We are speaking to Frank Dekker, CEO & Founder at The Pure Goat Company. The Pure Goat Company was founded by seasoned professionals from the dairy industry to address the growing demand for (organic) infant formula with a new organic Dutch goat milk-based range of products: www.puregoatcompany.com. They were recently awarded the silver medal in the Best Organic Product Award 2020.

With plenty of procurement experience when working for traditional multinationals, Frank has first-hand experience with the flaws of traditional business models . He was committed to create a company that can spur change in the entire industry, and in doing so this former corporate employee has transformed himself into a true entrepreneur. We spoke to Frank early in 2020 when covid-19 still seemed a Chinese affair. So the challenges that result from this unique situation were not captured.

Frank’s passion and energy are hard to capture in words, but his lessons as an entrepreneur are worth sharing. Here are three lessons that we found most inspiring. Please scroll down for the full interview;

• Use science as a force for good for your business, not as a force for marketing – make sure that you know everything there is to know about your product and create the best possible product from scratch. , instead of using science as a marketing device to make minor adjustments to a very traditional product.
• Be stubborn and commit yourself fully; it is important for the mindset to ‘go deep’. Demand the same commitment from potential investors and partners – if they want to make a quick buck, you will not have a solid foundation.
• Offer your key suppliers a true partnership – give them stability and commitment, even when your customers are not giving you the same commitment yet – somebody has to be brave and step up to change a traditional system.

We use our Value Creation Loop and Sustainability Visor frameworks to structure the interview. It results in 7 questions which guide the interviews in this ‘Sustainability Pioneers & Frontrunners’ series. They are: 1) Sustainability meaning & benefits; 2) The Why; 3) The How; 4) The What; 5) With Whom; 6) Trade-offs (4 P’s); 7) Next horizon. 

Sustainability is extremely important in establishing a position with big retailers. They are all looking for the sustainable disruptors in traditional segments. Customers are looking for it, and the big retailers want to have a sustainable offering too. They especially look for products with a very good story. Also for our suppliers it is an important differentiator. They like to be part of a fresh, new, sustainable company – once you’ve proven to be a serious player.

Obviously, for our customers the sustainable angle is important, but safety comes first. We get tons of questions about the nature of our product and how it compares to the traditional infant formulas. Many questions are from parents who want to opt for a sustainable product, but rightfully want to make sure that their children are getting the best possible start in life. But we also see that we get quite a few very detailed, questions about the scientific elements of our product. Especially when we just started we were flooded with these questions. It is possible that these are questions from competitors to get a better view of our product and/or test us as a company. But we don’t receive those questions anymore – perhaps we passed the test now, haha. And it helped us to keep our eyes on the ball.

I like the balance between the 4p’s in your Sustainability Visor framework. Building a sustainable business requires a harmony between these elements, including profit. I am an entrepreneur; I love being a successful, honest business. Profit is a means to achieve our purpose.

I am text block. Click edit button to change this text. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

By aiming for a healthy and the most sustainable option every single time, we created a product that employees and suppliers can feel proud of. And customers are asking for it. Our product is still a dairy product, but that is because the health of infants comes first and we work with the most sustainable dairy producers possible. All the other ingredients are as sustainable as possible. Tuna has been replaced with algae. The industry claims that tuna oil is a by-product of tuna-fishing for human consumption (the eyes, which are considered a waste product of the main fish). Meanwhile, the entire value chain is focused upon the eyes, as the fish oil is so lucrative, and the bodies are almost the waste product now. The same goes for palm oil, sugars etc. It is extremely lucrative to go for the cheapest or easiest option every single time. But that doesn’t lead to the best possible product in our view, and it certainly doesn’t do much for our planet.

An important personal driver for us was the belief that the current global business model is outdated. The model of traditional big companies, with managers that take no risk and make decisions about money that is not theirs to begin with, whilst getting bonuses for selling products that are not beneficial to the world whatsoever, is outdated. It is a really, really weird model. I’ve been an active part of it, now I am changing it.

We are a very lean and mean organization. That means we all have to work hard, but it also means that each of us knows exactly what’s going on in our company and the wider industry we operate in. We are quick to act if needed.

The most important asset that we have is our team: we bring top scientist and nutrition specialists on the one side, and young parents on the other side. That mix between understanding every technicality of our product, understanding our customers and understanding the supplier dynamics through my experience with procurement in this sector, is what sets us apart. Combined with our drive and willingness to commit ourselves completely, this is our competitive advantage

If you want to create a new sustainable product – there is an opportunity (and perhaps imperative, in our category) to attract a scientist who can help create the best and most sustainable possible product from scratch. That’s what we did. My partner is a top scientist in his field of nutrition. He can literally look at our product on a molecular level. Since we didn’t have huge operating expenses or shareholder value to take into consideration, we were able to let go of all the commonalities in the industry as unnecessary burden. It makes us competitive whilst offering a product that is organic and more transparent.

So the design or ‘create’ phase of our product cycle is what sets us apart. Besides that we spent a lot of time and energy on our procurement. That is my field of expertise. We made sure that we took our time to build relationships with our farmers. I would literally visit them 16 times to show them that I was dead serious and we committed ourselves to 5 year contracts. The farmers were paid upfront, so this was a serious commitment that was possible through the support of our investors.

We work with the same factories that cater to the needs of our traditional competitors. Initially none of these factories wanted to work with us; the ‘disruptors’. And I understand their position. They needed to understand how their big multinational customers would respond. Now that we are at a certain scale, this is no longer an issue.

Our team, consisting of scientists, doctors, enables us to co-create our products with our suppliers. Quite often they don’t have these capabilities in house. By working with them, we are able to find win-win solutions. Our expertise combined with a long term commitment that we were willing to formalize generates trust.

But for our competitors it is challenging: if more customers demand transparent, healthy, sustainable infant formula, what does that do with their gross margin? How are they going to source these ingredients at scale? Hence their response is typically defensive, as described earlier.

Our investors were a critical success factor. It was important that they were comfortable with a healthy, but longer horizon ‘return on investment’. Their main reason to invest, was not the focus on sustainability per se. They were triggered by the entrepreneurial drive that we showed and shared the willingness to disrupt and win. We had committed our time, personal savings, everything to the success of this business. That combined with the potential of our product made for an appealing investment opportunity. Our investors take pride in the fact that there is a brand new product on the shelves in a well-defended category of household names.

We want to create an honest product at scale. That means that we have to build a company too. It is always a balancing act between building and growing a company, and achieving the next level in sustainability. As co-founders we have quite some discussions about this.

I want to be able to compete with the big players. I want to win the boxing match. My partner wants to go for the greenest option possible. For instance: I wanted to expand to China, my partner didn’t want this as it requires a lot of transportation. We agreed to transport our products exclusively by train and once we establish a solid base in China we will use sailing ships. So we choose the light green option first and go for the dark green option as soon as our company is able to support it.

We try to go for the sustainable option in everything we do. Our company sweaters are of course made of organic cotton. In our packaging we opt for the best possible option that is feasible for us now. At the same time, we don’t have a solution yet for a crucial sustainability challenge in the dairy industry: how to deal with the billy goats …

We are looking to expand to India and China. And as I mentioned before, we are looking to do this in the most sustainable possible way. In achieving this we test our local partners the way we were tested. Are they willing to show up 16 times? Can they answer tough questions? Are they really committed?

Another challenge is our packaging. We are looking for ways to use thinner cans, bio-ink and find ways to recycle packages. It is an ongoing journey to find the best alternative in everything we do, whilst building a healthy company that can bring the fight to the big players. It is the only way to really change the system.

This is our summary of an extensive interview – any direct quotes are in citations

Photos courtesy of Unsplash & Pure Goat Company

Notes

(1) The properties and abilities of systems to remain diverse and productive indefinitely

(2) Leadership, Strategy, Innovation, Organization, Assets & Risk; Metrics