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Taking coffee pods to the world from Adelaide

May 28, 2015
PODiSTA has 15 varieties of coffee, chocolate and milk flavourings

PODiSTA has 15 varieties of coffee, chocolate and milk flavourings

“Move fast and break things: unless you are breaking stuff, you are not moving fast enough.”

The quote by the Facebook co-founder Mark Zuckerberg on Toby Strong’s wall tells you quite a lot about the Adelaide entrepreneur who is turning small pods of coffee and chocolate into a big business success.

Strong has certainly been moving fast since starting his first business – a clothing label – while still in high school, working overseas for two years as a skateboard instructor and returning to South Australia in his early 20s looking for business ideas.

He found one in the opportunity to be the first company to supply Nespresso compatible coffee pods in Australia. And he’s been breaking new ground ever since with the company he co-founded, PODiSTA, becoming the first in the world to produce chocolate pods to complement its popular coffee range.

With a production line working overtime (turning out 20 million pods over the past year), the PODiSTA brand now on the Woolworths and Coles shelves nationwide, and export sales burgeoning, Strong and his team in suburban Beverley have clearly moved apace. PODiSTA’s success has been achieved in the space of two years including one year of local manufacturing.

And yet Strong gives the distinct impression that he is almost surprised to find himself, at age 32, a successful entrepreneur.

He describes “an unconventional upbringing” – a poor family, a single parent (his father) since the age of six, having dyslexia, and being very disengaged in high school. He moved out of home at 16 and decided to stay in Adelaide despite overtures from his parents to follow their separate paths to Sydney.

“I didn’t connect with anything they were teaching (at Adelaide High), didn’t enjoy it and didn’t feel the need to learn about mathematics, for example, – that’s what you have calculators for, right?” Strong tells Business Insight.

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Toby Strong

“I don’t know what it is but I‘ve always had a fascination with running a business for some reason. I’ve always liked chess strangely enough and even though I’d had no influence in my life to push me in the direction of chess, I’ve always liked the strategy, and thinking a few steps ahead and in different directions.”

So Strong and two mates started a clothing label, called Materialism, in their last year of high school. They grew the business, ultimately manufacturing their own t-shirts and selling to around 80 retail stores across Australia.

“I worked in a service station nights and weekends and then came into the Materialism office during the day. None of us drew a wage for five years but we just loved it and I learned so much from it,” Strong said.

It was while developing the clothing business between 1999 and 2004 that Strong encountered the SA Young Entrepreneurs (SAYES) program run by Business SA.

“SAYES was such an amazing program for me because I didn’t have that education and I came from a non-business background. I had the desire to run a business but I didn’t have any of the knowledge of how to do it,” he said.

“When you start a business you have so many questions and so many things you don’t know and it’s hard to find out where you can get that information. But the SAYES program managers and mentors were able to put you in touch with someone who could give you the answers.”

While he says it was hard to give up the clothing label, after five years Strong gave in to a desire to see the world and travelled through 20 countries for two years, paying his way as a skateboard instructor.

Returning to Australia, Strong worked for several companies before a friend suggested there might be an opportunity to tap the growing popularity of single pod coffee.

“We knew the big players like Vittoria were going to come into the market  soon enough so we were interested in being innovative, doing drinks and beverages that no-one else was thinking about.”

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But Strong couldn’t convince his Italian supplier of coffee to branch out into chocolate and other products.

“At that point we knew we had to have our own production line. If we want to stay ahead and we want to be innovative and have different beverages we have to do this ourselves, and we have to do it in Australia,” he said.

With an investment of around $2 million for the production line and related packaging equipment, PODiSTA is currently producing 150,000 pods per day with a double shift.

PODiSTA-#4---cropped

PODiSTA is currently producing and packaging 150,000 pods per day

With surging popularity for its 15 varieties of coffee, chocolate and milk flavourings, and after taking on contract packing for a range of other coffee brands, the company was operating 24 hours a day in the lead up to Christmas last year.

While PODiSTA sources its coffee from South America, Africa and Asia and it is roasted and blended in Sydney, Strong is committed to using local SA product and services to the maximum extent possible.

“Our first priority is to keep business in Adelaide and our second priority is to keep it in Australia,” he said.

Strong, as managing director, leads a team of 16 at PODiSTA and is now focussing on export markets.

“We really feel we have saturated the Australian market, there is not much more available once you are in Coles, Woolworths and Foodland, and we have done better than most in also being in Harvey Norman and the Good Guys,” he said.

“Last year was all about getting set up and getting the product out but starting in January this year our big focus has been on export markets.

“We are now doing well and are selling in the United States, Hong Kong, China, South Korea, Taiwan Singapore and New Zealand, and we are negotiating with potential buyers in another ten countries in South America, the Middle East and Europe.”

A second production line is planned and is pending a decision in Canberra on a grant application.

PODiSTA has made great strides in the Australian market in a little over two years and further success on the world stage does not seem far away.

Asked what advice he might give today to a young, disenchanted high school student with an interest in not much more than skate-boarding, Strong replies: “I have always felt that if you work relentlessly and hard on something you can’t really fail”.

“You can have setbacks and you are not going to win all the time but as long as you can win more often than you lose, and that will be the case if you are persistent and work hard, that’s what it really comes down to in the end,” he said.

Toby Strong and the PODiSTA team are clearly moving at the sort of speed that Mark Zuckerberg thought necessary for success.

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