Tyler Gray holds black perigord truffles from France.Rafal Gerszak/The Globe and Mail
Each week, we seek out expert advice to help a small or medium-sized business overcome a key issue.
Mikuni Wild Harvest is hardly scrounging for business. Founded a decade ago by B.C. native Tyler Gray and his Canadian partners Gord and Tim Weighill, Seattle-based Mikuni started out selling mushrooms and other wild foraged foods to top restaurants throughout North America.
The company, whose name combines Japanese words that translate as "beautiful forest," has since expanded beyond its initial list of white-tablecloth, top-tier restaurants. It has also branched out into sustainable fish and farmed produce, and artisanal packaged products such as its Noble Handcrafted maple syrups and vinegars. On the Mikuni website, celebrity chef Mario Batali praises its truffles.
With additional offices in Las Vegas and Vancouver and a partner in New York, Mikuni racked up nearly $10-million in sales last year, Mr. Gray says. The 50-employee company has about 2,000 restaurant clients who purchase its products through sales reps.
Mikuni does a healthy online retail trade – some $130,000 in 2013 with no advertising, he says.
But Mr. Gray wants to act on a long-held ambition: to build a consumer brand alongside the business-to-business one.
"My vision has always been to share this passion for wild foraged foods with the mass market," Mr. Gray says. But how can the company best capitalize on its brand and reputation?
With Mikuni in the midst of securing private equity financing, Mr. Gray has started plotting this move into the consumer market. The company is launching an e-commerce division that could feature products such as a wild-mushroom-of-the-month club and monthly subscriptions to dinner ingredient boxes curated by leading chefs. But he also envisages a push into retail stores and even a health and wellness program.
Mr. Gray wonders: How should they choose the right e-commerce strategist? How soon should Mikuni expect results from its online sales platform?
Although the company plans to capitalize on its ties to famous chefs, he thinks the new enterprise should have a different name. "I feel like the Mikuni Wild Harvest brand isn't the right one to take to business-to-consumer," Mr. Gray says. "I may be wrong in that, but that's my gut."
The Challenge: How can the specialty restaurant supplier Mikuni Wild Harvest build a successful consumer brand?
THE EXPERTS WEIGH IN
Tom Beakbane, president, Beakbane Marketing Inc., Toronto
While they see it as a big step going from business-to-business to business-to-consumer, it really shouldn't be. It should be just an evolution. They do need to do some deep-down thinking about how people refer to them and how they communicate their brand on their packaging, but in my view it shouldn't be a radical change. The more radical they make it, the more likely they are to, quite frankly, fail.
Their consumer brand can quite easily build off the credibility they've built up with restaurants. It's a nice story. The name Mikuni does sound a little Asian, which doesn't mesh perfectly with their product line, which is very local and fresh and North American. But it ain't bad because it's fairly unique, it's memorable, it's easy to find on Google.
The big issue for them is distributing fresh foods. They're very difficult to sell through grocery because they're very hard to brand, they're very hard to package so people remember the brand, they have a very short shelf life, and the extra shipping costs are high.
Where they're likely able to make the most money is in distributing products that are shelf-stable packaged goods – the vinegars, the maple syrups.
They certainly shouldn't try to get into mainstream grocery; that would be suicide. They need to stick with specialty food stores, possibly Whole Foods but probably more online – their own website and the likes of Amazon and others that are starting distribution of grocery products.
Lynn Bevan, partner, private midmarket practice, Ernst & Young, Toronto
Even though the product may be similar to what they've been selling directly to restaurants, almost every other cost is very different in a business-to-consumer model. Things like marketing, order processing, packaging and delivery are very different, and they need to understand them to make proper pricing decisions.
The right e-commerce strategist has to be someone who has a track record of getting a brand out there from its inception. Because Mikuni is starting from scratch, they need someone who would understand how to interact between a website and social media and how to get the buzz about a product out there.
I've seen [e-commerce] programs take off very, very quickly, literally within weeks of developing an online presence. It can be anywhere from a few weeks to six months. If it goes to six months, it's probably not going. Social media tends to pick it up quickly or not at all.
They appear to be very labour-intensive and therefore have quite an expensive order-fulfillment process. One of the other keys they should consider is how to make the process more efficient, how to drive costs out by IT systems, looking at how to get the best bang for their marketing dollar through social media and even at things like income tax: Where should they locate?
The taxation of online sales can depend on the physical location of the warehouse and the server. And there are tax jurisdictions that are cheaper than others. So where they locate could impact the tax bill, not only for income tax but also for sales tax.
John Rowe, CEO, Island Abbey Foods Ltd., maker of Honibe honey products, Charlottetown
I found it confusing that their company is called Mikuni Wild Harvest, which I think is a fantastic brand, and their maple syrup has a different name. My suggestion would be everything should be branded Mikuni. It is a very unique name, and Wild Harvest, if they're focusing on produce or next-to-raw product like maple syrup – they should focus all of their products under that brand. I think it's extremely strong. And having an umbrella brand with different lines underneath it is a strategy for success that is proven.
They could start by doing collaborative advertising within their existing customer base. In other words – and this is something that we've done – simple table talkers: a little paper placard that a cafe or restaurant might put at the front desk or even on a table that says, "We're proud to serve Mikuni Wild Harvest produce here. Did you know you could get it at this specialty retailer a block away?"
If they really want to get to consumers, they have to develop a bricks-and-mortar retail strategy. I'm not suggesting that they ignore e-commerce. But my suggestion is to try to leverage those relationships they already have, and if they're able to do cross-promotion, they want to make sure they have a retail location that somebody can walk into to check the quality of their produce.
Getting into retail for food is a long and arduous process. It takes years. So it's not about trying to knock it out of the park and go nationwide in the first six to 12 months. Quite literally, you have to start local, and the Northwest is a great place to do it, especially if they're Canadians living in Washington.
THREE THINGS THE COMPANY COULD DO NOW
Stick with its original brand
Their unique and memorable name will serve them well with consumers.
Drive out costs
Find savings and set up shop in lower-tax locations.
Create a bricks-and-mortar retail strategy
Online sales are important, but give people the chance to see and touch your products in stores.
Special to The Globe and Mail
Interviews have been edited and condensed.