BAA: How did your Alberta School of Business education help you grow your own business?
Chris: Understanding the fundamentals of business has been a huge asset to our company’s development. It helps us understand what systems and processes need to be in place to ensure our operations are well-managed and sustainable. As well, all of the case studies and exposure to best practices from the program helped us form our vision and determine what kind of company we want to build. In addition, the network that I built during my MBA has been extremely valuable.
BAA: Can you tell us about the early days of Honest Dumplings? Where did the idea for the business originate?
Chris: My business partner and wife, Ray, came to Canada to pursue her Master of Laws degree a decade ago. While in Canada, she found her passion for food and creativity. At that time, I was in the technology industry in Alberta (TEC Edmonton) and had a strong inclination to start my own business, as I had recently caught the entrepreneurial bug.
I still remember the day when I asked Ray what she would want to do if she didn’t have to worry about anything. Her response was that she wanted to be a lawyer who owns a restaurant. I immediately laughed and said, "You don’t have to be a lawyer to own a restaurant!". After exploring with her that she wasn’t really passionate about law, we asked ourselves, "Why don’t we start a food business"? Ray could pursue her passion and I could live vicariously through her.
After some further exploration of the idea, we looked around and saw a market gap in the “progressive” food scene and Asian cuisine. We chose dumplings as a platform to bring the creative, unique, high-quality Asian food experience to Edmonton, as everyone loves dumplings! We ate dumplings for 3 meals a day, 7 days a week in April 2014 for R&D purposes. We picked the top 4 flavours and started selling them in May 2014 at the farmer's markets in Edmonton. We sold out at our first few markets and received overwhelming support from the local food community.
BAA: Tell us about your company's growth.
Chris: We started producing dumplings in our first rented commercial kitchen and selling them at the farmer's market in 2014. Our first wins included holding our first pop-up restaurant, working with our first retailer (SPUD.ca), and being featured in the Edmonton Journal.
Following continued success at markets and stores, we travelled to San Francisco for market research in 2016. It was then that we decided to pursue a retail model and scale our business nationally and internationally. At the same time, we moved into our second commercial kitchen and added more niche Alberta grocery stores to our list of resalers.
We hired our first few employees in 2017, and have continued expanding the team since.
2018 was a year of massive growth. We signed a lease for an 8,000 sq ft facility and started talking to the Edmonton International Airport about a 18,000 sq ft CFIA facility. Sobey's local development manager confirmed interest in carrying our pies and dumplings in their stores. Our product line grew to offer gluten-free dumplings. We also merged with South Island Pie Co., a company that we had been working alongside for a year.
This year, our focus has been on the development of new products, the new facility, and the Uproot Food Collective [editor's note: more on that later!]. We also provided concession at this year's Edmonton Folk Music Festival.
BAA: That's amazing! What challenges have you faced?
Chris: Given Ray’s background in law and my background in technology combined with engineering and an MBA education, we didn’t know anything about the food industry. Even the very basics, such as food handling permits and commercial kitchens were new to us.
The early days were relatively easy for us as we took a lean start-up approach where we didn’t need a lot of capital to develop our product and validate it in the market. We literally made product, got the easiest packaging we could find, and printed our name on a banner that we taped together. We started at the downtown farmer's market and had a lot of early success at farmer's markets, pop up restaurants, and grocery stores.
The bigger challenges for us came after the early success, when I left my job at TEC Edmonton and we were on a path to turn this into a viable business. We quickly discovered, in order to have a sustainable business, we needed to scale up significantly. We soon realized it is very difficult to do this in the food industry due to all the regulatory challenges, lack of facilities, and industry-specific economy of scale barriers such a procurement of ingredients, getting deals on packaging, and having machines for automation.
Even once you have your production lined up, distribution or access to market is another big challenge. Everything, from having access to a grocer, distributor, or broker to setting up bar codes and making sure the packaging meets CFIA regulations, adds to the complexity of the industry.
BAA: Where are you now?
Chris: We are currently in about 60 stores between the South Island Pie Co. brand and Honest Dumplings.
We are also excited to launch our food accelerator program, Uproot Food Collective, in our space. Through this program, we will focus on community engagement and getting companies ready for national distribution, including working with grocers and sales partners to ensure our products can get on the shelf.
Furthermore, we have recently launched our Series A investment round for a $5 million investment to develop our federal (CFIA) facility that will enable the companies we are working with to have access to national and international markets. It is almost serendipitous how all of this has come together in the last year. We have some very interesting partnerships that we are working on, which can make this opportunity much bigger than an Edmonton play. We think this opportunity is something that can impact the western Canadian food industry.
BAA: Tell us more about the food accelerator.
Chris: Our food accelerator is called Uproot Food Collective. Uproot Food Collective is a new model for bringing high-growth food businesses to mass market. As a combined business accelerator/co-packer, Uproot is changing the pathway for local food companies to scale nationally and internationally. Together with South Island Pie, we are operating under one company which will be called Uproot Food Collective.
The Uproot Food Collective team has experienced and understand the challenges of developing a food concept into a successful food business. Honest Dumplings and South Island Pie both started as home-based food businesses selling products directly to consumers. The desire to build a successful company and take our products beyond farmer’s markets and craft sales and into main-line grocery was what brought us together, and our combined efforts have helped us get to the cusp of being stocked in national grocery chains.
The journey has been challenging and the experience our team has gleaned from this inspired us to found Uproot Food Collective, which is designed to help emerging food businesses overcome the barriers to entry and growth that are inherent in the agri-food sector.
The Uproot Food Collective team has expertise in developing a brand, marketing and sales, developing Canadian Food Inspection Agency (CFIA) compliant packaging, developing manufacturing processes that exceed the requirements for food safety and industry requirements, working with brokers and distributors in the grocery industry, as well as business and financial planning, which is necessary to support a Fast Growth Consumer Packaged Goods company.
We want others to be able to leverage our knowledge and experience and develop their food inspiration into a national or international brand.
We currently have three companies working at our facility: Honest Dumplings, South Island Pie and Natural Kitchen Delights. We have a lineup of companies wanting to join our accelerator program.