 Welcome to Adventures in Small Business, a series covering the stories of local entrepreneurs and small businesses that contribute to their success here in Hawaii. A collaborative effort by the U.S. Small Business Administration, the Hawaii Business Development Center, the Patsy Mink Center, and the Veterans Business Outreach Center of the Pacific. I'm Sandra Cancino's Public Affairs for the Hawaii District Office of SBA. We're celebrating Small Business Week, and in honor of that, we have asked one of our young Entrepreneur of the Year awardees to join us to talk to the story. Zach Berry is co-founder of Banan. Zach, thank you so much for joining us. Thanks for having me, Sandra. So it's been four years since Banan has came about and has expended all the way to Japan. Can you tell me a little bit about how Banan came about? Yeah, so Banan was started by four friends from high school, myself, Matt Hong, Luke Unterman, and Galen McLeary. We all went to high school together here at Puneho, and after going off to different universities all over the country. We started talking when it was senior year and really just had this spirit of entrepreneurship. We didn't know exactly what we wanted to do, but we wanted to do something, and we wanted to do it together. So really, we just started talking in the middle of senior year. We had all these very grand ideas, not even in the food space. In tech, we were talking about a crowdfunding platform for nonprofit, and a lot of things that were way above our skill level at the time. And Banan actually started as a joke around the dinner table. As we were working on these other ideas in Santa Cruz, one of Galen's cousins, her friend was making this recipe at home. It was delicious, and we tried it, and immediately with the simplicity of the product. So it became this ongoing joke around the dinner table, like, oh, this other idea doesn't work out. It became the Jamba juice of banana ice cream. And when things started going south with the other idea, we started doing a bit more research and found out that Hawaii is the only state that commercially grows and sells bananas in the whole United States. And that's when I really started heading home for us. The idea had a bit more depth to it than just some silly products. We could come home, do business in the local community, be supporting local agriculture, and really just have a tangible product that we could start on right away. So as you know, the research that I've done, it's a non-dairy product. So what was the inspiration or reason behind the Nana non-dairy product for your brand? Yeah, you know, it wasn't a choice, this or that. We just stumbled upon this product that was actually pretty classically famous in the vegan world. None of us are vegans, but it's one of the ways vegans make ice cream. The natural viscosity of bananas is just really smooth and creamy. Bananas are naturally kind of bland, so it provides this really nice base to then create flavors off of. And I have to say our passion after three years has grown for being part of this kind of plant-based food movement. It's a really exciting time to be in food, and we find that a lot of the workers we attract are also very passionate about plant-based food. Last week, huge news came out that this plant-based meat company Beyond Meat had one of the biggest IPOs since 2000. It went public, came out at like 25 and closed at like 68, which for us it's a huge signal that people are starting to pay attention to what they eat and wanting to make changes. So we're really excited to be part of the movement and stoked on our timing. So it sounds like you're very conscious of what you're putting your product and being a source of locally grown farms and food. So what inspired the table to form model that you use for your company? Yeah, well one was the main ingredient, which is bananas. We source currently about 6,000 pounds of bananas a week to supply our four retail locations on Oahu. And for us, growing up in Hawaii, you're ultra-conscious that 80% of our food is being imported and the food miles are just ridiculous. Like how far that food travels before it gets to Hawaii. So for us, we had this product fit that's almost just like the perfect model for trying to do things as local as possible. So our bananas are sourced from sugarland farms on Oahu. We source a lot of our toppings locally, pineapple from Maui, macadamia nuts from the Big Island. We do some dried bananas from Moloka E as well as sourced from a lot of other small farms on the island out of Waimanalo. We work with Yogarden, Isaac's farm and source turmeric from there. So yeah, it's been a really fun exploration for us into agriculture and food that's available. So besides using local ingredients and local farms to produce your product, you rely heavily on being conscious about sustainability for your company and for the islands. So how do you incorporate that into after the use of all the products that you've done? And I read there that you use the banana peels to feed things at other farms. Yeah, you can imagine if we're peeling 6,000 pounds of bananas, we're left with a lot of banana peels, a lot of food waste. And my co-founder, Matt, he's not here today, but he coined this term early on in business, table to farm, so on the flip side of farm to table, it's also just as important to think about where that food waste is going to. And for us, there's a couple of different ways we deal with that. The majority of our fruit waste is picked up by pig farmers. We use it to feed their pigs. And then other portions of it are used by small farmers who are composting that food waste, bringing it back into nutrient-rich soil and are able to grow even more food with it. And yeah, it's been cool, even since starting business four years ago, to see all the other businesses who are also doing similar things. So going back to expanding to Japan, how did that come about? What made you go to Japan and are using the same models out there? Yeah, so I mean, living in Hawaii, obviously, there's just that very strong connection Japanese people love here. There are a lot of our tourists are Japanese. And our first location we started out on on Montserrat Ave, a food truck at the base of Diamond Head would attract a lot of hikers coming down. And then our third location in Waikiki, we also have a ton of Japanese tourists. So the momentum started to build over time. We attracted a lot of different Japanese magazines and even a couple of famous Japanese celebrities who aided our spot. And last summer, we were invited to do a fair called the Honkyu Festival. It happens in July in Japan, about 50 brands from Hawaii are brought up and able to showcase their products for just a week. So yeah, we gave it a shot, went up there, probably had the best week of sales we've had in an entire life for our business. And while we're up there, the partners that helped us with the food operations got talking to us and they were very interested in helping us bring the concept over there. And immediately there was this connection. And they were also young, looking to do something fun and innovative and kind of changed the way Japanese people think. So things clicked and we ended up opening the store just a month and a half later in Yokohama. And this past year we went up again and opened up a second store in Osaka. But just like Hawaii, as we're expanding abroad, that idea of using produce that's as local as possible is still incredibly important to us. And in Japan, unfortunately, there weren't enough bananas that we could source in Okinawa in the south. So me, myself, Luke and another employee, adventured out before the store opened to the Philippines and met with this co-op of 3,000 banana farmers and traveled around deep into the jungle and found this awesome source of bananas. And that's bananas that are being used in our Japan stores. Awesome. So tell me a little bit how you came up with the recipes and what type of flavors do you have at your location? Yeah, so the original banana flavor, it really is just made out of bananas, incredibly simple. And off of that, we kind of have a theme of using fresh and wholesome ingredients. So we'll have Asai, Lily Koi. One of our first favorite flavors was the greens flavor. It was like a ginger, mint, kale and spirulina. More of a healthy flavor. We have a turmeric and olena flavor. And then in the past year or two, we've also ventured into some more deserty, fun flavors. So one of our more popular ones is a chocolate macadamia nut banana flavor and then as well, peanut butter. But yeah, that's one of the fun parts about our job is just experimenting and creating new recipes. That's awesome. So being young entrepreneurs and just starting fresh here in the islands, what were some of the challenges that you had opening up your business and how did you go about it? Where did you seek any information or any assistance in trying to put out what you had envisioned in your company? Yeah, we certainly jumped into this business right out of graduating. We were just four months out of graduating college and certainly didn't have any business experience. And I can remember it being tough to even communicate with suppliers and have them trust us just because of our age as we were trying to set up our supply chain and source ingredients from around the island. Yeah, they were a bit hesitant in the beginning just because we didn't have any credibility yet. And the resources that were available, both Luke and myself grew up in small business families. So Luke's mom and dad started Pictures Plus, which is now Plus Interiors. So they've been incredible mentors to us and my parents have been in the bead business. They own bead it for the past 20, 27 years with a few different retail locations all around the island. So we both grew up in a small business family and definitely knew what it took. Those were a lot of the discussions around the dinner table. And besides that, yeah, we've been pretty good about just reaching out into the community and learning from people. I think that's one of the advantages of going into business as a young entrepreneur is that people are incredibly willing to offer their advice and help. Okay, so during the startup portion of your company, any challenges for any licenses that you needed, anything that you thought you didn't need, ended up having to have any barriers or things of that nature for food track or for location in the mall or for having to talk to UH for the location up in university. Any challenges in that? Yeah, so I mean, although we came back with a product that we loved, when we got back to Hawaii in August 2014, we didn't have a super clear direction of the vehicle that our business would take. We weren't sure if we were going to hop into a farmer's market, head straight into a brick and mortar store, do a food truck. And the food truck actually just popped up spontaneously on Craigslist and we went out and checked it out one day in Waipahu. And it was a pretty memorable story. It was the four of us drove out there with this family friend who pretty much wheels and deals cars on Craigslist for a living. So he was checking out the truck for us and it was listed for $5,000, but he was able to bargain it down to just $2,000. And he kind of holed us up and just asked like, all right, are you guys ready? And we all like took out our 500 bucks and bought this truck. It was a 1977 Love's Bakery food truck with this three foot stick shifter. And we drove it back to my parents' house and started working on it for the next month. And at that point, we still didn't even know where we were going to park it. So we didn't even have a location picked out. I ended up finding this Craigslist listing for this empty parking lot on Diamondhead that was actually for sale at the time. I just called the owner and asked if we would be able to try out our business on there and rent it for a few months. From that, yeah, one thing just led to another and we started gaining some momentum. Oh, awesome. Yeah. We'll be going to take a break and we'll be right back in one minute. Aloha and welcome to At the Crossroads. I'm your host, Keisha King. You can catch me every Wednesday. Alive at five. I'll see you there. Aloha. This is Winston Welch. I am your host of Out and About where every other week, Mondays at three, we explore a variety of topics in our city, state, nation and world and events, organizations, the people that fuel them. It's a really interesting show. We welcome you to tune in and we welcome your suggestions for shows. You got a lot of them out there and we have an awesome studio here where we can get your ideas out as well. So I look forward to you tuning in every other week where we've got some great guests and great topics. You're going to learn a lot. You're going to come away inspired like I do. So I'll see you every other week here at three o'clock on Monday afternoon. Aloha. Welcome back to Small Business on Think Tech, Hawaii. My guest, Zach Berry, has been telling us about his business, Banan, and how he's expanded and what it took for him and his co-founders to fill that business out. I just wanted to ask you, you've expanded to four different locations even up to Japan. So where do you see your company going in the future and what objectives do you have for Banan? Yeah, as we dream Banan into the future, we certainly could see it doing well in markets outside of Oahu and outside of Hawaii. A very important to us is to first investigate supply chain wherever we're going. Bananas are a huge part of our business and we want to make sure they're coming from a pretty righteous source. So if we were to go to California, one of the proto-adopted business models we've thought of is that even if the bananas can't be sourced locally and they may have to come from South America we could incorporate a lot of the different berries and other produce that California has to offer into our flavors. And likewise, anywhere we go, another exciting area of interest for us is Australia. In the Queensland region they have a lot of similar agriculture to Hawaii. So yeah, we've already taken a trip to California this year to kind of check out the landscape and also plan to head to Australia a bit later in the year to explore that. So when you branch out to these different locations, how will you be keeping up with your model of able to farm and farm today? Yeah, so our sort of adopted business model that I was talking about is that certainly we'd like the bananas to come from as close as possible but as far as flavors go, we would always like the flavors to reflect the agriculture of the locations that we're in. So in Japan we were able to work with some fun new flavors and toppings like matcha and yuzu and azuki bean. In California we're excited about the different berries that we can use in our flavors that aren't available in Hawaii and somewhere like Australia we have yet to explore what can be available there. But our idea is that if you visit Benan in different places in the world, it will be a reflection of local agriculture. So expanding and having this model of having sustainability, where do you see yourself or where do you see Benan in the local and business communities? One thing that my business partners and I have always talked about since the beginning and even wrote it into our business plan is that we'd love to be inspiration for other young people who want to do something themselves to show them that they can do it and that you can do it with friends and have fun with it and that takes such a traditional route. And yeah, I definitely have been able to talk to and mentor a lot of young people with ideas already and hope to continue doing that into the future. So you're saying you mentor young entrepreneurs and as yourself a young entrepreneur, do you take a different approach in management styles for your business or do you go with the traditional way of things? I know we're in a different generation where you see things differently from what it used to be in the past so do you incorporate that at all or do you have any strategies at all for management? Yeah, absolutely. We have this term called meaningful management and yeah, we'd love to provide a fun and memorable experience for our employees and we do that by engaging with them outside of the workplace. One thing we do is we go and visit the local farms that we first produce from such as our banana farm or we'll go out and find Manalo and Harmis Humarek as a group and then we'll also just go do fun things like one of our company traditions is makapu sunrise parties. So I'll wake up really early, brew up some tea, go surf down at the beach and do a little beach cleanup and yeah, those just become really great bonding moments and that definitely translates to the culture that you'll feel when you walk and decide and any of our stores or employees are all really tight, look at it like a family and yeah, seem to be having a lot of fun. Okay, and so going from there to management style or opening up the businesses in different locations what mistakes have you done in the beginning and what have you learned from them and what would you do differently? We probably shouldn't talk about not paying GE tax 2016, but no, I would say that one mistake early on that we made is not really thinking about putting in the right structure before starting a company and just thought oh we're just all friends and let's just all jump into this without much wise counsel on putting together a good operating agreement. Some people may have tried to tell us maybe we were just so excited to start, but certainly things in life can change. One of our business partners got another great opportunity and took off and we all still remain great friends but just having those structures in place so things are very clear cut. It's definitely something we've taken out of this first venture. So besides coming up with the concept and just working together as co-founders, have you besides your parents or small business owners any outside assistance that you've had or tried to mirror for your company at all? Yeah, one of our mentors that we always look up to in business is Yvonne Shenard of Patagonia. I might butcher it a little, but one thing he says about Patagonia is that they're here to protect the environment and they happen to sell apparel just that they're mission driven business. In Benong we kind of have an adopted one that we like to say that we're in the business of spreading good vibes and we happen to sell banana ice cream. And yeah, we certainly hope that if you visit one of our restaurants that it's not just that you're coming for the product that you're also getting a great experience, a good interaction as a customer and come out there feeling a little better than you came in. And how has Hawaii Small Business Development Center or any SBA assistance or programs have helped you in your company? Yeah, so actually just two years into business I went up to the Hawaii Business Development Center in Manoa and I was looking for some accounting help and met with Lori up there and she was a huge help in letting me partake in some free accounting hours and the counselor there actually turned out to be our accountant today, Kenyatta of my personal financial CPA so we still meet with them every quarter to make sure our numbers are in line. And then as well another program I'm really excited to be a part of and just got accepted into is the Emerging Leaders program done by Julie Purcell. I've only had my first class but I've already met a lot of really cool entrepreneurs in Hawaii who are in a variety of industries so I'm excited to see what I can learn from them. That's awesome. So as a young entrepreneur what guidance or what advice would you share with somebody who's wanting to open up their own business? Sure, definitely always feels a little cliche to say but really doing something you're passionate about does make all the difference. For us we love banan and that ice cream is great but we also see it as a really fun and mindful platform to talk about our food systems as a systemic issue about where our food comes from and how we can educate the youth a little bit more and start thinking about these issues. Another thing that's fortunate for us is working with a bunch of buddies with four friends certainly makes hard days in business a lot better so I would say having a product you're passionate about and then also working with a team that you love are huge in business. Awesome. So from beginning to now, how has banan grown? How many boys did you start with? How many do you have now and where do you envision it going from a year or two from? Yeah, so it started as just myself, Matt, Luke and Galen. We pretty much worked the truck, the food truck ourselves for the first six months of business and at the time the idea was that the food truck was just our proof of concept model but it really proved to be our classroom for business for the first year. It's where we learned how to work with each other as business partners just learned about how to streamline our operation and then also just, yeah, it was a good testing ground to see if our customers liked our product. From there we opened up to university the next year through the help of a Kickstarter program and enormous support from the community. 2017 we opened up in Waikiki and then December in Gahalamal. In 2018 that was pretty much about exploration to Japan and, yeah, this summer we're going to be opening up our fifth retail location in Kailua and we'll be growing to just over 80 employees. As well we have like an event truck this year so we can cater to weddings, different events around the island and things that will be a great marketing tool for us. Awesome, awesome. So I thank you so much for coming in and sharing your story and I've had your product at the farmers market as well so it was delicious. Thank you so much. So thank you for joining us today. Follow us on Twitter at SBA underscore Hawaii to find all the latest news about our programs and events. We have a location all around the Hawaii island so if you look up at our website as well sba.gov backslash hi you'll see where you can go and find us out. Thank you so much for watching. Have a great day.