NAB senior leaders take a closer look at Australia’s trade and export sector – providing all-important insights into how regional and agribusinesses can best respond to today’s challenges and opportunities.
Launched in early 2016, Dad’s Oats is the brainchild of siblings Alicia and Peter Cain, who clocked the potential for the family farm to earn extra revenue by selling the cream of their crop direct to the public.
Oat growers since 1861, the Cain family harnessed the power of crowdfunding to build a customer base for Dad’s Oats, a premium porridge brand named in honour of family patriarch Maurice Cain.
The Cain family farm is situated on 800 hectares in the tiny hamlet of Natte Yallock, two hours northwest of Melbourne. A producer of cereal crops since 1861, including some 450 tonnes of oats annually, a year ago it pulled off its first crowdfunding exercise to launch a brand new product line.
Twelve months in, the Dad’s Oats range of oats and groats is stocked in 50 produce stores and supermarkets nationwide, sits on the breakfast menu at fashionable Melbourne cafes and is flying out the door via an online subscription service.
It won a silver medal at the 2016 Australian Food Awards and the business has begun exploring export opportunities. Prices range from $8 for a 500g bag of quick or traditional oats to $55 for a 5kg bulk bucket.
It was at a 2015 seminar hosted by Melbourne crowdfunding platform Pozible that Peter Cain first became aware of the benefits of a crowdfunded launch. An entrepreneur whose other venture dataGO sells overseas SIM cards to travellers, he had been pondering ways for the family farm, currently run by brother Matt, to earn additional income.
Crowdfunding refers to the practice of financing a project by setting a fundraising target and soliciting backing from multiple individuals, via the internet. Capital raised is used to get the enterprise off the ground and backers typically receive a product in return for their financial pledge.
“We had the Dad’s Oats idea in train already and a few other businesses that had started from crowdfunding suggested we should look into it,” Peter says.
“I went along to the seminar feeling a bit sceptical and then thought, ‘Hang on a minute, we could use it as a way of furthering our brand, getting it out there and getting more people behind it’.”
“Not only would the pre-sales that a campaign could generate get the business off to a good start, the marketing that came along with it would be hugely helpful. Getting the word out there and raising awareness for the brand was just as important for us as the pre-sales.”
Peter and his sister Alicia, a Melbourne-based commercial property valuer, created a range of oat-themed product bundles, priced from $30 to $250, for backers to choose from. They also commissioned a 90-second video to bring the story of Dad’s Oats, and the Cain family farm, to life.
Developing a strategy to spread the Dad’s Oats story far and wide, via social and traditional media, was critical, says Alicia.
“You have to have a bit of a plan about how you’re going to get that message out there,” she says. “You can’t just put it on one Facebook post and hope for the best. There definitely has to be some thought around it.”
Creating the campaign focused and galvanised the siblings’ hopes and plans for the label.
“It was important for us, to firm up our message,” Alicia says.
“You know when you’re telling it to your friends, they’re already aware of what you’re doing so it’s a lot easier. But, all of a sudden, when you open that audience up, you have to be able to communicate what you’re selling and what your business is about. It put the pressure on us to do that.”
The pair had modest hopes for their campaign and were loath to set their funding goal too high. Most crowdfunding platforms specify that pledges will only be remitted to a campaign organiser if their goal is reached within a time limit.
“Early on, Alicia and I thought, if we got $5,000 in pre-orders that might be good,” Peter says.
“By the time we finished the video and had put a fair bit of work into the campaign, there was momentum building and we thought, actually, we might put the goal to $10,000, which is what we did.
“We reached that target within 48 hours and, by the end of the campaign, we ended up raising double that amount – $20,000 worth of orders.
“That accounted for about a third of our first production run – around 4,000 bags of oats. We definitely would have launched the label anyway but doing it this way was a major shot in the arm for a new business.”
Should other primary producers consider following the Cains’ lead into the consumer sphere? Yes, if they’ve done their homework first.
“Realise that it does take a bit of preparation,” Alicia says.
“You’ve got to put work into having a good product to launch, a good story to tell and a good way of spreading it widely. If you can honestly tick those three boxes, I’d say give it a go!”
© National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686.