Dairy-free Over the Moo finds niche in Australian ice cream market

By Katie Langmore 

If there’s one trait Australian entrepreneurs tend to share, it’s tenacity.

In the case of 20-something Over The Moo founder, Alex Houseman, it is an attribute that has seen his start-up grow into a multimillion-dollar business in three short years.

A gap in the ice cream market

Houseman identified a potentially key gap in the market. Being lactose-intolerant since his teens, he was looking for a dairy-free ice cream that didn’t compromise flavour.

“At the time, there were a number of brands on the market, but they’d positioned themselves as a health product,” Houseman recalls.

“Many had no refined sugar and were functioning at a cottage industry scale, so were very expensive. I started to think about repositioning the category and going for full flavour and affordability.”

Getting down to supply chain business

Backed by some savings, a former career in food marketing and what he thought was a good idea for a vegan-friendly, gluten-free ice cream made from coconut milk, Houseman spent around four months on research and product development.

“The first step was to analyse the hypothetical supply chain, which involved a lot of googling and cold-calling manufacturers,” he explains. 

Once he decided to launch the venture, Houseman searched for a contract supplier – so he wouldn’t need to invest in equipment and could scale as required – and partnered with a seasoned, local ice cream manufacturer. 

“I chose them because I had no way of knowing if this would be successful, and they were prepared to start out with a small MOQ [minimum order quantity]. Some places weren’t prepared to turn on their machines for less than a A$50,000 production run.” 

Rocky roads

It’s all well and good to have a new ice cream to share with the world, but quite another to convince people to try it and buy it.

According to Houseman, the biggest challenge during the first two years was simply making sales. 

“I went hammer and tongs, driving around the country and building a community of independent stockists,” he says. “

That was a big challenge [with] more rejections than I care to remember.” 

Another challenge was ensuring the strictly dairy-free brand positioning, as his appointed contractor used dairy milk for other produce.

“We developed a series of cleaning protocols to eradicate any possibility of cross-contamination, but all our products still have to be tested to ensure they’re completely dairy-free,” Houseman emphasises.

There were a few occasions where complete batches had to be discarded which, as Houseman notes, “meant not delivering to the growing number of stores we’d worked so hard to build up”.

“We developed a series of cleaning protocols to eradicate any possibility of cross-contamination, but all our products still have to be tested to ensure they’re completely dairy-free,” Houseman emphasises.

There were a few occasions where complete batches had to be discarded which, as Houseman notes, “meant not delivering to the growing number of stores we’d worked so hard to build up”.

Hitting the big league

Even so, with the product quickly gaining popularity, convincing store owners to take Over The Moo ice cream on consignment (Houseman would only be paid if all stock was sold) soon paid off.  

Before long, he struck a distribution deal with Independent Grocers of Australia (IGA) outlets that spanned traditionally blue-collar suburbs to Sydney’s North Shore. It held him in good stead when he eventually knocked on the door of retail giant Woolworths.

“Once I had the Woolies contract, securing a loan to expand was pretty straightforward,” Houseman says.

Over The Moo is now available in every Coles and Woolworths store around the country as well as 450 IGA supermarkets – all the while maintaining a lean business model of just three full-time staff.

“That brings us up to 2200 stores,” Houseman says. “We’re really proud of the growth so far, which is roughly 300 per cent everyyear.”

The fipside to an extensive supply is maintaining consumer demand, and Over The Moo has built a devoted following.

“They say that social media is the great democratiser for small business and I have really found that [to be true],” Houseman says, who frequently uploads quirky posts and competitions.

“In the early days, that was front and centre of our entire promotion strategy. As a result, over the years we’ve gained some great traction and now have over 30,000 followers across Facebook and Instagram.”

One piece of advice

“I wish I’d known earlier how to forecast cash flow better. It’s terrible when you put all that effort into growing and promoting the business, then don’t have the cash flow to keep up.”