Pana Organic’s plant-based chocolate products grew from founder’s entrepreneurial drive

Now stocked in major shops, Pana Barbounis will never forget telling his father he was quitting corporate life to follow his dreams of selling chocolate on the back of a scooter.

Pana Organic founder, Pana Barbounis.

Pana Barbounis will never forget the day he told his father the time had come to follow his dreams.

Barbounis senior, a labourer from the Greek islands, had come to Australia with his brother at the age of 17 and settled in the then rough and grungy suburb of Footscray in west Melbourne. Five years later he met his sweetheart, who was also Greek but with a Polish background.

They were married within three months – she was only 18 – before their son was born.

After finishing high school, Barbounis junior worked initially in hospitality before taking a corporate role in the sector with the former American owner of the Sizzler restaurant chain.

But as a child of Greek migrant parents who did not have much money, he always believed that if he was self employed, he would be more prosperous.

After his 21st birthday, he teamed up with a fellow Sizzler manager and started his own company.

“I remember then I said to my dad, ‘You know I love food and I’ve always loved food. I’m going to go out on my own.’ Having been a migrant but also being working class and very simple, he quickly replied: ‘What do you want to do that for? The company you work for pays your holiday pay, they pay you when you are sick’,” he now recalls.

“Many, many times since that little voice has come into the back of my head.”

In his early 30s Barbounis developed an interest in raw chocolate after watching the famed movie Chocolat about a French woman and her young daughter who open a chocolate shop in a small remote village that shakes up the local community.

Pana Organic CEO and founder, Pana Barbounis.

He was intrigued by the fact that cocoa had traditionally been roasted when making chocolate to kill off the bacteria. But the ingredients of raw chocolate were never cooked above 42°C.

After training in the UK and making visits to Belgium where he worked with traditional chocolatiers, the Melbourne-based entrepreneur worked on his products for six months before taking them to market under the brand Pana Chocolate in 2012.

He started out selling $600 worth of chocolate a month and delivering it from the back of his scooter. The firm was one of the first in Australia to display nutritional panels on food packaging.

Growth plans

Now one of Australia’s market leaders for vegan, dairy-free, plant-based chocolate, Pana Organic – as it is now called – is forecasting revenue growth of up to 50 per cent over the next three years by expanding its existing portfolio, customer base and international reach.

About $15m has been invested in the company over the last five years, largely by Barbounis’s now business partner Michael Saba – the former CEO of Swisse Wellness Group and the fifth largest shareholder in the Myer retail group – who invested in Pana Chocolate in November 2016.

“We are quite fortunate that he supports the growth of the brand and the innovation. Innovation costs a lot of money and when you launch a lot of items, not all of them stick unfortunately,” Barbounis says.

“I think the biggest revenue growth that we had was about $7m-$8m in the one financial year, so that requires some capital.”

He says the business, which turns over “tens of millions of dollars, has seen a 54 per cent growth in sales over the past two years driven by a desire by consumers to eat healthier and organic.

Pana Organic is now stocked in major supermarkets.

After launching new products in recent years such as a hazelnut spread and a frozen dessert, Pana Organic has just started selling snack bars as it transitions from the health food aisle in supermarkets to the mainstream confectionary space.

“We are one of the only organic brands in the marketplace. So we are expecting quite an uptick in growth from that move into snack bars,” Barbounis says.

The firm now plans to expand over the coming years into new international markets such as New Zealand and Japan and to return to the UK.

“We are watching the international plans closely at the moment. While the Australian market is where we want to focus, we see some opportunity in New Zealand and in the next two to three years we would love to look at the UK. There is already brand awareness for us there,” Barbounis says.

“We had a lot of traction in the UK with a distributor based there and then Brexit came and really changed that landscape. We really haven’t recovered. We will revisit that in a couple of years.

“In Japan we have a great distributor and brand ambassador – it is one market that when it is ready, we are ready to support it.”

The international expansion will be underpinned by the momentous recent decision to bring all the firm’s production under the one roof at a factory at Coburg North. For years Pana products were handmade and wrapped in its Richmond store.

“We make our own chocolate and our own spread. At the moment we make them at different facilities,” Pana says.

“Now we are bringing them under the one roof, which is great. We are looking forward to it.”

Supermarket wars

For years Barbounis knocked back supply deals with Coles and Woolworths, declaring he wanted his products to only be in organic and health food stores.

Independent supermarkets also became mini ambassadors for Pana Chocolate, pushing and promoting the brand.

“I used to take samples to the independents and they were happy to sell it, they are always willing to take on new brands that are untried and untested. We got great support from the independents and I’m forever grateful for it,” Barbounis says.

But in 2017 the business pivoted to the mainstream.

“That was a big decision. I knew where we wanted to go and there was demand for our product.

Pana Barbounis in 2017. Picture: Kylie Else

“We had seen a bit of a plateau with the chocolate, to be honest, so we moved mainstream. You have to sacrifice a bit of margin to capture the volume but it was worth it,” Pana says.

“It was almost a play we had to make for the longevity of the brand and to create brand awareness in the marketplace. When you become too niche you isolate yourself a little bit.”

Coles was first to take Pana brands, followed by Woolworths. In 2019 Coles was the first to stock Pana’s frozen dessert products.

But the founder declares that he has not compromised the company’s principles. He also continues to put them into practice in his own life.

“It really resonates with me personally. I’m of Greek background so you probably say, ‘Would you like lamb with that?’ But I haven’t eaten meat for about 11 years now. Dairy for about 14. So my family, my kids, they still all have it. It is their choice, I’m not putting my way on them,” he says.

“When I first invested in the Pana brand, I didn’t think I could ever compromise on the whole plant based, gluten free aspect.” Although he admits to still loving bread.

While he has always been lactose intolerant so has never consumed many dairy products, he says the turning point on eating meat came when his youngest daughter was born.

“Twenty years ago I was part of the slow-cooked food movement. I used to buy deer from the Vic market from a farmer that I knew and slow cook it. But when my daughter was born, I knew the next step was for me personally was to move into more sustainable methods,” he says.

Pana Organic CEO and founder, Pana Barbounis.

He adopted the core principal of veganism that sees all sentient animals as beings we should respect, not as objects for us to use.

“It became about the sentient being for me, that I was not worthy to take another sentient being’s life. I remember I was overseas in Los Angeles with a friend and we watched a documentary called Earthlings. I got tears in my eyes and declared from that day forward that I wasn’t eating meat anymore.’

He now loves and respects his Greek heritage, but it wasn’t always that way.

“I was sort of anti my heritage for a bit when I was 18 or 19 because I wasn’t given much of a choice on a few things. It wasn’t until a few years later that I came back to it,” he says.

“I now believe I’ve got best of both worlds. I was born here, I live in the best country in the world. But I’ve also got a great, rich heritage. I’ve done my best to try and take my kids back to Greece to experience my culture.”

Ironically he says his heritage also likely contributed to selling himself short on the opportunity of building a business when he decided to do his own thing a quarter of a century ago.

“Maybe that was the background with migrant parents that I never thought big,” he says.

Over the past two decades he has dared to dream.

“I felt I had a brand after six months. When my second daughter referred to the Pana business as a third person, it made me think ‘I might have something here’,” he says.

“The first move I made, I think I had outgrown the space within three months. I am now onto my fourth kitchen. So I wished now that I had backed myself in, believing a bit more from the beginning. That would probably be my biggest lesson in life. Never underestimate what you can do.”