When Corin Mullins mixed together a handful of gluten-free and vegan ingredients to make a cereal that would address her husband Brian’s food allergies, she had no idea it would become a sought-after breakfast staple for millions of consumers around the world.
Today, the husband and wife team behind HapiFoods Group Inc. – makers of the Holy Crap and Skinny B cereal brands – are shipping product from their small town near Sechelt, B.C. (about a two-hours from Vancouver) to stores and homes across Canada and the U.S. and as far away as China and Africa.
The company started off by selling 10 bags of the cereal at a local farmers’ market in May 2009 and later picked up international interest from their kiosk at Vancouver’s Granville Island Market during the 2010 Winter Olympic Games.
“Timing is everything,” says Brian Mullins, noting the company only started selling on Granville Island a few months before the Vancouver Olympics.
International online orders began to pile up, but it wasn’t until the couple appeared on the CBC reality TV show Dragons’ Den in November 2010 that sales began to soar. They had to drop the farmers’ market business to focus solely on the exponential growth in online orders. Astronaut Chris Hadfield’s decision to take the cereal on his five-month mission into space in 2012 proved another a big boost for the brand.
The company kept its revenue numbers under wraps, for competitive reasons, but says about 12 per cent of its product is now sold outside of Canada – a number that continues to climb each year.
The company’s success is driven in part by consumers’ desire to eat healthier, says Brian Mullins.
“People want good food. They want to know it’s organic and that it’s from Canada,” he says.
HapiFoods cereals’ ingredients include hemp, sourced from farmers in Alberta and Saskatchewan, buckwheat and cranberries from Quebec, raisins from California and chia grown in Mexico and countries in South America, such as Nicaragua.
The food is shipped to the company’s production facility in Sechelt, where it is re-cleaned, mixed and packaged using specialized machinery. Each bags is then topped by hand with additional ingredients, such as whole fruits and seeds, before being sealed and shipped to warehouses in Canada and the U.S.
For its U.S. orders, the product is shipped to a warehouse in Blaine, Wash., just across the border from B.C., about 50 kilometres south of Vancouver.
A good chunk of the company’s business is done through online orders. HapiFoods currently sells product from its own website and on Amazon, but will soon move all online sales to the giant e-commerce company for greater efficiency. HapiFoods will keep its 1-800 number, recognizing that some customers aren’t comfortable ordering online.
Corin Mullins says the deal with Amazon saves time and is more profitable because it’s a one-stop shop.
“Their volumes are also huge,” she says. However, she warns that the process isn’t as simple as signing a few forms and shipping the product.
“You need infrastructure – and Amazon has very strict rules around quality and process,” she says. “You have to be good at what you’re doing, or you can get fined.”
HapiFoods also ships some of its product separately to a handful of U.S. health food stores that are long-time customers.
While most of the company’s sales are still in Canada, exports are expected to fuel its growth in the years to come.
“Export or die,” quips Brian Mullins. “There isn’t any other way for a Canadian company to grow.”
The couple’s plan is to set up partnerships in other countries, such as China and Japan, where they can oversee the buying of ingredients and maintain brand quality. Canadian trade deals, such as the 12-nation Trans-Pacific Partnership, will also open a lot of doors for the company’s sales outside of Canada.
“That has a huge impact on us,” says Brian Mullins.
The company also plans to form partnerships on the ground in other countries, which the Mullins see as key to keeping Holy Crap and Skinny B on the breakfast tables of consumers around the world.
Five questions with Hapifoods founders Brian and Corin Mullins
1) What was your first export sale?
It was over the Internet in 2010 to consumers in the U.S. and a few other countries around the world.
2) How did that first export opportunity arise?
We had customers taste our product at the Granville Island Market in Vancouver during the 2010 Olympics. They bought a bag or two, but also wanted more shipped to their homes. That is what really helped to seed our sales around the world.
3) When it comes to exports, what do you know now that you wish you knew then?
The tariffs can vary greatly for different countries. For instance, England’s tariffs are a lot more expensive than in places like Norway. You need to factor in those costs in when you’re exporting.
4) How has the trading world changed since you started in business?
Commodity prices are always fluctuating. You have to try to buy when the prices are best, without ever sacrificing quality. The entire success of our company is based on buying quality items at a good price. If those ingredients aren’t good enough, we don’t have customers.
5) What is the No. #1 thing new SMEs need to know about export and trade?
Think about the global market. Is your product exportable? Does it work in other cultures? You need to be aware of this before you start selling it abroad.