When Alexandra Daignault first founded Sarjesa, a Canada-based maker of tea and latte powders, she produced and packaged all her products at home. Eventually, she rented space in a commercial kitchen, but as the business continued to grow, she was faced with a choice: find a third-party manufacturer or figure out how to produce on a larger scale herself.
Daignault ultimately chose to produce her own product—also known as self-manufacturing—so in 2020, Sarjesa opened a 4,000-square-foot factory. It now has five largely automated production lines and is operated by fewer than 10 employees.
The decision has paid dividends for Sarjesa, which largely avoided the supply-chain snags of recent years—though Daignault recognizes that self-manufacturing is not for everyone.
“I don’t think most people self-manufacture, and I don’t think they should,” she said. “It’s really hard to set something like this up, and I think that there are probably easier ways to do it.”
This is partly why Sarjesa is now manufacturing powders and teas for 20 other companies as well. Daignault said she wants other food startups to side-step the quandary she faced early on by making affordable, flexible manufacturing more accessible.
Staying flexible: As Daignault explained, there is a serious lack of small to mid-sized manufacturers that are willing to produce in small batches. Most require large minimum order quantities (MOQs), which can be cost-prohibitive for startups.
She defines a small MOQ as any order under 2,000 units per run. Anything larger than that makes it harder for firms to adjust supply in response to demand. This can sometimes lead to excess inventory—which even Target and Walmart have struggled with recently—but for startups, it brings the added danger of requiring too much investment prematurely.
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“If you’re tied to a 15,000-unit MOQ, it’s taking up a lot of your cash flow, which is forcing people to maybe take investment that they don’t actually want,” she said.
Self-manufacturing allows Sarjesa to manufacture only what it needs. “I can put out, say, a thousand tea bags of a flavor, and if it doesn’t sell or if we get feedback from customers that they would like something a little bit different, we can easily iterate,” she said.
Sharing the love: But learning how to self-manufacture wasn’t easy. The company had to learn new equipment, build out new quality control and HR systems, and navigate a litany of regulations. Even now, she added, it’s a constant struggle to balance resources between sales and marketing and plant operations and management.
“If I had known the actual costs (versus what I thought the costs were) when I started, it would have been much easier to work with an experienced manufacturer,” Daignault wrote in an email.
This is exactly the role that Sarjesa is now trying to serve for other firms.
When other brands started reaching out during the pandemic, the company opened up its production lines to third parties. Now it has taken pains to make the process more seamless for its clients, including on-the-ground access to the factory floor, data sharing, and even holding extra inventory of key materials to provide faster turnaround times.
“I really wanted people to experience what it’s like to be able to act quickly and respond to market needs,” she said.