When plant-based chocolate manufacturers Loving Earth started breaking into the lucrative US market, they turned to Export Finance Australia to make their dream a reality.
Scott Fry and Martha Butler began making plant-based chocolate late at night in their local bakery. Using a ‘bootstrapping’ business model – they self-funded the whole venture – the pair’s delicious raw chocolate stood out in the market.
“We make the chocolate ourselves – from bean to bar,” said Scott. “But we don’t roast the chocolate beans – so it’s truly raw chocolate. We are also plant-based, not using any dairy. So it's all really healthy chocolate that just tastes amazing.”
A market innovator, Scott says Loving Earth were the first among their competitors to make chocolate using whole foods, sweetened with coconut sugar instead of cane sugar. He says that their competitors are shadowing their lead – with a large Swiss manufacturer recently turning to coconut sugar.
“We were one of the first ones to try these different things – and now you can see the market following.”
Breaking into the US market
After success at home, they entered the European market but found it challenging. So they decided to focus more on the US with its huge market for plant-based food – using the lessons they’d learnt in Europe.
But soon after the first containers left Australian shores, Scott and Martha realised they’d need external funding to manage the extended working capital cycle involved in exporting to the US.
“We import raw ingredients like cacao and coconut sugar from Mexico and Indonesia respectively, which can take up to 40 days from payment to reach Australia,” Scott explained. “The manufacturing process in Melbourne can then take up to two months.”
The chocolate is shipped to the US, which takes a further two months until it lands in a warehouse, said Scott.
“Then someone buys it and it may take up 60 days for us to get paid – so trying to do it all self-financed is a stretch.”
While their bank supported them with equipment finance and a line of credit, they didn’t have the appetite to provide finance for the export ventures. So their accountant advised them to approach Export Finance Australia.
We were able to provide Loving Earth with a $75,000 Small Business Export Loan.
“Our financial controller filled in the application,” Scott said. “It was completed online, and the process was fairly seamless, so that was brilliant. With Export Finance Australia help, we’ve been able to take our business to the US market.”
With funding secured, Loving Earth will focus on building their US market – and is likely to approach us again down the track.
“We’re developing a relationship with Export Finance Australia like the one we have with our local bank. So, the plan is: start where everyone feels comfortable, execute on that, and look to grow it from there.”
Image credit: Gregory Lorenzutti