August 27, 2017
Kate McAleer, founder of Bixby & Co., an organic chocolate and food company attributes a lot of her success to plain, old, get-your-hands-dirty-and-stop-complaining grit and perseverance.
Kate founded her company at the end of 2011 while still in New York. It remained “a beta effort” for the next year or so before she pre-sold a prototype of her Bixby Bar to Whole Foods. This happened right before she moved to Maine in January 2013, which sent her scrambling to find enough manufacturing space to fill the order. The first place she lined up fell through at the last minute. She then moved into a shared commercial kitchen in Belfast, which worked for about a year before she needed to expand to a larger space, which she found in Rockland, and where her business is still located.
“You may not be the perfect person, but if you work really hard and put a lot of passion and grit into something, you’ll keep getting somewhere.” I think that really exemplifies my modus operandi. It was a hairy time of trying to find somewhere to manufacture product, but it all works out if you keep hustling,” she told me.
She’s had noticeable success in pitching her business. In 2015, she won Gorham Savings Bank’s Launchpad competition and $30,000. Last year, she was named a Tory Burch Foundation Fellow and ended up winning the concluding pitch competition along with $100,000 (half in grant money and the other half in a low-interest loan).
Her products are now in more than 1,000 stores across the country and she says her sales are growing 30 percent a year.
In our Founder Forum interview, Kate speaks candidly about the personal challenges of building her business and offers her advice for new entrepreneurs (hint: develop grit).
This interview was edited for clarity and length.
When was your first entrepreneurial experience?
I came to entrepreneurship out of college. I went to NYU for undergrad and pursued a liberal arts degree, but was trying to find my passion. I found that I really wanted to be in control of my own destiny. And my mom suggested starting my own business. Food and food businesses became an intersection of a lot of my interests.
I should explain that my interest in natural and organic food came from a family experience of my mother surviving breast cancer numerous times. My mom was diagnosed my freshman year at college, so I was 18 I think. That’s a pretty alarming, shocking experience. When someone gets cancer, you start to really look at a lot of things, including food, differently. And I saw a void in the candy space. I wanted to do chocolate and did a lot of market research. Candy was this stagnant category that hadn’t been innovated, was unhealthy, made with all sorts of strange ingredients (which I know now why people use—for shelf life, stability and all sorts of cheapening that comes from mass producing something that has little nutritional value), so really I was trying to turn that on its head and wanted to make candy with real food in a more holistic approach and make it in Maine, which is an unlikely place to manufacture candy. It was really diving head first into entrepreneurship. It quickly became my passion once I dove into it.
What have been the largest challenges you’ve faced thus far?
I would say the biggest challenges have been navigating a complex industry where you have federal regulations and state regulations. As a smaller manufacturer, I’ve taken all that learning the law, how to comply, food-safety compliance, upon myself. I don’t see that as a challenge, but it’s something that I had to reconfigure in my mind. When you think about starting a company, you’re not sure what you’re going to have to deal with, but I didn’t imagine digging into food law. But I’m glad that I did; I’m glad that I do. I think I need to be on top of it anyway, but it wasn’t what I thought I’d be dealing with all the time.
I think the whole distribution aspect of the business is really eye opening. When you’re a consumer, you have this idea that the food that’s available to you is available because you want to buy it. And the reality is what’s available on the shelf is because people have paid to be on the shelf. So fighting for space as a small, emerging brand is a challenge when you’re up against large conglomerates. There’s no disruptor in the food-distribution business. I mean, maybe you could consider ecommerce as a disruptor, but that’s even complicated with a perishable product. There’s not a cold-supply chain with Amazon, so they don’t sell chocolate during the summer. So the oldest part of this business is the distribution side of it—and so you’re new and innovative, but you have to deal with this antiquated system. That was a challenge and eye opening, too. Because you think you could bring innovation to the marketplace, but it’s very much a pay-to-play model.
Even Amazon is becoming a pay-to-play model, which I don’t think consumers are aware of. If you want your product to come up in search on Amazon, you have to pay Amazon marketing fees for that. What you’re buying is because people are paying to have access to you. We were just accepted into Amazon Launchpad, though, which is their program for startup businesses, so I’m eager to see how that helps us from an Amazon perspective.
Tell me about what you did to prepare and improve your pitch.
I really attribute a lot of learning my pitching skills to the Top Gun accelerator experience. I think I was the first person on the first day they called on to make a pitch. Don Gooding called on me and I think it was a blabbering, terrible pitch. It was really good shock therapy of realizing that I better be on my game at all times to explain my business. That was one of those moments I’ll probably never forget. I’m sure it wasn’t that bad, but I thought it was terrible myself. That program was awesome. Lots of practice, research. I did some videoing of myself, which was kind of awkward, but watching that was helpful. It took a lot of practice and intention in saying I want to improve in this aspect, which is pretty important. It’s a lot of work. You really need to hone your messaging and presentation skills. I’m probably rusty now. I haven’t pitched in a while.
What have been the personal challenges you’ve faced growing a company?
I am not married and I don’t have kids. I feel like I work all the time, so I give anyone who is raising a family a lot of kudos on doing that. I would say there’s a tremendous amount of personal sacrifice. I really have not seen my friends in a very long time. I mean my friends from college or New York, if I have seen any of them, they’ve come to Maine to see me. And then I think I put them on the line wrapping candy bars. Basically I tell them “If you want to hang out with me, we need to finish this product and then we can go have a lobster roll.” [Kate laughs] I think that it’s not a 9-to-5 thing you can turn off—at least I can’t. Maybe some people can. The business is in the back of your mind always. There’s a lot of sacrifice in terms of working every weekend, almost every day for a very long time. And just trying to get things done.
Talk about your growth
We’ve been growing 30 percent each year. We’re in about 1,000 stores right now with a goal to grow. I think what’s been really good for us is we are distributed by the two largest natural food distributors in the country, and we gained partnerships with L.L.Bean and now Hannaford, which have been great. We have a growing online business, and then we’ve innovated a lot of new products and have more products in the pipeline that I’m really excited about.
What advice would you give a new entrepreneur that’s preparing to start their first business?
I’d say to really try to research the support networks that are available. In Maine, the programs like MTI and Top Gun, have been tremendous for me. Go after those resources, invest the time in it. I think you reap a lot of benefits that are tangible and intangible. And I’d say make sure you’re ready to work very hard.
Read more about startup advancements in Portland, Maine at TechCo
Editor’s Note: Founder Forum, a weekly interview with a startup founder in Maine, is sponsored by the Maine Technology Institute.
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