Sips to success
Despite challenges business idea of mutual friends bears fruit
It’s big, orange, and moves around the island on four wheels.
And that’s not all. It was created at a time when the recession first started to affect the island, and five and a half years later it has outlived some other established operations.
You guessed it –– Sips Smoothie Bar.
Creative director Corey McClean, one of the brains behind the mobile speciality beverage business, spoke with Barbados TODAY recently about the operations and its achivements so far.
Started in December 2008, perhaps at a time when people were starting to cut back on their spending, McClean and his business partner, director of operations Christian Thorne, had to take quick action.
“We then had to pretty much prove our value, and the value of our products, and the service that we offered to the customer base, so that when they did their budgeting, it then made sense to include Sips as part of their weekly or monthly spending,” said McClean.
Sips Smoothie Bar is a mobile speciality drink shop serving a range of beverages, including shakes and smoothies. McClean met Thorne through a mutual friend and after juggling the idea as a full-time operation, they decided to get things started. But they did not have the required capital, and so the duo “pretty much bootstrapped everything”.
“In the initial phases we borrowed and begged,” admitted McClean.“That was the approach to getting off the ground to pretty much pushing the business and the brand. We borrowed equipment before thinking about buying it. That was in the initial stages before the soft launch and testing,” he said.
And after managing to grow the business to a satisfactory level, the operators have maintained a lean approach in terms of inventory, sticking as close to demand as possible.
“So rather than being oversubscribed on any particular thing, we try to manage the resources very carefully,” McClean said.
He admitted it was a difficult task as they moved to grow their customer base.
“One, we were in an unconventional delivery system . . . . We are a café, but not in a building as people were traditionally familiar with. So being a start-up and unknown brand, you were out there in an unconventional way; then pretty much we had those two hurdles to overcome, and we pretty much, one, let the product speak for itself ;but then we put the emphasis on the service that we provide . . . . So that is pretty much how we went about battling the spending changes and the changes in approach that customers started to make in response to the changes in the external economy,” explained McClean.
Within months the hard work started to payoff, as the acceptance of the product increased among Barbadians. The duo currently drives from sections of the west and south to the east of the island, serving customers. They are yet to establish a presence in the north
of the island.
“I would go as far as to say the demand has increased and the customer base has deepened; and the connection with the customer base is our biggest weapon. That is what pretty much ground Sips and keep Sips stable,” he said.
One of the amazing things, he added, was that almost daily there was at least one person who was “discovering” Sips for the first time.
“So it is more of a levelling out more than a fall-off. There are some people who have depressed revenue. Our business hasn’t taken a hit in terms of that, but we have been able to pretty much ride it out, and we have grown the customer base. At the end of the day as long as someone trusts you, they are willing to spend,” he said.
McClean said a big plus to maintaining the operation over the years was the fact that he and his business partner complemented each other.
“So we balance it . . . . I tend to excel in things that are more difficult for him and vice versa,” added McClean.
While Sips sells a variety of products made from a mixture of natural and artificial flavours, McClean said they would like to incorporate more local fruits, but one of the major issues with that is that most of them were seasonal. In addition fruits such as soursops and sweetsops are very labour-intensive and hence they have not been included in the menu.
The St James resident said he was currently exploring expansion options. Saying he was not worried about competition, McClean boasted of offering something that many businesses did not –– that of convenience.
“We go to customers at their workplace during the day . . . so you don’t have to get in your car and drive to [Bridgetown] or Sheraton or wherever in order to get what you want,” he added.
“In the five years a few companies have left the market while a few have come in. What we have noticed now though is the growth in the mobile food business. So we also look at what is going on there, along with the speciality beverage places such as coffee shops and cafés and health shops. There have been some expansion from larger competitors,” he pointed out.
“The thing is, at the end of the day, even though we are competitors, the customers pretty much draw their line in the sand and they will chose their brand. They may brand-jump in terms of the product categories, but there are still the loyalists who will stick with your brand through the product range,” said McClean.
But while he may boast of increased customer base and a lucrative business, it has not been a smooth ride, given the state of the economy that was impacting on some of his suppliers.
“A lot of the suppliers are also feeling the crunch and they are passing that along in terms of higher prices for products. In some instances, rather than passing that to our customers we have been holding the price changes from our suppliers for quite some time,” said the entrepreneur.
The price changes could occur “suddenly” after a few months of holding prices steady, he said, “and it is not like you can say it is a five per cent increase; sometimes it is something that you can’t even fathom like going from $30 for something to $70 for the same thing”.
The former St Michael Secondary School student said the worst part of that was that he would find out the price changes at the time he wanted to make a purchase “as opposed to be given notice”.
Another challenge, he said, was that some suppliers were not restocking as often as they used to. This, said McClean, created a problem for him since the demand would increase in some instances or was remaining constant in others.
“In one instance, we had a supplier for some of our fruits not have the fruits in stock for like three weeks, only to then find out that they had discontinued the product. So they discontinued the product after not having it for an extended period of time and none of this was conveyed to us.
“So we had to find another supplier immediately before it became a problem for our customers. That puts a strain on us in terms of inventory,” he explained.
And notwithstanding the challenges, Sips has managed to partner with two charities, the Hope Sanctuary and the Sea Turtle Project. This, he said, was in an effort to bring more awareness.