guaranteed activations for campaigns that are rooted in those followers.

The social media struggle for us is finding credible experts who understand our scale. There are lots of amateurs who will help you out with highly variable ROI and lots more “experts” who have great case studies - but need $30k of time and money to prove it will work for you, and that’s a big gamble. We’ve done it in-house thus far, with increasingly specific help - but every major gamble we’ve taken with an “expert” thus far has not really paid off.

Nothing beats elbow grease until you have the capital to spend on really doing it right.

On that point, Amazon has been exactly the same for us - it’s the world of people who know what they are there for, but of highly questionable value at our scale. Thanks to my background and our nonprofit partnerships, we can pack and ship orders very effectively.

Since it isn’t removing logistics headaches, the main benefit is access to a market of people looking to buy. However, thanks to our successful earned media most of our traffic is based on organic search - typing something like “peaceful fruits” or “buy peaceful fruits” into google.

The impact of this publicity can’t be overstated - and having an authentic story, and a mission behind it, is exactly what the media is desperate for. We’ve been featured in Huffington Post and BuzzFeed and see regular high-value local coverage, such as this recent video on our local Fox station.

https://youtu.be/nCbHfTOnjpQ

This is where the old fashioned grind of outreach and networking is critical - I’ve been tovnearly every entrepreneurship and/or food business group in my region. Pitching, speaking, listening, giving away product, giving away time. But if you actually have something to say - and high quality content to back it up - you can leverage those endless networking meetings into something a lot more useful than a business card swap with another digital marketing firm or lawyer group.

That gives us a brand that’s strong for our size, but even non-direct competition from players like Fruit Rollup etc that massively outbid us (with dollars or just SEO history) on keywords make non-branded organic search tough for us both on Google and Amazon.

That means, though we do see incremental growth in our customer base thanks to Amazon, overall revenue impact is negligible because our margin is literally 50%.

On the topic of Amazon, and this is critical, always remember that a buyer on Amazon is their customer, not yours. None of the data, no chance at an email address, etc - all of that means lifetime value is a fraction of a customer on our website and the brand ROI is severely reduced as well.

For us, we are OK to be there as another necessary way to access customers, but we don’t treat it differently than we would a grocery store chain - possibly high volume, but only worth it when you can go relatively very big.

How are you doing today and what does the future look like?

Peaceful Fruits is in the middle of a production expansion to 5x capacity so that we can hit breakeven levels and beyond. Speaking of PR, we just got a great article placed about this - check it out.

In our pilot phase, we simply haven’t been able to sell more because we couldn’t produce more. We’ve seen that people respond to both the product and the story, so it’s just a question of getting in front of a larger audience.

Right now, our revenue is about 50% online and we’d like that to continue - grocery stores etc are a necessary evil at this point, where you have to work harder for lower margins. Our goal is to 10x our online following (to the 30-50k range) over the next 6-12 months and take our website revenue up 3x at the same time.

The most concrete, useful lesson is definitely that nearly anyone has a $10,000 crowdfunding campaign in them. And, second, that the world is not about viral success.

Our gross margin is a decent 35%, but our new facility will allow us to drive that down towards the 50% we need it to be to hit break even and continue to grow. That’s easy to picture since we have been almost entirely by hand so far - filling machines, more efficient dehydrators, packaging machines, etc will allow us to 5x production over the next 3 months while significantly curtailing labor costs and waste.

As we grow, our baseline goal remains the same - we want more people to try authentic snacks that match their values, and we want to prove mission-based business can be competitive and profitable in the global marketplace. To do that, once we pass the $5 million annual revenue mark, we will begin looking at strategic partnerships with major food companies to help drive rapid growth in grocery where they are much better positioned to do well.

Through starting the business, have you learned anything particularly helpful or advantageous?

The most concrete, useful lesson is definitely that nearly anyone has a $10,000 crowdfunding campaign in them. And, second, that the world is not about viral success. Concrete, incremental steps to try out an idea are what it takes.

When I read stories - here or elsewhere - I recognize that Peaceful Fruits is on a somewhat slower trajectory than some other businesses. We are in the top 13% of Shopify stores… with a tremendously long tail on one side and ridiculously high unicorn spike on the other.

This has been a bootstrap grind, with missteps and slow growth at times. We haven’t gone viral, but we are part of a growing trend in the food industry and beyond.

For us, the key has been to revel in the small victories and the big impact we make in our community every day. That keeps me going and makes the big victories - whether Shark Tank or landing a new account like Kroger recently - that much sweeter. They aren’t just for me - they are for the whole team.

What that means for anyone is that figuring out what success means to you is so significant. I’m not looking to be Forbes 30 under 30 or on the “fastest growing” list - though those would all be great!

Peaceful Fruits is looking to help shift the needle toward better snacks and better business. You have to set clear goals for yourself - time and money spent to achieve what result, community impact made, recognition achieved, whatever that means. That’s what helps you make the decision, each day, to keep going or not.

What platform/tools do you use for your business?

As a bootstrap startup, we like things simple. Free platforms - Google, Canva, Asana, Wavehave all served us well. They allow a mobile, remote workforce to do almost anything they have to do these days. If you can’t do it in there, you probably aren’t thinking hard enough or you can find someone with spot access to what you need.

Where we have seen value worth paying for is Shopify, MailChimp, and Shipstation especially. Shipstation has been critical for us to handle growing online sales and other orders, since we ship direct around the country. They get us the best prices on postage and make it super easy to scale.

What have been the most influential books, podcasts, or other resources?

For anyone in the food business, I strongly recommend Do the KIND Thing* by Daniel Lubetzky and *Mission in a Bottle by Seth Goldman of Honest Tea. Both provide a clear roadmap, with all the hurdles and bumps, of building a major food brand.

Beyond that, The Four Hour Work Week is always a great pump up. I loved the first few seasons of The Startup Podcast by Gimlet Media, but I have to admit I stopped listening the busier I got with my own startup journey.

Advice for other entrepreneurs who want to get started or are just starting out?

You’ve heard it before and that’s because it’s true - just start. It’s the only way. Stop reading, start starting. Figure out a way to test your idea for less than $200 (a dehydrator in your parents basement and a farmers market 200 yards away, a dummy website and some facebook ads, whatever) and do it - beg, borrow, do what it takes to get it in front of people.

Then figure out what it means to be good enough to keep going - and don’t stop until you’ve made it or you aren’t hitting that threshold.

Finally, look very very carefully at where things already exist. Our mission is core to Peaceful Fruits, but there are strong reasons why we didn’t start our own non-profit (hint - you almost definitely should not start your own non profit. Find someone else’s and partner.) Similarly, you can learn so much from what is out there that is similar - other people’s good ideas and bad ideas are the best teachers.

Are you looking to hire for certain positions right now?

If you are in northeast Ohio or want to be, we are looking for a Kitchen Manager to help drive production and make more snacks so we can sell more snacks.

If you are a social media wizard who thinks you can take us from ~5000 followers to 50,000 we’d love to talk - that’s our single highest priority for the next 6-12 months.

Where can we go to learn more?

www.peacefulfruits.com or feel free to reach out [email protected]

https://www.instagram.com/peacefulfruits

https://www.facebook.com/peacefulfruits

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