Corporate growth is always tricky and, in most small businesses, states Eric Elsberry, CEO and Founder of Arizona Vanilla Company, "it's often more blood, sweat, and tears than forethought." Like a wildfire, his company, born in 2005 from a quest to find inexpensive vanilla beans for the delectables his wife enjoyed cooking, rapidly surpassed the boundaries of its initial vision.
"Ecommerce quickly takes you places you never dreamed of going before," comments Elsberry. But the real reason for the pace of acquiring new customers at this Mesa, Arizona phenomenon is quality products at very low prices. In just a few weeks, the start-up leaped from a handful of customers to orders for 60 cases at a time of vanilla extract or vanilla beans.
While the small business suddenly had to figure out how to ramp up to fulfill those orders, Mesa's famous Chef Sabine Goldman discovered its high-quality vanilla products and proposed a joint venture for baked goods. Soon, Arizona Vanilla's Web site was handling more orders due to its Bakery page, touting Chef Sabine's cheesecakes, tarts, brownies, blondies, and cookies made with organic ingredients and Arizona Vanilla's extracts and beans.
A stream of opportunities and sales continued to pour in. A radio station approached the company to participate in a trade show geared to home cooks; and Sante magazine, whose readership is hoteliers and restaurateurs, wanted to review the vanilla products for one of its issues. Next to come down the pike was an increase in orders for pure ground vanilla. What had been small quantities of orders jumped to orders 100 times what Arizona Vanilla was accustomed to.
As if that weren't enough, a company in London approached Arizona Vanilla about using its products. That call changed the picture for the small company in Mesa. Elsberry recalls, "Their first question was: 'What does your HACCP documentation look like?'" He didn't have an answer.
"We had to step back and get help to determine if we were doing something right or wrong and, if we were doing it right, how to tell people like this UK company that we were doing it right," explains Elsberry.
Adding a Dose of Reality to the Growth Recipe
HACCP is a set of seven principles comprising the US Food and Drug Administration (FDA) food-safety program. Basically, the European company needed HACCP certification attesting to the quality of Arizona Vanilla products and processing.
"HACCP is similar to ISO9000 standards, which document an information technology process," remarks Elsberry. "With HACCP, you document the points in your processes where potential hazards could enter into the product. For example, when we get ready to start a batch of vanilla extract, if we haven't cleaned the vessel properly, there is an opportunity for unwanted bacteria to enter into the process."
"HACCP causes us to identify the risks and what we will do to mitigate them," he continues. "Then we have to determine that we are compliant with what we said we are going to do. We have to be able to provide documentary evidence for that, or we could receive civil or criminal penalties."
At this point, Elsberry wisely sought consulting advice on the direction the company should take. Enter Oculus Consulting Group, LLC, also headquartered in Mesa, Arizona. Oculus specializes in turning its clients' visions into measurable reality. It advises on challenges that involve process reengineering strategy, technology selection and implementation, project architecture, project management, and organizational management.
In addition to business growth and transformation consulting services, some clients opt for Oculus to provide outsourced services, where it takes over various business processes when its offerings and expertise can provide a competitive advantage to a client.
Preston Cameron, Managing Director of Oculus, remembers Elsberry contacted him after Arizona Vanilla had been in business only four or five months--about the time many small businesses fail. "He asked us to conduct a preliminary assessment to make sure they could meet the HACCP requirements before they took on the prospective European client. He also wanted to know if they were in a position to remain competitive, given all of those requirements."
After the initial consulting assessment, the company selected Oculus to be the outsourcing service provider for its HACCP certification work.
"The HACCP document is really front-loaded with work involved in creating it, and it's more like a manual," comments Elsberry. It describes Arizona Vanilla's process, the control points in the process and the risk-mitigation procedures at each control point, testing procedures, etc. "Unless you change your process of how you produce your product, you don't have to change your HACCP document," he continues. "But you do have to audit the process on an on-going basis. The FDA requires periodic reviews to make sure we follow the procedures."
Another component of the HACCP certification program is periodic product testing. The HACCP document details what products are tested, what company tests the products, and how they are tested. Periodic reports attest whether the products meet the quality requirements.
Oculus first developed the HACCP manual and continually monitors the process and conducts the periodic assessments and requirements of the FDA program.
The Oculus assistance didn't stop there. Cameron recalls that, "At the time of Arizona Vanilla's request for our HACCP assistance, Eric said to us, 'We really need to get serious and run this as a business.'"
Strategies that Make Scents and Success
The essence of success in business growth, says Cameron of Oculus, is putting in place strategies that ensure a company can support the processes required to get where it ultimately wants to be, based upon its vision.
The Oculus consulting effort determined Arizona Vanilla had the necessary competencies and processes that matched what the European prospect wanted them to do. "At that time, we also revisited strategies and mapped out some business processes so that, as new opportunities and orders come along and business continues to ramp up, they do not have to constantly revisit the vision and strategy," Cameron explains.
Elsberry underscores the value of Oculus' consulting expertise focused on business transformation. "They are now helping us evaluate what would be involved in branching out to other potential products as we go forward. Vanilla is our core business and our bread and butter; but we're thinking about whether we want to just stay with vanilla food or also want to look at vanilla aromatic products like candles, lotions and potions, and similar things. Vanilla is one of those soothing aromas that everybody loves. We're considering some products Arizona Vanilla could put together annual for Valentine's Day, for example."
Oculus is also currently advising on the value proposition of outsourcing the total production process for vanilla extract (including producing a bottle) to a company in Mexico. "We can get that process off our shelf and rely on the expertise of a company that has been doing this kind of work for 125 years," says Elsberry.
Outsourcing the HACCP program's business processes and the manufacturing process are only two examples of strategy to support Arizona Vanilla's phenomenal growth. Elsberry sums up the value of Oculus' consulting expertise. "They help us find appropriate outsourcing avenues where we can decrease our costs and increase our ability to penetrate different markets."
Lessons from the Outsourcing Journal:
- Small businesses often fail simply because they don't have strategies and processes in place to ramp up to fulfill unexpected growth and embrace new opportunities without re-visiting the vision and strategy.
- Outsourcing non-core processes can help manufacturers decrease costs and increase their ability to penetrate new markets.
- Manufacturing companies can be overwhelmed with the labor- and paper-intensive processes associated with regulatory compliance for their products; outsourcing these functions is a highly effective strategy for operational efficiency.