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Entrepreneur Lis Armstrong’s story and her essential COVID-19 pivots
Lis Armstrong, founder of Treat Dreams
Fri 3 April 2020 - 11:09 amEntrepreneur | Featured
Lis Armstrong founded her vegan chocolate business Treat Dreams in 2015, after craving dairy-free treats herself and seeing the demand from others in the same situation.
Starting simply with a Facebook page, a photo album of the products customers could buy and an email address, Treat Dreams has now grown into a large team, with products stocked in stores and online.
It was, like many businesses, started as a side hustle, as Lis’s day job five years ago was actually in marketing within the finance industry – quite a big change.
She had to learn all things chocolate, and soon realised why there had been a gap in the market for good quality vegan chocolate… because it was really difficult to do!
Describing herself as “stubborn,” she persisted with her tuition on food and learning how to set up her own business, in order to bring her product to market.
The marketing background has been extremely helpful for Lis in lots of business decisions along the growth journey, particularly most recently with their COVID-19 Business Continuity Plan, but Lis confesses that in the early days her ego definitely hindered her progress.
Lis’s story has fantastic insights for all businesses; she discusses how she found the idea of Treat Dreams (her husband helped!), how she got the Treat Dreams name out there (with help from The Veronicas), and how she is currently pivoting her business during this difficult time.
How did this all start when your background was marketing in the finance industry?
“I was actually on a project at work, on a rebranding piece. There were some things that happened during that project, that were critical in nature, that made me reflect on my abilities to influence outcomes within a larger organisation. There’s only so much as a manager that you can do.
“I realised that I needed to have more creative control over the outcome… From a perspective of the impact that I can make on the state of the world. At that point I knew I needed to make something.”
So, it was more that you were ready to get away from that situation, rather than having the idea first and then leaving as a result of that?
“I knew that it wanted more. I needed a creative outlet and needed more control, but I wasn’t sure how that was going to come about yet, so I did need to go looking for the idea.”
I’m sure a lot of people can relate to that. From there, what was that moment that you thought ‘OK, I’m going to launch Treat Dreams’?
“Originally it came out from simply craving something that I used to eat that I couldn’t anymore. I kept talking about creating this particular thing. And my husband – bless him, unbeknownst to me – went to visit a friend… The two of them created a dairy-free chocolate crème egg for me. It was such a really lovely surprise. We went away for an Easter trip and he surprised me and a friend of mine who was vegan, with this little basket of crème eggs that they’d made for us. That was very sweet.
“From there I posted it on my personal social media, and I didn’t realise that it would blow up the way it did. I mean everyone wanted them, and it went form there. I realised OK I wasn’t the only one craving this nostalgia without the cruelty, and so from there we just started tinkering, and it was a proof of concept initially.
“We did a soft launch, I had run it over Christmas, and I decided if I enjoyed it and if I could make money and if there was demand, well then, I would invest more heavily in the business after that.”
That’s amazing that it came from a social media post.
“Yeah, it’s really interesting. I think my marketing background meant that I was acutely aware of the need to test the demand in the market. I think that if we often hear stories of starting businesses for things that we want, and we assume that everyone wants what we want, but we never really know that until we go to market. So that’s effectively what I was doing over that short launch – asking ‘Am I right? Am I just hallucinating that people want this or is that actually a demand?'”
Definitely. As food was not your background, what were the practical steps you had to take in order to take Treat Dreams to the market?
“From a practical sense, definitely some work around getting training in food. I paid for training with one of the teachers from Cordon Bleu pastry school. I didn’t even know what tempering chocolate was. It was learning ‘What is it? How do I do it?’
“Really basic things that any pastry chef learns, but obviously I didn’t know, as that wasn’t my background and I didn’t have experience in that.
“So, it was tuition in a food sense. Also all of legalities around the food as well. And then all of the usual things that go with starting a business when you’ve never done it before – like ‘What is a profit and loss? How do I set up my bank account?’ – all of those type of things!”
Have there been any specific challenges in launching Treat Dreams that you’ve experienced?
“Initially it was not knowing what I didn’t know. As simple as things like finding someone in the business who might be willing to let me come spend a day in their kitchen, to learn how a kitchen works.
“I’d done waitressing, and I’d prepared sandwiches, but I didn’t know anything about how to properly run a kitchen. So, I was really fortunate that through the vegan community I was able to connect with other business owners and find out about things like batch tracking.
“It’s the processes that aren’t really aligned with a marketing brain typically. It was fortunate that connections through Herbisaurus and Suzi Spoon were gracious in sharing their knowledge and I could build systems based on their experiences. Community has been really key in overcoming those challenges. Seeking the right support has been important and at times I haven’t asked for support soon enough.”
What were your starting products and services to begin with, and how has that changed over time?
“It was very different to now. When we launched Treat Dreams, I thought I’m just going to create a variety of nostalgic treats. I want to see what works, what sells. I realised that there were a lot of people making vegan cakes, but there wasn’t really anyone making chocolate to a good standard. Not too difficult to source a vegan cake these days, and even back then really, whereas the vegan chocolate at the time was raw, sugar-free etc. and I just wanted chocolate that tastes like chocolate. So, I thought that must be my gap – that’s what I can sell.
“But what I didn’t realise was that there was a gap for a reason. It was a lot harder! The ingredients are a lot more expensive, it’s a specialist skill, it’s more labour intensive. And these were all the reasons that the gap was remaining. But I’m a bit stubborn so here we are.”
“When we first started, the primary chocolate we created were bonbons. Hideously expensive to make and a very short shelf life. Obviously, you can’t scale that.
“It’s funny, at the beginning my ego was so involved in the product; ‘This is the best, it’s delicious, I’m going to prove that this is going to work.’ You know, that’s all well and good but you need something that you can scale. And that’s not a great way to operate your business. Eventually I realised I needed to check my ego and go back to the numbers, what’s selling, and how to reconsider the recipes both in terms of more shelf life and profitability.”
How did you get your name out there?
“At the very beginning when I launched, it was back in the days when you could get away with launching a business with just a Facebook page. I literally just had an album of things that people could buy, and they could just email me. It was embarrassing for me as a marketer! But I kept putting rules on myself, saying ‘This is only an MVP, this is just a test before you invest.’
“And then a friend reached out who was a graphic designer and said, ‘No, it’s not acceptable – we need to fix this.’ She worked with me on our brand identity and our look book, and it meant that when we did actually launch, we already had everything in place, and the brand has pretty much remained unchanged since then, with only a few minor tweaks.
“And then we really focussed on social media as well as collaborations with like-minded businesses in the community and using influencers. What’s really worked for us is that vegans are a really niche part of the community, and it’s really easy for us to know who the genuine influencers are to work with and not. They are the ones you see engaging with the community all the time with authentic content.
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“The first staff member I got on board was actually the media manager. I needed someone else to deal with customer demand that was coming through. She has done an incredible job of projecting a really great image for us on the market, which actually made us appear a lot bigger than we were. It gave us a lot of opportunities that we wouldn’t have had otherwise because people took us a lot more seriously than they should have in hindsight!
Some new business owners are often reluctant to bring someone on and relinquish control, but that wasn’t the case for you?
“We bought her on maybe only 2 months in. Once I’d passed through the MVP and decided this was going to be it, I bought her on. She was the first and it was great because it allowed me to focus on product creation and product development. I know I couldn’t make it, market it and run the business. Strangely enough it was the thing I was most comfortable with!
“I was very confident in knowing she was the right person. If I was hiring an accountant, I’d have had no idea if that person would be good. But because I know the field, I was therefore happy to give her the control.”
How have has Treat Dreams grown since 2015?
“There’s quite a lot of us these days. There are two key things that happened in our growth, about 6 months in I’d say. That first Easter we were making the crème eggs, and posting photos, and Lisa from The Veronicas stumbled across our post, and she shared that on her page.
“We struck up a friendship with her, and she’s been such an incredible advocate of our brand and it’s been so incredibly authentic.
“At that same time, we got our first stockist in The Cruelty Free Store. They had 5 shops at the time, and online, and so the combination of these two gave us a massive boost, we were absolutely run off our feet and had to hire new staff, move kitchens. And now when I look back at the numbers were making, I will laugh because we now make that in half a day, but at the time that was massive!”
At this point, I should ask how Treat Dreams is dealing with COVID-19 and how you’ve adapted?
“Yes, sure it’s very topical and front of mind for us at the moment. My background in marketing and comms meant that I was on a lot of Business Continuity groups and as soon as I saw where this [COVID-19] was going overseas, I was like, ‘Right, let’s get a BC Plan.’
“First rule of thumb is to never write a plan in the middle of a crisis. So, I broke that one. However, here we all are. So, first step was securing immediate safety of staff and premises. We had a plan in place where if anyone came to site, they didn’t come past the ground floor stairs. So, protecting staff and premises. Making sure that we upped our sanity and hygiene; every 2 hours we sanitised all common surfaces… everything. Staff get temperature checked on arrival. We work with food and whilst there is no evidence that it’s a food-borne illness, we do work in close proximity and so it’s key that we keep each other safe. Everyone is scrubbed in and gets changed into dedicated work outfits.
“Making sure any deliveries get quarantined before they’re allowed upstairs, anything that needs to go up sooner will be completely washed. When the social distancing measures came in, we remodelled our entire kitchen so that all staff could be 2 metres apart. This has meant our production is less efficient, but everyone is safe.
“Step two was around protecting our customers. At the early point, we weren’t sure if it was known to be a food-borne illness, we were still getting information on that. It was two-fold, on making sure that we’re not infecting anything but also ensuring our supply chain.
“So, it was getting in touch with all of our suppliers to make sure that they’re ingredients were safe and also that they had an ability to get the supply to us. Asking, ‘Were they expecting any delays in their delivery dates?’ We do have one supplier that we can’t get ingredients from, out of Europe right now, but for the most part we have secured 3 months of ingredients.
“We then looked at our customers who are wholesale. We are super conscious that a lot of our customers are experiencing a substantial decrease in the traffic coming into their stores. The first thing we did was make sure that if they had a delivery date scheduled, that we brought that forward. We wanted to make sure that we could get as much stock as we could to them before the stores closed in Australia, so that those stores could turn that stock over and make their sales for their next period ahead.
“We then got in touch with anyone toward the later end of the delivery schedule to make sure they were OK with going ahead. This was something that we debated a little bit internally, you know, we had some people saying, ‘But you need to keep your business going and it’s not your concern.’ Well it is because we’re all small businesses and we’re all in it together. So ethically I think it’s really important that I’m not overloading a business, just like me, with more financial burden than they can take. Otherwise I could send them the stock and they can’t pay for it anyway.”
Yes, and in the long-term those relationships will stay strong.
“Yes absolutely, and this will blow over eventually and I hope we are all here when it does. Sadly, there will be some of us that will not be. The way that we behave during this period will be remembered.
“A few of our customers did cancel, so we got in touch with our online stockists and said ‘Do you want this?’ and they said ‘Yes please!’ so we re-allocated that capacity. So, it didn’t have any impact on our business but made sure that cash was flowing through the right small businesses that could do it at that point.
“A third of our revenue actually comes from events, like the Sydney Vegan markets – they account for a substantial amount of our revenue and that was gone overnight. So, we had to really reconsider how would we plug that gap… There were a few things we looked at. One is that we developed a range of care packages, that were originally available for pick up, but we are now encouraging delivery.
“However, we have arranged a pickup station where there’s no contact, and we wave from a distance! So, the care packages are helping but they won’t come anyway near the revenue drop that we’ve experienced. So, we’re also looking at collaborations with businesses and influencers that we’ve worked with before.
“At the end of the day we need to hope for the best, but plan for the worst. And worst-case scenario would be that our chocolate revenue dries up and then I consider, ‘Well, I have a commercial kitchen, I have staff, how can I deploy them to what people need at this time?’ So, reconsidering what our customers’ needs are at this time. We can make savoury food, and takeaway food if they need it. We have a whole range of pivots and ideas. The Treat Dreams team have been really transparent and open.”