Boutique ice cream maker shows that customers are prepared to pay top dollar for quality products.
In just three years, Greg Hall has built his boutique ice cream company, Kohu Road, into a sweet success story.
The company's organic ice cream and sorbets - which include award-winning flavours such as espresso and golden syrup - sell in more than 400 specialty food stores and supermarkets in
New Zealand and Australia. Kohu Road has just relocated from a kitchenette to a 600sq m warehouse in New Lynn, where it plans to open a cafe next year. It's also on course to open a retail store on Auckland's waterfront in June, and is negotiating to buy a small food and beverage company.
Kohu Road was also a finalist in the small business and marketing categories of the Waitakere Business Awards.
Hall set up the business three years ago with his Japanese wife, Yayoi, a Kaiseki chef (the best translation is a degustation or nouvelle cuisine chef), working from their Titirangi, West Auckland home. After high-pressure jobs in Tokyo, they wanted a cottage industry to keep up the cashflow while their children were in pre-school.
The couple bought an ice cream maker and, when friends and family began putting in orders for their dark chocolate ice cream, realised they had the beginnings of a business. They sold their bach and a property management business they'd set up in Wellington, and got to work.
Logistics proved a challenge, says Hall. Companies refused to bring supplies to a residential address and frozen logistics companies required a minimum consignment of one pallet, or 528 litres. In the end, Hall bought a freezer truck and delivered the product himself.
Hall targeted big retailers and specialty food shops, preferring to sell wholesale and build a market. A sticking point was the retail price of $18.50 a litre: supermarkets didn't believe the ice cream and sorbets would sell at that price. When he approached a central Auckland New World supermarket, he "turned on the theatrics", Hall laughs, begging, "just give me a chance and I'll show you".
The dramatics paid off. The Victoria Park New World (between Ponsonby and Auckland's CBD) now stocks 12 Kohu Road products, up from the original three, and the supermarket is one of the company's biggest customers.
Meanwhile, about 20 per cent of the company's products are exported to Australia, where they are sold through a distributor. Eventually Hall aims to export to Britain and to other European countries.
The steep price - now $19.40 a litre after October's GST rise - is justified, says Hall, simply because the products are worth it. "Customers might say, 'goodness that cost a lot of money', but [it tastes] better than they expected and so they think the price is worth it; they have value for money. And as soon as you have value for money, it's not expensive anymore."
He follows the example of French fashion house Louis Vuitton, which would never "insult" its customers by discounting.
"We don't let the customer down through cheap sales strategies. If you buy a fine piece of art only to see that artist's work in the gallery later for 50 per cent off, you'd feel ripped off."
Designed by Hall, the Kohu Road labels are simple. There are no tempting pictures of the product or ingredients, and compared with most food product labelling they're "counterintuitive", he says.
"We didn't want to insult the consumer and dumb it down. We consider our customers to be intelligent and sophisticated people - they don't need pictures to tell them what's inside."
Hall uses high-quality ingredients - for example, infusing the vanilla ice cream with vanilla seeds from Madagascar rather than using vanilla essence.
While he may be in the luxury market, Hall and his 10 full-time staff aren't living it up in a posh office.
The Kohu Road office, freezers and creamery are in a warehouse in an industrial estate in West Auckland's New Lynn. The office desks - Hall found one on the roadside and traded another for ice cream - are under a marquee tent in the warehouse.
In winter the sides are folded down to help keep it warm. A lot of the company's eco-friendly strategies - energy-saving light bulbs, re-using boxes and giving unsaleable stock to hospices - are simple money-saving methods, says Hall.
The company does support sustainable business, he emphasises: "20 years ago you would have been called Scrooge for doing [those things]; now you're called a champion of sustainable business."
To help fund the numerous expansion plans, Hall aims to offer shares in the company, extending ownership from himself and staff to friends and family.
