May 18, 2012
It’s not unusual for someone to become a food entrepreneur after having worked in other industries. They’re drawn to the artisan food world because of their passion for the product and the idea they can develop something different – something better – than what’s commercially available. Ellen Daehnick is no different except that along with her passion for salted caramels, she also brought a significant amount of business and management experience with her when she started her company. While she flexes her creativity and artistry with her caramels on a daily basis, she is always cognizant of the fact that running a business is…well, a business.
The Food Network Made Me Do It
Prior to 2010, Ellen Daehnick was immersed in the world of business complete with its power suits and PowerPoint presentations. She’d earned an MBA from highly-regarded Columbia University and spent years working for one of the largest consulting companies in the world on a variety of analytical projects before going out on her own as a consultant.
With a demanding scheduling and clients calling at all hours, Ellen rarely had a minute to herself but when she was able to carve time out she admits that she could usually be found watching the Food Network. She says that she used to watch as many shows as possible on the channel and would complain to her husband that she wanted to start a food business. Finally, Ellen admits, her husband was over “hearing me whine” and told her she should try selling her caramels.
The caramels that Ellen makes are not like the ordinary caramels you pick up in grocery stores. Over the years that she’s been making them for family and friends, Ellen had learned to how to heat her sugar mixture so that her caramels develop a rich, deep flavor without being scorched. As Ellen says, the trick isn’t in using a thermometer since little things – like the humidity in the air on any given day – can change how the caramels need to be treated. Instead, she relies on her intuitive feel for the product and understanding when the time’s right to pull the pot off of the stove.
Not surprisingly, this level of attention to detail creates some mouth-watering caramels and Ellen’s friends and family had long given her rave reviews whenever she’d handed them out. The idea of actually taking these caramels and selling them commercially though was something Ellen hadn’t tried and the idea stuck with her. A mere four weeks after her husband had first suggested it to her, Ellen was exhibiting at her first local foods show.
Testing The Waters
In the last three months of 2010 Ellen rented commercial kitchen space and brought her caramels to a couple of events in the Denver area. While Ellen says that those events were the perfect place for her to test her
packaging and pricing, she admits that she was really using the events to experiment and see if selling caramels was actually a viable business.
Once Ellen determined that her caramels were something people wanted and were willing to pay for, she spent several weeks winding down her consulting business so that she could focus on her new company – Helliemae’s Handcrafted Caramels – fulltime. When asked why she didn’t think about just continuing to build the business on a part-time basis while also consulting, especially that in 2010 the economy had just begun a rather shaky recover, Ellen unwaveringly replied, “unless you are a price taker, running a commodity business, the external economy isn’t really very relevant. If you are making a differentiated product the overall economy shouldn’t hold you back.”
An Analytical Approach To Caramels
As mentioned earlier, Ellen approached her new venture with the keen eye of the savvy businesswoman that she is. Prior to her first year of business Ellen created forecasts on how many boxes of caramels she thought she’d sell to help her determine how much product and packaging inventory she’d need on hand. “I typically do pretty rigorous forecasting for anything so this was no different,” Ellen says. “What worked for me was looking at how many events I’d be doing in the coming year, how many people were going to be at the events, how many people I thought I’d touch online, and how many of those people would actually buy. When it was all over I evaluated my forecast I found that I was within 10% and I try to use that as a measurement going forward.”
Ellen also says that she spent a lot of time determining what her appropriate price point was going to be for her caramels. In addition to taking into account her actual ingredient costs, Ellen quickly realized that one of her biggest costs was the labor to produce the caramels. “When I set my prices and looked at my gross margins I built in a cost for labor,” Ellen says. “You have to do this if you want to scale a business and not be the one still making the caramels in five years. My goal is to be an employer in Denver and to provide people with decent jobs but that will never happen if my product margins don’t allow me to grow my business.”
To date, Ellen has had part-time employees on staff to help with wrapping and packaging of her product when demand increases, but she hasn’t yet turned the culinary aspect of her business over to anyone else. “The toughest part of my production is training someone to make the caramels because it’s a two-stage caramel and there’s a degree of darkness I’m looking for that I can tell from the smell, look, and even the noise from the pot that the caramel is close because I’ve done it thousands of time by now. I haven’t figured out how to train someone to do that yet but it’s something I’m hoping to do in the future.”
Luck – The Unquantifiable Aspect Of Running A Business
It’s often said that running a small food business is comprised of three pieces – a good business sense, a great product, and a little luck. Helliemae’s being featured in the Wall Street Journal’s Valentine’s Gift Guide was the perfect example of all three of those pieces coming together. As Ellen tells the story, while she was exhibiting at the Fancy Food Show she received an online order from a name that range a bell “in the fuzzy edge of my consciousness.” Ellen did some quick googling and was able to determine that the order was being placed by a freelance food writer so she tucked a few extra samples in with the order and sent the caramels along.
It turns out that the food writer had a friend who had been visiting the Fancy Food Show and who had stopped at the Helliemae’s booth. This friend had been so enamored with what she’d tried that she sent a note to the food writer who happened to be working on a story about great Valentine gift ideas for the Wall Street Journal. Next thing she knew, Ellen received a call from the Wall Street Journal indicating that her products would be featured for Valentine’s Day and, with just two weeks notice, Ellen began stocking up so she could be ready for an onslaught of orders. “We did as much business in the first 36 hours after that story ran as we did all of Christmas,” Ellen says. “It was a little crazy but a lot of fun!”
Helliemae’s Handcrafted Caramels are available in 9-piece boxes in a range of flavors (like the seasonal Atticus Caramels which are made with whiskey – perfect for Father’s Day!) and you can also order up some of the delectable Helliemae’s caramel sauce too. Orders can be placed online or, if you live in the Denver area, you can arrange to pick them up at Helliemae’s facility.