Sustainable breakfast company breaks into new markets with help from Kiwibank.

In the old children’s fairy story, kissing a frog produced a prince. For Kiwibank, their close relationship with Blue Frog Breakfast, produced a princely result.  

Blue Frog Breakfast, founded by passionate foodie Scotty Baragwanath, had developed its hero product (Macadamia, Almond and Manuka Honey cereal) in 2019 – but needed backing to make the next big leap.  

Kiwibank’s Head of Sustainable Finance, Tom Williams, says loaning capital to Blue Frog in 2020 to buy new equipment meant the business could massively increase output. It was also, he says, an object lesson in the power of real partnerships, as opposed to those in name only.   

Baragwanath had, over nine years, gone from making cereals in his kitchen to having his premium breakfast products stocked in hundreds of stores here and in Australia, but he says: “The investment from Kiwibank enabled us to buy a much larger automatic filler [machine] so we could go from around 2000 bags per shift to 15,000. That was instrumental in us growing and not only being able to source new markets in Australia but servicing them. It was an absolute game-changer.”

Today Blue Frog sells 16 products in over 350 stores in New Zealand and almost 1400 in Australia. It is New Zealand’s most awarded breakfast cereal producer, having picked up a slew of top prizes at the likes of the Food Producer Awards and the New Zealand Food Awards. Rapid growth is continuing with plans to be stocked by retail giant CostCo. 

Williams says Kiwibank is drawn to businesses like Blue Frog that are excited about bringing their products to the world: “We love a passionate [company] founder, and you only need to spend 30 seconds with Scotty to see he ticks that box. He had a clear vision for producing a premium quality product – their cereals are really, really good – and an understanding of how sustainability would be part of that. We love working with people like that, helping them to achieve success. 

“Blue Frog cereals are a premium product that reflects consumer preference. People want to consume products that make them feel better about themselves, that are healthier and that they know are produced more sustainably. That matters now. 

“[The new machine] not only meant they could fill more bags but increased the quality of what was going into each bag. That enabled them to take the next step up and be stocked in more stores.” 

Sustainability is crucial if businesses are looking to trade internationally, he says, with the supply chain often demanding it. It could be consumer preference, or a large purchaser saying, ‘Hey, we want to know what your ethical sourcing policy is because our customers want that’.  

“We are here to make sure our business customers understand that. We have services and products, like our sustainable business loan, that can support businesses to improve their sustainability, which will have an impact here and abroad.

 Kiwibank, like Blue Frog, are B Corp certified – a designation given to companies that meet high standards of social and environmental performance, transparency and accountability. Rather than focusing solely on making maximum profit, B Corp businesses consider the impact of their operations on their workers, customers, suppliers, community and environment.

Baragwanath says sustainability is important to Blue Frog, the first breakfast food company to be B Corp certified in the Asia Pacific region. It is also certified as carbon positive by Ekos, which means it has measured and offset 120 per cent of its carbon footprint. The plastic bags that contain the cereal Blue Frog produces – around 1.5m each year – are made of 44 per cent recycled milk bottles. 

“We have always said that, if we are going to be making a product to scale, we are going to look at the impact that has and make sure we are being a force for good, not only environmentally, but when it comes to how we work with our staff, and how we work in our local community. The fact Kiwibank shares those values is very important.” 

Kiwibank tailored its banking services to meet Blue Frog’s needs as the company has grown, including offering access to sustainable finance benefits. Expertise shared by Kiwibank Commercial Manager Mike Mangino, who has built a strong one-on-one relationship with Baragwanath, has been vital.

As well as recommendations like suggesting Blue Frog made changes to shore up their core New Zealand business operations before going after new overseas market opportunities, Mangino’s knowledge about how similar companies operate has also been extremely helpful. 

“Mike will come and have a coffee and catch up on what’s happening, and a lot of the conversation is him sharing perspectives on other businesses he is working with,” says Baragwanath. “There are a lot of learnings in common and he has so many ideas that are really useful. It’s a partnership in the true sense of the word.” 

Williams says: “The founder or the owner of the company is always going to know best how to run their business. As a bank we are there to support them and give them the tools to enable that growth. 

“What we’ve done for Blue Frog, aside from the everyday banking services, is establish a relationship that provides connections to networks and other support,” says Williams. “Mike’s been on a lot of this journey with Scotty and he’s there as much as an adviser as someone who says, ‘Here’s a new bank card’.  

“He’s played a key role in helping Blue Frog to make pragmatic and practical decisions throughout their growth, including helping with the capital that allowed them to increase production.” 

Watch the full episode in Kiwibank's series, Business for Better, and learn more about how Blue Frog Breakfast are leading the way in how they do business for better    

This article was proudly brought to you by Kiwibank, who believe sustainability and profitability go hand-in-hand when creating a future proof business. That's why Kiwibank support Kiwi businesses making a positive impact on the environment, their customers and their employees. This is business banking for better #ThisisKiwi.