From Powder to Product: A Case Study on Algi
This is one of a series of case studies on lessons learned from starting sustainable businesses!
Key Takeaways:
- As a student, the world’s doors are open to you. This isn’t school. You CAN ask for help.
- Find EVERY single way you can to test your ideas. Aim to make your validation process THE big story you tell when you talk about your business.
- Large market = lots of money? Not if you try to do everything and end up with nothing.
Alessandra Amato has been trying to go vegan for a REALLY long time…
She doesn’t like the harm that factory-farmed meat does to the environment and to animals. But at the same time, she’s anemic and allergic to soy… So it was really hard to find a meat alternative that could support her dietary needs. She could spend at most a week without meat and then had to start looking for other options again!
Then, she came across spirulina algae. It’s a superfood that can replace meat a lot better than most vegan products! The only problem was that spirulina was pretty much only sold in health powders…
So, Alessandra and her cofounder, Devon Hawkins, saw a market opportunity to scale this nutrient source to be more than just a health fad. That’s why she founded Algi to make spirulina algae healthy AND convenient!
Specific Actions to be Sustainable
Algi makes ‘energy bars’ — but with algae! (‘Algae bars,’ I guess?) They call it the IMPACT Bar and it’s made out of spirulina algae, nuts, seeds, etc. Growing algae actually sucks CO2 from the atmosphere and replaces it with oxygen, so each bar replaces 14 grams of CO2 with 14 grams of oxygen!
Asides from the algae, Alessandra and her team try to find other sustainable ingredients for their IMPACT bar too. The bars include locally-grown ingredients where possible and try to minimise the land and water use behind each bar. For example, the IMPACT Bar contains pumpkin seeds or sunflower seeds instead of almonds so they can buy locally and use less water. Algi also does its best to work with suppliers that have a mission for sustainability.
They’re also in the process of developing compostable packaging for their bars, though there aren’t any perfectly sustainable packaging options for them right now.
The Journey to Get Here
After getting the initial idea, Alessandra’s journey can be described as research, research, RESEARCH!!
Algi started off by figuring out how to make spirulina more convenient. Alessandra and her team weren’t actually planning on making an algae bar to start with. They’d go down to the farmer’s market during the summer with free spirulina noodles, hummus, crackers, juice, and so on. The biggest problem was that they needed to get a product that was convenient for customers to try out (without feeling super brave, like when trying green spirulina ramen noodles).
So by the end of the summer, they’d decided to stick to algae bars and were now talking to food scientists to figure out how to make their product taste good, be nutritious, etc. Still, it took a long time to perfect the recipe! They’d constantly visit vegan/vegetarian food festivals and bring along samples and iterate on their recipe, its flavours, etc.
One of the hardest things from all this consumer research was actually narrowing down their target market. From the farmers’ markets, they had identified 5 unique target customer groups that they could market towards and it was really intimidating to pick just one. And as they created their website and started marketing more, they had to split that one target customer group even more!
Getting this type of feedback got harder over time, especially due to COVID-19. They were planning to launch in March 2020, which was completely derailed for several months. Still, they used this time to scale up their online sales and marketing. Now, they’re getting ready to commercially ship their product in early 2021.
Some Numbers Behind the Story
- 75% of Algi’s consumers liked or loved the flavour they’ve developed.
- About 65% of consumers in their initial market said that choosing sustainable and clean nutrition (clean, simple ingredients) was important when purchasing food products.
- 20% of consumers they talked to (not just within their target market) were willing to pay a premium for their products. IF it met an extensive list of requirements such as good taste, healthy nutrition, accessibility, the right branding, local production, etc.
- 6 IMPACT bars cost $17 USD online, 12 cost $30 USD. They’ll be rolling out to more stores at a price of $3/bar.
What Worked Well and What Didn’t
There are two main things Alessandra wished she could have improved. On a personal level, Alessandra wished she had taken the time to learn about the details of sustainability earlier. Before starting her business, she did try to learn about sustainability a little as a consumer. But amidst greenwashing campaigns and the sheer amount of environmental branding out there, it was difficult to filter through the noise.
Later, as the cofounder of Algi , this slowed down Alessandra. There were so many areas of sustainability she had to consider that she had never thought about before. For example, the tiny details of picking a location to ship your product from that minimises greenhouse gas emissions during transport. While it’s hard for consumers to navigate this complicated territory, learning more earlier could help create a map of areas that need more exploration.
The other thing that Alessandra wished she had done differently is to specify her niche target demographic earlier! Despite the stressfulness that this can bring with the fears of limiting yourself, it was SO helpful to Alessandra when Algi chose a specific target demographic. It meant that she could wake up every day and have a clear idea of what they were doing and what they were moving towards. Also, this would’ve saved them a lot of time pursuing pointless meetings and directions that they didn’t need.
Advice to other Founders
At the end of the day, the best advice is the simplest: JUST TALK TO YOUR CUSTOMERS. Regardless of how often you talk to your customers, just talk to your customers even more!! Let your customers guide what you do and you can figure out your market size, competitor analysis, etc. later. If you don’t have customers whose needs you’re meeting, you’re not going to be a business.
The other big piece of advice Alessandra had was to just ask for help. Especially for university students and other first-time entrepreneurs, it’s kind of like you’re trained in school to answer tests, assignments, etc. individually. But the real world doesn’t work like that. You’re inevitably going to have areas that you don’t have expertise in. So it’s better to get that one meeting with the expert on how to package products instead of wasting a month researching things on the side.
And the best part is that as a student, the world’s doors are open to you! Alessandra can’t even remember the times where people had to tell her no. Her biggest problem was just convincing herself to pick up that phone, write that email, or ask for that introduction.
If you found that case study helpful, GO THANK Brave Soles for making this possible!! And check out the next case study soon :-)
