Starting a beverage company comes with its unique set of challenges. Imagine the excitement of doing a manufacturing run, just to have 10,000 cans come out defective. This was the reality for Sara Delaney, founder of Sarilla. Her journey, however, is a powerful story of resilience, dedication, and mission-driven entrepreneurship that offers valuable lessons for emerging CPG founders.
What is Sarilla?
Sarilla is a brand of sparkling teas crafted from organic, fair-trade teas sourced from Rwanda and South Africa. These refreshing beverages, like the popular Hoppy Hibiscus, aim to offer healthier options with clean ingredients and no preservatives. The brand is committed to promoting social inclusivity and supports the Pink Boots Society, which aids women and non-binary individuals in the brewing industry.
Production Challenges
In late 2020, Sara made the move to switch to printed cans from sleeves, aiming for more eco-friendly packaging and a premium look. However, delays and a significant production error led to 10,000 cans with peeling labels. Sara had secured a new contract with a digital printing company and a co-packer. After delays pushed the production from December to late February, she was finally able to run the new cans. Unfortunately, all 10,000 cans emerged from the tunnel pasteurizer with labels peeling off.
The co-packer blamed the can company, claiming they weren’t approved for their facility, while the can company cited improper handling by the co-packer. This left Sara in a frustrating situation with no clear party taking responsibility.
Navigating the Crisis:
Sara’s immediate steps to resolve the issue were crucial. She:
1. Identified the Problem: Sara quickly recognized the extent of the defect and sought to understand the root cause by communicating with both the co-packer and the can company.
2. Sought Expert Advice: She reached out to Russ Taylor from Secure CPG, who helped her understand the insurance implications and steps to mitigate such risks in the future.
3. Engaged the Community: Sara shared her experience on LinkedIn, receiving support and suggestions from the community, which led to new partnerships.
4. Found New Partners: She secured a new co-packer, ensuring they had the proper approvals and quality control measures in place.
5. Ensured Proper Coverage: With Russ’s guidance, Sara updated her insurance policy to cover all operational risks, including third-party facilities, ensuring future incidents would be covered.
The Role of Proper Insurance
For emerging CPG founders, having robust insurance coverage is essential. It protects against various risks, such as production errors or shipping issues. Brands should work with an CPG specific insurance agent like SecureCPG to customize policies that fit their specific needs, safeguarding their investments and ensuring they can weather unexpected challenges. Proper insurance can prevent significant financial losses and business interruptions.
Here are specific insurance policies and coverage recommended for CPG brands:
1. Product Liability Insurance: Covers any damages or injuries caused by your product.
2. General Liability Insurance: Protects against claims of bodily injury, property damage, and personal injury.
3. Property Insurance: Covers your property and inventory at various locations, including third-party facilities.
4. Business Interruption Insurance: Compensates for lost income if your business operations are disrupted.
5. Cargo Insurance: Protects your products during transit.
6. Errors and Omissions Insurance: Covers legal costs related to professional mistakes or negligence.
Renewed Determination
Despite the setback, Sara’s resilience and the support from her community helped her navigate the crisis. She established new partnerships and continued her mission to promote healthier beverages and support tea farmers. Sarilla’s ongoing success highlights the importance of perseverance and adaptability. The new production runs have been successful, and Sarilla continues to expand its offerings.
Sara Delaney’s journey with Sarilla is a powerful example of resilience in the beverage industry. Her story underscores the importance of perseverance, community support, and learning from challenges. For emerging CPG founders, Sara’s experience offers valuable insights into navigating setbacks and building a sustainable, mission-driven brand.
SPONSOR: I wrote this in partnership with SecureCPG a modern insurance agency that works with emerging brands to get the best coverage at the most affordable price. They work with founders on general liability, workers comp, product recall, cyber liability, and more.