The earthy, eight-year entrepreneurs behind Crapola, a granola maker based in Ely, Minn., plan to take production out of the house and into a larger commercial space, thanks to raising more than $38,000 in recent weeks on Kickstarter.com.
“This is the best July and our best sales month ever, and this is our best year so far,” said Brian Strom, who quit a day job years ago to start the specialty food company with his wife, Andrea. “This year, I’m hoping for $250,000 in revenue. We’ve got a couple of part-time employees, who we pay $9 or $10 an hour, and we’re paying ourselves a meager salary once in a while, just enough to get by. Andrea has a part-time job.
“We seem to grow every year. But we need to invest in the business, new equipment to increase capacity, and a larger production facility.”
Crapola, one of the smaller players in the granola wars, also is an interesting story. The No. 1 outlet for Crapola granola is Zup’s grocery in Ely. The Stroms also sell the plastic-encased product to Kowalski’s, Cub, Coborn’s and other retailers.
They bought the Ely house in 2009 and converted it to a commercial bakery. They and their kids live in a solar-powered cabin a couple of miles out of town.
The Stroms, who also plan to invest thousands of dollars of their own money in the effort, plan to lease a larger space, convert the Ely house back to a residence and rent it to cover the mortgage payment.
Brian and Andrea are conservationists who earned degrees in biology and natural resource conservation, respectively. They’re interested in healthy food and sustainable agriculture and once worked on organic farms in New England.
They settled in Ely after a vacation to the Boundary Waters Canoe Area Wilderness years ago.
The product name Crapola is a play on the intent of the oats-fruit-and-nuts concoction they make in small batches to keep customers healthy and regular.
Start-up with Minnesota roots pitches in D.C.
Austin Grandt met William Hakizimana in the summer of 2013 when they were both working as baggage handlers for Delta Air Lines in Madison, Wis. Grandt had recently graduated from the University of Minnesota with a bachelor’s degree in global studies; Hakizimana was finishing his master’s degree at the University of Wisconsin-Madison.
Just two years later, on Tuesday, they were pitching their start-up company, Export Abroad, at the first ever Demo Day at the White House.
Instead of companies pitching for funding, Demo Day entrepreneurs pitched their ideas to President Obama, among others, to demonstrate the need to help start-up entrepreneurs pursue their business dreams.
Grandt started working on Export Abroad, which identifies export markets for U.S. manufacturers, out of a Minneapolis co-working space.
The company has five employees and 110 beta customers on just $120,000 in friends-and-family financing.
Grandt now lives in Chicago and commutes to Madison, where Export Abroad is located. “There is a little bit more capital down there,” Grandt said of Chicago. “It’s a very enterprise software focused city in terms of investment.”
Peter Kane, who runs the Startup Venture Loft co-working space, hated to see Grandt leave Minnesota. “They … had true intentions of helping other start-ups here,” he said.
St. Paul Park refinery sets production record
The St. Paul Park oil refinery hit a production record in the second quarter — 99,000 barrels processed per day, the company said last week.
And the SuperAmerica retail chain owned by the same company, Northern Tier Energy of Tempe, Ariz., is having a growth spurt, too.
The former Marathon refinery has undergone a series of upgrades since new owners acquired it in 2011. After the next round of capital investment, the refinery’s capacity is expected to exceed 100,000 barrels per day in late 2016, the company says.
SuperAmerica stations, now at more than 260, are a growing outlet for the refinery’s fuel. In the past 18 months, 20 new franchise locations have been added, many on the Interstate 94 corridor near St. Cloud. Another five company-operated stores are in the pipeline. The first is under construction in Lakeville, and others are coming in Woodbury, Oakdale, Coon Rapids and Prior Lake, the company said.
Northern Tier last week reported strong earnings for the quarter ending in June, with net income more than doubling to $129 million compared with the quarter in 2014. CEO Dave Lamp told analysts the refinery benefits from lower-priced Bakken oil, delivered by pipeline rather than more costly oil trains.
“Nobody really knows what’ll happen with the drop in crude price,” he said. “But bottom line is our competitive advantage is still there.”
Northern Tier is a variable-rate master limited partnership, whose partnership units are publicly traded like stock. Earnings per unit were $1.39, compared with 62 cents a year ago.
Cambria fundraiser to help summer camp
A star-studded golf-and-music fundraiser Monday is expected to raise $500,000 for Camp Cambria, the summer camping experience for kids with juvenile arthritis as well as capital improvements at Camp Courage, the Wright County lakeside location for kids with other disabilities.
The fundraising event is being hosted by Cambria, the Le Sueur-based quartz countertop giant that sponsored the first JA camp in Minnesota last summer at the Camp Courage site under the banner of Camp Cambria.
Fundraising activities include golf at the Hazeltine National Golf Club, home of next year’s Ryder Cup, and features pro golfer Tim Herron and NHL stars Zach Parise and T.J. Oshie. An evening concert on the shore of Lake Minnetonka is being donated by the country duo Big & Rich with an opening act featuring Minnesota’s Gear Daddies.