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Sprouting pencils a huge success

By The Confederation of Danish Industry / Photo: Joshua Gross, November 28, 2016

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.

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.

– Read more about Sprout

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. 


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.

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

Source: Read the entire article from the Confederation of Danish Industry 

 

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