SIX YEARS 6/3/2021

Quick things:

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  • We’re open for pre-orders/curbside pickup AND in-person shopping. Click here for more info, or here to start shopping!
  • New & noteworthy: STRAWBERRIES. Mini broccoli. A nice lamb restock. Rhubarb plants.* Beautiful bouquets. Cream of Asparagus and Chicken Noodle soups. Lasagna. The June issue of TheBurg.
  • ICYMI: We have our own in-house bread fresh every day (Tuesday thru Sunday, that is) — that’s baguettes, Plain Jane sandwich bread, white sourdough boules, and multigrain Sweet Hearty. (All varieties available fresh until sold out, almost always available frozen. All made exclusively with Small Valley Milling’s certified organic flours and grains.)
  • This week’s fresh McGrath’s Bakehouse breads: Cinnamon Raisin, Cheesy Peppercorn, and Nutty Irishman (plus the standard Original, Sesame, and Irish Oatmeal). Next round arrives 3pm-ish on Friday.
  • Please note — due to inventory controls to prevent overselling, many items will show out of stock on the website even if we have them in store. (This is especially true this week as I’m way behind on inventory load-ins.)
  • Masks continue to be required.

 

*Several of you have asked me about rhubarb plants, so we got a few. They’re $12.92 each, and decent size but not huge. If you’d like us to save you one, just drop me a line.

 

The stand as it looked our very first weekend.

Whew.

It’s a word (or a sound) that can be used to express exhaustion, or relief, or both. I’m feeling both.

SIX YEARS, folks.

Our technical anniversary of the launch of Radish & Rye is May 28th, but because this often coincides with Memorial Day, and because in the Market days odds were better than even that we wouldn’t be open on the actual day, our tradition is to celebrate the weekend after Memorial Day. And here we are!

We’ve decided not to have much of a public celebration this year.  We’re not quite ready to host anything unmasked (it’s hard to drink champagne through a mask), and we’re not quite mentally ready to figure out anything else. Maybe we’ll have a belated party in a couple of months.

For me, the other anniversary tradition is a “state of the business” newsletter, which, in reviewing the last couple years’ writings, has often focused on our dreams and plans for opening a standalone store. And here we are!

The impetus behind, and inspiration for, the very first “state of the business” anniversary newsletter, five years ago now, was an attempt to answer the recurring questions Is this going okay for you? and How is the stand doing?. 

At the time, and for the (almost) four following years, things were chugging along very nicely, always at a rate of growth that felt just barely manageable — a wonderful problem to have — and for three of those years we were spending our “free time” working towards getting this store open. That project, for those of you who haven’t been around the whole time, involved purchasing the building (with help from our families, the seller, and our wonderful bankers at FNB), applying for and navigating a USDA grant under the Local Food Promotion Program, navigating building code requirements, and ultimately (counter to our original plans) gutting and rebuilding the space the store occupies now. We were soooo cloooose that as of early March 2020 I thought we were just a couple of months away. And then…well, you know the rest.

We were just babies.

But now, here we are! And now, I’m hearing a lot of those questions again. You guys doing okay? and How’s business? or Is this working out?

The answers to those questions — like the business itself — remain fundamentally unchanged from five years ago. We are doing okay; business is pretty good; and at least so far it seems like it’s working out! I maybe have slightly less confidence that everything’s totally great than I did five years ago, but I think my perspective has more to do with experience than actual circumstance or reality. And while the fundamentals have remained the same, other things have changed, dramatically.

I’m not just talking about a global pandemic.

Five years ago, at our first anniversary, we had yet to hire our first employee. It was just Dusty and me, working the stand together (or sometimes one of us alone), there every hour the market was open (and then some), hoping we’d be able to do well enough to financially sustain ourselves. We had the safety net of a paid-off tax-sale house, good health, and access to the best food we could want. We didn’t need a lot to survive, really just enough to pay property taxes, utilities, health insurance, and the occasional meal out. Five years ago, at our first anniversary, we had just hit a point where the stand could provide that, and both of us had cut way back on the outside paid work we were doing.

And now, as of our sixth anniversary, it’s Dusty and me, plus six or seven additional people, and Dusty and I are both working 70-80+ hour weeks (84 is our estimate for this week, but it’s not always that bad). Sorry I didn’t get a newsletter out last week. 🙃 Anyway, in case you’re curious, I think “fully staffed” at this point puts us at approximately 400 person hours per week, or 10 FTEs.

This means, of course, that a lot more of my time is spent on paperwork and payroll and training than I could have imagined back when it was just Dusty and me, but what it really means to me is that there is a lot more pressure to make sure the business is strong enough to pay all these people! Thankfully, the USDA grant we received is subsidizing wages through this first patch, and the PPP money we received during the pandemic helped enormously in bridging the remaining gap during the period when revenue was way down but labor costs were still way up. Order fulfillment is much more labor intensive than our normal operations, and by winter, orders were significantly down from where they were when we decided to move to six days/week.

We made it through (there’s that whew), but there were a few weeks when we had to beg patience from our farmers and suppliers (we didn’t have to beg at all — they were all very understanding) while we waited for PPP disbursements and grant reimbursements, and by the end I was too scared to even try to calculate how long we could keep going as we were. I know we would have had additional help available to us if we’d needed it, but from my perspective, our re-opening came just in the nick of time.

Since re-opening, I’m happy to say, revenue has recovered. Five years ago we’d just doubled the weekly revenue the stand was seeing (vs what the business was doing under the previous owners at the time we took over in 2015). Looking at 12-week moving averages, our weekly revenue as of February 29, 2020 was almost exactly double what it was in June 2016 (or quadruple where we were when we started).

Since fully re-opening for in-person shopping the first week of March 2021, we have met or exceeded our pre-pandemic sales every week, and our current 12-week average is 14% higher than our pre-pandemic average.

Of course, we’ve increased by something like 100% the number of hours we’re open each week, and, as you might imagine, our labor costs have more than doubled as well. While we’re not quite where we need to be for long-term sustainability, between the four months we have left of subsidized wages thanks to the grant and the growth trends we’re seeing since re-opening, I’m feeling cautiously optimistic.

At the same time that we’re thinking about financial sustainability for the business, we’re also turning our attention to financial sustainability and security for our staff. At the market we were only open three days a week, and most of our staff worked 25-30 hour weeks (three days plus half a prep day). We weren’t really offering a job that could be the entirety of someone’s living wage no matter what the hourly rate was, or a career with much room for growth. Now that we’re open six days a week, we have an opportunity to change that.

The team in late 2017/early 2018.

Getting to where we are now has been our major focus for the past four years. (Well, that and getting through the pandemic!) Our focus for the next phase of the business will be securing what we have, for ourselves and our people, and, perhaps less directly, for the farmers and producers who are the beneficiaries of 66ish% of our revenue, and you, as shoppers, who I hear like having us around. 🙂

We’re working on re-building our training program to reflect changes from the market days and to provide clear opportunities for growth, and we’re working on revamping our compensation structure to better tie in to demonstrated accomplishments by our staff. We’re looking for a path to a guaranteed $15/hour minimum wage for all full-time (32 hours/week or more) employees who’ve demonstrated proficiency across core functions and been here for a year. We hope eventually to have a number of folks making more than that.

I don’t like it when businesses try to pull guilt trips on me, or claim that they’re helpless victims to market forces. But I do want to ask for your help in this next phase.

The way we get to financial sustainability and increased wages is through higher revenue. The significant majority of dollars that pass through our hands are going directly to farmers, small producers, and farmer co-operatives, and what’s left covers our overhead, investments in the business, and, most of all (as a percentage of the remaining dollars), staff wages.

Overhead — cost of occupancy, business insurance, etc — is pretty fixed. Though, I’m, um, pretty far behind on thorough bookkeeping, I’m pretty sure that at our current level of business we’ll be able to cover overhead even after the grant period ends in September, assuming the landlords (um, Dusty and me) are willing to continue waiving the rent as long as it’s necessary.

We’ve also made most of the major investments we’re likely to make in the near future, though we never stop dreaming. We may have some additional funds we have to spend on equipment due to some details of the grant, but we’re not, like, on the verge of doing anything crazy like opening a new store.

At some point an increase in business has to mean an increase in labor (ie, hiring more people), but there’s also a bare minimum number of staff we need to provide coverage for all the hours of open, and we’re operating pretty close to that minimum. And — for the first time in Radish & Rye history — we feel like we have the capacity to do more with what we already have. (For what it’s worth, THAT is an incredible feeling after spending six years feeling like we’re always scrambling to keep up.)

Anyway — I tell you all this to say that because COGS (that’s Cost of Goods Sold, or what we’re paying for the stuff on our shelves) is a fairly fixed percentage of revenue, and because our overhead is pretty fixed and because we’re not trying to fund any upcoming additional major projects, we anticipate that we’ll be able to devote a significant percentage of any increase in sales from where we are now to staff pay.

What we left behind.

So what can you do? If you’ve bothered to read this far, you’re probably already shopping with us — thank you — so the next best thing is to tell your friends! We’ve seen that our average transaction size has gone way up from the market days — by 50% or more — but the number of transactions we do in a given week is significantly down, from an average of 760ish/week at the market to 570ish/week now. We believe this is in small part because not everyone has figured out where to find us (here we are!), but mostly because we’re missing the casual foot traffic through the market (these casual visits would likely be smaller dollar transactions, too, so their absence is part of what’s driving up our average transaction size).

If we can recover about half of those missing transactions at a transaction size about halfway between our market average and our current average, it’ll get us (I think) 98% of the way to being able to implement our plan.

A hundred people a week feels like kind of a lot, but in our first year at the market the number of transactions we saw in an average week increased by TWO hundred, so I think we can do it. But can we do it in the next few months, hopefully getting there by the time the grant period and subsidized wages ends?

On our end, we’re spending money on advertising for the first time in our history (also subsidized by the grant — it’s through the Agricultural Marketing Services arm of USDA, after all), and trying really hard to provide a good experience for everyone who decides to take the plunge and walk through the doors. Most weeks, we’re managing to write a newsletter. 🙂

Word of mouth, though, is the most effective advertising there is, by kind of a long shot. Insta influencers aside, it’s also hard to buy, with or without a marketing grant.

So — in lieu of serving you free champagne this Friday, we instead invite you to help celebrate our sixth anniversary by talking us up to all your friends. Share your favorite R&R treat with them, or just raise a glass to us at your next happy hour (virtual or otherwise). Our staff will thank you. 🙂

And in the meantime, you know I can’t end without an expression of gratitude myself — thank you, from the bottom of my heart, with every fiber of my being, for getting us to where we are today. This past year has been, um, a little brutal, but your support, your smiling faces through the car windows, the emails and phone calls, the tips for our staff which really did significantly raise their pay during the worst of it and when we could least afford to — these are the things that kept us going. And, of course, our faith that we would make it through to the other side (here we are!), and that, despite the delays, we would be able to get to where we need to be by the time the grant ends.

These days, I’m pretty exhausted, pretty grateful that our recent round of hiring has yielded strong additions to our staff, and looking forward to those new additions being fully trained so Dusty and I can cut back to maybe 60 hour weeks. But beyond that — these days, it’s your faces in the store, your kind words, your stories about the delicious dinner you made with R&R ingredients, your excitement about strawberries, your incredible support — these are the things that keep me going.

Thank you. Thank you. Thank you.

With much love,

Julia

P.S. Though we’re not having a public celebration, this “weekend” Dusty and I are heading to DC for a quick excursion for our own celebration of his birthday (back in May), the stand’s anniversary, our upcoming wedding anniversary (later in June), and my birthday (in July). We’re going to sample all the baguettes and croissants we can find, eat at fancy restaurants, hang out with my aunt and uncle, walk around as much as we can stand in the forecasted 95 degree weather, and take a looooong nap. We’re pretty stoked to have a team — even with two brand newbies! — that can get going on Tuesday without us, and all we have to do is be back in time for closing. Whew.