The Financial Post stopped by the Real Food Kitchen to chat with David & Lulu for their Innovators column.
Faced with processed, canned and frozen foods at her son’s daycare, Lulu Cohen-Farnell opted instead to pack him lunch every day. The daycare director noticed Max’s meals — fresh fruits and vegetables with fish, quinoa or bean stew — and asked Ms. Cohen-Farnell for help feeding the other children. Inspired by this demand, she and her husband, David Farnell, started Real Food for Real Kids in 2004. Today, they service more than 8,000 children at Toronto’s YMCA centres, daycares and schools; last year, revenue topped $7.5-million. But in 2005, they faced expansion, something they could not have done without a big investment. The couple spoke to the Financial Post’s Melissa Leong about taking a big risk and having it pay off. The following is an edited transcript of their conversation.
QWhat pushed you to expand?
Cohen-Farnell We started this because it was something that really matters to us: The health of children and fixing something that wasn’t right. It was passion that made us do it. It was not easy. It was just me and David, a truck and someone who helped us with delivery. We grew very organically. And very shortly after that, word of mouth happened.
QWord of mouth increased demand and you decided to meet it. How did you do this?
Farnell It went from being a co-ordination effort that was relatively low risk with no infrastructure requirements to “We need to go out and get a commercial kitchen, we need to hire staff, we need to do our own deliveries.”
QWhat kinds of challenges did you encounter?
Farnell We looked for financing and found that banks were not willing to give a startup company any money. That was the first big road block. So we took as much money out of our house as we could. We got personal lines of credits to the greatest degree.
We got very good at using Ebay and auctions for manufacturing equipment. For the first three months, we rented a shared space, we rented a vehicle. After three months of outstanding reviews from the pilot clients we had, we said, “Let’s go for it.”
On Nov. 1, 2005, we took out a lease on a restaurant space … with a really big kitchen and a delivery garage.
QHow did you keep yourselves motivated in the face of road blocks?
Cohen-Farnell Some friends or neighbours were worried. They’d be like, “I can’t believe you’re taking a second mortgage. How do you do this? How do you sleep at night?” David and I had complementary skills. We hired the right people. People came to us and volunteered their time at the beginning. We never freaked out. We were both so excited about creating change.
QSo what is the next step for Real Food for Real Kids?
Farnell We were asked to contribute to the Ontario Ministry of Education’s new regulations for healthy eating in schools. That was amazing — that we were able to influence policy. The health of kids is our main mission. Those things have added fuel to our resolve.
We’ve been approached by hospitals. We’ve been asked by parents to make food for them. The funniest and most frequent comment we get from parents is: “My kid eats better in daycare than they eat at home.” We’re just set to pilot our branded product in the childcare facilities we serve. When parents go to pick up their kids at daycare, they can pick up several nights’ worth of food. We’re calling it Real Food Family Dinners.
QBased on your experiences, what does it take to succeed?
Farnell Lulu lives this. It’s not just a product for us. It’s a calling. If you truly believe you’re going to change people’s lives for the better, you’re going to attract motivated, high quality people to join you. Our focus as entrepreneurs is to do this for a much longer time than the average business person thinks. We’re not in this just to cash out.
Check out “How Real Food for Real Kids Handled a Growth Crunch” here.