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From Net-A-Porter to Nutmeg: Adding Spice to the Market

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By Published On: April 23, 20190 Comments

It's just as much about cumin and tumeric as it is about creating dramatic change. Sprinkle is spicing things up with its small-batch products.

Sprinkle is a maker of artisan spice blends and sells single origin spices and fine salts. It launched in May 2018 as ‘a next-generation’ spice merchant. While it was inspired by the magic and history of Tel-Aviv’s Levinsky Market, it gains its edge from its use of modern tech.

Co-Founder Rachel Dulberg grew up in Israel, a melting pot of global cuisines where cooking with spices is a way of life. “She’s always been an avid cook and, during the many years we’ve lived abroad, used to make her own spice blends, partly for fun and partly out of frustration with mass-produced options which just didn’t taste like the real thing,” explains partner and Co-Founder Daniel Williams, when telling us about the Sprinkle journey. “When we returned to Australia a couple of years ago and couldn’t find fresh, authentic and nasties-free spice blends on the market, the idea for Sprinkle was born. We wanted to introduce Australian home cooks to the magic of spices and inspire them to eat well and explore diverse flavours in a fun and engaging way.”

Williams and Dulberg are trying to do for spices what the ‘third-wave’ movement did for coffee (before the days of single-origin, small batch roasters were mainstream). “As we delved deeper into the spice industry, we realised that it was dominated by opaque supply chains and layers of middlemen between farmers in developing countries and the end consumer in the West,” Williams explains. “Spices are nowadays a cheap commodity – they are often adulterated and lose most of their flavour and traceability on their long journey to our kitchens. Most consumers don’t know where spices come from, what’s in them or what they should taste like. So, we decided to take a fresh look at a category that is in need of massive change.”

The Founders both worked in the technology space prior to launching Sprinkle. Williams previously had his own an e-commerce business and was also responsible for warehouse automation for Yoox / Net-a-Porter in London and New York. Dulberg was a technology lawyer and worked at leading law firms and tech startups in London, New York and Sydney. “We’ve both witnessed first hand the shift in consumer values and expectations in the retail space over the last few years as well as the challenges facing e-commerce businesses today. So we’ve tried to tightly control all elements (where possible) that affect the customer experience, avoiding outsourcing,” Dulberg tells Power Retail. “We’re also embracing digital features and techniques typically only used by leading global brands – focusing on integration, customer data, analytics, content creation and engagement.”

Sprinkle is currently selling via its online store and Amazon Australia. The main challenges involved with launching the business will be familiar for anyone starting out. “We had to do everything from branding to market education, packaging design, labeling, industrialising and automating our manufacturing process, factory design (including custom equipment), creating the website, photography and content as well as building out a supply chain,” Williams says.

The duo were lucky given their background in the space, specifically Williams’ technology and automation experience. “Building up a network of reliable suppliers and service providers is key and can be a very time consuming (and sometimes expensive) exercise. Unfortunately, there’s no magic solution, it involves a huge amount of continuous research and trial and error to find all the right solutions for your specific business needs,” Dulberg adds.

Marketing is also something the Founders are needing to take care of in-house (with in-house being defined as by Dulberg and Williams themselves). “Obviously as a startup we have a limited marketing budget and so we are focusing on organic growth driven by original content across all platforms…[W]e produce all our own photography, blog articles and social media posts and find that to be most effective to reach our target audience. To date, we’ve found Facebook advertising to be expensive and ineffective. Obviously, the challenge today is to capture people’s attention and generate meaningful engagement given saturation, so originality is key,” Williams tells us.

Their extensive global experience has given the Founders a unique perspective on the Australian landscape and the challenges faced by entrepreneurs here. “Australia is still quite a long way behind the US and UK on the e-commerce front, both in terms of consumer adoption and confidence, as well as retailers’ unwillingness to properly embrace the shift to digital,” Dulberg says.

“The biggest challenge facing most Australian retailers is overhauling the traditional bricks-and-mortar model and investing in digital and omnichannel fulfilment models whilst remaining profitable,” Williams adds. “The influx of overseas competition and local digital native brands (like The Iconic, Appliances Online, Flora & Fauna and Catch) are, however, a positive thing and forcing the issue. Consequently, we are seeing the Australian retail landscape undergoing a dramatic shift which will ultimately benefit consumers.”

Last mile delivery is another element that’s providing a hurdle for Sprinkle (and indeed Aussie retailers across the board). “One of the major areas for improvement is on the transport and fulfilment front,” Dulberg tell us. “The ‘last mile’ capabilities are still not world-class and very expensive due to lack of competition in the Australian market. Most companies in that space are creating bottlenecks due to their legacy systems, lack of infrastructure and inability to track and report on shipping in real time. This has impacted trust in the entire ecosystem.”

The Founders believe that more competition in the Australian retail market is what’s needed to drive improvement as well as investment in better e-commerce infrastructure. “It seems that the world has moved on from the Australian retail oligopolies with slowing sales growth, falling margins and dwindling share prices. We think that instead of trying to build platforms to rival Amazon, we need to encourage greater investment in Australian products and the companies that can build the digital brands of the future, to address global consumer demand for more independent, authentic, innovative brands.”

The company is in the process of talking to investors about scaling and the team are currently working on a few exciting partnerships in the pipeline that they’re hoping to announce later this year.

“We’re looking forward to continuing to contribute to Australia’s digital economy and think that the next few years will bring dramatic change and exciting opportunities in the e-commerce space,” Williams says. “It would be great to see the Australian government acknowledge that startups are the future employers and engine of the economy. We’d like to see both government and established players across all industries get behind startups and technology in a more meaningful way.”

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