#131 The Rise of Carbone Fine Food with CEO Eric Skae
Love handing out jars of, Carbone. So we try to make sure they're stocked so when people come into a restaurant or whatever, that they have something to give people as they come in. So it's been great in that event. They've tagged team us us on a lot of their events, and that's helped us build. Carbone just makes sure every detail is done right.
Eric Skae:It's the way they operate, which is great.
Daniel Scharff:Hello, CPGers. Welcome to the Startup CPG podcast. I am your host, Daniel Scharf. I am really excited for you to hear from today's guest, Eric Skay, who is the CEO of Carbone Fine Food. I actually had reached out to Eric a long time ago because I had seen just his career track record on Linkedin and thought I gotta meet this guy and figure out what did he do to have such a cool, varied, interesting career in CPG.
Daniel Scharff:And after talking to him, I thought it would just be such a good opportunity for this audience to hear from him as well. You'll get to hear about the beginnings of his career starting his own distribution up in Florida to running progressively bigger companies and all the way through to creating the Carbone fine food pasta sauce with the founders of the restaurant. I hope all of you get as much out of this as I did. Enjoy. Alright.
Daniel Scharff:Hello, CPGers. Welcome to the Startup CPG podcast. Today, we are thrilled to have Eric Skay, a seasoned c level changemaker with a remarkable track record of the CPG industry. Eric has spearheaded transformative initiatives at very well known companies like New Leaf, Iceland, Springwater, Popcornopolis, Rao's Specialty Foods, leading them through successful sales and rebranding efforts, and now he is the CEO at Carbone Fine Food. Eric leads a team dedicated to crafting super premium pasta sauce that embodies the essence of Carbone Restaurants' mid century elegance meets pop culture.
Daniel Scharff:With his expertise in acquisition process leadership, corporate strategy, and brand development, and his commitment to delivering restaurant quality products, Eric brings a wealth of experience to our discussion on building world class brands in the CPG space. And I only messed up a little bit saying restaurants, ssss, ssss. So the rest I nailed. How does that sound to you, Eric? Pretty good overview?
Daniel Scharff:Yeah. Alright. We got it all. So, Eric, I was just so excited to have you here on the podcast because you're somebody that I had just reached out to myself previously because I was so interested in your whole career trajectory and all of the cool stuff you've been able to do. So I was really excited to have you here on the podcast just to tell people a little bit more about it.
Daniel Scharff:It. So do you mind just, like, kinda starting us off, maybe doing a quick little intro and then talking about real quick what are you doing now? But let's go quickly back in time to what got you into the in the first
Eric Skae:place. Alright. So I've been doing this a long time, so I hope we have a lot of time. I have a 35 year history in the business, and, I started I've always been entrepreneurial, so I used to buy and sell homes in Florida in my twenties. And in 1989, there was a savings and loans crisis where it became very hard to get mortgages for people.
Eric Skae:So while I was waiting to get my houses sold, the insurance would be canceled, the copper tubing would be ripped out of the house, and so on and so forth. It became a very, very tough business. So I was looking for something to do, and I saw an ad in the Wall Street Journal for a water route. And I was like, well, it's Florida. And you gotta remember, this is 89.
Eric Skae:Bottled water was, like, not in its infancy, but it was only 10 years in in plastic or 12 years in a plastic. So it hadn't been around for a long time, and, I started selling water off of it and created a distribution company in Orlando, Florida. I built it up to 800 accounts, and I was lucky enough to get Arizona iced tea in that process when it was brand new. And my business, that's what got me to 800 accounts. I ended up having to figure out how to route 212 711s.
Eric Skae:And if you had a van and it would work for cash, you I'd load you up, and you'd deliver 711s for me. So I created that business, and Arizona went to a bigger distributor, which just happens. Didn't have a contract. Learned a big lesson. But at the same time, the water company that I was at with wanted to transition to Miller beer distributor.
Eric Skae:So between a local Miller beer distributor and a water company I was with, they bought me out. Didn't Didn't make a lot of money, but I learned the business, and I called Arizona Ice Tea and was lucky enough to land the job with them. So they moved me from Orlando to Cleveland, Ohio, which initially I thought was punishment because I flown over to Cleveland once, but I'd never been there. Ended up managing 6 states for them over a period of time, then I was recruited as VP of national accounts to Hansen's, which is my shoulda, coulda, woulda. Mark Hall, who was at Arizona, went to Hansen's, started creating several brands.
Eric Skae:At the time, it was Hansen's Functionals, which was an energy, but it also we also had de stress and antioxidants and a bunch of things. And I put these things, I put the these new items on shelves nationally in places like 711 and Walgreens, and they weren't working. And I decided to leave to go to a company called Fresh Samantha. It's my shoulda, coulda, woulda because Mark created Monster a couple years later, and I left all my options and cost of the lesson. Eddie's done an amazing job.
Eric Skae:Like, it's amazing what's happened since then. But I went to Fresh Samantha after that, which was director of sales, helped scale that from 5 to about 40,000,000 in under 3 years. They sold to Odwalla, then sold to Coke. Right at the end of that process, I went to a 9 company roll up, which the brand everybody would know would be Naked Juice. I was president of a division of Juice division.
Eric Skae:I had half the country, and, yeah, again, Naked being the one that everybody would know. Northcastle Partners sponsored that roll up. After I left there, I had 2 of my own brands, Iceland Spring Water and Nu Leaf Iced Tea, exited in 08. I will tell you, the two places I learned the most in my career were Arizona Iced Tea from the 0 to $500,000,000 growth in 3 years. It's sink or swim.
Eric Skae:And New Leaf Iced Tea because it's what I call my commercial success financial failure because, oh, wait. It happened some messiness in the company where I got hit with some suits that were not anything to do with the company. It was outside of our control. You know, essentially, employee doing something way after hours and us getting dragged into it. Let's put it that way.
Eric Skae:But when you have a $10,000,000 suit and you're trying to raise money and you don't have clearance, you don't have the line of sight as to where the suit's gonna go, it's hard to raise money. I managed to keep it alive for several years, and in 2011, finally left, but, my board and I just had I had a kind of a a way I wanted to go. The board had a way they wanted to go, and they had control at the time. So such is life. But I sold Iceland Spring successfully.
Eric Skae:My partners bought me out there. It was good run, and then I consulted for 5 years. And that's why I'm excited to be on this show because during those, it's actually 6 years. And during those years, the most exciting thing for me was working with startups. I had clients from startup to Smucker, but I loved working in that startup environment.
Eric Skae:It was always fun and always fun for me, and I could use everything I learned, like creating the Nuuly brand that, you know, I I drew that brand on the back of it. It's funny. I was coming back from Ireland. My mom's from Ireland, so I have a lot of family there and go often. And we were there for my aunt's wedding, and my 2 brothers were on the plane coming back for me, and I had nothing to draw on but the airsick bag.
Eric Skae:So I have these 2 airsick bags with all these sketches of New Leaf Ice T, and it's, like, not even existed yet. And I say to my bro my brother's like, what are you doing? I'm like, well, I'm creating my new brand. And my brother, John, is like, yeah, sure you are. You know?
Eric Skae:And I still have those drawings framed, which is pretty neat, but I learned a lot during the Nuuly time because of the because of some of the failure. Like, you learn more of that in a tough environment than you do in an easy environment. But again, consulted for, for 6 years and did anything from writing your business plan, setting up your distribution, to selling your company, or being involved at least in a sale as an advisor. Learned a lot, I learned food there, and I realized that I liked food a lot better than beverage. So I got a call to see if I would take the Rao's position.
Eric Skae:It was a tough choice because I had built this consulting firm. My wife was working with me. My sister was working with me. We had one employee, but I was managed to transition 12 of our clients to other folks when I took the REO's job and then stayed on the boards of the 2 that I couldn't transition because they were early on. I'm happy to say I'm still on those boards, right, energy and wandering back.
Eric Skae:So it's worked out. I took the reos position, took that through an exit. It was a fast process, and it was a tough, tough turnaround. There was a lot of turnover early on in the REOs position just because of circumstances. There was shareholder fight going on that was in the New York Post.
Eric Skae:We had all sorts of press. One of our shareholders' daughters was Vanessa, who at the time was Vanessa Trump. She's no longer Vanessa Trump. So, like, it just all bought a lot of noise, but I managed to go clean up things there, get it sold. And, you know, I look at it today, and I proud to say that I was able to clean that up and sell it because to see what happened with Rayos.
Daniel Scharff:Yeah. Man, that's amazing. That's already such an incredible track record before even coming to the success of the gig that you have now. So from those early days then because, I mean, you've done it all. You've started from 0 and, you know, you've been at bigger brands as well.
Daniel Scharff:Do you have any quick insights from kind of that, like, hey, what are the big things at that early stage that you really need to do to get a brand off the ground? And then also if you're thinking about that kind of like Arizona iced tea stage or like getting that kind of next tier of growth, like what are the things that are going to be important at that stage? If you're a founder just starting a company, you know, thinking about like, alright, what do I need to kill it the next couple years, and then what's the next stage after that gonna be like?
Eric Skae:So if it's like I'm at the next stage with Carbone, so it's an easy kinda one to kinda dive into. But in the early stage, it's a matter of picking the right partners. I always inch wide mile. You know, everybody gives that advice. No one, including me, follows that advice, but they should.
Eric Skae:So, like, creating a success story and being hyper focused on velocity, I don't care if it's one store. Go out and prove that the brand can sell and actually can grow from a velocity standpoint before you go scale. So, like, I like picking 1 or 2 markets and really, really focusing on those 1 or 2 markets, or sometimes channel specific. Really depends on the brand. So, like, if you're in the clear pioneering stage and let's say you're going into a category that hasn't been premiumized yet, that hasn't hit that point, then stick with specialty and really beat it in specialty, and make sure you have velocities there before you go to conventional or club or mass.
Eric Skae:The next stage of the business, and I'm there now, it's it's where I'm kinda hyper focused, hyper focused on margin. It is the most fundamental thing that you have to get right, and you have to know you're gonna get it right from the early stages. I love people who say, I'm gonna get there with volume. Well, you better understand how you're gonna get there with volume, so you better know where your price breaks are on cans, and glass, and ingredients, and production, and co packing and so on and so forth. And if you don't, it's gonna be a tough road because volume just doesn't always get you margin.
Eric Skae:Sometimes it does, sometimes it doesn't, and, like, I learned quite a bit about that starting Carbone. I started I had the manufacturing margins that I needed right in the beginning.
Daniel Scharff:One thing you mentioned I wanted to come back to is you said you like a re like a local or regional strategy, you know, starting in 1 or 2 areas and really proving the velocity. And then you also mentioned another strategy that can be kind of like specialty or natural that probably is broader, bigger area. What do you think if you're a new brand considering one of those two approaches, would one of them be right for certain kinds of products? Like, if you I mean, probably most people listening to this are making some kind of a premium product. So where would you recommend, hey, just really stay in your own backyard and grow it there versus, yeah, maybe consider looking regionally or nationally at some of the natural grocers?
Eric Skae:Look. I mean, I think you stay in your own backyard, and if you have the ability to start small and really small, do it off your own trucks. Like, if you're in a market that has good independent markets where you can go out and really, really learn your brand, try to do it yourself if you can. I mean, I think back to, like, Fresh Samantha and Naked Juice, starting naked in New York where I had my own trucks, and I had the ability to gotta really, really do whatever I needed to with the brand and learn the brand. That was a brand that went from 0 to $10,000,000 in New York in under a year, and we launched the week before 9,112,001, so we had a lot going against us.
Eric Skae:Now I will tell you, it also comes back to team. And the guy who led that initiative for me is a guy named Chris Bajuk, who now is has been at Doris for the last 20 years and is an amazing strategist when it comes to how you attack CPG in New York City.
Daniel Scharff:How do you? I'm curious. What are
Eric Skae:some answers
Daniel Scharff:to that?
Eric Skae:I can't I can't give you the secret sauce today because it's been it's been years. Right? Like What
Daniel Scharff:was it then? Back then, so, like, those early days.
Eric Skae:At that time, Chris quadraded off Manhattan. It was before Brooklyn became a thing. Like, there was a couple of pockets of Brooklyn that you know, were there, and we had those areas covered, but it wasn't, like, where everybody migrated to Brooklyn yet. So he kinda quadraded off the city and really attacked the Upper West Side, Lower East Side, and village, and hammered the hell out of those areas. So, like, we definitely opened accounts in Midtown, but we didn't focus on Midtown.
Eric Skae:We also had 10 trucks running around that were branded that you saw it every day. Like, you you know, every day our trucks were visible, but just hyper focused on the areas that kinda were brand building areas at that time. Now, again, it's changed. I'd have to get in and dive in in New York and say, okay. I'm going after Dumbo, and I'm going after parts slope, and I'm, you know, I'm going after parts of Queens now, which you didn't have to back then.
Daniel Scharff:It's pretty interesting to hear you say that though. It's thinking about New York because, if you have branded trucks and you're focusing on a couple of different areas, they're like slow moving billboards because they're going to be sitting in traffic a lot of time. Like, people are out in the street a lot walking places or they're in a car that's also moving slowly, and they're gonna it's not like if you get a billboard here in LA, someone's gonna whiz by it. And maybe they see it, maybe they don't. Like in New York, it's just going to sit there for a long time.
Daniel Scharff:It's going to be parked outside the store that they're going into. So I could see that being a pretty interesting part of the strategy, especially the way you're talking about it of like, yeah, it's not just all of New York. Like, we're picking specific neighborhoods inside of Manhattan and really penetrating those first. That's pretty cool to hear about. And I know I
Eric Skae:Look, I couldn't get Boxy. I have 4 trucks running around New York with Boxy right now, and I couldn't get them to brand the top of the trucks. I would have liked that because of everybody looking down as well.
Daniel Scharff:That's so funny to think about. Oh my gosh. So cool. Alright. Sorry to drill you on specifics of things from 20 years ago, but we're hard with people.
Daniel Scharff:I think they're very interested in that, like, street level approach. Okay. So coming back up then to kind of that next phase of growth then. So when people are looking ahead after conquering that early stage, like, getting, you know, into your local area and really just crushing it, like, yeah, what do you need to be doing then for that to really unlock the next big stage of growth?
Eric Skae:So, I mean, you gotta start and make sure you have the right margins. Right? Because I we can talk about it whenever. But what I call the WIIFM, which I did learn, funny enough, from Mark Hall Monster, everybody wants to know what's in it for me because you've gotta pay your brokers. You've gotta pay your employees.
Eric Skae:You've gotta have margin for the distributor. You've gotta have margin for the chain. And at the end of the day, you've gotta get to the most important person, which is the consumer. It all costs money, and you've gotta make sure that there's enough margin in that pool to do it. So, like, I'm hyper focused on COGS because look.
Eric Skae:I started Carbone. The first bottles went on the shelf under 3 years ago, March 1, 2021. We're in 20,000 doors right now, and in the next couple of months, we'll be at 25,000 doors. We're we're launching Walmart. It was very, very, very fast growth.
Eric Skae:I started with the right margins, and then the supply chain world fell apart. Like, freight from Italy went through the roof. Tomatoes doubled in price. Olive oil's an issue now. This, that, the other thing.
Eric Skae:So I've had to fight it on both ends. I've managed to pick up a lot of the margin, but I'm still not back to where I was when I started this 3 years ago from a manufacturing margin standpoint. And if I went there, my price would be too high at Shell. So focus on on COGS, and your pricing is one of the most important things to do. Always go back to doctor Richardson's book on, you know, scaling your brand, like, that book will tell you.
Eric Skae:Always look at your 4 P's, like, constantly. Is my product right? We know our products right, right? Our pricing right? You know, that's an area where I'm working on.
Eric Skae:So I gotta look at it east to west because I'll see my brand anywhere from 899 to 1499.
Daniel Scharff:Got it. So, I mean, I think something really interesting about the Carbone brand, and I wanna get into the process of starting it also and what that was like. But the first time that you see Carbone and the label, like, it just looks iconic. It looks familiar and, like, premium, right, which is not an easy thing to do as a new brand. Like, how exactly rigatoni
Eric Skae:pasta or something. It was
Daniel Scharff:like, it was mind blowing. And
Eric Skae:the focaccia
Daniel Scharff:bread, rigatoni pasta or something. It was, like, it was mind blowing, and the focaccia bread was unreal. So but, like, there are plenty of people who don't live in, you know, Miami or New York or Las Vegas, wherever all the locations are. I suspect they would still have that same feeling about the brand looking at it that it's just sort of like a little old world, but very high quality and premium, and it just looks like it's going to be really good. Like, how did you guys accomplish that?
Eric Skae:You know, I think I hate to say this, but this time around, they took a shortcut. Right? I didn't draw it on the back of an AirSig bag like I did Nulif. So I met the Carbone guys, and, Jordan Gaspar from Excel actually introduced me to Mario initially, and I will always appreciate her for that. And she said, hey.
Eric Skae:Would you be interested in meeting Mario Carbone? And I'd never thought about going back in the pasta sauce because once you did something once, I don't know, doing it twice. But I had gone to Carbone for my daughter's 25th birthday when I was running Rao's. And, honestly, when she told me where she wanted to go, my exact response is, are you effing kidding me? And she correctly said that people your age go to Rao's, people my age go to Carbone.
Eric Skae:And she goes, and I've been to Rao's already. So I ended up taking her to Carbone, remembered the experience, but when I got that call, I'm like, yeah. I can build something on that. So a lot of the elements that you've asked about, such as the label, were already in place. That label is the menu at Carbone.
Eric Skae:That's the picture of the menu. And I'd love to say I was the brilliant guy who said, let's put that on the label. But as I was as I bring in a branding expert and I do everything I do to wow my new partners, Salasnik, who was one of the partners of Major Food Group, said to me, we've already got the label done. It's it's our menu. And that was that.
Eric Skae:It was as simple as that, and I looked at it, and I go, wow. No one has a label like that. And I picked the background colors, I picked some of the colors, but the branding was essentially done for me from a label standpoint. The interesting thing is, though, household awareness of Carbone, to your point, wasn't as high as I thought it would be. I was my son went to St.
Eric Skae:Joe's in Philly, which is a food marketing school. He had a I wanna say he had 5 couples over, so or 6 couples, actually. And out of the 6 couples, one of them knew Carbone, and these were all food marketing majors. And the one who knew Carbone happened to have, like, moved to Manhattan after college, but no one in Philly really knew the brand. That said, I think because it's Carbone, because we can do things in that, it's very tough for Senator to store brands too.
Eric Skae:We get a lot of publicity on this brand. We've managed to grow household awareness now over the last 3 years and are really consciously talking about restaurant quality. You know, the brand has to stand alone. It's gotta stand away from the restaurant, but we will never do anything as a brand that would hurt that restaurant. Anything we put in a jar has to be restaurant quality, and to that point, like, Rich Turrisi and Mario Carbone, who are the 2 award winning chefs, arguably, like, top Italian chefs in the world.
Eric Skae:Right? Every single new item goes through them first, and they are really, really serious about it, which is great to have them as partners doing that.
Daniel Scharff:And so, obviously, you were coming in with a ton of credibility. So not surprising at all that they would wanna have a meeting with you. But what did it take to actually convince them? I'm assuming that you probably built a business case around it and just showed them some really compelling data for why this would be a good use of their time and a safe play for their brand? So what did you do to bring them along that journey, and what were those discussions like?
Eric Skae:You know, it wasn't a lot of convincing. I think they had gotten to a point where they said, okay. We see what's happened with CPG brands restaurant brands. We see there's an opportunity there. Sauce is a place that's obvious to start.
Eric Skae:And I think, you know, when they saw my background with Ray owes, and they said, okay. We've got someone who finally knows the category, which is, I think, one of the main things they wanted to make sure they had in place. I actually know that. The one of the main things they wanted to have in place was the right person. And because I've never seen 3 guys that I mean, they're they're early forties.
Eric Skae:I don't think I've met anybody as driven in my life, and I've met a lot of driven people. So they have a 1000000 opportunities. Right? And they work on a 1000000 opportunities. Right now, they're building clubs and restaurants in a high rise building in Miami, and Mario's got a clothing company.
Eric Skae:It goes on and on and on. But I think they're very smart in the sense that they wait for the right opportunity to present itself. And I think me coming in, REOs having grown so much, clearly, you know, no number 2 in premium super premium behind Reyos. I wouldn't even consider myself number 2 yet. Right?
Eric Skae:Because there's so much distance between us and them. But we are clearly the number 2 super premium brand kind of over 7.99, but there's still a great deal of distance between us and them, and that's where I saw some white space. Everybody needs a competitor. You don't have a competitor, you don't grow.
Daniel Scharff:Interesting. Okay. Cool. So then, you know, just digging more into once you got started with Carbone, what was that like? Probably a lot of things were secondhand to you just having done them fairly recently.
Daniel Scharff:But, I mean, yeah, what was it like to just kinda start from scratch again and get the product made and, you know, get into retail and, you know, light back up your old networks and and partners? What was that process like?
Eric Skae:I've never had a gap up in the industry where I've had time off, so, like, my contacts are always pretty fresh. Right? Like, so I don't have to reengage with a lot of people. They're people I've kept in touch with. So I started I signed my agreement with them on October 29, 2020.
Eric Skae:And by March 1, 2021, we were on the shelves in our first customer, which was Stop and Shop. I bought on as a consultant. I was a consultant because we didn't even have a company yet at that point. Someone named Barbara Amoyo, who worked with me at Nuuly Vice D, Iceland Spring, Rao's, and now here. And Barbara and myself, almost all the way up to launch, did it a 100% ourselves.
Eric Skae:We hired no one else. So it was her and I. It was the chefs while I was doing trial and error, getting in their car at in New York at 3:30 in the morning to meet me in Pennsylvania at 6 in the morning for production runs to make sure we had it dialed in. So Mario and Rich were there tasting batches with me. And, like, the things that I had to get used to doing again, when I took over Rao's, it was developed already, so I didn't have to go to the extent that I did at Carbone.
Eric Skae:For the 1st year, a 187,500 cases were produced. I tasted every single batch. I did a 100,000 miles on United and did not leave the country. Now that's my fault. I live in Vegas.
Eric Skae:Production was in Pennsylvania at the time. But every single batch before I got yard, I tasted. You know? And these are the things that it takes to really launch a brand and make sure that you're doing it right.
Daniel Scharff:What do you think that they were looking for in the sauce as compared to what they would be serving in their restaurant? Restaurant? Like, I mean, is it exactly the same, like, the quality and taste that you'll get, or are there some differences, or what were you trying to
Eric Skae:You'll never get a 100 percent the same because they're 2 different if I move from your kitchen to my kitchen, it's not gonna be a 100% the same. There's some advantages to commercial cooking versus kitchen cooking because regulation of heat is much easier. Right? You've got steam jacketed kettles that you're getting uniform heat all the way around, where controlling heat is a big thing when it comes to cooking in a restaurant. But, you know, we took their recipe and adapted it for commercial cooking, so we wanted it as close the essence of the restaurant as we possibly could, and that's what we've accomplished.
Daniel Scharff:Amazing. Alright. So and then, I mean, how easy was it for you to line up retailers to jump on board? It sounds I mean, you were hitting retail within 6 months, which is pretty awesome. I mean, were they just saying yes because they knew you and your track record, and it just was a no brainer because of the brand, or they're just they were really eager for a competitor for that particular segment of the category?
Daniel Scharff:How did that go?
Eric Skae:I think it was a combination of all, taking the car bone, building that story so even those who didn't know it, there was enough press about the restaurant where I could build a really sexy story. There was enough social just of like, at the time, I think Mario Carbone had 20,000 followers on Instagram. He's well over a 100 now. But just to give you an example of the power of Mario and the base that he does have, we put out a post on March 1st that we launched, then you could buy direct to consumer, and I had $80,000 in orders in 4 days. Now I had to learn how to, Barbara, actually, who I've mentioned earlier, had to become a packaging engineer because she had to figure out how to make a box where things weren't gonna break because our breakage was through the roof on those 80,000 dollars in orders.
Eric Skae:But it was a nice way to launch, and it helped us scale where we were able to get direct to consumer and get to consumers outside of that Stop and Shop footprint early on, and then take that and kinda build it from there. I mean but some of the accounts that I would have thought would have jumped on immediately. Like, I built this brand and said, this is perfect for Whole Foods, and they were resistant. I mean, it took me over a year to get attention. Like, I almost took it personally because when I counted with companies that I've been on the board with, companies I've run, whatever, I've been involved with 21 brands that have been put in Whole Foods in this 33 year period of time or a 35 year period of time.
Eric Skae:You know, you'd think I could have gotten a call back. And don't get me wrong, they were going through a lot at the time as well, where they were down buyers and so on and so forth. You know? So I kinda understood, but some of the ones I thought would be easy were very difficult. Some of the ones I thought would be hard came easy.
Eric Skae:So
Daniel Scharff:And I'm trying to remember exactly what the timeline was, but there is a period I think it was 2022, at least, when I was, like, really ramping up sales where it was, like, the great buyer turnover period. And everybody was switching desks, and they were changing structure and downsizing, and and everyone was just moving. And you, like, work for 6 months to finally get a meeting, and then it's like, psych, go back to go. Start from the beginning. New buyer now.
Eric Skae:21 to 22. That's what was going on during that period of time, and Whole Foods was dealing with quite a bit of that, and it it became a tough one. Now, you know, that said, finally broke in. We're the number 2 brand there. Number 3, if you wanted if you look at 365.
Eric Skae:Oh, it's Rayo's private label and us at this point, from what I can see, which is a nice place to be.
Daniel Scharff:And then so probably one of the things that helped you get their attention was just how interested and engaged consumers, with your product. Man, honestly, I don't cook a ton at home, home, so I
Eric Skae:don't have a lot
Daniel Scharff:of pasta sauce here. But just, you know, looking at your brand, I assume you kinda probably had that, like, Erewhon effect of people just posting about you online, which is not something that consumers probably do a lot for pasta sauce. But I imagine just because, I mean, people do if you go to Carbone the restaurant, you're you're gonna post a picture probably to social media. Were you finding people were doing that a lot with the pasta sauce, and was that having an effect on retailers?
Eric Skae:Yes. And it's still happening. You know, like, we've got a pretty good social game in terms of how we attack it, and we do I'm grateful to anybody who posts, but we we do get quite a few people that post because, look, we have a brand that people wanna be associated with, which I think is great. I'm happy with it. I mean, you mentioned Erewhon.
Eric Skae:They've been a tremendous partner. Like, Vido could not have been better, but it's where I launched the brand in California and give them an exclusive, but, essentially, they were exclusive for 6 months, and the brands never looked back with the number one brand in there and have continued to be able to hold that. Really, really, I appreciate all my retailers, but I appreciate the partnership of Vida.
Daniel Scharff:I've launched Air 1 before and, you know, spent a lot of time demoing in the stores. Did you have to do specific things to support the brand there, or did it just hit a need and it just started flying?
Eric Skae:So we did a big launch party there at the Pacific Palisades store, and we had 750 people show up. I had flew Mario out. We brought Chefs in. We recreated our spicy vodka using arabeada at the event. So, you know, that's kinda how we launched Air 1, and worked ever since.
Eric Skae:Now that said, we promote. We do their end caps. We work with them every way we can to kinda grow our business, as we do with all our retails.
Daniel Scharff:So was there something about this category that made it so ripe for a really premium brand to just come in and resonate so well? Do you think that there are other categories in food that maybe wouldn't have that kind of appetite, whereas you look at a Carbone jar, it's just like, that that looks amazing. Of course, I want that. So do you think there's something about sauce that makes people want a premium option so much?
Eric Skae:I think so. You know, it's not as heavy private label as most categories, but there's been a premiumization going on in a lot of different categories. Like, we saw it in ice cream, you know, going all the way back to Ben and Jerry's. Right? Like, they might have been the pioneers of premiumization, like, in taking a category and really kind of driving that category up.
Eric Skae:I think every category, and I think it has happened an awful lot of categories. Pasta sauce was already there. I mean, Rao's was already there. I just think it was ripe. I think Rao's was ripe to have a competitor is the way I look at it.
Eric Skae:And don't get me wrong. There are competitors to Rao's, but I think they were ripe that they have someone compete with them that had kind of the same stature from a restaurant standpoint or maybe even a little higher just because of the amount of restaurants that Carbone has and where. Like, you know, Carbone's got a Hong Kong restaurant, and they've got I think there was an announcement the other day about the UK, and there's restaurants in the Middle East. Yeah. Carbone brand, the restaurants.
Eric Skae:So little bit of a bigger footprint, little more of a global, recognition.
Daniel Scharff:So has this success surprised you at all? Has it been just kinda what you expected, and you've done this before and you could see that when you were pitching this idea? Like, no. No. This is how it's gonna go, and I have a pretty good understanding of that.
Daniel Scharff:Or has it gone, like, you know, even better and you kinda had to scramble to keep up with it? Or how has it been compared to your dreams and expectations when you were launching?
Eric Skae:So when you start anything, you know, there's always apprehension about where it's gonna go. If I didn't think I would be where I am today, I would not have done this. I had a lot of options on things to do, going back to a start up after taking Rao's and Popcornopolis through a successful very successful exits. The path for for me was to dive into a couple of established companies and do a couple of more exits. I turned 60 this past year, so I'm not doing this forever.
Eric Skae:Right? So to go back and do a start up, like, at the time, at 58, there was days I said, way out of my mind. But I saw this platform that I can build off. As we discussed, you know, not everybody knows Carbone. There was enough people that knew Carbone there with something to build off.
Eric Skae:And that's, you know, what we've done, and it has worked. And household awareness just continues to grow on the brand because of what we've been able to do in press. Spicy vodka launch. Like, these are things I've never seen before. Spicy vodka launch, which was July of this year, 23.
Eric Skae:In the 1st 60 days, I wanna say we had 4,000,000,000 impressions in media. Wow. And that doesn't happen. Like, it just doesn't happen. We we sent out a beautifully, branded box where when you open it up, it had the carbon neon light inside, and it had jars of sauce inside.
Eric Skae:And we sent it out to influences, and, like, some of the posts that we got were a major, major influencers. Yeah. Bobby Flay. You know? Like, Yeah.
Eric Skae:Brought up on TikTok. And just, like, the interesting thing of that is I can see the sales spike and spins from those things happening.
Daniel Scharff:Yeah. That's something like that is probably something that an early brand would dream of doing, but they'd be very worried about the cost of it. For you starting this, was it how did you line up the financing for it? Was it pretty easy for you to do based on your track record? Or, you know, what where were you looking to fundraise?
Eric Skae:Look. My partners bought in a family office. I did the pitch, but they made the introductions. I wouldn't have known this family office, and the family office has been best financial partner I've ever had. So it's a good situation.
Eric Skae:Very supportive board. They recognized that they didn't have the expertise in CPG, so they gave up one of their board seats to someone they knew named Tom Corley. Tom was president of revenue at Kraft. He has been a tremendous board member to me. Anytime I have a question about a retailer or even need an introduction, he has picked up the phone and made those introductions at some major chains across the country.
Eric Skae:So Tom's been helpful, and it's one of those things. I mean, I would say, at the end of the day, this was still a startup. It was from bottle 1. Right? It's a startup, but I had a lot of things going in that I would have loved to have had in past startups.
Eric Skae:Right? Like, really supportive board, good family office with backing, a brand already. Like, I didn't have to do a ton I had to do some positioning work as to how we were gonna position the brand, but a lot of the assets were already there, such as the label. You know? And and just events that they're doing, and I and I get to leverage some of their events.
Eric Skae:Like, Mario, Jeff, and Rich are are the 3 partners of Major Food Group, Love handing out jars of, cargo. So we try to make sure they're stocked so when people come into a restaurant or whatever that they have something to give people as they come in. So been great in that event. They've tag team us us on a lot of their events, and that's helped us build.
Daniel Scharff:Well, I remember when I saw you Fancy Foods in Las Vegas, you said, I think I tried to invite you to an event we were doing, and you said, I'm hosting 5 dinners in 3 nights at Carbone here. And I was like, oh my gosh, that must be such a cool experience for a buyer to get to come and check out your brand in the environment where it came from. Like, I mean, what an ideal scenario to be introducing people to your brand. When I used to work in food tech, we would always try to get buyers come into the office so we could just really show them what the company was all about and the vibe of it and, like, you know, where the products came from and experience the culture of the company. But I mean, how could it be better than bringing buyers to a restaurant like that where the product actually comes from?
Daniel Scharff:It's the best asset that I have. I love hosting dinners at Carbone. It's funny. You would think the experience would be better because I was there. The experience is
Eric Skae:the same for everybody. Right? Carbone just makes sure every detail is done right. It's the way they operate, which is great.
Daniel Scharff:Well, if you launch the focaccia bread at some point, I'll definitely be a buyer of that. Yeah. Yeah. I promise you that.
Eric Skae:If if I could ever figure out how to do the croutons in their Caesar salad, that would be up.
Daniel Scharff:So let me ask you a couple other questions kind of just from your career in general. So, I mean, one is so you're on a couple of boards. Right? Like, you were talking about how much you value great board members. What is it that you try to do when you're on the board of a company?
Daniel Scharff:What are the specific things that you feel like you can be the most valuable to do, and what are the things that you're looking for from
Eric Skae:the company? You know, because I've got experience across all kinda segments, whether it be ops, finance, sales, it's kind of a board by board discussion because it comes down to what the needs of that particular board are. But I just try to be helpful with inter more with introductions, strategy, planning in those areas, but I will go to the level of if someone's making a key hire I wanna interview. So I'll get involved at that level and make sure they're making the right decisions.
Daniel Scharff:What are you looking for from people usually? Is it, like, you you really just wanna know about their expertise, or are you pretty interested in checking culture fit, or, you know, any kinda key things probably?
Eric Skae:Probably bad on the culture fit side just because, like, I remember Mark Hall one thing he said to me back in the Hansen's days. He's like, you know, everybody has their own personal brand, and your personal brand is hard work. Because I do. I work. So I'm looking for someone who's got grit, who's got it doesn't necessarily mean you know?
Eric Skae:So I probably should look more at culture. I don't think about those things, but I like people who work hard, who are grit, who think fast. Right? You've gotta be able to make quick decisions in this business. And how do you smart quick decisions.
Eric Skae:So And how
Daniel Scharff:do you screen for that in an interview other than just, you know, getting a sense for them? Are they
Eric Skae:gonna use the skills? Just a sense, and it's general conversation, and I base it on the fact that I while I've been doing this for 35 years, you know, my career is over 40, and I've worked with and hired a lot of people. So I can generally get a sense whether what I'm hearing is accurate or not. Right.
Daniel Scharff:Cool. And then so, also, you know, when you're in the past, you were tasked to go in and turn around a company. What's your playbook for something like that? Like, what are you I'd probably gotta look at everything, but, you know, are there top couple areas you're expecting to find opportunities for the company?
Eric Skae:So it's really hard, and it's dependent on that on the particular company that you're going to. So when in ARREOs, there was shareholder battle going on. So the first thing I had to solve was a shareholder battle. Right? Had 90 days to do that, got that done.
Eric Skae:But then I started looking at the sales, seeing where gaps were, and had a head of sales there named Jim Murano, who was also a shareholder. Weird situation. I reported to Jim as a board member. He reported to me as head of sales, and we made it work. And we really made it work well.
Eric Skae:But, Jim, it was more of a divide and conquer, so he was really sharp, so we kinda looked at sales. But where he wasn't, where he didn't have the expertise like a Whole Foods or like an independent distributor network in New York. I kinda handled that. But first and foremost, started with the shareholder battle there, but then we looked at, okay, where's the low hanging fruit fixed? So, like, one example I always use with RAYOS.
Eric Skae:RAYOS was down 6% in Target when I took it over. And within the 1st year, we were up 81 percent. And I'd love to say I was the genius behind that, but Jim just identified we had so many voids when it came you got once you got beyond marinara, we had so many voids. Just fixing those voids, we knew we were gonna get growth. So we're able to do it, but, like, you have to look at everything from the manufacturing to the sales, and then you gotta figure out where your most critical points are to go fix first.
Eric Skae:And just take it one at a time.
Daniel Scharff:How do you actually identify voids? I mean, that sounds so impactful. Like, are you is it because you're sending in merchandisers, or you're looking at the sales data? Yeah.
Eric Skae:This is all data driven or data driven and broker interviews. I mean, I remember it kinda clear as day. First off, like, when I took that Rao's job, they gave me a mountain of paper that I had to go through, and I was going through a 2025 year history of a brand. I had had, at the time, letters going back to 1992 that I had to kinda understand this brand. And I read through all of that information, but then we just really, really broke down the data and went account by account and went all the way anywhere from a 10 store chain to a 2 1,000 store chain.
Daniel Scharff:Alright. So, Eric, what a cool career that you have already had, and continue to have. Do you think that there's anything that you would do differently other than try and hold on to some equity for our monster, which I think was, like, 50,000,000,000 market cap last time I checked? Like, you know, anything you would try to do sooner or differently or just, like, maybe would you have a different perspective on things or ways you've learned to kind of when you're working so hard and getting through everything, like, you wish you would have that would have made it easier for you or anything like that?
Eric Skae:You know, I think about that quite a bit, and I'm not sure that I could be doing what I do today if I didn't have the experiences that I had in the past. So, like, some of the challenges that I faced at Nuuly, for example, where I learned a lot, or that fast growth at Arizona ST. If I didn't have those things, I wouldn't be able to do what I can today. Like, I even think about, like, you know, financial modeling. It might be it's an area where I've got some strength.
Eric Skae:If I didn't take the Naked Juice job and meet Brad Barnard in 1998, who sat in the lobby of a a hotel, like, teaching me how to build the financial model from the first sell. You know, I'm not sure I could do what I do today. Right? So, like, when I think about all of it, it's, you know, it all built upon each other. Sure, I wish I would've held on to some equity or hung around a monster, but I've done okay.
Eric Skae:I've done okay not doing that, So I'm not sure I changed much.
Daniel Scharff:And then, okay, if you meet fresh faced college grad eager to get into the industry who hopes to someday get to lead a company like you're doing now, what kind of advice are you giving them?
Eric Skae:Meet as many people as you can. Develop a network across the country. Right? So know people. Work with those people.
Eric Skae:Like, call your friends. Right? That's where you're gonna learn. This is what I love about what you're doing with start up CPG. So if you think about, what do I wish I had?
Eric Skae:I wish I had start up CPG, like, 30 years ago. I really do because I remember starting my consulting practice, and I'm, like, running around Expo West, going to every booth, trying to pick up clients, and a buddy of mine said to me, what the heck are you doing? He's like, you know everybody. Go to your friends. They'll get you your clients, and they did.
Eric Skae:So, like, building that network and, like, and making it a two way street with people, it's not like you can be calling someone for advice all the time without them calling you. So having that network that you can lean on, that can lean on you, and being open to do those things, I think that's kind of the most important key to success. I talk about this with a lot of friends of mine. It's like, you know, at this point, at least in CPG, I feel like I'm one degree of separation from anybody that I gotta get to, because I have friends that can help get me there. Yeah.
Eric Skae:I think that's
Daniel Scharff:a really powerful thing to remember. And, you know, I always like to think of, you know, everybody should be working hard at what they're doing, but also, like, yeah. I mean, take your head out of the sand every once in a while, look around and connect with people to other companies. In my last role as CEO, I wanted my team every week to just pick up the phone and network with somebody new for an hour. You just don't know what kind of stuff you're going to hear about and just make friends that way.
Daniel Scharff:And yeah, I mean, your friends can help you. And just it's such an important, I would say, muscle memory to have, like a reflex being call your friends, like when you have a problem. And I think, I mean, that is the basis for our whole community is, like, gosh, we can all help each other, and people like to. And, you know, it feels good. And then obviously, it feels really good when you need the help and you reach out and someone just has that answer or the right connection for you and feels good for them too, especially if it's easy for them.
Eric Skae:I wish I had more time in the day because I do get a lot of early stage entrepreneurs call me and say, hey. Can you give me some advice? And I try to be as generous with my time as I can. Like, you've you called me. Right?
Eric Skae:Like, we didn't know each other. I got on the phone with you. I will do that wherever I can. Unfortunately, there's just not enough time in the day, and I can't do it as much as I'd like to. Maybe that's after this someday.
Eric Skae:Maybe I'll be a just a mentor.
Daniel Scharff:Hopefully I mean, that is also a lot of the spirit of this podcast is, you know, I hope for all the people who do wanna pick your brain that they'll be able to maybe listen to this first also and hear, at least get a baseline. And then if they approach you, then after that, they can ask some stuff that we didn't cover. But I think we covered a lot. So I think that's probably a pretty good place for us to wrap up here. Eric, thank you so much.
Daniel Scharff:I think it's just going to be really incredibly helpful for a lot of brands to get to hear more about your journey. And like I mentioned before, like I had reached out to you just blindly on LinkedIn because I had seen your profile and track record and was like, man, what a cool career that is. I would love to just try to understand how I could try to have something that's like that. That's so interesting and get to do all these different kinds of roles and obviously hope to have the kind of success that you've had. So, you know, thank you.
Daniel Scharff:I think I'm definitely getting a lot of takeaways from this and especially that power of the network. So thank you so much for joining us. And, you know, if people just kinda wanna follow along with you, is it good for them maybe just try to follow you on LinkedIn, something like that?
Eric Skae:Hit me on LinkedIn. I check it every day, so and I do my best to respond to everybody. It's getting really, really hard with SEO providers and Amazon providers and so on because I get so many of them a day, so I can't answer them all. I I was at a point up the year ago where I answered every one of them. I can't do it anymore.
Eric Skae:But if me, I'd like if me, I'd like that. I will respond.
Daniel Scharff:Awesome. Alright, Eric. Thank you so much. Hope to see you at expo and a bunch of other cool industry events coming up, later this year. And, yeah, thank you again so much for your time and to everyone for listening.
Eric Skae:Alright. Look forward to seeing you soon. Alright. Thanks, man.
Daniel Scharff:Alright, everybody. Thank you so much for listening. If you enjoyed the podcast today, it would really help us out if you can leave a 5 star review on Apple Podcasts or Spotify. I am Daniel Scharf. I'm the host and founder of Startup CPG.
Daniel Scharff:Please feel free to reach out or add me on LinkedIn. If you're a potential sponsor that would like to appear on the podcast, please email partnerships at startupcpgdot com. And reminder to all of you out there, we would love to have you join the community. You can sign up at our website start up cpg.com to learn about our webinars, events, and Slack channel. If you enjoyed today's music, you can check out my band.
Daniel Scharff:It's the Super Fantasticks on Spotify music. On behalf of the entire Startup CPG team, thank you so much for listening and your support. See you next time.
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