My problem with her plan -- and this doesn't mean that she can't pull it off -- is that I had a lot of difficulty just learning the beverage business, and she's trying a number of products. That's very ambitious. I think Jack Kavanagh was right to tell her, "Limit your selection." Even though it's all fancy foods, every product is different. The government regulations on food are different from those on beverages. The production and manufacture of these things are completely different.
Something always goes wrong, and if something goes wrong with more than one product, I don't know how she could handle it.
FINANCIER
SKIP CUMMINS
General partner, The Vista Group, New Canaan, Conn., a $335-million venture capital firm with positions in two food companies.
I think she's working, but she's not working smart. Randolph's plan is inconsistent with the available financing. She has to come up with reasonable milestones given the money she's got. The question "What can I sell?" is a lot different from "What can I successfully market given our cash resources?"
I'm concerned she really has no focus. I think she ought to work on at most two products. With one product she ought to go into the distribution outlets she's talking about -- specialty shops. I think that's a good strategy. She can do that with a manageable amount of capital, and she can control the amount of time required to support the outlets by controlling the number of shops she's supplying. By doing that she will prove that the dog will eat the dog food. And for the other product, she should do some sort of deal with a corporate partner who can somehow take the time and money to support the soda.
By setting two goals -- getting a good deal on the soda for distribution efforts, and proving that she can get distribution with one product in a test market of Boston-area specialty shops -- she's now set two reasonable milestones.
I wish she'd worked her buddy network better. Where are the advisers who have a track record of successful performance? Consider the design firm: she didn't choose it because it had successfully designed the package for the Dove Bar or Soho soda. She went by personal chemistry and low rates. And Jack Kavanagh could have been tapped for help with creative financing. Randolph could have said, "Jack, I don't have the money to do soda, but you're interested in it, what companies do you know of that would work as good partners?" He said the soda's the hot product, and she seemed to let it drop.
Also, I think she's making a serious mistake not compensating consultants with stock; it can provide a lot of leverage in a start-up. If I were Randolph I would set up a pool of stock for five key consultants -- in marketing, for instance, and maybe for her chef and Kavanagh -- preserving her most precious asset, which is cash. It's hard to say exactly how much of the company she'd have to give away, but a pool of 10% would seem reasonable.
Because I think she will have a very difficult time building a major company in the market that she's chosen, a large venture capital firm like ours would not be interested in investing. However, that doesn't mean that she can't still build a $3-million to $5-million, profitable specialty-food company. I think she should measure success by her ability to get to that point.
OBSERVER
SUSAN FRIEDMAN
Executive editor, The Gourmet Retailer Magazine, North Miami, Fla.
Randolph's entering the market at a fine time. At the most recent international fancy-foods show, the Jamaican representation was larger than it's ever been, with 10 manufacturers. There are two Caribbean cookbooks recently published. I think Caribbean cooking is beginning to be well received.
But there's a contradiction that concerns me. She's looking for quality shelf items, but she's also working with an individual with an interest in going broader in the market -- like putting the soda into convenience stores.
She has to make up her mind where she wants placement. If she wants to go specialty right now, I think she should avoid discussing the mass aspect, because that could be a real turnoff for the specialty independents. They're competing with the supermarkets, and they want to be able to offer unique product.
I think she has something special. But she has to determine if she wants to go specialty or mass market.
WHOLESALE CUSTOMER
ARI WEINZWEIG
Co-owner, Zingerman's Delicatessen, Ann Arbor, Mich.
She deserves a lot of credit -- she's done her homework, she accepted that she didn't know everything, and she got help. Randolph was smart not to go with the soft drink first, yet I question whether the product line is focused enough to the outsider. What do two jams, banana chips, and soda have in common? They might not even end up in the same area in a store. I don't come away with the feeling that Oualie has a cohesive line of products.
The question I always ask myself when we sell something is, "Why would anyone want to buy it?" Right now there are way too many jams on the market. The chips seem more unique; they'd give her a better chance to get attention. I'd consider starting with just the chips.
It seems to me that she also has two different long-term strategies for distributing her line. It's common that producers want to sell to both supermarkets and specialty stores, but they aren't at all related. If I know that in two or three years she wants all these products in supermarkets then I might sell them, but I'm not going to put a lot of energy into it. It's just not worth it for me. She should think more about this. It's very common from the producer's point of view to see the supermarket as a panacea. It isn't. I'm not sure what her priorities are.
