Given that pasta is a staple, Shelby Taylor decided to develop organic, gluten-free pasta made with chickpeas and lentils. She founded Chickapea in 2016.Supplied/The Globe and Mail
Shelby Taylor owned a health food store when she decided to launch her own product, even if she wasn’t sure yet what it would be.
Ms. Taylor started canvassing customers to find out what they felt was missing in their cupboards.
“I listened to what they were struggling with and heard how they were challenged to feed their families foods that everyone would actually sit down and enjoy and that were healthy,” she says.
Given that pasta is a staple many families eat multiple times a week, Ms. Taylor decided to develop organic, gluten-free pasta made with chickpeas and lentils. She founded Collingwood, Ont.-based company Chickapea in 2016.
After some initial inquiries in Canada, Ms. Taylor decided to produce the products in the United States, sell them there, and import them to Canada. While it might seem like a strange choice for a Canadian company, Ms. Taylor felt she had no other options at the time.
“I really tried to find manufacturing here in Canada and I met with every pasta manufacturer who could do gluten-free pasta,” she says. “There was no manufacturing available here that could produce not only our gluten-free pasta but one that was high protein without a bunch of additives.”
A Canadian ingredient supplier connected her with a manufacturer in the U.S., and everything came together. Chickapea began selling products in Canada in July 2016 and in the U.S. in February 2017. In 2018, Ms. Taylor moved manufacturing from the U.S. to Italy and began importing to Canada and the U.S.
“Italy just has pasta masters, and they had much higher quality products available,” she says.
Chickapea has a line of organic products, including spaghetti, lasagna, elbow macaroni, penne and spirals. In Canada, Chickapea pasta is available in most major supermarkets, including Costco, Loblaws, Metro and Save-On-Foods, and in most natural health food markets. The company had about $150,000 in revenues in its first year of operation and is expected to surpass $13-million in revenue this year, split evenly between Canada and the U.S.
Early on, Ms. Taylor hired consultant Andrea Russell, founder of Collingwood-based Upstart Consulting, to help her figure out the complexities of food regulations in Canada, the U.S., and now Italy.
“Most start-ups are run by entrepreneurs whose primary skills are selling and innovating and believing and charging up their investors. It’s not getting mired down in mountains and mountains of regulation,” says Ms. Russell, who has worked with firms across sectors such as airlines, medical devices companies and consumer packaged goods.
For packaged-food companies like Chickapea, compliance includes labelling, traceability, organic certifications and record-keeping to meet Health Canada and U.S. Food and Drug Administration regulations.
The Canadian and American systems for such goods are fairly harmonized but the gluten-free designation is still “the wild west,” Ms. Russell says, and the organic designation is also a bit more complex when it comes to exporting.
“All of those things are possible to get because these equivalencies exist… it’s just a little bit more paperwork,” she says.
Each product also has different tariffs and duty rates. Fortunately, there are many government resources and incubator programs that business owners can turn to for help, as well as outside consultants, Ms. Russell says.
“I think sometimes it seems daunting, but there are a lot of avenues to help,” she says.
Ms. Taylor has overcome several challenges in her export journey to date.
For instance, when launching in the U.S. in 2017, she didn’t realize how different the market was from region to region, for example between California and the eastern seaboard, or how costly it would be in distribution and listing fees a company pays distributors to get their product on the shelf to launch across the country all at once.
Chickapea had to raise a lot of capital to finance some of its inventory upfront.
With no formal business background, Ms. Taylor decided to attend a pitch event at Georgian College. There, she met the founder of the Georgian Angel Network, a group of angel investors. Through that group, she met other investors and ultimately signed a funding agreement in 2017, two days after giving birth to her second child.
In 2017, Chickapea was selected for an accelerator program of District Ventures Capital, founded by Dragons’ Den dragon Arlene Dickinson. District Ventures later made a seed capital investment in the company.
In 2019, Toronto-based InvestEco Capital venture capital invested in Chickapea. Last year, District Ventures announced another co-investment of $9.3-million in Chickapea with InvestEco and Export Development Canada to expand its product line and grow its market in Canada and the U.S.
Ms. Taylor is ready to expand the product line after moving production to Italy in 2018 due to concerns over product quality.
“It’s incredibly important that our pasta taste as close to traditional pasta as possible. I think that’s true for any sort of any sort of health foods - people will try them, but if they don’t taste great, it’s not something people are going to stick with.”
To do that, she enlisted the help of Giovanni Santi, owner of Chicago-based Santi Consulting. Mr. Santi founded and then sold his own pasta production company using peas and lentils and now specializes in helping other companies set up manufacturing in Italy.
As the birthplace of pasta, Italy not only has top-notch pasta production facilities but also access to the ingredients for traditional and alternative pasta products, Mr. Santi says.
“Italy is the country that developed gluten-free pasta going back more than 30 years, so the technology that Italy has in the manufacturing industry is absolutely advanced,” he says.
Connecting all the elements, from packaging and raw materials to shipping and certification, can be a challenge for companies outside the country, he says.
“We identify how to connect this chain all together,” he says. “It’s not difficult, but you need to dedicate the right time to have the results you’re looking for.”
Ms. Taylor says product quality is better, but making it in Italy meant more lead time for shipping to North America. Initially, it took about four weeks, but then the supply chain issues brought on by the pandemic made timelines unpredictable. Still, by planning as far in advance as possible, Ms. Taylor says her company was able to avoid running out of stock.
Chickapea now has 18 employees, up from seven at the end of 2020. Growth has been strong despite the disruptions, she says.
“At the beginning of a starting a business, every single challenge you think you’re completely done, it’s the end, the dream is dead,” she says. “And then over time, you just almost start to embrace the challenges for what they teach you.”