Can I call my future daughter Sugar?
FULL SPEED THROUGH KATJES INVESTMENT AND REWE STARTUP AWARD 2019 - SD SUGAR DADDIES CO-FOUNDER MARK MÜHÜRCÜOGLU
MARK MÜHÜRCÜOGLU IN AN INTERVIEW
FULL SPEED THROUGH KATJES INVESTMENT & REWE STARTUP AWARD 2019 - LIKE SD SUGAR DADDIES CO-FOUNDER MARK MÜHÜRCÜOGLU WITH COOKIE BROS. AND O-MOCHI MAKES SUGARY SINS A TRENDY LIFESTYLE PRODUCT WITH PERSONALITY
It's going to be particularly sweet in our blog post: Co-FounderMark Mühürcüoglu and his food startup SD Sugar Daddies GmbH brought sugary sins to Madeleine Heuts in den MISSILESTART podcast!
The self-proclaimed "Sugar Daddies" have made it their business to establish special food trends in Germany and to give the sweet products their very own touch.
With Cookie Bros. they bring ready-to-eat cookie dough from New York to German supermarkets and domestic refrigerators. In 2020, the traditional Japanese rice dough ball is to be revolutionized with O-Mochi. With a filling with delicious Italian gelato, the Sugar Daddies combine continental traditions with sweet innovation. For the founder Max Kolvenbach, Paul Richrath and Mark made a childhood dream come true. The fact that sweets not only make children's eyes light up, but also have great potential on the food market, is shown by the constant growth. The products of SD Sugar Daddies GmbH are available in over 1,000 supermarkets, including the retail giants REWE, Edeka and Metro. In addition, they were crowned winners of the REWE Start-Up Awards in 2019. Katjes has also recognized the start-up's successful course and secured 10% of the company's shares with an investment in 2018.
You can find out what plans the Sugar Daddies are pursuing for 2020 in the following blog article.
Note: The interview is a written form of the MISSILESTART episode with mark. It is not a 1-to-1 quote.
Hello Mark, introduce yourself and tell us what brought you together with sweets, of all places.
I'm Mark, 35 years old and actually a trained business administrator. However, I quickly realized that I no longer felt like working for others. That's why I have my own café with the name in Cologne with a good friend Flakes Corner opened. This mainly dealt with so-called "food porn's". We had the idea of importing American products - which do not exist anywhere else in Germany - and selling them here. This mainly includes cornflakes, waffles, milkshakes, bars, in other words everything that makes the confectionary heart beat faster. Everything packed in a nostalgic retro atmosphere with couches, 90s music, posters on the walls, comics and game consoles. We wanted one Willy Wonka Wonderland in which people can escape from their everyday lives.
The implementation was then also relatively quick, it only took a year. Shortly afterwards, we had the first franchise inquiries, even though we hadn't even dealt with the topic beforehand. This ultimately resulted in five stores across Germany. That brought us a high media presence, including the BILD newspaper, taff and ProSieben reported on us. After a while, however, we noticed that the human factor is difficult to influence. Especially if you have to intervene with other people to sell a product (for example, to buy third-party products), who in turn should act on your behalf. We therefore asked ourselves whether we would rather bring our own product onto the market that we can then sell directly ourselves.
Running the cafes was very valuable. We noticed that Germans are again willing to spend more money on food if it is fun and tastes good.
How did you come up with the idea of founding SD Sugar Daddies GmbH? Was there a specific trigger for this?
Even though the stores were doing very well, we kept on the lookout for new food trends. During my stay in New York, I noticed a long line in front of a small shop in Greenwich Village. A neighboring sorter told me that there Cookie dough, that is, raw cookie dough for direct consumption, would be sold. This is the latest food trend in New York City, so I got in line, waited, and waited until I could finally try the sweet dessert - which is absolutely my thing.
I was flashed because it was a product that I hadn't seen before from Germany. At the same time, however, it evoked memories of my childhood that reminded me of my mother's cookie dough, which as a child was actually not allowed to be snacked on. So the perfect basis to play with the product and the development.
You are a Sugar Daddies trio, how did you get to know each other?
I met my business partner Max a long time ago at a family celebration over a few corners, from which the Flakes Corner emerged. When I was back in Germany, I told him about it directly. I knew that I had found exactly the product that we had to bring onto the German market here. He thought the idea was good and was immediately convinced. I've known Paul a little longer. But I actually only convinced him during a men's vacation in Ibiza, when we had a drink one evening over our thirst.
Paul has his background in retail and is very familiar with it. Max and I are experts in dessert dishes, so it's a perfect combination.
All three of you are business graduates and meet up to bake biscuit dough: From the idea to the product - what were the challenges? How do you deal with these problems as a career changer?
It was a long process creating the right cookie dough. In addition, you need packaging that looks so good that all genders are aware of it and buy the product. The biggest challenge was certainly to develop a cookie dough that can be kept chilled and still tastes good at the same time. As lateral entrants, we were completely overwhelmed at the beginning and tried over 100 recipes until we finally found the basic recipe, which we subsequently made durable in cooperation with a laboratory. We were then able to use this finished basic model to create further creations and flavors.
You also have a second product, O-MOCHI. How do you build the bridge to the cookie dough?
In the end, that was the actual genesis of the Sugar Daddies, since we'd talked about everything beforehand Flakes Corner have let run. But we wanted to be the little newcomer who - like the big names, for example Mondelez or Ferrero - several cool brands united under one another. So we started looking for new food trends and very quickly landed in the Asian market, which is booming. There we became aware of Mochis. These are rice dough balls filled with bean paste. However, the starting product, especially the filling, didn't really appeal to us. We therefore decided to replace the bean paste with Italian ice cream - which everyone in Germany likes.
We were also the first to combine the two nations of Japan and Italy in this variant. We were quickly recognized as "the creative forge for innovative products in German retail ".
How did the name “SD Sugar Daddies” come about?
We thought that our concept was actually exactly the opposite of the current one Trend food wave represent. Which is primarily about a conscious and low-sugar diet. So we said we'd definitely be there Sugar are. But at the same time we wanted to have a funny name. At some point we sat at the Kölner Ringen in a pub and then came up with it Sugar daddiesto call. However, when registering the company, the notary advised us to add a "SD ” in front to not only improve the findability on the Internet, but also to avoid legal trouble. This is how the SD Sugar Daddies GmbH.
The company was founded, the products developed. How did you start your sales then? Did you check out the individual grocers or how did it go?
Paul has a family network with several Rewe stores, so we were able to test our products early on in both urban and rural branches. This also made it possible to determine very quickly how well our new products were received by the end consumer. In the end, we had perfect numbers that we could play with and see exactly where we still had to improve. Through the one-year test phase with 20 stores in Cologne and the surrounding area, we have been able to gain so much experience and obtain positive figures that we were also able to swarm to other regions in order to constantly expand our dealer network.
But we were brought back down to earth when we tried to get listed at one of the largest food markets in Hamburg. We were first really taken apart by the responsible employee. Above all, he criticized the fact that we came around the corner so cheeky and young and gave the impression that we wanted to tell him something. The man really had a clue and at the time we just didn't. However, the conversation helped us a lot with regard to further negotiations with other markets. And at the end of the day he still listed us.
Later, however, we also went over to introducing ourselves to the headquarters and applying for a stock listing. We quickly managed to do this for the west and south regions.
A well-known investor became aware of you, but he actually works a lot in the field Food awareness is to be found. What is it like to cooperate with Katjes came?
Funnily enough, the contact to Katjes came about through the daughter of the CEO and managing director of Katjes. She lives in Cologne and thought our product was so cool that she brought it to her father. He probably ate several pots of our Kektsteig so that his wife had to stop him in the end. He was so enthusiastic about the product that he immediately invited us to the Düsseldorf office of Katjes Germany. But we also didn't feel any pressure because we weren't actively looking for an investment. In the end, it came down to some figures, data and facts with the result that the CEO, whom we liked, signaled to us that he was ready to invest.
After that, we drove home first to let the whole thing go through our heads. At the same time, we received another offer from another major player on the market. So we had a luxury problem. After much deliberation, we decided on Katjes. On the one hand because they were super nice and open to us, on the other hand the chemistry, especially because of the aggressive marketing, is the best fit. Katjes invested a 10% stake in our entire startup, although the CEO initially only invested our brand Cookie bros. was interested. In his opinion, the food trend for the next few years.
You also do very aggressive marketing yourself. Do you think about a possible shit storm? How do you prepare for it or have you already had relevant experiences?
Fortunately, we have not yet had any negative experiences. But we actually have less interest in typical political topics or those that are very much in focus. We only try to do things that we can identify with. Our marketing should reflect a bit of our humor and the spirit that we also have in the office. We also have many women on the team and therefore we look together with them that everything that could be interpreted in the direction of sexism is definitely socially acceptable. But of course you can play with topics. For example, we ran a poster campaign in Cologne that said: “Are you pissing off Brexit? - Cookie dough for snacking from the EU ”.
We are happy to take up current daily or weekly topics, but always without offending others. We just want to have fun. Put a smile on the face of the people who see our actions without having to swim with every hype.
Keyword hype, you recently won a very prestigious award, the REWE Startup Award 2019. How was that and what has it changed for you?
We actually only registered for the REWE Startup Award two or three days before the application deadline. Although it is a price that is not only very well known in the startup scene, but in the best case also brings in a national listing in almost all Rewe markets.
Over 300 companies from 11 countries applied. After two weeks we got the message that we were among the last five and that a presentation had to be prepared for a pitch. This should take place a week later in front of 120 people. We did not expect this news and were accordingly exhausted. On the other hand, however, also overjoyed, because the top 5 already gets a lot of media attention and is listed on REWE-Digital. Nevertheless, it was necessary to prepare quickly in order to preserve the chance of the national listing.
Although I visibly struggled with my nervousness beforehand, I went on stage alone. I probably got the presentation across very convincingly and was ultimately grilled by the judges for ten minutes in the Q&A. They kept asking me the same irritating question about how to properly eat the mochis. "Biting off or whole in the mouth", was my answer every time, I didn't really understand what was going on. What I didn't know at the time, the catering had ours Mochis Let stand too long unrefrigerated, so that they became soft and wobbly and thus the question was rightly asked. So I left the stage irritated and a little disappointed inside and then waited with Paul for the winner to be announced.
Much to our surprise, we were named as the winners of the REWE Startup Award 2019. I was overjoyed and rarely had so much adrenaline in my blood. This made me grin like the Scary Movie mask all evening. After we had extensively watered the victory, it was time to get down to business. We faced the challenge of having to supply over 3,000 Rewe branches in a very short time. With our core team of five, we ultimately only tried to put out the fires in order to achieve the specified goal.
But now you and the team have set up a little bigger and a new office as well. What are your plans for 2020?
We locked ourselves in together so that we could really be a business administrator and think about the annual target planning for 2020. On the one hand we want to join us Cookie Bros. diversify, i.e. bring new products to market under this brand. On the other hand, also with O-Mochi introduce a new concept into the trade: the so-called "Pick & Mix". This means that you can have your personal information at a station in the supermarket “Mochi Mix of Happiness”Can be put together as desired. Furthermore, we are currently planning some interesting collaborations, so that by the end of 2020 everyone will hopefully know the brands of SD Sugar Daddies GmbH.
If you look back again, which legal fuckups, especially from the food sector, caused you the most problems?
If you do not have this legal background, it is either pure stress or very cost-intensive. We had a lot of topics, but it all started with the packaging.
In this regard, we also tried to do our own research on the Internet, but quickly realized that it is not that easy. You can't find a lot of content or there are sometimes many contradictions. We then also started looking at products in the supermarket and comparing them. Nonetheless, we were super unsure of what exactly had to be considered. However, we also knew that a recall due to incorrect labeling is not fun and can lead to high costs. In the end, we actually solved it completely with our own research, which was also incredibly laborious. At this point it was both a curse and a blessing that we still printed the cups ourselves so that changes could be responded to quickly.
The Food Information Ordinance with all the information and labeling obligations for, for example, allergens or traces of, as well as the determination of what you write on the front of the packaging must be found on the back, have stayed with me for a long time. It would be a mistake, for example, if you advertise unicorn shit on the front of the packaging, but there is none in the list of ingredients at the back. Finding out such regulations took a lot of time and effort.At this point, it would have been really helpful to have a corresponding contact point where you can read this in a processed form.
We are working hard to bring a special food package onto the market so that you can read all the necessary regulations in an appropriately prepared manner and thus save valuable resources and valuable life time. So let's hope that this can help future founders.
What is your secret to your success?
So for me the three pillars of success are: sales, earnings and the team.
Fortunately, we had sales and earnings right from the start and the team is actually our most important factor. Sometimes you spend more time with your team than with your family or friends, which is why it is incredibly important to get along well. We brought a lot of friends into the team right from the start and also make sure that we only hire people who are like us. Nonetheless, the issue of personnel is extremely important, especially in legal terms, because people can sometimes not be so kind to you. You should therefore be contractually secured in any case.
We had to dig into the labor law regulations, be it the granting of vacation entitlements or the amount of an appropriate salary, or in some cases had to fall back on model employment contracts. If the team continues to grow, there will also be other regulations that must all be taken into account. For example, a data protection officer with ten or more employees or certain fire protection precautions. Nobody tells you that, but you get that from other startups at some point. It would therefore be really worth gold to have a platform where you can read all these topics in an appropriately prepared way and, in contrast to the high legal fees, also have a reasonable price-performance ratio.
At this point I would just like to give your startup a lance MISSILESTART breaking - because support is not murder.
Thank you for the great feedback! In general, this is also the mindset that I have been able to take with me from the startup scene so far. You help each other, support and gladly give something back from time to time.
But now I have one more question about the contract with Katjes. It's a classic David versus Goliath situation, how did you deal with it?
At the time, SD Sugar Daddies GmbH was actually still in the seed phase and a bit green behind the ears, but basically a serious partner like Katjes doesn't want you to harm you at first. The relationship of trust must be there in any case, otherwise a partnership doesn't make any sense.
Despite all that, contracts are contracts and as a normal person with a business administration background you simply have no idea about them. We read the contract, of course, but quickly realized that we needed help with it, even though it was a standard contract. Time was short, as the whole thing should be completed within two weeks. For this reason we decided to consult a lawyer specializing in mergers and acquisitions. He was also very honest and advised us to postpone the appointment a bit. Of course, that was super uncomfortable for us and we feared that the deal would break because of it, but at Katjes the rule was: one company, one word. The money flowed, the contracts were adjusted to mutual satisfaction and everyone could laugh about it on the day the contract was signed.
That’s a good learning curve that can be passed on to future founders. As a startup, self-confidently enter into contract negotiations, even if it is a large partner like Katjes, as both sides ultimately only want a functioning cooperation.
Mark, do you have any other tips or experiences that you would like to share with future founders?
Basically, as a founder or a startup, you have problems that you solve or challenges that you have to master on a daily basis. Regardless of how much sales you make or what prizes you win. It is important that you remain authentic in everything you do, that you do not pretend and that you play with open cards. We stand for what tastes really good, but may not be the healthiest. We communicate this very openly and honestly and our customers notice that too. Another lesson is that you should have your numbers under control. In the end, the best marketing and product will not do you any good if you are not liquid.
Finally, what do you think of the show? "The Lions' Den", where a product similar to yours also made an appearance. Did that unsettle you?
As for the lion's den, we made a conscious decision against it. On the one hand, we didn't want that stamp to be put on it. On the other hand, you suddenly receive a huge push that you first have to cope with without really knowing how long this hype will last or whether you will be sitting on your pre-produced goods. In particular, the contracts that many startups do in this context were not particularly kosher to us. At that time we had the luxury position that the company Spooning - also a cookie dough manufacturer - was at DHDL and the topic Cookie dough made famous in Germany. However, they only offered a cookie dough to mix yourself, so that retail customers preferred to use our ready-to-eat product.
That gave us a big push that we got for free, for which we are very grateful.
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