Case Study

mySmoothie: The Swedish fruit invasion (Abridged)

18 pages
September 2007
Reference: IMD-3-1871

May 2007. Domenique could not help but marvel at the unbelievable plain sailing since she launched her smoothie company in late 2004. From the haphazard debuts in her own kitchen, mySmoothie was now distributed in more than 27 countries through a broad spectrum of customers. Its revenues passed €1 million in 2006 with sales in the first half of 2007 indicating they could hit €10 million for the whole year – a 10-fold increase over the previous year – and projections indicated an annual growth rate of some 200% for the next three years. Hypergrowth though was seriously starting to challenge the system. First, despite their continuous efforts, short-term working capital needs remained very high. It took weeks to collect on sales and the company still had to pre-finance production. Domenique would have to contemplate a fresh round of financing to fuel the explosive growth. Second, it was time to build a professional team to handle all operational aspects and to systematize some of its processes. Third, manufacturing was quickly becoming a bottleneck. Finally, due to the company’s insistence on using as much local produce as possible, locally picked fruits, in particular wild forest berries, were reaching their natural limits. The company was facing its “winner’s curse”: the future looked bright and sweet, and it could very well become the leading producer of long shelf life pure fruit blends. That is, if it could address a number of pressing strategic questions. The gap between wild success and catastrophic failure never seemed so narrow…

Learning Objective

The case documents the inception and early development of a smoothie drink company over three years – from late 2003 when the concept was hatched – to April 2007, when the founders suddenly realized they were on track to realize sales 500% higher than anticipated for 2007 (close to €10 million). This unleashed a chain of major strategic discussions and adjustments in the company. The case was designed and written to address in an integrative manner issues common to most fast-growing start-up companies, as well as specific ones in the FMCG world.

Keywords
Fast-moving Consumer Goods, Growth Management, Growth Finance, Management Team, Foodstuff
Settings
Global
2004-2007
Type
Field Research
Copyright
© 2007
Available Languages
English
Related material
Teaching note, Video
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