Interview for Kapital.mk

Sofija Daceva, founder of Matryoshka, creator of wine ice cream

Recently, during the holding of the first Startup Summit in Macedonia, we met Sofia Daceva, a young entrepreneur and founder of the startup Matryoshka, the first domestic and one of the few in the world, producer of wine ice cream. But not just an ordinary wine-flavored ice cream, as we can usually find, but an ice cream that really has wine in it, which has been brought to a freezing point of 0 degrees with a special technological process. During the informal part of the summit, we also had the opportunity to try the ice creams sold under the Wice brand, created by Daceva and the Matryoshka team, which currently come in two flavors - Merlot (chocolate and cherry) and Riesling (vanilla and raspberry) and the impression is: be careful, this is a beauty that can literally intoxicate you 🙂

Sofia, how did you come up with the idea for this product, what is your professional experience before, give us a little background about yourself?

I am 26 years old and today I can proudly say that after more than five years of hard work and a lot of effort, I am the founder and manager of Matryoshka, a company that has its headquarters in Skopje, and since 2021 we have also established a subsidiary in the United Kingdom.

Matryoshka is a startup established in 2017 that deals with the development of innovative technological processes in the food industry, which would have added value for targeted customers and a positive impact on the environment. With our team, we are working on several projects at the same time, but the main project that is the closest to commercialization and that I have been working on since before the founding of the company, is wine ice cream - known under the brand name Wice (abbreviated from Wine Ice-Cream).

Namely, although the idea of ​​combining ice cream and wine sounds attractive, the process is very complex. The main reason is because of the difference in the freezing point of wine which varies from -13℃ to -18℃, compared to the freezing point of ice cream which is 0℃. After more than two years of R&D activities mainly taking place in the United Kingdom (where I have completed my undergraduate and postgraduate studies, as well as being supported by the British Government and the University of Warwick on a startup visa), I managed to develop a technological process of raising the freezing point of wine to 0℃, so the end result is ice cream with wine, where a 200ml scoop can reach the equivalent effect of consuming a glass of wine.

Regarding the idea of ​​developing wine ice cream, I got it spontaneously in the summer of 2016, while I was in my last year of undergraduate studies at HALT University in London. I am a lover of both ingredients – ice cream and wine and I just thought what would happen if they were combined in one product. When I did more detailed research about the idea on the Internet, I found that there is only one indirect competitor in America, but the difference is that their ice cream is "infused" with wine, that is, it has the aroma and taste of wine while most of the alcohol has evaporated.

I thought that if an ice cream were to be developed that actually contained wine, it would represent a great business opportunity to market and innovate within two industries (ice cream and wine).

The same year after completing my undergraduate studies, I enrolled in a Master's degree at Warwick University specializing in Innovation and Entrepreneurship at the Warwick Manufacturing Group faculty. Even when I applied, I applied with a motivational letter in which I told the idea I had, and they were the main reason why this idea came true and why we managed to develop a proof of concept in 2017.

In the same year, I was supported by the British government and the University of Warwick with a startup visa, which allows me to receive support from all kinds of experts including technical, legal, marketing, all in order to reach the commercialization stage not only of the domestic but also in their market. In fact, the very innovation for which we received this visa is in the technological process, which allows the wine alcohol to be retained in the base mixture of the ice cream and to have a stable structure and a shelf life of 12 months, making it ideal for commercialization. At the moment we have developed two products with which we want to enter the market in 2021, where the first is Merlot, chocolate and cherry, and the second is Riesling, vanilla and raspberry

How did you choose the name "Matryoshka" for your startup? (Matryoshkas are the popular Russian wooden dolls that come in sets, several of different sizes placed inside each other)
I was inspired by the way Matryoshkas were created. Namely, although everyone associates them with Russian culture, they themselves date much earlier, at one time this kind of "handmade wooden dolls" were known in Japan, only under a different name, which represented a symbol of happiness. The way they are made is that you always start with the smallest and after it is made, it is given character. Each subsequent one that is made has its own character, but also something connecting from the previous doll, but this one is bigger and with more content on it. I aim for the same through my company, that is, the experience that we will offer to target customers through the products that we will make in the food industry. We start small, but it is something unique and with its own character, and as we grow we develop more and more new products using innovative food technologies, and what unites them all is the unique experience that customers will have when they try the product. Additionally, a name that is unique always helps to be remembered.

Do you have partners and how did you financed the development of the idea?

The matryoshka company has only one founder – that's me, while we have many partners. Namely, in 2017, right after the technological process of raising the freezing point of wine was developed, I also founded the company. In 2018, after finishing my master's studies, I moved to Macedonia, in order to develop the production process and the factory here. The first funds we received were back in 2017 from Warwick Enterprise, which were in the form of an award won as the best innovative business pitch (committee presentation, n.z.).

I used those funds to prove that wine ice cream would have a product market fit, that is, that there are potential customers interested in it. Testing took place at the University of Warwick in England, and at that time interest in the product spread so quickly that we were even contacted by journalists from the BBC. In 2018, shortly after I moved to Macedonia, we managed to get our first grant from the Fund for Innovation and Technology Development. FITD played a huge role for Matryoshka, because thanks to their support from the "Startup 1" grant, we were able to make our own small R&D laboratory in the food industry and bring the product to the pre-commercialization stage.

After it was perfected, in 2019 we entered into negotiations with one of the three accelerators in the country: X-Factor Accelerator Veles, and at the same time we received an offer from foreign business angels. However, mainly due to the fact that at X-Factor Accelerator we also saw the opportunity for a long-term partnership that is key to the company's rapid growth, we decided to go with them. With the help of their funds, we built a factory for the production of wine ice cream, with an automated line and a capacity of 300 liters per hour.

In addition, the funds from FITD and X Factor Accelerator helped us to employ two more people in the company. In 2020, Matryoshka was also supported by the Business Ready Programe, which is an accelerator in the UK and provided us with additional support in the form of expertise, mentoring, business premises and financial support. Finally, since October 2020 I, as the founder of Matryoshka, have been supported by the New Entrepreneurs Foundation program, which selects 50 entrepreneurs in the United Kingdom every year and turns them into future leaders. Through this program we managed to find another potential partner for the company who is a former board member of the largest ice cream company Unilever and thanks to whom we connected with large potential customers in England.

My idea of ​​success, especially as a sole founder, was to surround myself with as many quality mentors and partners as possible, because that's the only way I could grow fast enough and achieve the main mission for Wice, which is the development of an international brand that will be available in world markets.

What were the biggest challenges on the way to creating the wine ice cream?

Honestly, considering the complexity of the industry I chose, I have had and will always have challenges. All of them are great challenges, mainly because the wine ice cream is completely developed by me without any outsourcing, that is, from the very idea to its complete production, everything takes place in the company. The first challenge that I would highlight as the most difficult was actually the development of the technological process itself, mainly because I was only 21 years old at the time and also considering that I did not have enough knowledge about the food industry, I had to learn a lot. I'm talking about constant learning, reading and experimenting from 14 to 16 hours a day, and sometimes more. Namely, it took me two years to develop a technological process of raising the freezing point of wine to 0℃ and another whole year to prove that there would be market interest for this wine ice cream now for its consumption.

The next huge challenge was building the factory itself. Namely, I had no choice and had to build it because again our production process is different from that of producing ordinary ice cream, so even if we wanted to outsource we couldn't. Looking for funds and partners was also a challenge, but I think that the constant work and the love I had for this idea helped me even when it was the most difficult not to give up but to continue, because for every problem there is always a solution, you just need a person not to give up.

At the moment, the biggest challenge for us is the management of the cold chain for the wine ice cream, but we are learning that as well.

At what stage of development is the startup now, have you started selling the ice cream or are you still preparing the ground for it?

At the moment, ice cream with wine is in the pre-commercialization phase, mainly because the supply chain itself, from the moment of building a factory and installing machines, up to the establishment of a cold chain for transportation and storage and packaging of the product itself, is a complex process. The fact that it is a product that is still part of the food industry means that everything must be done according to set standards and at the highest level. In addition, the COVID-19 pandemic resulted in the prolongation of all activities, which took place much more slowly than expected. However, the end is already in sight and we expect to enter the domestic market in the summer of 2021, and from May 2022 to enter the British market as well.

What did the X Factor Accelerator experience mean to you and how will you use the investment you received from them for?

We first came into contact with the X Factor Accelerator back in 2019. Namely, I visited their website and first submitted a short application form, which is the first step to apply. Soon after, I was contacted by them, and we had our first meeting. In fact, from the first meeting with them, I felt sincerity, which is a quality that is not often found today.

They represent a team of experienced experts in multiple fields and from the very first meeting they showed that whatever happens, they are here as an accelerator to help us as a start-up if they can. I found real partners in them, and in my case that was the other thing I was looking for from the investor – of course, besides the funds, i.e. people who would help my company grow, and grow fast. In my case, after the first meeting, I was called to fill out a long application form, which was followed by a series of trainings and a demo day, so that we were finally informed that we were one of the companies in which they decided to invest.

We mainly used the investment from the accelerator to build the factory, i.e. with their help we acquired production machines, increased the number of employees and will soon commercialize the product. In addition, in addition to financial assistance, they also offer workshops, networking with international experts and continuous mentoring support, selflessly and at any time of the day, which is again a key quality that I recommend all start-up companies to look for in their investors.

What are your target groups for product placement – ​​are domestic retail chains, or is the HoReCa segment more suitable for this type of product?

In order to successfully enter the market, our company has developed a B2B strategy, by targeting the HoReCa sector as well as by targeting trade chains. In terms of the domestic market, Matryoshka will start by entering the HoReCa sector, mainly because that way it will be easier to target the customers we are aiming at. After the ice cream will be distributed throughout the HoReCa sector and the customers will be familiar with the brand, our next placement will be by targeting one of the domestic trade chains.

You also mentioned exporting to foreign markets, do you have any preliminary contacts with trade partners, etc.?

Wine ice cream was supposed to be exported as early as 2021, but unfortunately due to the COVID19 pandemic, the export plan has been moved to May 2022. In terms of contacts with foreign markets, we are currently in a deep phase of negotiations with one of the most elite supermarket chains in the United Kingdom, which has around 900 markets in the country. In addition, our company is in the phase of negotiations with another supermarket chain from England, as well as a chain of elite shopping malls, and where we would enter, of course, also depends on where we get the most favorable conditions.

At the same time, we are also interested in entering the German market and we are already slowly starting to consider opportunities to enter it, starting from 2022.

What is your assessment of the startup ecosystem in Macedonia at the moment - what is good and what needs to be worked on more seriously?

I believe that the startup ecosystem in Macedonia has been developing rapidly in the past five years, although there is still a lot of room for improvement. I would single out the capital Skopje as the main point of development, although in the past two years it has been seen how the focus is beginning to shift to other major cities as well.

The fact that there is continuous progress is evidenced by the growing number of startup companies, which are still mainly focused on the IT sector. Additional proof of the development is actually the increasing number of opportunities for startup companies that are enabled by various institutions. As one of the main stakeholders that significantly contributed to the development of the startup ecosystem, I would single out the Fund for Innovation and Technology Development, but over the years, other types of investments have appeared, such as accelerators and business angels, up to favorable credit lines for startup companies. which started to be offered by the banks in the country.

Something that should perhaps be worked on more seriously is diversification of the IT focus and stimulus for innovation in other fields as well. In addition, more education is needed for the startup companies themselves, especially in the direction of a way to achieve rapid growth and massive expansion in international markets, which would certainly have a positive effect on our economy. Finally, I would put a special focus on sustainable economic development, because it is something that current generations should observe, in order not to jeopardize the opportunities of future generations to meet their needs.