The brothers spent UAH 3M searching for the perfect cheese flavor

Kharkiv resident Vadym Hryshyn is the co-founder of the snEco cheese bites brand. In just a couple of years from launch, the business's annual turnover reached UAH 3 million.

At the end of 2018, the entrepreneur participated in the 'Nova Poshta Business School' project. To the project's information partner MC Today, Vadym told how he entered a new market and how knowledge helps him run business effectively.

Two million cheese bites per year

snEco is crispy pieces of cheese with the moisture removed. Vadym Hryshyn and his brother Pylyp founded the brand two years ago. During this time they purchased equipment, developed the technology, and set up supply to several national chains.

By 2018, the entrepreneurs reached an annual turnover of UAH 3 million. In product terms, that's 70 thousand packs (or about 2 million cheese bites).

This isn't the brothers' first business. They have been running AbrisArt for ten years now, a company that makes embroidery kits. Despite their extensive experience, the Hryshyns realised they lacked knowledge for developing a new venture.

In early autumn, Vadym became a participant in the 'Nova Poshta Business School' project. With his strategic plan to improve snEco's efficiency, he took first place among Kharkiv graduates and won a grant for Nova Poshta services.

"Earlier we felt like blind kittens. Now we have a very clear plan: triple our turnover during 2019 and enter the markets of Europe and Israel. We're looking at the USA," — Vadym shares.

From embroidery to snacks

Vadym and Pylyp opened their first major business ten years ago, while still students. They invented and patented bead embroidery on canvas. Currently, the products of their company AbrisArt are sold on four continents, and the annual turnover in Ukraine alone is UAH 5 million.

Two years ago the Hryshyns felt that their established business no longer brought drive, and decided to come up with something new. The idea was born in the kitchen.

"We love cheese and wanted to find a technology that would extend its shelf life and make it airy and crispy," — Vadym says.

The search took half a year and about UAH 3 million. The brothers selected the cycle alternation and drying temperature at which the raw material turns into crispy balls. To make 400 g of snacks, you need 1 kg of cheese. No preservatives or colorants are used.

The first success came after 8 months. The company supplied several thousand snEco packs to the OKKO gas station chain. Today they produce four types of snacks: Fitness, Mozzarella, Gouda, and Smoked Sulguni. The latter two are the most popular. A 40 g pack costs about UAH 50.

During the 'Nova Poshta Business School' project, Hryshyn and his team also decided to launch a kids' line in special packaging. The Fitness snacks will get new packaging too — now they will be 28 g. The company arrived at this number after analysing several focus groups.

All because during the classes the entrepreneur realized one of snEco's main mistakes. "Earlier we didn't even think about who exactly our customer was, and we tried to sell everything to everyone at once," — Vadym admits. Now they take positioning much more seriously.

Problem #1 – finding quality cheese

When the brothers were just launching production, they were horrified by the quality of Ukrainian cheese.

"Small factories often replace milk fat with palm oil. Such cheese doesn't foam, and you can't get crispy bites from it using our technology," Vadym explains.

After a series of setbacks, the company began cooperating with the largest domestic producers. One of them is the 'Shostka' plant, owned by the European concern Groupe Bel. Their representatives reached out to the Hryshyns themselves.

The CEO of 'Bel Shostka Ukraine' saw snEco at OKKO. He tried it and bought up everything available at the gas station — for tasting. As a result, the company offered the brothers to make snacks from their cheese. That's how the joint 'Shostka' line emerged.

Production meets international standards
Production meets international standards
Before its launch, the Hryshyns passed inspection by the quality and food safety department of Groupe Bel's European division. To make production meet international standards, it had to be retrofitted. The process took six months, with costs running into several hundred thousand hryvnia.

Instead, the company received the HACCP food safety certificate and the ISO 14024 environmental certificate. This gives them the right to officially use the wording 'First eco-snack in Ukraine' on the packaging. And with such documents, you can supply the goods to any national chain and enter foreign markets.

To prepare for this step, Vadym will soon take a course on organising exports for small and medium businesses, which Nova Poshta is launching on the Prometheus platform.

Specifics of national retail

Another serious obstacle the entrepreneurs encountered was the high rates of large chains.

For example, the experiment of selling snacks in the ATB chain would have cost UAH 3 million, says Hryshyn. With no guarantees — in a month ATB could offer further cooperation, or could refuse.

The brothers weren't excited by the prospect. They reached deals with other major chains, including Silpo, Novus, and Eco-Lavka. "In some cases we paid both entry and marketing fees, but the amounts turned out to be manageable," — says Vadym.

Education in the USA and Ukraine

A few months before the 'Nova Poshta Business School' classes, Hryshyn visited the USA. There he participated in the SABIT educational project of the U.S. Department of Commerce for young innovative companies from Eastern Europe.

The program was built on practical assignments. For example, you had to find a poorly-presented product in a New York supermarket — be it the name, color, or pack design. Vadym spent three days on this: unlike in Ukraine, in the USA it's almost impossible to find a badly-designed product. It simply doesn't survive in a competitive market.

Also, at a local Starbucks, which usually sells only coffee and pastries, Hryshyn found cheese bites similar to snEco. That's how he became convinced that such snacks are needed in the Western market.

"It will sound conceited, but snEco tastes better and has a better shape. The Starbucks snack crumbles and leaves greasy traces on your hands," — Hryshyn shares. "And I'm not sure the raw material there is fully natural."

While the American program inspired the entrepreneur, the 'Nova Poshta Business School' training gave him tools for working in Ukrainian realities, Vadym compares the experiences.

After the first sessions, Hryshyn began optimizing processes in both businesses. For example, he learned to forecast inventory based on statistics. This allowed reducing AbrisArt's warehouse space and shipping orders daily. By the way, about 98% of these shipments go through Nova Poshta.

After the program ended, Vadym continues to communicate with its participants in a Telegram chat. There are 80 entrepreneurs from Kharkiv and over 400 from all over Ukraine, who exchange experience and contacts. For example, in January Vadym received contacts from large retailers from other graduates.

Original article: https://mc.today/potratili-3-mln-grn-v-poiskah-idealnogo-vkusa-syra-predprinimateli-za-god-prodali-2-mln-syrnyh-sharikov/