...and all at once, Summer collapsed into Fall ~ Oscar Wilde
Here in Colorado, especially at an elevation higher than 8,000 feet, Fall is in full swing and we're bracing for snow. I think it's a great time for reflection.
Let me brief you not only on the last month, but specifically about the highs and lows of this last week!
TL;DR
No-MaTer Marinara Sauce is expensive. Hopefully with growth the price can be lowered. Starting a small business has these challenges, sadly.
Whole Foods application is next month! And hopefully negotiation of the price point for on shelves goes well.
Big orders still surprise me, but also give me the warm fuzzies. So, thank you!
"Attack of the Killer Tomatoes" cartoon from the '90s should've been my theme song!
Social media platforms (Facebook and Instagram) continue to be the most impactful marketing for me at this time. Through Facebook, I had a lovely conversation with someone who is looking for alternatives for a tomato-less marinara sauce. Unfortunately, No-MaTer's Marinara Sauce is not within her price range. I wanted to take a moment to acknowledge this for a few reasons: transparency, current inflation, and plan of action.
I don't believe that there is enough transparency around pricing strategy, especially for small businesses. I am generalizing here as this is not true for every small business. Most small businesses start out not making much of a profit because the overall goal is to get market attention. Now, we do not typically have access to funds the way big corporations do, and we do still have to pay the bills and thus our prices are not usually as cheap as corporations.
We, as consumers, are used to sneaky things that corporations do to "save a buck". Things like making a container a little smaller but keeping the same price, or putting a divot at the bottom of the peanut butter container so that the container looks the same size, but the quantity is reduced. Even as far as adding "filler" ingredients to an item, and these ingredients are usually not healthy. So there is an already built-in assumption that high prices equates to company greed. With No-MaTer, a lot of thought was put into how to decrease costs and keep the price point low. We actually increased the size of the container (from 12 oz to 24 oz) in addition we made sure the ingredients were short, simple, and healthy.
No-MaTer, and the majority of small businesses, enter the market hoping to be at a competitive price point. But for niche products like No-MaTer, we can't compete with tomato-based marinara. Tomatoes are cheaper than carrots and beets, and the marinara on the shelves today is also manufactured in quantities that are outside No-MaTer's capabilities. So, we have a few factors that impacted the price point, and not in a good direction: ingredients, containers, and economies of scale.
By choosing to go with a bottling company, all three of these factors were addressed in some way. Ingredients were purchased at wholesale vs retail (going to the grocery store). Containers, and fewer of them with the larger 24 oz jars, were again purchased at wholesale (compared to the smaller self-canning Ball jars that you find at the store). And economies of scale was considered to some degree as I could produce 400 gallons at once vs six or seven 12 oz jars in a weekend. Buying in bulk allows for a cost drop. When we can get to processing 1,600 gallons at once (which is more upfront cost), then price can again be adjusted.
We've all seen how inflation is impacting purchases recently. It feels like our grocery prices went up 30-40%! Now, whether that's true or not, I have not done the research.
At the end of 2021, it was more than 20% cheaper for me to move forward with No-MaTer. By the time March of 2022 rolled around, things had changed drastically. The price of glass alone went up and was not easily accessible. I elected not to factor this into my price point. Entry into the market is hard enough and nearly $12/jar was higher than I really wanted it. Now, all that being said, if inflation continues, I cannot promise that I won't have to adjust for it in future batches. But for now, no adjustment needs to be made while I still have inventory.
Now let's talk about the future in the best-case scenario. Next month, Whole Foods opens up to receive applications for new sauce specific products. I am queued up to submit and then hopefully will get the opportunity to present No-MaTer Marinara Sauce to them. Ideally, they'll fall in love and we'll be in stores soon. However, that does not mean that Whole Foods will sell No-MaTer Marinara Sauce for $11.99 a jar. Grocery stores usually tack on between 35% and 45% surcharge to items they stock (not including delivery and potentially stocking fees). Whole Foods is in the higher range. I will be doing heavy negotiations to try to keep the price around $16.00 a jar. I do acknowledge that this sounds (and is) high. So, there will be a lot of negotiations and working the finances to see if that will work out.
Ok, enough of the weeds there, let's talk about some good news!
Yesterday I was standing in line at the post office when it hit me. It felt like I was actually in business. Sure, it has been 6 months of these ups and downs trying my darndest to make a dent in the market. But yesterday when I was in line with my order of 6 jars heading out to Massachusetts, it felt surreal. Like, despite all of the above financial "fun", I was actually starting to make headway. Hope and optimism are wonderful things. So, especially to this customer who ordered 6 jars of a sauce she has never tried before, but to all of you who have supported No-MaTer and given your trust in this unheard-of product: Thank You So Much! I really needed that boost as it is easy to feel overwhelmed by all the problems that need solving. :)
In other news, I'm not sure why this came to mind this month, but I recalled there used to be this cartoon back in the '90s called "Attack of the Killer Tomatoes". If you want a laugh, you can find it on YouTube.
Well, I think I've blathered on enough in this blog. It might be my longest yet! If you do have questions, please do not hesitate to reach out (nomatersaucecompan@gmail.com) and I'll do my best to address your concerns.
As always, thank you ALL so much for your continued support and for reading this extra long blog. Tell your friends to tell their friends!
All the best,
Gena
