Allan Rodd has spent 10 years developing the perfect vegetarian burger, writes Janine Perrett.
What do you do when your hobby business is on the cusp of becoming a viable concern but until it does it is delaying your retirement plans?
That's the dilemma facing 67-year-old Allan Rodd of Uncle Harry's Natural Foods, who has spent years developing his vegetarian hamburger alternative, Natraburgers.
"With healthy diets, junk food, obesity and overeating take-away food in the news daily, we have been making the ideal product for the last 10 years which is now just gaining a bit of popularity in both the retail and food service sectors," Rodd explains.
"At 67, I had hoped to grow the business faster but after a few years became resigned to running this nice neat little business until retirement. But alas, producing the right product at the right time has forced me to grow, move into a new factory and postpone retirement for a few years until I reach 70.
"Without family to carry on, how do I transition into retirement without losing more than 10 years of hard work?"
The Detroit native migrated to Australia in the 1970s and, after working in marketing for major companies, started his own importing firm.
In 1978, he opened his first health food shop, the Pampered Pantry, in Gladesville and kept it going for the next 20 years. It was through the shop he met the company namesake, Harry, who came in selling the vegetarian burger patties he had been making at home.
"They were very good and I was trying to go into business with him but he died and no one had the recipe, not even his wife," Rodd recalls.
Together with a vegetarian cook, he tried to recreate the recipe in his own kitchen, using similar ingredients with varying success. The health food shop customers were used as taste testers until, though trial and error, he found an ideal mixture of fresh vegetables and wholegrains.
He came up with the brand name Natraburgers to differentiate them from the more common and less appetising term "vegeburgers" and called his new company Uncle Harry's in homage to his inspiration.
In 1994, Rodd bought the building housing his shop, acquired a commercial oven and set up a small kitchen-factory to produce his natural burgers and store them frozen. Within a year he thought the result was good enough to launch at the Fine Food Show, where he won a major order from Coles supermarkets.
Uncle Harry's Natraburgers were sold there for six years, and Woolworths in NSW and ACT began stocking them last October.
"In 1995, we were selling about 40,000 a year and now we're doing 150,000," Rodd says.
However, his ability to grow has been limited by space, with the business just paying its way as he continues to operate out of the tiny space with just one part-time worker.
"This was my superannuation. I recently sold the building and made a tidy profit so now I've leased a new factory double the size to increase capacity."
Rodd has spent about $40,000 fitting out the new bigger factory in Homebush, which will be capable of producing 500,000 burgers in its first year and will also have a coffee and tasting room downstairs.
The expansion also allows for increased interest from interstate distributors and he is already negotiating with one to truck the product to Melbourne outlets.
As well as expanding nationally through the large supermarket chains, Rodd is keen to grow in other markets, ranging from the food service sector to coffee shops and hospitals.
At the moment, Woolworths accounts for about a quarter of his sales, with strong support from the universities. However, he is finding it difficult to break into the primary school canteen market despite the lip service paid to encouraging children to eat healthier alternatives.
"The big challenge is to get into schools because even though the Government has issued a book of guidelines for healthy eating, the canteen manager says they have to make a profit," Rodd says. "They say if the kids won't eat it or even taste it, then they just have to throw it out."
It is a problem that has frustrated even British culinary guru Jamie Oliver but Rodd points out that once the kids get to high school and university it is no longer a problem and his Natraburgers are popular.
A major constraint on distribution and sales has been the fact that Rodd is a one-man band doing everything from research and development to packaging; this highlights the eternal small business conundrum.
"It's a catch-22: until I grow, I can't get the funds to hire someone to help me grow," he says.
"Meanwhile, how do I find a good distributor, how do I find key customers, how do I contact those customers?"
To overcome the problem, he has come up with one solution in the form of a unique franchise concept. "It would be for small home businesses: the mum at home who doesn't have to cook them but gets the burgers already oven baked, vacuum-packed and she stores them in her freezer then goes around the local market, coffee shops, book stores, car washes and the like."
While the idea sounds more like sales reps than franchisees, Rodd has had someone draw up a formal disclosure agreement. The next step is to hire a franchise manager to sell the concept.
Marketing is an ongoing issue as Rodd has had little success in advertising in vegetarian and family magazines; the best marketing effort has been the annual Fine Food show. He will also do in-store promotions at Woolies from October.
As far as competition, he claims there is no "distinct brand leaders in this niche category". However, like many others who find themselves up against the giant multinational Sanitarium health food group, which is owned by the Seventh-Day Adventist church, he resents their favoured tax status as unfair.
"The problem is my main competitor is a not-for-profit company," he says.
In the absence of any sales, distribution or marketing back-up, Allan oversees everything himself from the style of the packaging to planning the new vacuum packs at the new factory.
He would love to increase his product range to include different shapes and finger size food but at the moment the first step will be the bigger freezer space which will mean more taste testing.
"The challenge is to get the new factory working right; to get my sales procedures, administration and sales in train. I had a vision, now I must build it up.
"I am hopeful of raising sales to a level where someone will see this as a viable business.
"I need an exit plan because by the time I am 70, I want to expand it to have something to sell. I have to present it to potential buyers as a going concern."
CHALLENGES FOR UNCLE HARRY'S NATURAL FOODS
·Bed down new factory
·Find interstate distributors and reps
·Expand nationally and into school canteens, etc
·Grow business quickly so it can be sold and owner can retire
Contact:
Uncle Harry's Natraburgers
Allan Rodd
Unit 14/378 Parramatta Rd, Homebush West
02 9746 3333
www.uncleharrys.com.au