A Kiwi SME which launched during last year’s lockdown has grown its sales by just 60% in two months and is now crowdfunding its export expansion into the US and Australia.
Little Elephant, a functional beverage manufacturer, currently produces 6,000 units of product per month but has had to limit its marketing activities as it struggles to meet rapidly growing demand.
Globally the functional beverage market is forecast to reach US$208bn by 2026.
Company co-founders Grier Govorko and Courtenay Rickey launched Little Elephant following a year-long, immersive cultural experience in Bali.
Their wellness tonic range consists of three core products to aid in the holistic recovery from chronic conditions such as stress, burnout and exhaustion.
Such has been the uptake among Kiwi consumers the pair say there is demand for them to produce more than 20,000 units of the product per month.
“We launched last year just before the first lockdown as a direct-to-consumer brand, however around 5% of our market is now made up of retail outlets such as Farro Fresh which stock our products.
“We have been amazed at how rapidly Kiwis have embraced the range, but we have reached a ceiling when it comes to production capacity and need to expand to keep up with consumer demand,” says Govorko.
He says the company is looking to export markets including the US and Australia and plans to release a new product every quarter.
Govorko says their direct-to-consumer model has proved highly successful and has already helped them develop a loyal base of thousands of customers.
He says that global demand for wellness tonics have increased in the wake of the pandemic and while lockdowns and shipping delays have intermittently impacted their supply lines, their own growth trajectory has exceeded expectations.
“We know that for every thousand prospective customers we reach through advertising, 500 and half of those will buy a second time - which gives us a 50% repeat buyer ratio.
“This gives us a significant amount of confidence in ability to target new customers and well as our medium-term growth projections,” he says.
Govorko says they are aiming to expand from 200 to around 7,000 repeat customers monthly, giving them around $3m in annual revenue within the next three years.
He says the company which started two years ago with zero revenue is now averaging around $16,000 per month in high margin sales - up from $7000 per month at the beginning of the year.
Govorko says to date their promotional strategy has utilised social media and search engine marketing to reach their consumers.
“We were surprised that a large portion of our customers are the middle-aged consumer it appears there is a significant unmet need for natural products which address a number of common health and wellness concerns in this segment.
“Our capital raising round will allow us to scale up production volumes as well as bring on professional marketing support to help us reach a wider audience,” he says.
Govorko says Little Elephant is aiming to secure $101,000-$230,000 through a fundraising round on crowdfund platform Pledgeme from October 26, 2021.