spinofflive
Brunch Box

MoneyMarch 21, 2021

How a fledgling food business took flight during lockdown

Brunch Box

For months, Chris Schulz and his wife Heather were battling to get their dream food business off the ground. Then Covid-19 came along and everything went ballistic.

We sat, crumpled in a heap on the couch. It was nearing midnight and my wife and I were exhausted. In just a few hours, we’d have to be up before dawn, picking up bread, pastries and doughnuts from bakeries around Auckland, then packing and delivering more than 200 orders over Mother’s Day weekend. In 2020, that celebration was being held with the country in alert level three.

In front of us lay the things we’d need to do this. Branded paper bags hand-stamped by us with our company’s logo were piled on tables. Boxes containing thousands of eggs were lined up in rows. Bags full of avocados, pancake mixes and sauces were pre-packed, ready to be loaded into cars and delivered to customers by mates we’d roped in to help.

To navigate our lounge you’d need to pick your way through carefully. A thin strip between the front door and the kitchen was the only visible floor space. Put a foot wrong one way and you’d smoosh a six pack of eggs straight into the carpet. Step the other way and you’d knock over a leaning tower of pre-made cake boxes.

Everything was squished into our humble Te Atatū home: us, our kids and our rapidly expanding food business. We were bulging at the seams. In one of our fridges, packets of our favourite bacon supplier lined the shelves, packed as tightly as we could fit them. In the other, cheesecakes, chocolate cakes and brownies were stacked neatly, intoxicating smells of chocolate and vanilla wafting through the house whenever the door was opened.

Brunches awaiting delivery (Photo: Supplied)

As the clock hit midnight, we felt frazzled and fried. We’d been working every day for weeks as Brunch Box, our twice-weekly delivery service of brunch essentials, took flight when the country went into alert level four. In the year previous we’d been limping along, trying to make our dreams a reality. We were about ready to give up on them.

Back on March 25, when lockdowns bound millions of people to their homes, we were sitting on the same couch having a different conversation. My Food Bag was considered an essential service. So were Woop and Hello Fresh. Our small delivery service wasn’t the same size, not even close. But all the small producers who supplied our business had nowhere for their food to go. Cafes might be closed, but eggs still get laid, avocados still ripen, and the bacon’s already packed.

Couldn’t we pick those products up, package them safely and deliver them to people stuck at home? Surely our tiny food business was also an essential service?

After many confusing email chains and phone conversations with the Ministry of Business, Innovation and Employment (MBIE), it turned out we were. As soon as we made that decision, business went ballistic as people in our local area flooded our site and helped spread the word. Excuse the pun, but those Covid-19 lockdowns saved our bacon.

Yet Mother’s Day weekend was different. It was huge. Mother’s Day is known as the biggest day in hospitality all year, and yet cafes were only allowed to serve takeaway items. The orders had flooded in during the week, the numbers getting so high they’d lost all meaning. We’d never done 200 orders before, and we were terrified.

Could we pull this off?

Side hustle to main hustle

Here’s another question we kept asking ourselves: how did we get here? At the beginning of 2019 my wife and I quit our office jobs. Disillusioned after nearly 20 years in our chosen industries – Heather had worked in the fashion industry, I’d spent a similar amount of time in newsrooms – we decided to take a punt. Our side hustle was going to become our main hustle.

Chris and Heather Schulz (Photo: Supplied)

For years, we’d each been cheating on our careers by having small flings with food. Sick of terrible supermarket avocados, Heather found a Katikati grower, persuaded them to courier her boxes of avocados every week, and delivered them to homes around Te Atatū, organising orders through an invite-only Facebook group.

By accident, I’d created a seasoning mix that worked well with almost every meal. It seemed to be addictive, and friends and family nagged me to make more. Finally, I called it Redspice, got a label made and began selling it through local grocers. The first day it went on shelves, then prime minister John Key was photographed with a jar. New Zealand, eh?

One day, Heather roped me in to help deliver avocados. I got bored and began throwing ideas around. “Why aren’t we delivering more things? Why not eggs? Bacon? Sourdough? Coffee?” It snowballed from there. We couldn’t stop talking about it. We knew all too well how hard it was to experience a long, leisurely cafe brunch with noisy kids in tow. Why couldn’t we box all our favourite brunch ingredients up? Who wouldn’t want the best bacon, eggs, bread, juice and coffee arriving on their doorstep on Saturday mornings?

Lockdown comfort food (Photo: Supplied)

A quick Google search found there was no competition. All food bags and boxes catered for weekday meals, not leisurely weekend treats. No one else offered that kind of service. Soon, the thought dominated our conversations. In the middle of the night, unable to sleep, we chose the name Brunch Box, gave a bloke $300 to design a logo and asked a family member to take some cheesy photos of us.

Then we lost a bunch of our savings to a website designer who promised amazing things but disappeared once he’d been paid.

Eventually, with a new designer on board, our site launched in January 2019. Looking at the video I took of us at the time, we look pensive, wide-eyed, terrified. Heather had already left her job. I was about to leave mine. We had no startup capital, no investors, no real business plan, and just a few thousand in savings. Did I mention we have kids? And a mortgage?

The startup grind

After that very definition of a soft launch, I harangued all my media contacts and spammed PR friends for advice. To promote it, we started attending farmers markets. We made a paltry $80 that first weekend, but feedback was fantastic. Determined to spread the word, we committed to more markets: Grey Lynn, Parnell, and Te Atatū Night Market. They were hard work, with low financial rewards, but crucial for building our confidence.

Brunch boxes awaiting delivery (Photo: Supplied)

The only noise coming from our website was crickets. Very occasionally, when an order came through, we’d gasp and high five. With our leftover market offerings, we launched Dessert Club, delivering healthified treats like paleo chocolate cake, vegan fruit crumbles and bliss balls with flavoured centres to local homes on a Sunday night. That began to flourish. People liked our food, and that gave us inspiration to keep going.

But farmers markets and desserts weren’t the business we’d planned. Along with the avocados and Redspice, our business had become a multi-tentacled mess. None of it was even close to giving us enough money to live on. Our savings dwindled. Imposter syndrome was a daily struggle. Others had spent their lives cooking, cheffing, living and breathing food. Who were we to storm in and set up shop?

Online, without big advertising dollars to spend, things built slowly. Across 2019, our busiest day of Brunch Box deliveries was just 10 orders, delivered between the kids’ soccer games. We expanded our catchment area and found ourselves driving to Pukekohe and Ōrewa for single orders, time and petrol costs negating any possible profit. By February 2020, we’d run out of cash. We were ready to give up.

Sitting on the same couch we’d find ourselves in just a few months’ time slumped on, over-run by orders, we discussed closing the website, selling the house, and giving up our dream.

How Covid changed everything

As it did for every single business on the planet, Covid-19 changed everything. With cafes and restaurants shuttered during alert level four, and lengthy queues formed around supermarket buildings, people turned online to order their food. We already had a website, and Facebook and Instagram groups containing hundreds of members. Our audience was ready and waiting. Spreading the word was easy.

Suddenly, the previous 12 months didn’t seem like such a waste of time after all.

So we “pivoted”, quickly. One part of our sprawling business model suddenly came sharply into focus. We folded everything up into an online farmers market: a choose-your-own buffet of delicious, hard-to-find, freshly picked, quality brunch-centred products, from producers that shared our ethos. We added our own products into the mix, put everything into recyclable or compostable packaging, and delivered to doors safely and contactlessly. Money supplied by the government’s Covid-19 business fund helped pay for a business coach and a newly streamlined, deli-style website.

With our MBIE certification in hand in case police stopped us, signs that read “Essential Service” stuck to our car windows, packs of masks in the front seat and a constant supply of hand sanitiser nearby, we began operating. And we began selling out. Stuck at home, and shopping online, people couldn’t get enough of us. Almost overnight, we went from doing a handful of deliveries to dozens and dozens of them. Orders would come in faster than we could keep up.

We’d be up late most nights, sitting on laptops around the kitchen table, collating orders, talking with suppliers, sorting delivery routes, persuading friends to drive for us. Orders would arrive from all over the place: Facebook, Instagram, email, phone and even text messages. Every available surface was used to prepare orders. Some days, we packed and delivered from 6am until well after 6pm. If we needed a breather, we’d collapse on our couch, too tired to move. There was no home-schooling going on. Sometimes, even our 11-year-old son would help out, demanding payment in chocolate croissants.

During lockdown, it felt like we had an inside eye on the human psyche. At alert level four, our customers craved comfort food. That meant two things: doughnuts and bacon. As alert levels went down, healthier food would take over, like gluten-free breads, haloumi and organic salad mixes. During the recent alert level yo-yos, the same thing happened again. One recent weekend, we offered and quickly sold out of hot cross bun-flavoured doughnuts. We didn’t even get to try one for ourselves.

In alert level four, people wanted doughnuts (Photo: Supplied)

Lockdown luck

We know we’re incredibly lucky. We didn’t launch our business with lockdowns in mind. We had no idea Covid-19 was coming when we quit our jobs. We also know many food businesses – especially those with fixed retail spaces and expensive overheads – are struggling. Some weeks, we do too. We’re nowhere near making it out of the woods. But we’ve found ourselves a small clearing that seems to be sustainable. Our regulars love us, rave about us, keep coming back and invite their friends to join too. We’ve found several suburbs that work for us, and focus our deliveries and marketing on those.

Yes, business yo-yos between lockdowns. When alert levels go up, Brunch Box gives us something to focus on rather than Ashley Bloomfield’s daily presentations. We know we’re helping our suppliers, who would be throwing away their incredible food. We know we’re helping those stuck at home eat delicious, healthy food during lockdown. “Thanks for being the lighthouse and ray of sunshine on each delivery,” someone wrote on our Facebook page in the middle of lockdown last year. Kind words like that kept us going. That makes us feel good. That makes us feel like we’re doing the right thing. One year on, we might even find time to celebrate with one of those doughnuts. They do look delicious.

Keep going!
The global economy was left reeling by Covid-19 (Photo: Getty Images)
The global economy was left reeling by Covid-19 (Photo: Getty Images)

MoneyMarch 18, 2021

The New Zealand economy experienced its largest ever decline in 2020

The global economy was left reeling by Covid-19 (Photo: Getty Images)
The global economy was left reeling by Covid-19 (Photo: Getty Images)

It’s a year for the history books in all the bad ways: in 2020, Covid-19 pummelled New Zealand harder than the great depression or the global financial crisis. Justin Giovannetti reports.

New Zealand’s economy experienced its greatest ever annual decline in 2020, contracting by 2.9% as Covid-19 shut the country’s borders and upended global trade.

The latest figures, released this morning by StatsNZ, show an economy that hit the brakes in the final months of last year as continuing restrictions on travel began to weigh on the country’s businesses.

New Zealand’s economy shrank by 1% in the final three months of the year, the worst showing among the countries with which StatsNZ compares its figures. The world’s rich economies grew by 0.9% on average during that period, while Australia and Japan’s GDPs grew by nearly 3% in the December quarter.

“The December 2020 quarter results reflect an easing of activities following a post-lockdown catch up in the previous quarter, and the continued absence of international visitors,” wrote StatsNZ.

New Zealand’s economic decline over the past year wasn’t unique or even exceptional when compared to the world’s other economies. Comparing changes in annual GDP between countries is tricky and that data isn’t collected by the OECD, the club of rich countries.

However, one way to look at progress over the past year is to compare the December 2020 quarter’s economic data, with the final three months of Covid-free data available, which is one year earlier, the December quarter of 2019. That compares the last three months of our pre-Covid economy, at somewhere near full capacity, to where it is today after a year of Covid.

Comparing those two points in time, New Zealand’s economic growth declined by 0.9%. Australia’s fell by 1.1%. The US dropped by 2.4%. Canada declined by 3.2%. The European Union overall slipped by 4.6%. The UK, take a breath, plummeted by 7.8%.

By that metric, only four economies were in a better place after Covid-19. That small group was led by China, whose rate of economic growth increased by 6.5%. Overall, New Zealand placed well among rich countries by that measurement, beating all our historic allies. It was, however, still a horrific year for the New Zealand economy.

Each quarter of 2020 tells a vivid story about the country’s economy and global woes. It’s a year that will go down in New Zealand’s economic history, having beaten the global financial crisis and the great depression for how awful it was.

After stagnating in the final months of 2019, New Zealand’s economy fell by 1.2% in the first three months of the year. That’s a time during which Covid-19 became a household name and spread through China, northern Italy and eventually North America.

In the second quarter, the economy plunged by 11% as New Zealand went into level four lockdown. It was by far the worst decline in the country’s history.

Released from their homes, New Zealanders went on a spending spree in the third quarter, propelling growth of nearly 13.9% in only three months. That was the largest rally in the country’s economic history, by far. The mad yo-yoing on the usually sedate economic charts then ceased in the fourth quarter as the economy dipped slightly into the negative.

The December quarter saw nearly half the country’s industries go into decline, a broad indication that consumers and businesses were pulling back on their spending.

The quarter’s fall was led by an enormous decline in construction spending, down nearly $400 million from the previous quarter. That’s a nearly 9% decline in three months. The fall would have been worse if not for growth in residential construction of 1.9%, propelled by incredibly rapid house price increases. 

Construction fell by 7.3% annually in 2020, a surprising contraction amid complaints of shortages of trades people and construction goods due to high demand. “Construction activity remains at historically high levels, despite this quarter’s fall,” said StatsNZ’s Paul Pascoe.

What should have been the start of the country’s international tourism season in the last months of 2020 instead saw empty hotels and cafes. Spending on retail, accommodation and restaurants fell by $250 million in the year’s final quarter, a drop of 5%, largely due to the absence of tourists.

The collapse in air cargo and travel to New Zealand meant that transport and warehouse spending fell by nearly 26% in 2020 – that’s despite a massive rally at the end of the year, presumably due to Christmas shopping.

While there had been an expectation that New Zealand’s primary industries would power through the economic disruptions of 2020, they largely didn’t. Sheep and dairy production fell sharply during the year as goods exports fell by 3%.

Manufacturing also fell by 3% during the year, while agricultural industries declined by 2.7% annually, joined by sharp decreases in mining and forestry. Amid an ocean of red indicators and economic warning lights, fishing was one of the few industries that had a good 2020, growing by 1.3%.

The political reaction this morning was swift. The National Party’s Andrew Bayly said the sharp decline in construction indicated infrastructure investment that was supposed to carry the country through the Covid-19 slump never happened.

“This was why the government originally announced its shovel-ready projects, the whole point of the programme was speed,” said Bayly in a statement. “They were meant to give our economy a boost and offset job losses. Instead the government has shown an inability to deliver with construction only started on 49 of the 205 shovel-ready projects.”

The Council of Trade Unions joined in with the criticism, with economist Craig Renney calling on the government to provide more economic support in its coming budget. Amazingly, Renney pointed out that the government’s share of the economy actually dropped in 2020 instead of the increase that would be expected if it had spent significant amounts of money.

“The recovery from Covid-19 continues to be uneven. When today’s GDP data is combined with recent unemployment and inflation numbers, we see a society where some people are experiencing significant financial hardship,” wrote Renney.

Finance minister Grant Robertson took a positive approach to today’s data, saying it shows New Zealand is “among the best in the world despite the impact of the Covid-19 pandemic”.

He gave no indication that he expects to spend more on infrastructure or other new investments when he tables a budget in the coming months. “Our economy remains strong. We will stick to our plan that has successfully helped New Zealand through this pandemic,” Robertson said in a statement. 

So what does today’s economic data mean for the average New Zealander? After an incredibly volatile 2020 that saw a global pandemic and unprecedented economic falls and starts, the average person in this country can now buy about 3.7% less stuff than they could a year ago. That’s a very rough figure for disposable income based on the value of goods flowing into the country and being exported, along with investments, population growth and a number of other indicators.

To Renney’s point, the average New Zealander is not better off. That average figure will conceal some people who have lost substantial ground over the past year.

Despite border restrictions, the country’s population continued growing through the year, adding about 10,000 people in the final months of 2020. Nearly 100,000 new New Zealanders were added to the country last year.

This story has been updated with additional data from StatsNZ and more reaction.

But wait there's more!