Author: Lucia Páchniková
Sincere interest works wonders. Even when it's about money, thanks to which Malý gazda of Prešov grew from a family-owned company into a producer with international ambitions.
Sell a car, buy a few dozen sheep for the money, relocate and embark on something neither of them had done before. Thus began the business journey of the Ševcová. Zuzana no longer enjoyed finance and Jozef left the police force due to injuries. Zuzana’s desire to have her own business and her husband’s dream of starting a farm were transformed into Malý gazda, a unique establishment in the dairy segment that daily produces approximately one tonne of yogurt and supplies dairy counters in Slovak, Hungarian and, in the near future, Czech stores. “Our product has a tradition. It has already gained a lot of customers who care about quality. We produce dairy products with love. Together with our employees, we put our whole soul into the work,” say the Ševcová, commenting on their relationship to the family business.
It’s different than with a loan
The couple learned about the Crowdberry investment platform from the Internet. They were fascinated by the company's previously launched projects and its team of professionals. “It was the right choice. We felt sincere interest. They saw potential in us. We came together on a human level. They experience our successes and failures with us. You will never get such an approach from a bank,” says Zuzana Ševcová, assessing the decision to approach investors and raise money for new goals.
With the entry of investors into the company, the Ševcová gained funding for the development of production, a marketing campaign and contacts to specialists, whose know-how has enabled Malý gazda to operate more efficiently. The professionals from the investment platform and the experience of investors helped them to set up processes in the company, controlling and accounting, and to start marketing and sales. “The cooperation resulted in an increase in gross margin by more than 100% last year,” said Ševcová. “In addition to that, they are helping us to solve the problems that we face as a family-owned company. For example, the constant pressure from retail chains to reduce prices and the unequal struggle with large companies,” she says, naming additional benefits of collaboration.
In addition to launching marketing activities and support for exporting products, they decided to enrich their product line with new delicacies. The investment sector also assisted them with that. According to the Ševcová, it is more flexible than bank financing. “We used and still use loans and advances from commercial banks. However, a bank will never advise you on real problems. They have a superficial idea in the form of numbers, but they will never penetrate the depths of how your company operates.”
Originality is appealing
Malý gazda decided to approach investors in 2018, when they were already producing almost one and a quarter million units of yogurt per year. "You have to be original, passionate, patient and convinced about the product. You have to work on innovations. Investors will help you start a business, but without putting your hands into the work yourself, it won’t work,” she says, explaining the importance of taking the initiative. Malý gazda approached investors with products and the gradual setting up of efficient processes within the company, which seems to have made full use of an investment of more than half a million euros by purchasing technologies and bringing to market new lines of products in modern packaging. They are working to increase revenues and marketing, address business partners and expand listings. The long-term goal is to expand to foreign markets. "We are also focusing on new target groups, especially families with children and people who prefer a healthy lifestyle. Products containing probiotics have proven their value and, in addition to traditionally popular flavours, there is also a new lactose-free product,” says Ševcová.
Awareness and improvement of the environment is also important to the company. Its products are packed in ecological packaging. Yogurts without artificial preservatives and colourings are produced exclusively using the traditional method of ripening in glass, which preserves the yogurt’s nutritional value, aiding digestion and immunity. Milk is obtained from local companies and other ingredients are carefully selected. They started with sheep’s milk, but later switched to cow’s milk. "Sheep’s milk is a seasonal matter. Demand has grown. It was a difficult decision. We chose the ecological path,” Ševcová explains. The Ševcová recommend that entrepreneurs bring crowdinvestors into their business. According to them, as a means of obtaining funding, such investors are definitely gaining in popularity and supplementing banks. “At the level of providing money, there’s hardly any other option. They solve problems with you and enjoy success. We are proof that even a small family-owned company can overcome its limitations thanks to a properly utilised investment,” the Ševcová conclude.
Expert on the topic: Daniel Gašpar, partner at Crowdberry
Why was Malý gazda an interesting investment opportunity?
The company came up with a world-class product. It has already proven itself on the Slovak and Hungarian markets. Investors were attracted by the potential of a young family business with good prospects for demand of its healthy, nutritional products. The freshness of local products was also a factor. Consumption of curdled-milk products, including those that are prepared according to traditional recipes, such as at Malý gazda, is on the rise throughout Europe. The share of products that have health benefits due to their ingredients is also seeing a growth trend. For Malý gazda, this is an opportunity to establish itself also in neighbouring countries.
What is the greatest benefit for investors?
Malý gazda is a typical example of a small, local, family-owned company that, thanks to capital and know-how, began to grow and transformed into a dairy producer at the international level. Investors with extensive experience in the food sector helped the company to bring new products to market, better set up internal processes and to undertake international expansion.
What is your assessment of the utilised investment? What challenges does the company and its investors from Crowdberry face?
Thanks to the technologies that the company has acquired, it aims to double its annual production. Despite the fact that it is difficult for small companies to get to the sales counters of retail chains, they are doing well and preparing to export to the Czech Republic. In addition to better profitability, their sales of new and traditional products are also showing healthy growth. Furthermore, the current situation shows that companies like Malý gazda have a place in society and are important for the development of the domestic economy. For investors, it is an opportunity to participate in that.
This article was created thanks to cooperation with the economic daily Hospodárske noviny as part of the Investment in Business series: https://hnonline.sk/prakticke-hn/2130115-maly-gazda-ide-do-sveta