COVID-19: The Bear Kitchen story
COVID-19 (Coronavirus) is impacting businesses of all sizes across the UK. With no clear end in sight, many companies, particularly those in the food and retail sectors, are feeling the pressure
The Business Finance Guide spoke with Jens Hannibal, co-founder of The Bear Kitchen, about pivoting his company towards creating and delivering meals to NHS staff. We discovered that Jens, like many small business owners, is no stranger to changes of direction and the tumultuous journey of being a start-up.
It all started with funding
Until COVID-19 struck, The Bear Kitchen was delivering food to a growing number of clients —including Airbnb, Idean and Moving Brands — up to twice a week. After subscribing to the service, customers would receive healthy, planet-friendly meals to enjoy as a ‘hosted lunch — a concept where teams all eat together.
Having established a scalable business model, Jens was 80 per cent through the due diligence process, sharing cashflow forecasts and projections with potential investors, when the global pandemic stalled his plans.
“We were originally looking for £250,000 investment but have increased the ask to £350,000 due to the COVID-19 crisis, as we need some extra cash for this time,” Jens says. “It is essential to us to work with investors who share the same vision and ethics as us — making the world a better place.”
Finding the positive
When the coronavirus outbreak began, Jens and fellow co-founder Michael Tingsager first explored the opportunity to move from a business-to-business model to a business-to-consumer one, using Deliveroo to deliver healthy meals to people at home.
They quickly realised that their business did not have sufficient brand awareness to do this profitably in a short period of time, and would drown in a sea of price-focused competition.
Unable to operate their business as normal, Jens and Michael wanted to put their efforts into doing something positive, if they could find the funding. By launching a campaign on the GoFundMe platform, the two men hoped to raise enough money to provide nutritionally balanced lunches, made with proper ingredients, to vital NHS staff at the frontline of the COVID-19 crisis.
- No factory-farmed meat or fish
- No highly processed foods
- Seasonal produce
- Local produce
The Bear Kitchen’s GoFundMe page encourages people to donate towards the cost of making the meals and delivering them directly to hospitals. Since launching on 8th April with a £30,000 target, the campaign has already allowed the business to take meals to staff at more than 10 sites, including The Royal London Hospital, Guy’s Hospital, and University College Hospital.
Jens says: “This is our opportunity to do something positive to help the NHS staff, and our aim is to continue creating and delivering these meals for as long as it’s needed, and funds are available.”
To find out more about the fundraiser, watch Jens’ video.
The Bear Kitchen story — lessons learned from a start-up food concept
After studying entrepreneurial management at the European Business School, Jens set up his first venture, a Scandinavian fast-casual food bar, in February 2015. Based in Spitalfields Market in London, O‑food was financed with a loan from The Start Up Loans Company, organised through Virgin StartUp.
However, Jens’s cashflow projections did not match up to reality. The business ran into working capital issues, having assumed fixed pre-opening CAPEX (capital expenditure), and had to shut up shop after just eight months.
“It was a really difficult time and tough to pick myself up,” Jens says. “But then I realised that my life’s purpose was not to be tied to a brand. A brand might die, but the idea and purpose will still remain. So, I told myself, I’m not going to give up on my dream.”
Start Up Loans — Second Loans and post-loan support
If you’ve already secured a Start Up Loan for your business and have been trading for no more than two years, you may be eligible to apply for a Second Loan for that same business.
The Start Up Loans team and network of delivery partners are continuing to work through the current crisis and are available to offer application advice and post-loan support. Find out more about Second Loans
If you’re a Start Up Loans customer and experiencing financial difficulties, contact your Finance Partner to discuss your circumstances and the options available to you.
Questioning the high-street business model
The Bear Kitchen began as a fast-casual concept. Jens and business partner Michael — who for a long time served as Operations Director for McDonald’s in Denmark — received early advice and support from industry leaders such as Allegra McEvedy, co-founder of restaurant chain Leon, and former VP of operations for McDonald’s, Helen Humphrey.
However, throughout the planning process, the two men realised that to avoid the same pitfalls that had beset O-food from the start, they needed a different business model.
There is never a bad time to seek advice and support.
By reaching out not just to investors, your bank and your accountant, but also to peers and other businesspeople with strong and relevant industry experience, you can avoid repeating past mistakes.
In the current climate particularly, people are willing to help businesses that are trying to survive. Use this time to make new connections and find support with reviewing your business model and operations, and your options for financing.
Staying lean and agile allowed The Bear Kitchen to pivot at a vital time
The Bear Kitchen is based on a lean “dark kitchen” model, which involves delivering food from a virtual shop-front rather than bricks-and-mortar premises. This not only saved the company significant expenditure in terms of business rates, but Jens was also able to save on the initial capital outlay.
As well as allowing Jens to quickly build The Bear Kitchen name and reputation, it has also enabled him to pivot his business model at a vital time, and quickly.
“At The Bear Kitchen, we’re always on a mission to change the world, by changing the way we eat,” Jens says. “Right now, that means doing everything we can to support the NHS and its staff.”
Jens believes it’s important now, more than ever, to offer people a way of eating that is locally sourced, sustainable and communal.
He and his team are looking forward to sharing the Bear Kitchen message more widely and revising the original fundraising plan, when the current crisis begins to fade, and people return to their offices and places of work.
“The business we’re really in is the business of behavioural change, of making a difference for the future,” Jens says. “Changing behaviours has to start with a deep respect for personal preferences, food cultures and traditions. If we all eat more sustainably, we’ll be healthier and helping the planet at the same time.”
Coronavirus: Government measures
On 11th March 2020, the Chancellor set out a £12bn package of measures to support businesses through the economic disruption caused by COVID-19.
Further to the Budget, on 17th March the Chancellor announced an unprecedented package of government-backed and guaranteed loans to support businesses, making available an initial £330bn of guarantees – equivalent to 15% of GDP.