February 2021: A nerdy business update
In previous editions of this Field Report, we’ve talked about everything from olive cultivation to pruning to milling, usually zooming in on a particular stage of the production process. For this edition, we want to take a step back and give you a picture of our business as a whole—and how it’s grown.
Why does the business matter to you as a Fat Gold customer, or someone curious about our product? Well, if you’re a customer, you know how seriously we take the task of explaining where our olives come from and how we treat them. Clear communication is a core value for us, and we think it should apply to the economics behind those olives, too.
So, here goes:
We started Fat Gold in the beginning of 2017 with an initial $30,000 contribution, split between Robin and Kathryn, drawn from our savings. That’s it; there’s been no further investment from us or anyone else. Everything has grown from that seed.
In our first harvest, autumn 2017, we produced 197 gallons of olive oil. (One of the ratios tattooed on the surface of our brains is 7.6, which is the number of 500 ml tins in a gallon of oil. Doing the math, we produced about 1,500 tins that first year.)
The next time around, in 2018, we produced 290 gallons, or about 2,200 tins.
In 2019, we produced 826 gallons, about 6,300 tins.
And just last autumn, 2020, we produced 1,850 gallons, about 14,000 tins.
As you can see, we are roughly doubling from year to year. When you are changing this much, it’s not a matter of “scaling up” existing processes, but inventing totally new ones every year—not just for making the oil but moving it, storing it, shipping it, and everything else.
Fat Gold’s financials have grown roughly in line with its production volume. Our first harvest yielded a significant loss; our second harvest, a smaller loss; our third, a small profit; and with this most recent harvest, we turned a significant profit. We expect that trend to continue.
Almost all of our profit has gone back into the business, supporting the year-to-year doubling. However, last year we began paying ourselves a small amount every quarter. It’s not much, but it feels like a stake in the ground. When our checks arrive in the mail, drawn on Fat Gold’s account, it’s our way of insisting (to ourselves, as much as anyone else) that this is a real business, aimed at sustainability.
(How do we support ourselves, if Fat Gold isn’t paying the bills? Kathryn does all sorts of things in food and agriculture. Robin writes books.)
We haven’t achieved that sustainability yet, but we are on our way, thanks to the support we’ve received from so many sources—our partners in groves and mills, our peers in the olive oil industry, and of course, the people reading this email. Our subscribers, in particular, have provided the working capital that’s made everything else possible.
If Fat Gold is going to grow and do the things we want it to do, the business will have to get its own mill and production space; there’s simply no other path. How exactly we do that is a discussion for another day; a mill is a huge and complicated piece of equipment, and correspondingly expensive.
In the meantime, the start of the year brings a major milestone: we’ve hired Fat Gold’s first part-time employee! When you order from the online shop, it is very likely that your tin will pass through the steady hands of Bryan Tradup.
Our 2020 oil is ready to ship, and it will never be fresher than this moment. We’re already working through our checklist for the March shipment to subscribers, and the online shop is open for business.
Thanks for following along,
–Kathryn and Robin