Loosing a Customer

In case you don’t know, or in case you work for the Argentine Federal government, Argentina is experiencing inflation. How much is hard to tell since the numbers are being fudged all the time and the government’s official stand on this topic is that there really is no inflation or at least not enough to be a problem.

However, I am not going to talk about inflation and the Argentine economy. There are other sites and resources to go to for that sort of thing. I want to talk about a victim of this inflation.

When we started selling to The Coffee Store I quoted a very economical product for them with the agreement that they had to eventually have other higher margin products of ours as well as allowing us to use their retail shelf space to sell our brand name products. I did this to get our foot in the door. I mean once they start offering our cookies they are going to sell so many of them that I can afford to not make so much on the economically priced and low margin cantucci that they give away with their coffee.

They wanted and insisted that the brand name products I leave on consignment. I really disliked the whole consignment scenario thinking it more appropriate if you are selling bubblegum or chocolates at kiosks not for high end gourmet cookies. However, they did argue that they had great exposure so I went ahead and agreed reluctantly and hoped that they would prove me wrong.

So far there are three components to this approach and I will expand on each one:

1. Economically priced cantucci that they give away with their coffee

2. They would add higher margin products to their product mix.

3. I would leave, on consignment, our branded products.

1 & 2. We made countless samples of different cookie flavors and different sizes. We also rushed to modify one of our brownie pictures so that they could use the picture (and eventually our brownie) in a promotion they were thinking about having. None of those things panned out. Instead, we started to see sharp increases in just about everything related to our factory and the cookie making business. Obviously we had to pass those increases on to our clients.

What kind of increases did we see? Well from the period between January of 2007 and May 2007 we saw our chocolate chips go up 48%, margarine 70%, butter 39%, eggs 27%, etc. In addition, in July there was a wage increase handed down by the government that was retroactive to April. These price hikes are felt immediately when you have low margin products so our economically priced cantucci needed to have price modifications consistently, on a monthly basis. Since May we have seen more price increases, but that’s not a problem right.

All of these price variations have forced me to have monthly meetings with my largest clients and for the smaller ones they just have to take it but I at least let them know beforehand what’s coming. This is really not all that much fun. There is a lot to prepare for these meetings. Basically I have to prove to them, every month, how the price increases I am suffering every month are impacting the price of the cookies they are buying. All my clients have reached the same conclusions as I with the exception of The Coffee Store.

3. There were some stores that really did not like working with consignment either. As a result I changed things around so that for those stores that would pay on delivery I would give them a discount. This was a cost cutting measure for everyone. There were plenty of stores that took me up on the offer, but there were holdouts. And as I would have guessed, the locations that sold very little really had no intention of ever going off the consignment trap. I mean, I give them cookies to decorate their shelves with and they don’t pay anything until they sell something. It was completely painless to them. It is also the very last time I ever give anything out on consignment.

So in the end, the Coffee Store managed to prove to some of their franchisees that consignment does not really work and to the others that it is a great way to decorate your store; not only did they not add any more products but decided to throw in the towel.

Yep, The Coffee Store is no longer a client of ours. There was a mutual realization that this was not going to work. However, it is still sad when this sort of thing happens. So what did I learn from this failure?

I will never leverage entering into a business by giving stuff away (low margin items and consignment).

I am the one at fault here because they just asked, I was the dope that went “yeah, okay”.

I will never sell anything on consignment again, ever. If a client does not believe in your product enough to buy it then they will never be any good at selling it themselves.

I will never give credit to franchisees again ever.

So who is the victim here? I honestly believe it is The Coffee Store.

What do you think?

Espacios TV Interview

A while back I was interviewed for a cable TV Show called "espacios TV"and I wrote about it. The video is out now and you can see it on their website.

The interview was done by Sofia Alurralde and I get another excuse to, yet again, put a pretty face on my blog.

When you go there you click on the little TV.

A little window will pop up within the site and the first show that pops up is show 121. It will start streaming and you can watch as it plays out.

You will see a report on a fashion show first and then the report on us starts.

Happy watching.

7 Random Things

Pip just hit me with a meme in which I am to write 7 random things about myself. This is the first time I do one of these so if I commit some sort of meme faux pax then it's just too bad.

1. I used to be in a garage band. I played bass and we actually played at a party. We did mostly covers of the Clash, Black Flag, Naked Raygun, etc. I didn't have any formal lessons. I just picked up the bass and started to hammer at it. Our guitar player, who along with out drummer, where the only real musicians in the group. I have to say though that we weren't so bad. Of course I am biased and I loved the attention I got from women as a result of playing at that party. To bad I had my girlfriend with me. Hey what do you want? I was like 20 years old.

2. I was a UPS driver. Yep, I had the brown uniform and drove the little brown vans and the bigger brown trucks as well. I never thought that women would be attracted to a brown uniform. My stint at that job proved me wrong. Secretaries and UPS guys, they just go together like PB&J.

3. I used to love to go out dancing. Yeah, we never called it that. We would always go out to the bar and drink and try to pick up women. But, we spent a lot of time on the dance floor and it also helped being able to dance. Heck, I met my current wife in those circumstances, but at a different club. The place I always went to was The Smart Bar on Clark Street. It has changed since my days. It used to be kind of grungy. The dance floor would have sawdust even. You could pick out the drunks a mile away since they were the ones with sawdust all over them from falling on the dance floor. Together with Metro upstairs, they just celebrated 25 years. I got a call at 1:30am from my friends that night. I wish I could have been there to see them all again.

Okay, I just realized that the underlying theme here so far has been women. I guess it has to do with what was most on my mind during my youth. I guess I should pick something from a different time period just to shake things up a bit.

4. I used to own a motorcycle. It was not a crotch rocket. It was an old Kawasaki and it was similar looking to this but old. Obviously I did not stray to far from the underlying theme on this one. I will do better on the next one. I promise.

5. I am actually quite shy. Always have been. This comes as a surprise to many people who have met me. Mostly in the States (surprised that is) since over here I think my shyness comes out a bit more due to the added difficulty in communicating in my second language. This also surprises people because I have worked in sales and have been pretty good at it also.

6. I can´t really bake. I can follow directions but the talent behind the cookies, cakes and what not is my wife, not me. I can grill pretty damn good though.

7. I studied Tae Kwon Do when I was little. I grew up in the west side of Chicago and sometimes we were the only non-black family in an all black neighborhood. My dad would always work two full time jobs, always trying to get his family out into nicer neighborhoods and better schools. Which, is something he ultimately managed to accomplish. I obviously fought quite a bit and I think it was my dad´s idea for me and my little brother to take those lessons. I can´t quite remember though. I will have to ask the old man to see if he remembers whose idea it was. Anyway, it sure helped because once you beat someone up decidedly there are not too many kids that want to try a hand at you. However, I never really liked fighting. Even when I won. I did like the science of it though. Throwing a punch or a kick just so. Blocking and countering was fantastic. Later in life, in my 20´s I took up Karate. Nothing formal. My best friend was a black belt and he would give me lessons on the weekend. I think he really enjoyed beating the hell out of me every weekend. However, he was a good teacher and he showed me very little mercy. Thanks Scott! I will just wait until he is 70 and then trip him down the stairs. I would like to see his black belt save him then. (just joking people)

Well there you have it, seven random little things about me.

What is a CAFO?

One of the things I love about living in Argentina has been the wonderful steak. I have always been amazed by just how much steak I could actually put away compared to those rare times in which I would have steak in the States. It turns out that steak in Argentina comes from grass fed, free range roaming cows, not feedlots. What is a feedlot? It is a Concentrated Animal Feeding Operation. According to the EPA there are AFO and CAFO. This is just their way of trying to define sizes and scope for these operations. Like just about everything in life they come in small, medium and large. One of the complexities of running these things is being able to handle the large amounts of waste. Yep, we are talking cow pies here on a massive scale.

Now how does Argentina raise cattle? They do it the old fashioned way, by letting them walk around the grass lands (called the Pampas in this region) and let the animals go and find their food. The result is that these cattle have less trans fat in the meat than their feedlot cousins where they are in confined spaces, with no grass in sight and their food is brought to them. The food, by the way, that is not part of their natural diet.

I have read that grass fed meat is tougher than feedlot beef. I think this is just a theory or at the very least a bad definition though since I have had more marvelous steak here than I ever had in the States. It is true that I occasionally ran into some tough meat but that has been the exception, not the norm.

In any case, what prompted me to write about steak this time? It was Yanqui Mike. You should go and read his posts on this subject. He should know more about it than me since he actually has cattle down here. He is not a born gaucho but more a self made one and he comes from my neck of the woods. That´s right, he´s from the windy city itself. Click on the picture below to go to the post in question. And if you ever see a guy on a horse dressed like a blues brother well it just might be him.

The Three Stooges and Company

Malba is having a Children´s movie festival and they didn´t forget about the parents. This festival sounds so fantastic that I just can´t wait for it to start. I have never seen The Three Stooges in a movie theater. I also would love to see Charles Chaplin, Laurel & Hardy, Abbot & Costello, Buster Keaton, Jerry Lewis, etc.


A nice thing about this event is that the majority of the movies are in English with Spanish subtitles. Before anyone who reads this thinks that I should get my priorities straight about why I would want a movie in it´s original language in a Spanish speaking country, you should know that I hate dubbed movies period. I don´t care what language the movie is in as long as it is subtitled. That is just the way I prefer them.

Some of the movies showing are...

Thursday the 19th of July
Betty Boop at 2pm
Three Stooges at 3:10pm

Friday the 20th of July
The Elephant Boy

Saturday the 21st of July
The Pink Panther 2pm
Mel Brook´s "Silent Movie" at 3:30pm

Sunday
Charles Chaplin Shorts at 2pm
- The Fireman
- The Pawnshop
- The Rink

There are many more, but this should give you a taste of what they will be showing.

Caminos & Sabores Wraps Up

Yep, that is the cookie monster and have you ever seen him not finish a cookie in his life? He was so tired after the fair that I think I heard him say "ME LOves cookies" right before passing out in front of a plate of his favorite chocolate chip cookies.

He actually came in from the USA, thanks to John, just in time to help out with the fair. John is a reader of this blog who happened to fly in from the States and was so kind enough to give me this talking Cookie Monster. Thanks John for this wonderful little gift!

The fair itself was a great success. There were tons of people that did not know the Sugar & Spice brand and my main goal was basically to promote the brand and our own store, get as many people to try the cookies as possible and as a consequence, maybe, hopefully many sales would generate. Key thing though is that I did not place sales as my primary goal. In fact, it hardly has been ever. Sales, for me, have been a consequence of my primary goals. This did not happen by accident. That is how I plan these things. As a result we ran out of our savory cookies, biscotti, and banana walnut pound cake. In fact, we started selling what was left our pound cake samples without the packaging. We were also giving away 10% discount coupons valid at our store to everyone who purchased and we ran out of those as well. The main thing though is that there are many more people this week that know who we are and where we are than there were last week. Just thinking about that puts a smile in my face.

I Like Elephants

I saw a couple of videos on 99's blog that I had to share with my kids. They liked them so much that I thought I would put it on my site as well and share it with my friends and family. One of them was an orchestra played with vegetables and another was a dancing and singing cow.

Thank you 99!

Eric Herman makes music for kids. He has a blog called Cool Tunes for Kids. And now he has four more new fans. Check out his blog and his music. This is our favorite new song:

Caminos & Sabores

This event will be open to the public. It is the third installment of a yearly event. There will be over 250 stands all representing all the regions of Argentina. Unlike this last fair we just wrapped up, there will be many people attending this one.

This one runs from the 12th of July to the 15th of July from 12noon to 10pm every day. The entrance is $12 pesos. On Thursday and Friday retired people pay $6 pesos and if you are a student in the field of tourism or the food industry then you get in for free. If you are a business owner in the food industry then you also get in for free. I guess on Thursday and Friday we are supposed to feed everyone...yikes.

This will be the first time we attend this fair as well.

The fair is divided into sections called Paths. There is the Cheese Path, Meat Path, Oils & Spices Path, Mate Path, Drinks Path, Rural Tourism Path, Fruits Path, Path of Traditions, and last but not least the Sweet Path. That´s the one I am going to be in. So what will you find in the Sweet Path? There will be honey, dulce de leche, jams and jellies, chocolate, sugar, candied fruit, and cookies!

At this fair there will be samples to taste, cooking classes, and even a photography contest. Last year they had more than 50,000 people attend so be prepared to see everyone and their mother at this one.

How to get there: in Spanish


We are stand number D29d. If you click on the picture below you should get a bigger view.

G&H Expo

I am currently participating in this expo. I am hoping that we get some more hotel contacts. Hotels have been an enigma for me in this business. The ones that I closed deals with went extremely easy. There were others that I never received a concrete answer as to why they were not interested. I always received the obvious praise for my product but.... I just never knew why for some hotels it was a no-brainer (and they currently do very well with our cookies) while others just could not get it.

This time I am not going to let them get away so easily. They have to tell me what is stopping them from buying the best, most delicious cookies in the market especially since some other hotels are buying and are buying well.

Here are some pictures of our stand. If it looks like half a stand that is because we actually built this stand keeping in mind one 3 by 3 meter size stand. We keep running into event organizer´s that give us an extra space (they had the space and they want us to participate so they end up giving us a space--we have been lucky that way). In this case, the stand came with that ugly little table, which turned out to be quite useful. I think next time I will have to invest in a table to use as a desk. It was just not part of the original layout so we didn´t have that thought out or developed. So, when these little opportunities pop up (free extra space) we get to use ugly little tables.

This event is closed to the public. The next event will be open to the public so next week I will write about it before it starts and hopefully you can come by.