Losing a key customer would send most entrepreneurs into a panic. Instead, the Bermeo brothers turned it to their advantage in launching their own healthy snack business.
Sometimes the best business ideas come as the result of a setback. Ecuadorian entrepreneurs David and Raul Bermeo watched in horror as their father's dried vegetable business collapsed in 2005 after the global giant Nestl, his biggest client, halved its order. Scrambling to find a way to survive, they decided to found TerraFertil ("good land') with two friends, with the goal of becoming the leading dried fruit exporters in the world. Fittingly, their first piece of capital investment was their father's idle driers.
Within three years they had generated enough business to open a factory in neighbouring Colombia in order to improve supply of their main raw material. This factory now supplies half of the raw fruit that they use. Despite this initial success, they realised that they needed to differentiate themselves from their competition. As their brother Daniel (now 32), who quit his job with HSBC to join them in 2010, points out, "moving fruit around the world is a business with low barriers to entry and consequently poor margins".
The trio therefore decided to branch out and started selling their own branded products. After looking at the data, they decided to focus on Mexico. Mexico is home to more than 120 million people and is one of the largest and fastest-growing markets in Latin America, second only to Brazil in terms of GDP. To underline the healthy nature of their range, which includes almond milk and coconut water, they adopted "Nature's Heart" as their brand name.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
They then saw that one of their products, goldenberries, had the potential to become a flagship item that might transform the company's fortunes in the way cranberry juice had for agricultural co-operative Ocean Spray. To make the drink which is high in potassium and other nutrients more appealing, they invested $5m in machines that would infuse the juice with other flavours, such as pineapple.
Their success in the UK has provided them with a springboard to reach markets around the world. At the moment you can find TerraFertilproducts in more than 30 countries, including Japan, Korea and China. Despite their current turnover of $50m, they are still hungry for more success.Success brings its own problems, however: the bigger their sales, the more closely they have to manage demand a task that is complicated by the fact that it typically takes six months to harvest fruit. As Daniel puts it, "you can't really go to Waitrose and tell them that you're sorry but you haven't got any fruit".
The answer, and the secret to being a successful entrepreneur, boils down tohard work. Of course, a killer ideaand adequate funds are also vital for success. However, he believes that,even if your idea isn't the best, or you don't have enough money to get it offthe ground, the fact remains that "with hard work you can find a way aroundany problems".
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Warning as Brits face €6,900 fine if they fail to follow new Spanish travel insurance rule
Rachel Reeves to announce permanent 95% mortgage guarantee scheme
