Who Loves Labneh? Lebanese Brand Krock's Eyes the Gulf
Day after day, Ramzi Jalbout and his colleagues
would gather during their lunch break at St. Georges Hospital in
Beirut. Usually 9-to-5ers vary their daily lunch choices, but one
of his work friends would bring a half-liter tub of labneh, along
with a big bag of ka’ak from Wooden Bakery with such regularity
that she became known for it. For years Jalbout bemusedly watched
her drag enough food out of her lunch bag to feed all of them,
bring the rest home, bring it to work again the next day, and so
on.
But one day in 2006, something finally clicked. The seed for
Krock’s,
dormant for years, finally sprouted.
Since then, Jalbout’s big idea – single-serving locally-made labneh
with enough crispy ka’ak to eat it with, served side-by-side in a
plastic container he designed himself and has since patented – has
spread to Spinney’s, TSC, Aoun Charcuteries, Medco gas stations,
and a number of Lebanese school and university cafeterias.
Called ‘Krock’s’ because of the crunch of the ka’ak, and after the
French ‘croquette’, major Lebanese media outlets have profiled his
product, and Jalbout, at the tender age of 30, was named one of the
top 20 Lebanese entrepreneurs of 2012 by Executive Magazine.
The way Jalbout describes it, over a coffee at a suburban
Starbucks, getting the company off the ground hasn’t been easy. The
startup faced several obstacles early on, including a major problem
with distribution, and what Jalbout describes as a “bad decision”
to outsource production of the container to China. The shoddy
packaging led to a major sales hiatus in 2012, as Jalbout and his
partners took time out to revamp it.
Sourcing wasn’t simple either. When Jalbout began going after
big-name labneh and ka’ak producers, at first, he says “Liban Lait
didn’t even want to sell to us.” It took several meetings, tests,
and a fair amount of charm, to finally win over Big Labneh.
Finding Investment to Scale
After securing investment from Bader's Lebanese Business
Angels, Jalbout was able to take out two 200 million LL loans
from Bank Audi, the most recent of which he expects to repay within
six years. The money cushion, Jalbout reports, made it easier to
weather the early missteps he made with production and
distribution.
Yet despite the investors, the positive press, the deals he has cut
with big-name Lebanese grocery stores, and a 30% growth rate over
the past two years, Krock’s has yet to turn a profit.
Jalbout attributes this not only to the Chinese container hiccup,
but to a general lack of public awareness of his brand. While
Krock’s plastic containers are now produced under strict
supervision in Lebanon, what remains now is to get the word out
about his product through planned marketing. The company has yet to
launch a website, Facebook page, or Twitter channel.
To help pay off his debt to Bank Audi, and perhaps eventually quit
his day job, Jalbout and his backers (some of whom are personal
friends and family) are also turning their gaze outwards.
While he has the Turkish and North American markets in his sights,
Jalbout is focusing first on Lebanese expats and their families in
the Gulf who yearn for a taste of home for export.
Part of his measured success in Lebanon, he insists, is the
freshness of his labneh, delivered daily by Liban Lait and flavored
in his own patented labneh mixers (the current flavors available
are olive, mint, and plain, but Jalbout plans to introduce new
flavors every six months as part of a marketing scheme).
The long shelf-life of ka’ak means that it can be imported from
Lebanon to the Gulf, but the labneh in each new market will have to
be made in-country. This level of quality control will incur
significant expenses, but it seems Jalbout is willing to make that
sacrifice for the best possible product. And he thinks that his
customers will be willing to pay for the convenience.
While Lebanese cuisine without labneh is almost inconceivable, it
remains to be seen whether the product will catch on in the same
way among consumers in the Emirates and Kuwait, where the company
plans to expand next. Yet it's well-known that the Gulf loves a
good Lebanese meal; perhaps they'll learn to love labneh
too.