SHAKER HEIGHTS, Ohio — Ethan Holmes was a normal teenager. Then he read the book, Reallionaire by Farrah Gray and Fran Harris, when he was 14 years old.
The book is about a teenager who went from public assistance to a million dollar net worth.
After he read the book, Holmes, now 22, knew he wanted to start his own business.
But first he learned some hard lessons.
Keep trying
The first lesson was failing. When he tried selling homemade candy bars at his school, he quickly got feedback from students who didn’t like them.
So he decided to try a different food, and this time he wanted it to be healthy.
While still in high school, Holmes started doing some research, and found there was little competition in the applesauce market. There are only a few manufacturers nationwide and none in Ohio.
So Holmes set his sights on creating an Ohio-made applesauce with natural ingredients. He admits he knew very little about cooking, but spent a year in his mom’s kitchen with a focused goal — his own business.
“I realized I’m going to make myself successful, not anyone else,” said Holmes.
The recipe
Holmes’ first tries included missing water, sugar and different apples. And he wasn’t happy with the recipe, so he started adding strawberries, pomegranates and pears.
Then, his parents, tired of purchasing apples, told him there would be no more money for apples. But Holmes’ entrepreneurial spirit couldn’t be broke, so he started asking for apples instead of gifts.
“I’d go back to school after Christmas break and kids would ask what I got. I would tell them apples. The kids would say, ‘an iPad or iPhone?’, and then I would have to tell them no — I mean apples,” said Holmes.
Struggle
Holmes quickly learned the financial struggle went way beyond apples — there were paperwork fees, capital finances and the need for business experience.
“I didn’t always have the money to move forward, but I’ve kept trying,” said Holmes.
Along the way, he’s had many mentors and people lend a hand.
“They have helped me fill out paperwork when I had no idea what I was doing,” said Holmes.
Holmes kept trying
Chop the fruit. Cook the fruit. Then he decided to add apple cider. Finally, with the help of his grandfather, the recipe came alive — and Holmes Mouthwatering Apple Sauce was born.
Business lessons
When Holmes was 16, his mom took him to the Shaker Heights LaunchHouse, a seed capital and investment fund based in Shaker Heights.
“Ethan is one of the entrepreneurs I’m most proud of here at the LaunchHouse,” said Todd Goldstein, CEO and co-founder.
Goldstein said Holmes has been successful because he gets out of his comfort zone by talking directly to customers about the product.
“It’s OK to hear ‘no,’ but what is most important is finding out how to get a ‘yes’ from those customers,” said Goldstein.
The next step. Holmes said the incubator helped him take the next steps, including entering the Council of Smaller Enterprises, or COSE, contest while in high school. He started the process, but was not accepted for a couple of years.
Then, in 2015, Holmes won first place and earned a $20,000 grant to jump-start his business.
Not long after high school, Holmes was able to get his applesauce into the Miles Farmers Market in Solon, Ohio, but he knew that was not enough. To fill his orders at the market, he needed a commercial kitchen.
Through his connections, Holmes found the Cleveland Culinary Launch Kitchen incubator. Through the kitchen, he learned state and federal food safety regulations.
Building the business
Holmes’ mentors encouraged him go to college. At first, he didn’t want to go, but he eventually decided to attend Hiram College.
On the weekends, he would head to the incubator, where he would spend the weekend making applesauce, selling between 20-30 jars a month. Between classes, he would work on marketing his business.
He knew he wanted to get his product into Heinen’s Fine Foods, a grocery chain of 30 stores, so he started calling the purchaser two or three times a week. Finally, in 2014, he found out the chain was interested.
Label challenges
To enter this larger retail market, however, required some label changes.
On a whim, Holmes reached out to a label designer for Kraft Foods. After hearing Holmes’ story, the designer decided he would help — for free — and provided him with a label that meets both state and federal regulations.
The next marketing challenge would be Giant Eagle. The buyer eventually said he liked the product and wanted it in the Market District locations starting in December 2014.
More applesauce
To meet the demand, Holmes’ challenge would be to produce 3,000 jars of applesauce. Holmes had used his family and school friends to help make the applesauce, but after making 3,000 jars, they said something else had to be done.
Holmes learned about Youth Opportunities Unlimited, an internship program for disadvantaged high school students. The young people would help pare apples, blend the sauce or do what ever Holmes needed them to.
The program paid for the youth, but Holmes would purchase pizza out of his pocket and even pay for bus fares for those who couldn’t afford it.
With the students’ help, Holmes would manufacture 20,000 jars of applesauce between 2014-2015.
Still growing
However, it was apparent Holmes needed a new manufacturing plan. So with the help of his mentor at Cleveland Culinary Launch, Tim Skaryd, he searched for a co-packer to help him make the applesauce.
The process started with a nondisclosure agreement signed by both parties. Holmes would fax the recipe, then the co-packer would ship the attempts to Holmes to see if it’s the same sauce.
He said one canner’s attempt was too chunky. Another used too much cider.
Then Holmes drove to a site in McArthur, Ohio, so the co-packer and Holmes could perfect the applesauce. Now, the co-packer cooks the recipe, packs it and ships it directly to the store.
The increased supply let Holmes pick up the Marc’s store chain, which now also carries Holmes Mouthwatering Apple Sauce.
Never alone
Holmes said he owes a lot to his mentors, but also to his parents. Holmes’ mother is in education and his father works as a social worker. They “helped me to become who I am,” said Holmes.
Everyone has a different definition of success, he added.
“I don’t believe success is based on money or fame, but accomplishing the goals you make,” he said.
His next goal is to own an apple orchard and grow his own apples.
