Each week, we seek out expert advice to help a small or medium-sized company overcome a key issue.
In 2008, former elementary schoolteacher and OrganicKidz founder and president Jane Walter introduced a stainless-steel baby bottle as a toxin-free alternative to plastic bottles.
Since then, sales of the Calgary-based company’s bottles have grown into the tens of thousands, garnered the attention of Oprah Winfrey’s magazine and celebrity parents such as Tori Spelling, and been named by NBC’s The Today Show as one of the top baby products of 2012.
Now OrganicKidz is trying to grow beyond its signature product to include other items, such as nursing covers and food containers, with plans as well to create organic-material bottle-drying racks and clothing, and toxin-free toys.
It’s also looking to new markets, beyond the more than 600 babies’ and children’s stores – the so-called “juvenile market” – around the world, chiefly in Canada and the United States, that carry its bottles. Ms. Walter sees opportunity to expand to gift shops, organic boutiques and natural food stores across North America.
The question is: What’s the best route to get her products into them?
She has already begun to expand to new frontiers in Canada, where a distributor is handling all of these markets with its own sales force that sells the whole line, and has made inroads in specialty stores and Canada Safeway Ltd.
But it’s a lot trickier when it comes to the United States, a much more vast market that Ms. Walter frankly says she finds far more intimidating. The company, which in February saw Target Corp. begin to carry OrganicKidz’ nursing covers in 30 states, has four staff, including a U.S. sales manager recently hired to oversee a dozen independent sales agents down south.
But Ms. Walter is not sure whether to stop there and keep all her eggs in the juvenile market basket, where the company has already developed a following, or spread the focus to pursue untapped markets, which would require many more resources, including more hiring, more visits to trade shows and more splitting of attention.
Her biggest fear is that, if she ignores these other markets, emerging competitors selling similar eco-friendly products will beat her to the punch.
“We want to be everywhere and we’ve developed our line to do that,” she says. “But should we focus on juvenile? Or should we spread our resources thin and attack other channels?”
The Challenge: Should OrganicKidz focus on the market it knows best, or reach new ones before competitors do?
THE EXPERTS WEIGH IN
David Ian Gray, founder and principal of DIG360 Consulting Ltd., Vancouver
The U.S. is 10 times bigger, but it’s also 10 times as noisy and competitive. So one of the mistakes she can get into is, instead of having one sale to one buyer, she’s managing many contact points with all the boutiques across the United States. That can be pretty daunting, so being able to sell under one large chain is pretty attractive. The fact that she has the one product in Target is a really good indicator because it shows that Target has done its due diligence with her. She should leverage that.
But she’s also selling lifestyle, so there are certain parts of the United States that are going to be more amenable. I would strongly recommend concentrating on geography to build up an audience and word of mouth amongst parents about the brand instead of picking a store in Boston, a store in Dallas and a store in San Francisco. Why not concentrate on California to begin with? Using her e-store, she can see, geographically, where the interest is mostly coming from and focus there.
Paul McElhone, executive director, Alberta School of Retailing, University of Alberta, Edmonton
Obviously she has a good product and good market share within Canada, but you can’t be all things to all people. I think if she has already carved out a niche that she knows and works well in, then that’s where in the States she should go. The problem with a lot of retailers is if they start thinking they’re going to be all things to all people and dominate the world. That’s when they can get into trouble. I’ve seen menswear try to do ladies’ wear when they don’t know a thing about it. She needs to be focused, understand what her core business is and stay on that path.
I would just expand the sales team in the States – get people who like to eat what they kill, have them on commission, put them out there and get them peppering the American market. Typically, you want to go after that specialty market first because it gives you cachet, and then, if you start tripling down into a mass market, know that it’s all about scale. But the reality with mass markets is, if somebody comes along who’s able to manufacture and wholesale those bottles for five cents less, then she’s gone. That’s the name of that game if you want to go that big.
Lyndon Cormack, CEO and president of Herschel Supply Co. Ltd., Vancouver, a manufacturer of backpacks, bags and travel accessories
Within Herschel’s presentation, we have all of our products in one catalogue. We have a consistent story. You’re only going to become a meaningful brand for a store beyond your one product. So rather than just advertising a product, she should continue to build a brand and concentrate her marketing efforts to telling the brand story. There’s going to be big guys and small guys that are going to knock her off – left, right and centre. But they can’t buy her brand.
It’s always best to concentrate on your core. … If she’s already successful in one category, stores will naturally try to expand her into more if it’s something they can sell.
THREE THINGS THE COMPANY CAN DO NOW
Concentrate on your core
You can’t be everything to everyone, but you can be a great brand to many. Think about the markets where that brand is a natural fit and focus your energy there.
As a lifestyle company, consider regions, such as California, that are going to embrace your organic products more quickly. Using online sales data find out where the interest is and cluster your sales agents in those areas.
Aim for chains – if you can manage it
Avoid cumbersome sales teams by concentrating on large accounts, but only if you can meet those volume demands and you’re prepared to compete. If another company with similar products approaches those big accounts with a lower price point, they can take you down.
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