Success tastes sweet for this honeycomb business with a mission to combat honey fraud

Douglas Raggio, founder of Pass the Honey, didn’t set out to save the bees. Just a few years ago, Raggio was a venture capitalist in the consumer packaged goods industry and started a private equity group that invested in superfoods. His career was doing well, but working in corporate finance was running him ragged. 

For comfort, Raggio started drinking lemon ginger tea with honey, just like his grandma used to make (“minus the whiskey,” he jokes). As he was squeezing a healthy dose of liquid honey into his tea, he started thinking about where honey comes from and how it’s processed. His background in superfoods had taught him a thing or two about food fraud. “Here I’m putting honey in my tea to heal myself,” he said, “but I know it’s mostly processed sugars.”

He was right. Honey is the third most faked food in the world, according to the Food Fraud Database. Honey manufacturers frequently dilute real honey with high fructose corn syrup or heavily process the honey to remove contaminants, like pesticides—removing all the beneficial properties while they’re at it.

Honeycomb, on the other hand, can’t be heated or blended—two of the most common ways to adulterate honey. “Honeycomb is the original source of honey,” Raggio said. “Nothing’s touched it from the moment a bee made it.” But buying large chunks of honeycomb isn’t realistic for the average consumer. “You’re not eating it all in one sitting,” Raggio said. “So you either leave it on the counter and attract ants, or you put it in the fridge and it becomes inedible.” 

That’s when Raggio had his big business breakthrough. “What if we package honeycomb in a convenient format?” he wondered. And just like that, Pass the Honey, individually packaged, snackable honeycomb, was born.

Overcoming 4 major challenges

Of course, “just like that” never really means “just like that.” As Raggio set out to sell snackable honeycomb, he encountered a few major challenges that would alter the course of his business. 

1. Sourcing 

“You can’t get clean honeycomb in the United States,” Raggio said. “There are no FDA standards for honey.” He was unwilling to sell honeycomb that could have been exposed to pesticides or other impurities, so he tapped into his superfood contacts for help. Raggio connected with a few vendors overseas and finally signed a deal with a vendor in Turkey that had been importing honeycomb in much smaller quantities. But sourcing his product overseas came with its own challenges. “We’re ordering combs 90 days in advance,” Raggio explained. “It pinches our cash flow.” 

2. Packaging

No one had ever packaged honeycomb in individual portions before—and they weren’t sure it could be done. “For years I was told you can’t cut honeycomb that small, you can’t pack it that small,” Raggio said. “Honeycomb as a structure is incredibly stable, but delicate when cut small. It’s a liquid, but it’s also a solid. And it’s sticky and messy, so we had to consider what’s going to cut it.” For Raggio and his team, it was months of trial and error to find the right equipment and packaging—an ultrasonic cutting machine and post-consumer recycled plastic cups—all of which cost his new business precious time and money before they were able to get off the ground.

3. Marketing

The third major hurdle was breaking into the honey space with a product no one had ever seen before and didn’t quite understand. “Yes, honeycomb existed prior to Pass the Honey,” Raggio said. “But it was never in this format, it was never merchandised in this manner, and it was never communicated to customers.” To overcome this, Raggio hired an agency to get his website set up for launch, “but it was a total dud,” he said. It took three months of barely any sales to realize that the “buy now” button on the site was broken. “For three months people hit ‘buy now’ and were taken to a 404 page,” Raggio said. “It was the biggest deflation for the company.” But this challenge led to one of Raggio’s biggest breakthroughs: “Retail is where we win,” said Raggio. “When customers see it, they buy it… I never intended this to be an e-commerce business.” 

4. Enduring

Raggio's fourth hurdle is one no one saw coming: The COVID-19 pandemic. “In the food space, the discovery of new items happens in grocery stores,” Raggio said. In April 2020, Pass the Honey was in the midst of opening retail accounts when the pandemic hit. “Suddenly all new items were on pause,” Raggio said. “Grocery stores were just trying to make sure they had toilet paper on the shelves.” For about two years, Pass the Honey wasn’t able to break into the retail space—and sales were stagnant. Pass the Honey has since landed several retail partnerships that have skyrocketed sales—and Raggio says there are a few more exclusive partnerships on the horizon.

Good for the earth, good for business

When he looks back on how far the business has come since 2018, it seems a bit unbelievable. After all, Raggio never set out to become a business owner—nonetheless a defender of the bees. “But it fits,” he said. “I get to wake up every morning and solve big problems and work with really smart people… I get pretty jazzed about it.”

And now, beyond running a successful honeycomb business, he’s on a mission to produce regenerative, clean honey in the United States. And this mission extends far beyond sourcing honeycomb for his own business. 

“We want to use bees to create healthy ecosystems, regenerate landscapes, heal the earth, and sequester carbon,” he said. “But also, we want to bring pricing back to where beekeepers can make a living on beekeeping, and make sure the bees are as healthy as possible.”

Pass the Honey recently secured 1.1 million acres to carry out large-scale pollinator research—representing one of the largest private-land commitments in the United States. Raggio is working with research partners at UC Davis, MIT, and even NASA to study honeycomb production in different environments and establish quality standards and practices. “We’re doing a lot of heavy lifting for a tiny company,” Raggio said.

By 2035, Pass the Honey intends to restore and enhance more than seven million acres of pollinator habitat in North America. “When people ask me what I’ve been up to, I just have to say ‘Oh, we’ve been up to a lot,’” said Raggio. 

What new businesses need to thrive

For Pass the Honey, a number of factors have contributed to business success. Snackable honeycomb is an exciting, new product with no marketing restrictions. Everyone wants to get their hands on this healthy treat. “There are no audience demographics,” said Raggio. “It’s like marketing a banana.” 

Beyond that, Pass the Honey boasts a worthy mission that keeps customers coming back time and time again. “Something like 60% of customers return within 40 days,” said Raggio. Plus, honeycomb is a premium product that doesn’t expire, so Raggio can order in bulk and avoid common challenges with inflation.

But if Raggio has one piece of advice for new business owners hoping to grow their business, it’s this: “Watch your numbers.”

“It’s shocking how many founders of businesses don’t pay attention to the financials,” he said. “My advice is to really watch your numbers. If you don’t understand profit and loss, or your balance sheet, or what your startup costs are, it won’t work.”

Learn more about Pass the Honey and follow Raggio’s journey with the Regenerative Honeycomb Initiative at passthehoney.com