It's a classic Kiwi story of little guy made good. And after being pitted against dairy giant Fonterra over perceived product similarities, the two blokes behind brand Nice Blocks are hanging off the back end of a tiger.
What could be better than a cold treat on a hot summer’s day? How about a cold treat that’s ethically produced and made from guilt-free ingredients? How about one with a fun attitude and a zippy look and feel? And as little sugar as possible and with gourmet flavours? Would I like one? Hot diggity, I would! And how come I didn’t think of this earlier?
So run the thoughts of the many discerning fans who have stumbled upon Nice Blocks, the small but rapidly expanding local boys making good. In a way it’s miraculous that a summer-loving country like New Zealand didn’t have a widely available top-flight ice block, but as with many great ideas, it seems obvious once it’s a done deal.
While the distribution is still growing and it’s very much a boutique brand right now, many would have heard of it through a wee media flap over perceived similarities with the new Fonterra-owned Tip Top Ice Bar Co products that were said to be very similar in look and feel. But while the story of Fonterra might be out there, what of that of the little guys they were accused of pretending to be?
Ideas on ice
Tom Holden, in his late 20s, and James Crow, just past 30, are tight. Their partners are old friends and they both have kids close together in age. Like many mates, they like to hang out and tinker at projects. Unlike many mates, their tinkering that started with making a few ice blocks for fun has, in the space of a little over a year, seen them go from the first moulds arriving from eBay to a major factory in Penrose, to international interest, serious investment and them hanging very much off the back end of a tiger.
Nice Blocks started from a shared interest in owning their own thing. Holden used to work full-time in a film art department but grew up in a business-minded family, always plagued by “an underlying thing” that he wanted to start a food business.
“My father was, I guess, a forefather of organics in New Zealand, with organic stores,” Holden says. Meanwhile, Crow is the old hand at entrepreneurship. He has two skin balm businesses, Pot of Gold and After Ink, which have seen him grace the pages of Idealog in previous issues.
From these, Crow has learnt a lot and been struck with a taste for the life of the entrepreneur.
“There’s just something about being your own boss,” Crow muses. “It isn’t that you don’t work hard – it’s that you don’t mind working hard.”
The pair spent six months developing an organic, guilt-free beverage in 2009. We’d tell you all about it, but as with all great ideas, they’d still like to see if they could get this off the ground one day, so it’s all very secret squirrel for now.
“After about six months we worked out that we’d have to start with about a million units to make it realistic,” Holden says.
The idea felt right, but the initial outlay was just too much, so with designs, branding, recipes and connections made, they decided to park it for the time being. But as Holden observes, the point that stopped them with the drink idea is the point they are just getting to now with Nice Blocks.
Ironically, it’s the same outlay, but with this they could build up to it.
Still, they learnt that they could work together, that they enjoyed experimenting and concocting potions, and also the problem solving of setting up a business appealed.
So while the beverage fell on the backburner, in many ways it was the basis for Nice Blocks.
Nice Blocks started proper, as many businesses do, because they couldn’t find exactly what they wanted on the market. Holden got “pissed off” that grapefruit Frujus had seemingly met their maker – it was the only one he liked – and he thought, why not make his own?
“I had this grand idea – I was going to convert a ute into a freezer ute and go out to Piha and sell ice creams out of the back of the truck.”
Holden outlined the idea to Crow, who was instantly keen.
“James walked out the door and he turned around and goes why don’t we call it Nice Blocks and that was it. Just like that!”
Crow’s memory differs: “Almost, that is kind of you to block this out, but first out the door I said ‘What about Peace Pops?’ Holden went ‘nah’ – so I said ‘yeah, what about Nice Blocks?’”
It really is a great name and encapsulates so much of what the guys do as a business. It isn’t fussy or pretentious or trying too hard. It’s straight up and down, friendly and open. Much like Holden and Crow. Of course, they don’t put it like that when they explain why they like it.
“We like it, sure,” Crow says. “It’s just ice blocks with an N on the front! But afterwards you think and it says so much more, maybe...”
Simple ideas are often the best. With hindsight it seems odd that a brand name gourmet and high-quality ingredient ice block was not widely available in New Zealand. Especially considering the recent explosion of artisan foods, with so many fancy, organic, ethical ice creams, sorbets, sausages, sauces, sandwiches, burgers, juices ... pretty much you-name-its.
Embarrassingly, it turns out that New Zealand is actually just a little late to that particular party. The pair discovered that the concept is huge, particularly in hot countries. And not just high-quality – in a bit of online scouting, they found that in America in particular, there are many producers of seasonal, organic and ethical ice blocks. What they came across – a plethora of ideas – mattered a lot to the brand-new Nice Blocks.
While ideas are all good and well, it’s actually following through and doing the work that separates mere ideas from success.
And Crow and Holden have been putting in a lot of work in the short time since November 2009, when they made and gave out their first Nice Block.
First stop eBay
They started with their first ice block moulds, purchased off eBay. Working at night in a café kitchen and then selling ice blocks on weekends, it meant a lot of late nights. And while they were in a way living their dream, they were also not able to get the Nice Blocks idea as far as they would’ve liked.
From their work looking into the beverage concept, they had a pretty good idea what they were missing at this point: cash.
There’s a saying that Holden and Crow now tell from experience: “If you want money, ask for advice. If you want advice ask for money.” Holden was in contact with a mentor who had helped with advice and knew a thing or two about taking a business like this to the next level. Might he also help with money?
“Chris was an old family friend and I knew he was astute in what he did. I’d be bumping into him at the supermarket on a Sunday afternoon, or I’d fire questions off to him – originally with the drink first and then on the ice blocks.”
Chris is Chris Morrison, otherwise known as the founder of Phoenix Organics and a pioneer in ethical, sustainable, organic and fair trade business. A handy family friend to have, indeed.
After growing Phoenix over 20 years leading to a successful sale to Charlie’s, Chris has gone on to support like-minded enterprises by being a passionate advocate, by helping lead the Sustainable Business Network and also by backing certain projects.
With All Good Organics he brings in fair trade bananas to New Zealand. He’s also on board with fair trade organic coffee Kokako.
And with Nice Blocks, he saw another opportunity to spread a product that could be a superior alternative to an incumbent and also fly a flag for a range of sustainable and ethical business practices.
“I think that consumers are becoming more empowered and are interested in what goes into their bodies,” Morrison says. “They’re reading labels, demanding companies support local growers, they want less chemicals in their bodies. This is not a phase that will come and go. It has happened in the US and Europe already and it is an evolution here to stay.”
It wasn’t just the idea but the values and character of Holden and Crow that got him involved in the first place.
“They are enthusiastic, ethical, not just in it to make money. I’m convinced that the secret to success is to be very passionate about your business. To have passion and belief in what you are doing.”
Morrison came on with a second partner who works in the production side of the food business, who doesn’t want to be a face of the business. They took nearly a half stake. But it wasn’t just money they brought to the table, but also business smarts.
“Between the two of them we gained so much more than investment,” Crow says. “We got intellectual investment from them. Knowing what we know now, it wouldn’t have helped us to have just money.”
To really make it, you’ve got to hit certain economies of scale, and the enterprise found itself with a whole new scale with Morrison on board. He helped them get there, organising finance, making introductions and connections.
“I didn’t always have that help,” Morrison says of his own experiences. “We built up Phoenix over 20 years and those first years were pretty difficult.
"We made a lot of mistakes along the way, and if you can avoid those, you can accelerate your business into a more positive place.”
The effects of the bigger vision for Nice Blocks were immediate.
“He asked, ‘What do you plan to do this summer?’, and straight away he was saying we had to make our plan bigger,” Holden says. “‘You want 20 retailers? Make it 40. Go to Wellington. Get two carts’.”
It was a sort of avuncular relationship.
“At the same time, though, he helps get us there and then lets us get on with it ourselves,” Crow says. “He’s like that dad who takes you to a party when you were younger and says, ‘Don’t drink too much’.”
By following that advice, they’re now much further along. Nice Blocks now has a distributor in Wellington and 30 accounts and counting in Auckland.
They also worked out that some of their favourite features, such as an ever-changing array of flavours, couldn’t make the transition to a larger model, and that sometimes going for 100 percent certified organic versus non- certified organic and local made less sense than going for what is best for the product. Not only is consistency something required for labelling, it also has its advantages.
“You want to be able to bring your friends back to the store and go ‘try this’ and have it be the same as last time,” says Holden, who’s a fan of making new flavours – an impossible model, says Crow.
“You never make it past the local farmers’ market – which is fine, but we would like lots of people to be able to have a Nice Block, as well as a farmers’ market.”
Last year was a testing ground, says Holden, though they didn’t see it at the time.
“We’ve taken those most popular flavours and transferred them into our current stock. And along the way, we’ve worked out that sometimes it made sense when needing a larger supply to move from full fair trade to using what is actually best.”
Oranges are a good example. They discovered that to get certified organic, they’d need to get oranges sent from Canada. Instead they opted for spray-free non-certified organic fruit from Gisborne, which is much better for a New Zealand-made ice block, even if they couldn’t have the ‘certified’ sticker.
“That was hard as well, but it’s still about the best decisions and we are happy to have that conversation, and we’re proud to say that we have managed to make the first fair trade certified ice blocks in the world.”
The importance of hitting scale means more to Chris Morrison than just a profit, though that, one day, would be nice too. “I firmly believe that one doesn’t have to be a small company to be a good company. If you stay true to your values and operate in an ethical manner you can still operate profitably, and do right by everyone in the chain.
“In fact, it’s important. You don’t want to become elitist. We want to make organic and fair trade food available to everyone. The norm, rather than the fringe.”
The move to bigger thinking meant that production had to move from the back of local Point Chevalier café Little Hero and into their own space, and they had to go from making everything manually to thinking about getting some kind of machine on board. That’s where the new investment and vision came into play.
“We looked at a machine that was the size of a BBQ that freezes the ice blocks much faster but would still mean pulling the ice blocks in and out manually, as our move to bigger production,” Holden recalls. “Our partners came back and said ‘what about this machine that makes 4,000 an hour?’”
They all laughed, says Crow. And said no.
“Then thought about it and laughed again. Then ...”
One of the big difficulties in breaking into a business like this is the cost of investment. An automated machine like the one they wanted might cost $250,000. And that’s if you can find someone to sell it to you. The big producers tend not to sell their old machines to likely competitors. In fact, one of the reasons Nice Blocks got hold of their machine, one that wasn’t strictly for sale to a local outfit, is that they originally were going to set up their factory with a partner in Samoa. Samoa?
“Yes, Samoa!” says Crow. “That’s where a lot of our coconut ingredients come from. We could help create jobs and have great partners there. But in the end it just became too much to try all at once.”
A half-century-old rust bucket, the machine had been stored out back of a factory for years in a rained-through container. It was 40 feet long, hardly hanging together and emphatically not in any kind of working order. But taking the long view, they could see how, before too long, they will hopefully need to be able to do many thousand an hour, and be fully automated.
They went for it. Fixing it up part by part, panel by panel, restoring and improvising DIY solutions to expensive problems.
Luck played a part. An engineer who was helping them clean the rusty parts just happened to know how to rewire the beast. Another friend was able to save them many thousands by building new bits.
“Luck has played a part in so many things,” Holden says.
There is a Woody Allen expression: “The harder I work, the luckier I get.” It holds true here for Nice Blocks. ‘Luck’ might be not investing in a factory that seemed perfect but might have held them back months, or finding their current factory – where, as an ex-catering facility, it came with everything right down to stainless steel kitchen, refrigeration and dishwashers ready to go. Or even the helpers who have been the right person for the right job at so many points. As cheesy as it may sound, it does seem that, if you keep pushing and approach the world with the right attitude, you’ll have that luck and find a way through.
In many ways, that salvaged piece of kit is emblematic of how they operate. They’ve recycled and restored a piece of machinery that many would have consigned to scrap. The machine is currently sitting in quite a few parts around their Penrose factory. It’s still a wee way off hitting production, but Holden and Crow are persevering. When it does go, it’ll make them the second biggest capacity ice block manufacturer after Tip Top, they joke.
And while Tip Top might seem so big as to not be a worry to them, they’ve had one interesting brush so far. When Tip Top launched The Ice Bar Co, some in the media felt that the new product was a little too close to the Nice Blocks approach.
And although it was made by one of the New Zealand’s biggest companies, it purported to come from just a bunch of people who wanted to make ice blocks. As a line in The Ice Bar Co website’s ‘About’ section has it: “The ‘Co’ in ‘THE ICEBAR CO’ stands for ‘Collective’. We’re just a group of people who collectively thought that it was about time ice blocks grew up. Simple as that.”
Not quite that simple. It is, in fact, made by a collective. It’s owned by Tip Top and therefore, in turn, part of Fonterra, one of the biggest co-ops in the world. Not quite the small, artisanal approach they are portraying. In fact, you had to look pretty hard on the website to work out that it isn’t a hip little company but the biggest big guys in the market. It isn’t mentioned in their ‘Our Story’ page, although they did mention their ice block chef by name.
Some looked at the brand look and feel and small-guy approach and questioned if the big guy wasn’t pretending to be the little guy and whether this was really cricket.
Although the lads took it in their stride, some excitable social media commentary (from excitable types like your author) and a mention in Sideswipe, comment from Paul Little in the Herald on Sunday and a story on the TV One early morning AMP Business show followed.
A Tip Top executive said that they didn’t even know Nice Blocks existed when they came up with their original idea. And it’s true that Tip Top could have come to the same point of wanting to present the face of a company that was small, where the staff could be listed by name, where gourmet and interesting flavours could shine. Thing is, Holden and Crow are actually that company, while the Ice Bar Co are pretending.
But such posturing doesn’t really worry Holden, Crow or their backers.
Morrison, for one, is not concerned.
“Though I do maybe find it a bit cynical,” he admits. “People talk about greenwashing. Perhaps they have their marketing departments, and the research says that consumers like the idea of a small group of people making it up in their kitchen using fresh ingredients, so they moulded that story into their marketing. But consumers are smart and with social media brands and companies are found out if they are not authentic.”
The stumbling block
Authentic or otherwise, it isn’t just on marketing that products live or die. A great product and the kind of marketing big guys might independently and more expensively arrive at are only two parts of the formula. The third is getting that product out there. And that is where the might of the established distribution network of the big guys will prove to be something small guys can only dream of.
To get a foothold they have to build their way there. Literally. When Idealog first visited their factory, we found Crow wearing safety goggles and wielding a grinder, busy wrapping one of their new sales carts in aluminium, it being destined for their new distributor in Wellington and the board walk of Oriental parade. The lobby of their factory had standing freezers in a row, their long-legged metal frames giving them a gangly look. There are parts and tools everywhere. Freezers sit around in stages of customisation.
In many ways those appliances are their vital staff members – out there selling the ice blocks in the cafes and dairies they’re managing to get into. Because with frozen goods, unlike many other businesses, it’s not enough to sell your product to a retailer – you also have to give them a way to keep it cold. The space in stores is owned by the big players, and unlike shelves, a dairy owner can’t chose to put a competitor alongside other brands.
Having to get fridges into pretty much most of the retailers is a big barrier to entry – and perhaps one reason the people who approach Nice Blocks at events to tell them they’ve thought of doing this idea for years haven’t managed to get it off the ground. But while the path to distribution is one dairy at a time, one café at a time, and perhaps a fridge per go, Holden and Crow aren’t complaining. They’re enjoying the challenge, which – although often hard on family time as they work every day, evening and weekend they can take – is very rewarding.
You can see the excitement through their Facebook page where every success and new stockist, every new bit of kit is chronicled. The fun and satisfaction of the big adventure they are on is palpable.
Nice Blocks has come a long way in only a little more than a year, a year in which they’ve picked up investors, debts, accounts, interest, a big warehouse and all kinds of things learnt along the way. It’s very much a tiger by the tail, and one that is not about to settle down any time soon.
“My brother-in-law said, ‘If you do a product and you hit it, it will be a tiger by the tail’,” Crow says. “But there are a few rounds of that. We are maybe just done being dragged through the first one ...”