Noshu literally means ‘no sugar’ and it’s the perfect name for Rachel Bajada’s line of sugar free cake mixtures, donuts and muffins.
Dynamic Business had a chat with Bajada to find out more about her buzzing startup.
Quite a few of Bajada’s extended relatives had developed Type 2 diabetes later in life and it had always saddened her that they could not partake in celebrations that involved sweets and cake without negative health consequences. In the process of cutting added sugar out of her own diet, Bajada realised there were not many options for sugar free foods that were healthy and tasted good.
“I decided to create them myself, in turn setting out to create a genuinely sugar free food company,” she says.
“The focus on sugar reduction and the issues with sugar consumption have only really come to a head in mainstream media over the last 5-6 years.
“In setting up Noshu I predicted this trend and still believe that in 20 years from now, cooking with cane sugar and added sugars as we know them today will be like looking back at photos of people smoking on a plane.”
When Noshu’s hero range of ‘Guilt Free Donuts’ came into the Australian independent retail market, retailers were not sure what to do with them and couldn’t put them in an obvious ‘category’.
“It was then that I realised we were actually creating a new category as we went, because 5 years ago it was almost unheard of to merchandise or buy a ‘better for you’ bakery item from a refrigerated cabinet,” says the founder.
Fast forward 4.5 years and the company now have a ‘huge’ and loyal following of Noshu fans. Now retailers are installing vegan and raw dessert fridges and are more accustomed to selling gluten free bread and healthier snacks refrigerated.
“Major supermarkets have a very structured and formal process for assessing and ranging new products. It’s important to seek advice from mentors or associates who are familiar with the process to ensure you are prepared and putting your best foot forward when pitching or presenting a new product,” says Bajada.
“Getting your commercials right is so essential – when you’re moving huge volumes and supplying a National chain, your cost of goods shifting just a few cents, can be crippling so you need to know your thresholds on pricing and be confident you can hold your price and withstand any market changes in supply chain.
“Build in budget for a robust promotional and trade spends to support your launch and boost sales year round. Most importantly, you need to be able to demonstrate a genuine market need for your product and back up your numbers on the size of your potential market and what value that can add to the proposed category.”
Bajada says the reality is that when the business started and had tiny volumes, the costs were high – really high.
“Food businesses and cost management really comes down to economies of scale and we really just had to keep building volume, consolidating our supply chain and investment buying (which often means higher warehousing costs but lower unit costs) to gradually reduce our cost base,” she says.
“This can have serious implications on cash flow so there is a lot to weigh up between buying in bulk for a better price, and the impact on cash flow and holding costs in order to do this. We have always maintained that we won’t compromise on quality when it comes to our raw materials as we truly believe the end customer is happy to pay that bit extra for a natural product and quality ingredients.”
Bajada believes it is incredibly important to have a great support network around of mentors, friends or advisors who have done something similar and had success in your chosen industry so they can guide you through tough decisions.
“You will always make mistakes and that’s nothing to worry about, as long as you can always walk away with a lesson. Don’t go cheap on getting good legals done or investing in good branding,” she says.
“It can be near impossible to recover from the consequences of bad, poor or insufficient contractual documents and a huge setback to launch with a lackluster brand or positioning that doesn’t quite cut through to your target audience.”
Noshu has some exiting product launches on the horizon for the next 12 months.
