Confectionery entrepreneur hits the sugar-free sweet spot with FUNDAY

Confectionery entrepreneur hits the sugar-free sweet spot with FUNDAY

Daniel Kitay grew up with a sweeter tooth than most.

The Perth-born founder of FUNDAY Natural Sweets was a self-proclaimed “bigger boy” during his teenage years and often enjoyed tuckshop favourites like lollies, chocolates, and soft drinks.

It was upon graduating from high school that Kitay decided it was time to make some healthier choices, kicking off a process that would eventually land his gut-friendly goodies in stores nationwide.

He embraced clean eating and lost up to 25 kilos while he was studying at university, but in doing so found that he eliminated all the ‘fun’ from his diet.

“As you mature you start to realise that you need to be more concerned about your own health. Even though you have family and people telling you your entire life that it's important, you sort of figure it out yourself,” Kitay said.

“The only way I could do it, and do it properly, was by cutting out pretty much all the junk food.

“I felt great, but I suppose the downside was that I never really got to enjoy eating, especially all the lollies, chocolates and sweet, yum stuff that people were consuming around me.”

After completing qualifications in law and commerce, and spending some time working at Luxury Escapes and two vitamins companies, Kitay started investigating whether sugar-free lollies would be a viable option for his own health kick.

What he discovered was both shocking and disappointing.

“Most people are very familiar with the warning statement on a lot of sugar-free products that excess consumption may cause a laxative effect,” says Kitay.

“It’s because typically these products use sugar alcohols like sorbitol… and the concentration of those alcohols is very high.

It was from this discovery and a desire to hit the sweet spot between health and satisfaction that FUNDAY was born in 2021.

Finding the right formula

Kitay quit his job at By-Health Co to focus full-time on creating a range of confectionery that was, to his knowledge, the first of its kind in Australia; sugar-free, sugar-alcohol-free and still delicious.

The biggest challenge for FUNDAY was creating a recipe that customers would want to buy more than once and didn’t include any harmful ingredients that are pervasive and often marketed as healthy.

“It needed to taste the same or better than regular confectionary, otherwise, we might get the first sale, but we wouldn't get a repeat purchase, which wasn't a viable business model for us,” explains Kitay.

“It needed to deliver on nutritional performance, but it also needed to ultimately deliver on taste, and if it didn't, it would be a very quick turnaround for our business.”

Having a message that could cut through a market laden with literally thousands of competing products was the key to survival.

Kitay ultimately settled on a brand that simply put the ‘fun’ back in snacks – hence the name choice.

Gummies go gangbusters on a winning ‘pharmacy first’ strategy

In just one short year, FUNDAY has achieved what most other food and beverage businesses spend years, sometimes decades, trying to achieve.

FUNDAY has entirely recouped its startup costs through profit in less than 12 months and is already on the shelves of Woolworths (ASX: WOW), Chemist Warehouse and Ampol service stations.

Customers can now purchase FUNDAY lollies including sour worms, red frogs, snakes and gummy bears online or pick them up at one of more than 2,500 stores across Australia. 

The brand’s meteoric rise even earned Kitay the coveted 2021 Melbourne Young Entrepreneur Award in the Startup category. This Saturday he will go toe to toe with the country’s top startups at the Australian Young Entrepreneur Awards, held on the Gold Coast, vying for national acclaim.

Despite this explosive success, Kitay has kept a cool disposition and says that fast growth was “always part of the plan”.

“From the outset the goal has been to expand the range we have,” he says. 

“We are well resourced and well capitalised to run the course and get Funday out into the market as we have been doing.

“We are busy, but the response has been really positive and the incredible feedback acts like a momentum for us – it keeps pushing us to develop new products and keep us going.”

Kitay says opting for the pharmacy channel first, particularly during the COVID months, gave FUNDAY the significant boost it needed to tackle other markets.

He identified that trying to sell to grocery chains or convenience stores first didn’t make any sense.

“No one was going out… people were very concerned about going into grocery stores and pharmacy was basically the only channel that was thriving, so we made a call to focus on that channel for launch,” he explains.

This meant FUNDAY could test its product in an environment that people were visiting daily, accumulate crucial sales data, and subsequently use them to enter the recovering grocery market.

“COVID could have been a tragic time, or it could have been an opportune time, and we chose to make it an opportune time for us as a business.”

What’s next for Funday? The answer will come from customers around the world

Having built a reputation in  Australia, FUNDAY is now pushing its sugar-free manifesto internationally.

In the next 12 months, Kitay aims to take his treats to any corner of the globe that “makes sense for the business”.

FUNDAY has already signed deals in the Middle East, Malaysia and is on the cusp of making deals in Singapore.

Kitay says he is happy to open the floor to customer feedback regarding range expansion.

“We listen to our customers a lot and want to hear from them about what products and other verticals we should potentially be going into,” he says.

“In saying that, our gummy-based confectionery has really been a terrific market hit, and we are going to double down on that.”

At the end of the day, putting his economic success aside, Kitay says it is truly wonderful to be the guy who sells lollies for a living.

“At home they call me ‘Wonka’ which is sort of ironic because all of his stuff was sugar-laden,” Kitay jokes. 

“But honestly the best part about my job is all the positive emails and messages we get from people who we are making happy through our product – other people like me who typically haven't enjoyed something sweet or tasty, in a long, long time.

“I’m not motivated by money. The growth is great, don’t get me wrong, but for me it’s about putting a smile on people’s faces.”

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