Lockdown sent our business in a new direction

Black Milk Cereal quickly ramped up its ecommerce offering to cope with the sudden demand for its sweet treats in lockdown.

The business had two cafés in Manchester and London and a string of events arranged for the summer. Like so many in the catering and events industry, the arrival of coronavirus forced the business to shut down these operations overnight.

Managing director Andy Young recalled how business was booming pre-lockdown. The business started serving pancakes around Pancake Day and customers were queuing around the block.

“We went from having the busiest café we’d ever had to being scared to have anyone in. As soon as they were all closed, we deep cleaned, gave all the stock to charity and then looked at what to do next.”

Learn from past experiences

It didn’t take Andy and his partner Oliver Taylor long to work out that they had to put their energy into the newest part of their business – online sales. Although they had only been operating an ecommerce site since September, an initial flurry of sales had forced them to learn on their feet.

“We went from zero to thousands of orders overnight when we launched online last year, which was a very steep learning curve. But it was fortunate because we’d already been through that first ‘hype cycle’ where there is phenomenal demand and dealt with teething problems, so we knew how to scale quickly.”

The company’s loyal customer base didn’t desert them in lockdown either. Online sales soon quadrupled, matching the turnover they had seen at the busiest point around Christmas.

Logistically, this caused a few challenges – mostly around staffing this new model of working – but Andy’s solution of teaming up staff who already lived together was a strike of genius. 

Other aspects have been more straightforward, such as utilising empty basement space underneath the café for a warehouse to store all the extra stock.

Don’t rely on one income stream

Thanks to this huge growth in the online business, Black Milk Cereal was now serving more people overall during lockdown, despite the huge drop-off in revenue from cafés and events.

Andy believes this is partly down to their different business “layers” and cites Warren Buffett’s theory about businesses with multiple streams of income being stronger and more adaptable when a crisis hits.

If one income stream goes, you have others to channel your energies into – which is exactly what Andy and his partner did, shifting the direction of the business.

Adapting to a new business model

Now that business has returned to “normal-ish” and the cafés are back in action, the team is looking at ways to make the ecommerce side of the business more profitable.

“It’s very easy to just keep up with demand, but we have to figure out a way to do it that sustains the business and makes enough money to invest in growth. It’s difficult to sell a £4 chocolate bar, ship it and make enough money to pay the staff. So now we’re looking at how we can create a bigger and better experience that’s more viable to ship out in bulk.”

The crisis may have forced their business down a slightly different route, but it’s also allowed them to reflect on the revenue streams they want to focus on going forward.

“The next stage of growth will be a bigger warehouse and manufacturing facility. We’ve tried cafés around the country, but as a small business it’s logistically challenging. We’ve decided it’s better to focus on ecommerce and retail as our growth model.”

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