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Sprouting pencils a huge success

Sprout sell pencils that sprout – about 450,000 a month to 60 countries across the globe. Production, sales and employees have more than doubled since the company from Tåstrup near Copenhagen started up three years ago. 
Michael Strausholm, owner and CEO of Sprout explanins, that the bottom of each Sprout pencil contains a small, oblong ‘capsule’ containing soil and seeds. When the pencil has been worn down, it can be placed in a plant pot with soil and watered. The water dissolves the capsule and sunlight makes the seeds sprout. Photo: Joshua Gross.

Publiceret: 24.11.2016
Af Karen Witt Olsen mail

Sprout started as a crowdfunding project in the United States in 2013.

Three young MIT students had a new invention on their hands: pencils that could be put in a plant pot and watered and sprout into basil, tomatoes or sunflowers, for example, when they could no longer be used to write.

The students needed USD 25,000 to launch their business and looked for investors online. This was where Michael Stausholm from Denmark spotted the project.

“It hit me straight away how ingenious, simple and sustainable the whole thing was. But I didn’t believe for a second that it had any business potential,” says Michael Stausholm who is now Sprout’s CEO.

Expected turnover DKK 300 million

But Michael Stausholm quickly found that, in fact, it did have business potential and he bought the rights to sell the pencils in Europe. In just a couple of months, he had sold 75,000 sprouting pencils in Denmark alone.

In 2014, he bought out the three Americans and this year Sprout’s turnover is almost DKK 20 million. This is double what it was in 2015 and four times what it was in 2014. The CEO expects to double sales every year until 2020 when turnover will be approximately DKK 300 million.

Why have you joined the Confederation of Danish Industry?
“We became a member in the spring of 2016 because we needed advice and support in our huge growth. The first six months, I woke up every morning and thought that selling any more sprouting pencils wouldn’t happen. It couldn’t go on. But it seems that it can. Right now we are selling about 450,000 pencils a month. This growth means that we have gone from being just me to 20 employees. That presents a number of challenges in terms of HR and employment law,” says CEO Michael Stausholm.

What can the Confederation of Danish Industry do for you?
“We are a small start-up where orders and employees are just rolling in. We don’t employ legal consultants or HR staff so we have looked for help for all sorts of issues like handling holidays, sickness and maternity leave correctly. We believe that it is important to do things the right way and the Confederation of Danish Industry represents a huge knowledge base for us. We can also get things in writing so that we are sure that we comply with all the rules. This is a real help on a day-to-day basis."

"We also get advice on reporting our figures to Statistics Denmark and understanding customs rules and we gained valuable contacts through the Confederation of Danish Industry as we were part of the Danish pavilion at the Rio Olympics. Networking and export promotions are something that I think we will be using much more in future,” he says.

Easy to communicate sustainability


What is it your products do?
“They make sustainability easy to communicate. A pencil which can be reused and be given ‘new life’ is something both children and adults are able to understand. Our clients are large corporations, organisation and authorities such as IKEA, Disney, Greenpeace and VisitDenmark. They buy our sprouting pencils and cards, get their own logo or slogan printed on them and use them instead of ballpoint pens and T-shirts. Our products work as ice-breakers to get customers, partners and employees to engage,” says the CEO.

Things are moving very rapidly. How do you manage?
“I previously worked in shipping at Maersk and I worked in the clothes industry in Asia for 15 years. I have seen a wealth of start-ups kill themselves. Right from the start with Sprout, I wanted financial sustainability by being order-producing and requiring pre-payment. Entrepreneurs often die due to lack of cash flow and I don’t want to be anyone’s bank."

"I have also ensured that I keep production close by so that we avoid warehousing which is dead money and it means we are able to deliver quickly. I have also spent a great deal of time ensuring that I only take on employees who are very talented and are people with whom I am able to spend eight hours on a plane,” he says.

Aiming for 100% organic


Where do you see Sprout in 2020?
“We will have a turnover of DKK 300 million. The world market for pencils is 14 billion pencils a year and I believe that we can take a minimum of one percent of that market. By then, our American subsidiary will account for 50% of our sales and our seeds will be 100% organic."

"We are already growing rapidly in the Middle East. Our largest order to date was for an Egyptian conglomerate that bought 500,000 pencils for its hotels and retail outlets, and yesterday we sold 50,000 units to a chain of book stores in Saudi Arabia,” says Michael Stausholm.

He adds that Sprout’s European production is currently located in Poland, but that he is thinking of automating it further and in the long term moving it to Denmark in order to have research and production close together. 

Sprout
Founded in 2013
Headquartered in Tåstrup, Denmark
Sales office in Boston, United States
Production in Poland and the United States, packing in Denmark and other locations
Sold 1.7 million pencils in 2015
20 employees
Sales in 2015: DKK 10 million. Expected sales in 2016: DKK 20 million.
Exports 95% of production.

The first six months, I woke up every morning and thought that selling any more sprouting pencils wouldn’t happen. It couldn’t go on. But it seems that it can.

SPROUT'S CEO MICHAEL STAUSHOLM
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PUBLISHED: 11/24/2016 LAST MODIFIED: 11/24/2016