How Beck’s Broth Lost $26,000 (and What They Learned)

Written by Bailey Kennedy

Have you ever wondered what happens behind-the-scenes in a female-owned Canadian small business that is rapidly scaling? I certainly do. So when the beloved Beck's Broth agreed to speak with me about their most recent business scare, I jumped at the chance. I had the opportunity to speak with Beck’s Broth President, Domenique Mastronardi, about the growing brands' nightmare: being scammed out of $26,000 worth of product.

If you aren’t already obsessed with Beck’s Broth, their bone broth drinks are a delicious, gut-healthy way to drink your protein. The line ranges from hot chocolate and coffee to matcha. The drinks were created by holistic nutritionist, Beckie Prime, who saw the benefits of bone broth herself and wanted a tasty way to get her clients drinking more of it. She met her partner and fellow entrepreneur, Domenique, at a farmer’s market and they bonded over gut health. Since those early days selling directly to clients, they have grown the brand into a line of products in almost 1000 retailers across North America and a team of 8.

Creators of Beck’s Broth, Domenique Mastronardi and Beckie Prime

You recently announced that you lost $26,000 worth of merchandise in a scam, can you walk us through that?

We did. About three months ago, I started to notice that our inventory wasn’t reflecting our sales, but not enough to raise any red flags. The amounts were low that were going missing and I kept joking with our staff that someone was drinking all our product. I kept digging but couldn’t figure out where the product was going. It wasn’t until one of our sales reps came to me about a $3,000 order that came through that was reduced to only the shipping costs. We couldn’t figure out what had happened until we started looking into the discount codes.

What happened?

It turned out a special code meant to give our investors free product had been leaked. I was able to pull a report of every time this code was used in the last few months and found that it had been used 10 times for a total of $26,000 worth of product!

How did that slip through the cracks?

We sometimes get hundreds of orders a day, and whoever was doing this was doing it in batches so as not to set off any red flags. Like I mentioned, I had noticed that the inventory wasn’t what it should have been, but it was a slow enough leak at first that it seemed more like a miscalculation somewhere than an actual theft.

What was your immediate thought?

The first thought was: we need to get our company back to safety. And then it was dread. We recently did our first round of seed funding and raised $500,000 from a group of investors with the minimum investment being $25,000. So, my first thought was we just lost one investor's entire contribution. And then, what does this mean for payroll? After the initial panic, it was time to fix the problem.

So, how are you fixing this?

The first step to getting our company back to safety was to shut down our entire website, processing and order operation for a few days so nothing could go in or out until we fixed the problem. Then it was to set up measures to prevent something like this from ever happening again.

What's happened since you went public with this scam?

It's actually been amazing how many people have come out and been supportive. People didn’t shame us or make us feel bad, they just wanted to help out. We have been asked to speak at an upcoming Fuckup Nights in Toronto to share our story and our learnings, and have found lots of people have been jumping in to help out. We even had one man who reached out to us and purchased $1000 worth of product to donate to charity. So, sometimes great things can come from mistakes.

What do you want other small businesses to learn from this?

If you have a gut feeling about something, keep digging. Up your online security, lock those discount codes. But most of all, I think it's important to share these things with other small businesses so we can all learn from each other and stay connected as a community.

What are your favourite products?

My go-to is the coffee. It's probably the most underrated product but the coffee is delicious and packed with 15 grams of protein. However, my latest obsession has been the mint hot chocolate which is launching later this week as a pre-sale.

Losing $26,000 would rattle any small business, but the way Domenique and Beckie handled it, by moving fast, owning the mistake and sharing what they learned, is exactly why we love championing brands like Beck’s Broth. And the best way to support them after a hit like this? Stock up. Which brings us to the fun part…

Thinking About Holiday Gifts?

Beck’s Broth has a number of delicious products that are perfect for stocking stuffers or would be a great addition to a gift basket. You could even tuck one of their single servings into the envelope of a Christmas card!