Arnel’s Originals
Arnel McAtee was a retired school teacher who had two little girls who were covered in eczema. Using an elimination diet, she finally figured it out; they were allergic to a lot of foods but especially gluten. She changed their diet and almost miraculously they were well again. At the time there just was not much gluten free food back in 1996 and the gluten-free bread was not very tasty. This put her on a path of trying to make better and tastier food for her kids by experimenting with recipes. One of the recipes she created was very good gluten-free bread.
In 2009 with her two little girls in college; Arnel’s friends encouraged her to try selling her gluten-free bread. Knowing nothing about business, at 56 years old, she started making her gluten-free bread and began putting it in local stores. Her bread was a big hit; orders were doubling before her very eyes. It was extremely hard work keeping up with the demand, but exciting at the same time. However, with no business background, it took her a few months to see her business model was not going to work. She could never make enough bread and deliver it for sale in high enough quantities to keep up with demand, and make a profit. A friend suggested that she just sell the mix and not the bread. She then got a website, made a video, and started selling the mix. This was much easier and gave her some great exposure. The mix turned out to be the answer, and it also allowed her many more ways to sell the bread. (See video)
She had no idea she would be making bread into a million dollars. She started her business with her modest savings that she and her husband of 25 years had put away. Of course his support was critical, and it has taken about $30,000 to start and to keep the business going since in 2010. In her first year she made $20,000 and her sales increased the next two years, but she still made no profit. Last year in 2013, however, in her fourth year the business tripled, was in the 6 figures, and finally showed a nice profit. In just the first quarter of 2014, her income was triple of the same quarter in 2013. If she only keeps doing what she is doing now, she should do about $250,000 to $300,000 this year, and make a very good profit.
Arnel, with no business experience, is doing a great job. She has:
1) exported to two countries and is getting requests from all over the world. This is a huge potential.
2) performed a road show for a major wholesaler. They were very happy with the products but she needs to grow enough so that her business with them is no more than 20% of her total sales. This would be a gigantic leap.
3) her four gluten free baking mixes in Whole Foods Stores, some Albertsons stores, Home Goods Stores, and other stores totaling approx. 450 stores.
4) four different gluten free bakeries are buying her bread and all purpose flour mix in bulk and putting their label on the finished product, which is called private labeling.
5) several online companies that sell her mixes, (Zulily.com, Vitacost.com, Amazon.com, WellAmy.com, etc)
6) plans of expanding into the foodservice industry (hospitals, schools, universities, restaurants, etc.) sometime this summer.
Arnel is still getting offers daily, and her problem now is growing the company wisely. This lady is not a millionaire yet, but she is sitting on all the potential she needs to be a multimillionaire. Arnel has received good, advice, and mentoring, but I feel she could have grown her company much faster with advice from someone who had walked this path before. And that advice was potentially available and could have saved her a couple of years. Still, she has built a very solid platform to grow her company from here and into the future. She has learned so much about marketing her product and has an impressive line of four baking mixes. Arnel is positioned to take her company as high as she wants it to go.
This is not a bad business model for anyone. Start small, test your product, and pivot. Her pivot was not the product, but the delivery of her product. Arnel learned the hard way that it is difficult to cook enough of anything to make any real money, so you have to find ways to package, distribute, and/or license it. Many businesses have been created in the kitchen and then moved out into the world of commerce. There are numerous examples that have grown to be big and successful, such as making, cookies, pretzels, baby food, and more. She has not made $1,000,000 in the bank yet, but her company is about to explode and it shouldn’t take her very long to get there.
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