Peanut butter maker Fix and Fogg has expanded from farmers’ markets to the biggest online marketplace in the world, Amazon. Rebecca Stevenson caught up with founder Roman Jewell, and discovered Kiwi ingenuity at the heart of this small business success story.
Google “craft brewery”, Fix and Fogg’s Roman Jewell says, and you’ll find a plethora of guides laying out how to set-up and run your own operation. But there’s no such self-help available when you embark on building a peanut butter business, which is how the Wellington-based company came to use a vibrating exercise machine for toning thighs to shake air bubbles out of its spreads – a classic Kiwi DIY move.
Fix and Fogg has been around since 2014. It’s not in an industry you’d think had a gap in the market, but Jewell – drawing inspiration (and the company’s name) from adventure novel Around the World in Eighty Days – decided to embark on his own adventure, selling homemade peanut butter at the local farmers’ market. From 30 jars or so a week Fix and Fogg is now stocked widely across New Zealand, and demand from Kiwis across the ditch means its now being sold there too.
Last year Jewell spent most of the year cracking the US; its first batch sold out in two weeks and the second delivery should be stateside next week, Jewell says. Building a relationship with online behemoth Amazon was the easy bit, but getting the tick of approval from regulatory agency the US Food and Drug Administration was not. The barcode had to be shifted to the other side of the label, for example. Everything had to be converted to ounces. The language used is US-English, not English – not major hurdles, but when everything Fix and Fogg does is done in-house rather than contracted out, it all adds up.
The labels are a good example of how the company has grown. For the first two years or so, labels – down to affixing them to the jars – were Jewell’s job. He’s relieved to no longer have that on his plate, after the company stumped up “a tonne of money” for a European-made label machine. They could have gone for a cheaper model, he says, but it’s important to the business that everything it does matches the quality of the product. It’s been one of the company’s biggest investments, other than all the day-to-day costs; wages for staff, premises to make the product, and having money in the bank to smooth the way if someone doesn’t pay.
Jewell says Fix and Fogg has been mostly fortunate in this regard since its inception. It was left out of pocket after high-end retailer Nosh went bust last year, but he says in general the big supermarket chains are good payers: “The New World franchisee isn’t going to go out of business tomorrow.” And when it comes to the small specialty stores Jewell says business is just as tough for them as it is for him. He prefers to look at those outlets as providing a service for Fix and Fogg’s consumers – they are taking his products to where they need to be. “Equally people are taking a risk on us,” he says, “particularly at the start. If they ordered 50 jars they didn’t know if they would turn up.”
The biggest challenge in small business is always cashflow. And while they are not stung by the three-month payment terms common in some industries (dairy, take a bow), he says Fix and Fogg’s tight relationship with its bank, Kiwibank, has made life as a small business less of a knife-edge proposition. The business now has a loan from the bank to help fund capital investment, but in the beginning it was all bankrolled by the Jewells’ savings. Andrea Jewell, Roman’s wife and a company director, kept a part-time job so there was some money, albeit not a lot, coming in every week. The couple have two children, they have a mortgage, they have rates to pay, they have daycare bills and now they have a business too, which Jewell says is 24-7.
Sounds stressful? It is, Jewell says. He says his previous life as a lawyer seemed tough at the time but in retrospect it was easy to follow a pre-planned career path. There’s no such path for a small business owner and the decision to do it themselves, all of it, was made with a certain naivety, he admits. He didn’t have a background in food manufacturing and as they’ve grown they’ve hired from outside of the industry too, which is how they ended up buying a piece of exercise gear to produce its flagship peanut butter. “We’ve definitely spent a lot of money buying things that weren’t fit for purpose.”
The company has been profitable for some time, but all of the profits go back into the business. They don’t have a flash house or cars, Jewell says, they have more staff and a bigger space to make the peanut butter – and its special edition fruit toast butter, brought back this Christmas after it was a surprise sell-out in 2016.
So what are his tips for small business success? Managing cashflow and budgeting is crucial. He says their bank manager also gave excellent advice at the beginning, which was to watch their margins. “I didn’t really get it at the time, but making sure you keep your margins is key. If you make 10% more peanut butter will your freight costs go up 20%?”
His final piece of advice is simple. “I can see this pun coming but I can’t help myself,” Jewell says, “but it really is not spreading ourselves too thin. All we do is peanut butter. Just do one thing really, really well. We are not trying to do a muesli, we are not doing a cereal – although we will work with other companies that do make those products. Our business is peanut butter.”
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The Spinoff’s business section is enabled by our friends at Kiwibank. Kiwibank backs small to medium businesses, social enterprises and Kiwis who innovate to make good things happen.