The Startup CPG Podcast

00:04
Daniel Scharf
Thank you to everyone for joining. I am really passionate about this topic, and we did kind of a first run of this at expo was just it was so great. We got such cool feedback from it that I really was excited to repeat it again. And so the topic is getting into retail, and I really am excited to feature people who I've been an operator, I've run a brand, and these are some of the people that I respect the most, who I feel like I learn from a lot. And not just the broad strokes of how to do it, but tactically, how do you actually do it? Like, who do you talk to? How'd you get their attention?

01:45
Daniel Scharf
What was the thing that you told them that was really important to change your trajectory and get on shelf? Because for me, the first year is so hard. Breaking the seal. Breaking the seal with retailers, distributors, getting some momentum going, like getting to the point, I think, where people feel like your brand is a know, I feel like is just so hard. And so we've had one change today. So unfortunately, matt from chlorophyll water, like many people right now, is under the weather, but we are really lucky to have paul from orobora joining in his you know, each of the people here is here for a reason. Clara with unite food have just seen her kind of do everything, and I learn about distributors I've never even heard of from her that turn out to be really important ones.

02:33
Daniel Scharf
So really excited to have here. Paul with orobora just when I moved to la. And I just saw aurabora blanketed everywhere, like all the tastemaker retailers that I wanted to be in, and ones I don't even understand how you get to, like, the aviator nation store on kitty, like, somehow he's just sitting pretty with a beautiful cooler there. So really excited to have him here. And I know a lot of you guys have followed his journey as well. And then we're also really excited to have Mitch from Earth Fair on here who can give us then the other side of that perspective of, like, okay, yes. When all of you come at me and try to get my attention to be in this amazing store, here's what that looks like, and tips for that.

03:13
Daniel Scharf
So I thought maybe we could just, before we get started, do a quick round of introductions and if everyone, especially the brands can share, kind of just so people understand, what does your distribution look like and how did it look like in the early parts? Do you want to kick us off, Clara, since you're on my screen on the left?

03:31
Clara Paye
Sure. And I just noticed my name is Misspelled. It's Clarapay. I figured that's not payer, but that payer in CPG a lot of times. I'm Claire. I'm the founder and CEO of Unite. Globally inspired protein bars. A lot of people know us by our churro flavor, but we've got Baklava peanut butter and jelly, Mexican hot chocolate. Lots of really fun flavors. Bubble tea launched in March of 2020. I was not from the food industries. This is my very first food enterprise. I was in rough plumbing and hardware distribution for 17 years. Totally different industry, but happy to be here. And startup CBG, I'll just give a shout out to Daniel was I didn't know one person in the food industry when I started, and I met Daniel, and that was my lucky day.

04:14
Clara Paye
And he got introduced to startup CBG and learned a lot in the slack channels there.

04:20
Daniel Scharf
Thank you. That was my lucky day as well. And, yeah, really excited to have you here. Thank you, Clara. Paul, do you want to go next?

04:27
Paul Voge
Sure. My name is Paul. I'm the co founder and CEO of a sparkling water brand called Aura Bora. We sell natural and conventional retailers across the country. We make delightful different craft versions of hopefully your favorite sparkling water flavors and a few that you haven't tried before. And we started this brand about four years ago and learned a lot about early stage distribution. So happy to.

04:52
Daniel Scharf
All right. Really impressive distribution for four years. I'm sure you guys have seen Or Bora pretty much everywhere, whatever retailer you're in. Great. Thank you, Paul. And I know Paul, I think, has to run after 30 minutes. Thank you for joining us last minute. So I'll probably try to kick off with a couple of questions for you and Mr. Mitch. I love your hat, and when I saw you had a cool hat, I also felt like I should bring one of my own. Wow. This is our startup CPG Captain's hat for our yacht party that's happening on this Friday here in the marina in La. We're doing a hundred person yacht party with a bunch of retailers around Notch Live.

05:30
Mitch Orland
All right. Don't forget Gilligan. Hey, I'm Mitch. I work for Earth Fair. The Healthy supermarket. If you don't know us. We have 18 stores, mostly in the Southeast. We have a very strict food philosophy. We were one of the first supermarkets to ban high fructose corn syrup, hydranated, oils, and we stay on top of it. I've been with Earth Fair on and off for about 20 years. I've also had my own restaurant, my own consulting business, where I've been on the other side a fractional sales VP COO and I've worked for most of the Supernaturals, whole Foods, Fresh Time, Wild Oats if you remember them, sunflower if you remember them. They're now Sprouts and Whole Foods. But yeah, so really excited to be here. I love helping brands. It's really fun and it's really why I'm in the business.

06:32
Daniel Scharf
All right, great. Thank you for joining. And I also just realized that all three of these guests have also been guests on our startup CPG podcast. So if you want to do a deep dive for any of them, definitely check out the episode history. Clara was one of the first. Paul did an amazing one, touched on some really cool topics around fundraising especially that were super interesting. And Mitch did one recently. Cool. So I'm just going to kick us off starting with a little bit more on the brands and then a little bit later on, we'll come back in for the retailer perspective. So, Paul, maybe I'll start with you. Can you talk us through, like, going back? How did you get your early retailers? What did you do? Who'd you talk to? Which are the ones you were? What was your strategy?

07:12
Daniel Scharf
How did it work?

07:13
Paul Voge
I had no strategy early on, which is the worst strategy, so you definitely should have a strategy. We started at a retailer that I lived maybe 200 yards from at the end of my block, and thankfully for me, it was an amazing natural grocery store and they were excited to try a new product and to be kind of a guinea pig account for us. And we could figure out pricing and which flavors sell the best and is it better to do promote deep less frequently or shallow more frequently? And we got to play with all of those things and we learned a lot from them. So that's probably my number one point of advice is if you can start with one retailer or better yet, a region of a chain, earth Fair would be an amazing one.

07:53
Paul Voge
If you're in the Southeast, you get to learn all of the things before it becomes a very drastic measure. If you promote in 18 Earth Fairs and you promote wrong and you've given away the farm, not as big a deal. If you do the same promotion in 1800 targets, you're probably updating your resume. So I think there's just a great way of starting small and learning a lot. And there's a reason everyone starts their brand in natural and specialty. It's not just because often the new thing is a natural or specialty type product, it's often because those are the retailers that are most interested in trying a new flavor or a new ingredient or, frankly, just a new product in general. So I would start small, start a natural specialty, start local, if you can.

08:36
Paul Voge
Ideally, you can drive to most of the stores and test out everything pricing, flavors, merchandising, all of the above to figure out the right playbook for the next set of stores.

08:48
Mitch Orland
Awesome.

08:48
Daniel Scharf
And can you just take us a little bit further in the journey of, like okay, so you started locally and tested and then what are some of the initial ones that you managed to unlock? And how did you do mean? Yeah, when I moved here to La. Like, a year and a half ago, I was just seeing you everywhere.

09:07
Paul Voge
Yeah, thank you. I'm glad to hear that one. I'll say I started selling out of my Subaru for about six months. So that was, like, the best thing we did, and it was just by necessity. If you want to sell to a big national distributor, if you're a natural, it might be Kehi and UNFI. If you're selling a convenience product, it might be McLean's or Cormark. But before you can sell to those guys, hey, they need a big, chunky national chain, or at least a big, chunky regional chain. We didn't have either of those. If you want to sell to a local DSD direct store distributor, you generally need to build up a book of accounts that's 40 or 50 stores.

09:48
Paul Voge
So for the first 40 to 50 stores, I was delivering myself and merchandising on the shelf and doing demos where needed, et cetera. What was great about that is I happen to live in the Bay Area. So of those 40 to 50 stores, the distributors I then talked to sold to most of them because they were natural specialty distributors. So in the Bay Area, that was Berkeley Bowl or Good Earth or Gosh. Insert the blank. All of the independent stores that have three or four locations oliver's in Napa, and it was talking to managers. What's so great about those stores is you can sell in on a Tuesday morning and be on the shelf Tuesday afternoon. That's very rare. And that's amazing because you can drop off the invoice, keep all the margin yourself.

10:29
Paul Voge
Yes, you're going to have to expense your gas, but for the most part, you can run a little profitable business, assuming your margins are decent, and then work your way into a local DSD that's then following you as you sell. And you can sell in, and the next day they can drop it off and then eventually graduate into a big national chain and then start working with some of the bigger distributors. So I'd say that is generally the path. And if you're not interested in selling out of the back of your car, this probably isn't the industry for you.

10:59
Daniel Scharf
That's amazing. You started by hand, basically delivering out of your subaru to 40 or 50 stores, to the point where you got a local DSD interested? They took over. Then the fulfillment. And then from that point, were you going into other regions to try to open those up, or when did you try to unlock the national distributors and bigger chains?

11:26
Paul Voge
I would say some of this is a little specific to fast moving consumer goods. So beverage, salty snacks, candies, et cetera, where you can sell to a network of DSDs from coast to coast and never sell to McLean, Cormark, CAHID, Unified, US Foods, Shamrock, et cetera. That's possible and I can name big companies that have done that. Five Hour Energy sells to like a thousand distributors and they do billion plus dollars in sales. So it's totally possible if you are selling a sauce or any sort of condiment, anything that's going to move fewer than two units per scoop or store per week, you're probably going to need a big national distributor at some point. So I'll say this advice all that withstanding it seemed to me that beverages did one of two things they either started locally and they sold everywhere.

12:10
Paul Voge
And if you want to read about that, Mark Rampola, the guy that started zico Coconut Water wrote an excellent book about it where he sold to every kind of store, yoga studio, grocery store, liquor store, sea store, bodega on the island of Manhattan. So he got very deep geographically and was not interested in Brooklyn or Queens or Bronx or Staten Island, just Manhattan or the opposite is folks that just sell via channel. I have another book if you want to read about Honesty's Journey. Seth Goldman did a great job and he sold all over the country but in the Natural channel. So it felt like, okay, I had to choose do I want to pick one channel regardless of geography or one geography regardless of channel?

12:49
Paul Voge
We ended up doing kind of a hybrid of the middle and maybe the best example there is La Colomb's kind of foam drink lates where locally were sold in conventional and in Natural and in some instances Sea Store, but nationally we just picked Natural. So we would sell to Earth Fair in the Southeast and we would sell to Fresh Time in the Midwest and Sprouts in the Sunbelt and Whole Foods everywhere and Thrive Market everywhere before we layered on conventional. But I had no problem selling a conventional down the block because the truth is I was down the block and I could merchandise it and give disproportionate love to those conventional stores. So that's how we chose to do it.

13:28
Paul Voge
And then obviously as you sell into the Fresh Time, sprouts Cahis, Sprouts, Whole Foods, Earth Fairs, you eventually get introduced to UNFI or Kehi and can sell nationally.

13:40
Daniel Scharf
Makes sense. And last question before I switch over to clara for a bit. Where were you when you got to the point where you were pitching fresh time and how did you actually do that? Did you find the buyers on LinkedIn or you had a broker or what was it about your story that you really needed to highlight to them to start getting those big chains?

14:03
Paul Voge
I would say the difference between the local chain and the next level up. I think this is how your selling story should sound, the local chain. I mean, I remember literally saying, my name is Paul, I live right over there. I'll be here five times a day. You should buy it from me because it's an exciting product and I buy my groceries here, et cetera. It just had to do with me. And as delightful as I am or you are listening to, like, it eventually needs to become about the product. And I think to the fresh times and Earth fairs and whole foods and sprouts, it becomes about the product. And this is kind of the second stage of selling. It's not about you, it's about the product.

14:42
Paul Voge
The third stage of selling that you begin to see at those larger chains and then moving to conventional is it actually has less to do with you or the product so much as it does. Like, what are you doing to the category? What dollars are you putting into my pocket? I could care less if it's lemon or lime or watermelon or chocolate or vanilla. I want to know what are you changing when I add you to the set? And that's kind of the third level. I say, what are you doing in the category? And then maybe the fourth and final level and this is what the big conglomerates do so well. How are you changing my incremental profit, my being the know, hey, you're the buyer at Walmart or you're the buyer at Target.

15:17
Paul Voge
Let me tell you how what I'm going to sell you will change the bonus you bring home to your family on Christmas Eve. And that's like the fourth and final level that I have yet to achieve. But that's kind of what the story and obviously along the way, it's still you and it's still the same product, but it's kind of just knowing your audience and what they need to hear. So hopefully that answers.

15:36
Daniel Scharf
Yeah, it looks like that resonates with Clara, I noticed. I see nodding along here. How are you showing the incremental value that you're giving to the category? Are you using specific kinds of data or feedback?

15:49
Paul Voge
We are, yeah, we use spins quite a bit. What's very helpful for us is our data is kind of easy to say, I E, hey, I'll just do this for being very explicit of, hey, we're twice the price of insert the blank competitor. If we move half as many units, you're going to make the same number of dollars as a retailer, except you're making more dollars off us because you don't have to send staff to change it over twice as often and we're not going to ding you in all these different ways. So for us it ends up being a clear, hey, if we move half as much at twice the price, you make more money. The truth is I think we'll move roughly the same amount if you give me two years at twice the price.

16:28
Paul Voge
And if you're an emerging brand that's kind of selling to the premium set, you probably have a similar economic game going on. And thankfully everything in the grocery store aisle at Earth Fair or at Target, regardless, is getting more premium because there is just a wide variety of products that people will buy. So that is the tide that's lifting every boat listening to this.

16:49
Daniel Scharf
Yeah, very well. And who was doing the selling? You were doing it, you had a broker. Yes. And then at some point you brought on some additional sales help or a broker, correct?

17:02
Paul Voge
Yeah, I'd say a lot of chains like Daniel just said, you can hit them up on LinkedIn yourself, you can find their email, you can go to a show and meet them. Some of them will only communicate with brokers, particularly the larger ones. As you get larger, they'll only communicate with brokers and some of them will only communicate with specific brokers. Hey, if you want to sell to Target, we only talk to these ten humans. These ten humans curate all of the brands in our set and they do that because they have a limited number of times. So for me, the local ones should be you. You're the one delivering it from the subaru should be you. As you get into, sometimes you can find local brokers that can kind of maximize your force.

17:36
Paul Voge
I would usually recommend go find another version of you that can two exit. And then as you get into regional chains like EarthFair, it's probably time to find an early stage broker that knows those specific regional chains of a specific channel. And then as you become a national sales company, you could find a broker for natural, a broker for convenience, a broker for conventional, et cetera.

17:57
Daniel Scharf
Okay, cool. And then sorry, I'm going to ask one more question because I know we're going to lose you pretty soon. So let's say you slate wiped clean. All of a sudden your products are gone, you have to start over with your same product. What would you do? Now I know I've heard some incredible lessons learned from you over various channels, but let's say just wipe clean. Okay, go. You have a certain amount of funding. What's your strategy?

18:22
Paul Voge
Yeah, that's a great question. I gave those three framings the Lockhalom Zico honesty framing. If I had to pick again, there's a brilliance of the Zico framing of just staying geographically. You can run a really profitable local CPG business and everyone listening to this probably knows a local CPG business, or maybe you don't even know it's local, but it's all over every store regardless of channel, and you won't find it two states to your left or right. I would probably lean that way if I had a higher margin product. Higher margin in terms of dollars, not in terms of percentage. If I had this same product margin, I e it's a low priced item because it's a sparkling water. It's not champagne or a cut of ribeye. I'd probably stick with, hey, let's just sell to Natural.

19:10
Paul Voge
And I'd probably try to pick off a few of the national Natural chains, like, can I just sell to Sprouts for a while? Can I just sell to Whole Foods and learn all I can for a year and then have amazing data to go sell elsewhere? That's if I could do it again. And of course, there's a a devil's advocate is, yeah, but you can't just twiddle your thumbs and wait for a yes from someone at Whole Foods or someone at Sprouts, which is why I did it the way I did. But if I had my pick of the litter, that's what I would do again.

19:36
Daniel Scharf
All right, perfect. Paul, thank you. That was amazing. All right, clara, all the same questions, basically, but just to kind of run back to the beginning, you can you talk a little bit about what it was like in the early days, just kind of starting out up to the point where you really started to pick up momentum? And how did you do it from a sales perspective?

19:56
Clara Paye
Yeah, I mean, just like Paul, I thought that was going to be my strategy of start local and really concentric circles around home. And I'm here in Southern California, in Orange County, and I launched in March of 2020. So you can imagine in March of 2020, right on the heels of this pandemic, there were no buyers taking meetings. They were more worried about keeping toilet paper on their shelves and keeping product coming in than placing a new brand or doing a reset. So my entire category didn't even reset for like a couple years. So it was a really interesting, crazy time. And so people would tell me I remember Daniel like, oh, Claire, I'm sorry you launched during this. And I was like, Well, I mean, everybody's going through it. It's not just and it's I think it's like how you view adversity.

20:38
Clara Paye
And I walked it into a local grocery store, so literally walked it into Bristol Farms where I did all my grocery shopping. And I knew the store manager because went to the same church. And I said, hey, Rick, could you introduce me to how do I get my product onto your shelf? I knew nothing about distribution. And he introduced me to a lady who did their local buying. And since I was a local mom and they wanted to support local people. They brought it in to five stores as a local vendor. And they gave me this great set right in the front of the store. And I remember going to that meeting, and she was in a mask. I was in a mask. I'm handing her a bar to try, and it's outside. And it comes down to a data story.

21:21
Clara Paye
And that first launch and that was, like, in June or July of 2020, that first launch gave me a data story. Those five stores sold 17 units per store per week, which is like, an incredible amount of units for a new product. But it was because it was like front of the store end cap. And then I could use that story to sell my next customer. And my next customer happened to be the world's largest retailer, Walmart. So I went from, okay, I'm just going to start in concentric circles, to, well, nobody else is taking appointments, and Walmart wants my product. So, yeah, let's go ahead and launch an 850 Walmart stores and be national from year one. Right? And so we just had to take the opportunity that was in front of us. I think there's theory and then there's practice.

22:09
Clara Paye
I think you can plan, I'm going to do this, and I'm going to execute it this way. But then as the opportunities come up, sometimes the time period you launch, when you launch, it will all affect how you grow your business and with which distributors and in which ways. And it's all about data stories. And it continues to be about data stories. Exactly what Paul hit on. How are you adding incremental revenue to the set? How are you bringing in a new buyer? How are you different? Don't be just a me too, because that's just really boring. And my favorite selling story of all time happened at Expo East. Being on this stage, talking about this topic, and Mitch leaned over and said, hey, we should probably carry you at Earth Fair.

22:51
Clara Paye
And I said, I agree, and followed up after that show, and now we're in Fair. That was the best selling story of my life. Will be my favorite to pitch and secure business on the stage at Expo East.

23:06
Daniel Scharf
Yes. Embodying what were talking about the importance of networking and using every opportunity. That's amazing. And so how did you get the Walmart opportunity, by the way? The first year, it was literally being.

23:21
Clara Paye
In the right place at the right time. Met a scout for Walmart who introduced me to the buyer. And she said, I don't have any influence over this, but I will introduce you to the buyer. And the buyer liked the product. He liked that it was different. He liked that it was unique. We were about bringing diversity into wellness, which is something that he was passionate about. And he wanted to give us a shot, and we had to come up with a new configuration and so there are ways that you bend. They wanted multipacks and so we didn't have a multipack developed yet, but of course you say yes and you figure it out. You know, it gave great brand credibility to the brand. So a brand new brand, a founder who'd never done anything in food.

24:00
Clara Paye
And when you can achieve that on time and in full that Walmart demands, and you can execute flawlessly and not have a backorder during the most significant supply chain shortages of our time over two years and be in full and be on time and have the right margins. It gave all the other retailers great comfort that we could execute.

24:23
Daniel Scharf
One thing that strikes me is I think both you and Paul you both have very differentiated products that you know from the branding. You see it, you're like, wow that's I'm like the first time I saw your churro bar, I lit up like I know I'm going to love that. That looks so good and the Orobora design is just so beautiful and out know how much do you think the branding played a part for you? And then I'll be interested in what Paul thinks about that.

24:51
Clara Paye
Too huge. I think it cannot be underestimated. Like the P is in CPG is packaging and so if your packaging isn't a five, then you better just go back to the drawing board. And I always talk about this. There's always people that want to go to 99 designs or some inexpensive pay and that's fine if you're just testing it in your local region, but if you want to be a national brand, you better have a national looking packaging design.

25:16
Paul Voge
I'd say the same. Yeah gosh I think sometimes investors frame this of we'd much rather invest in an amazing product that everyone loves that's in a brown paper bag than a product no one likes in a beautiful shiny box. Just kind of a silly way of saying it's like, hey, why not just do both? And for us, I'd say your packaging is the only thing that allows you to multiply efforts without you there. I live on the west coast. By the time stores open at eight or 09:00 A.m., I'm still in bed. But our packaging is sitting there on the shelf yelling out what we're about. It feels like it'd be a crazy thing to launch without packaging that you felt like was doing all of the right jobs. It's not that hard to do.

26:01
Paul Voge
The cost of a great graphic designer is coming down. So yeah, it's an easy thing to do right, why do it wrong?

26:09
Clara Paye
And it's the only equalizer on shelf. When you're looking at two products, you have the equal opportunity to capture that consumer's attention. You might be going up against Nestle, but it doesn't matter because the consumer can look at both of your packaging the same.

26:24
Daniel Scharf
Awesome. And just for everybody. Listening. I did open the chat up, which you just have to select it. You want to send it your message to everyone. If you want to put some comments in there and I'll try to take some questions a little bit towards the end just because we have a couple others prepared that we wanted to get through. Okay. So Clara, actually one comment that came in is about kind of like, oh, are you afraid to start with someone like Walmart that early? I've seen the submission documents for like there are some big choices that you have to make there with incredibly important repercussions financial implications. How did you think about that and decide if you were ready to shoot for it from a financial perspective?

27:07
Clara Paye
It's exactly the right thing. I said we have to shoot this shot. Right? And at the end of the day, I wanted my bars to be for as many people as possible. And Walmart was the best retailer to make that a possibility. Right. I wanted it to be accessible and I still want that. Right. And I want as many people to be able to afford to buy Unite and try Unite as possible. And so Walmart conceptually really fit. You have to have a really good grasp on logistics and supply chain, which I managed a business that had 8000 products with five distribution centers for 17 years. So I knew how to do that. I knew how to get it on time and in full. I knew how to hire the right logistics partner to help me do that.

27:48
Clara Paye
And so I think those chargebacks and deductions are really around not knowing how to get your product to the DC intact, in full, in the right quantities. And I think if you can figure out logistics and supply chain you're halfway, then, you know, having a partner in the manufacturing side that was already SQF certified had all those checkboxes and I did that day one. Like, I didn't do know start with random command and then get to that. We did it from day one because I knew where I wanted to take this brand. And so I think if you reverse engineer that and you select the right partners ahead of time, it derisks it a little bit, but it's definitely a risk. With large retail, there's a lot more marketing expectation and spend to move that velocity and it's a gamble.

28:34
Clara Paye
But for me, like I said, it was about building our brand awareness really quickly. And within the first year to be in all 50 states was really a milestone accomplishment.

28:45
Daniel Scharf
That is amazing. And were there any downsides to it that you saw? I know some people worry about the impact on pricing for other retailers or some natural channel chains reportedly won't take you if you're in Walmart.

28:58
Clara Paye
Yeah, that was always the risk, right? Like, well, they have 5000 stores and your chain has like, I don't know how many stores, but I'll take that risk. So if you eventually you want to end up there and I think that's backwards thinking. But there are downsides. I mean, you have to be able to have the capital to support it. You have to be able to have the time and space to support it. Oh, Paul just jumped. So you know, it can be very.

29:29
Daniel Scharf
How did how did you go about getting the other chains after know from the outside it looks like they all just fell like dominoes. But I know there's a lot of work that goes into that. So how were you contacting them, how were you reaching out to them? How did you do your networking? What was the story you were telling and how are you doing it?

29:46
Clara Paye
Basically story is very important. So very early on I thought I would hire a VP of sales to help me. And then I looked at kind of like the salary requirements of a VP of sales and I was like, there's no way that I can afford that. And all the travel and all the admin work and all the things at an early stage age. So I looked around to see if there was some kind of solution and I found a really great sales team that was like national where it wasn't a broker but it was salespeople and they're called FDM. Sales is who we use. And they were great because they had reps in all the accounts that we wanted to get into and they would follow the review calendars and help me get appointments. And I like to pitch.

30:24
Clara Paye
So some founders aren't that great at pitching and so maybe they don't pitch, but I love to pitch and tell our story and so it's just one at a time. And were lucky to get Keihi and UNFI to accept us and open up distribution for us. Kind of a very early stage and that know, that kind of chicken and egg thing where you need anchor before you get distributor or you need a.

30:45
Daniel Scharf
Know before you get and how did you get like one of them you unlocked with Walmart or other chains or you got them just to agree to stock you.

30:54
Clara Paye
We just got them to agree to stock us before we even had you.

30:59
Daniel Scharf
You can see I'm trying to get to the very tactical advice. How did you get in touch with them? Because a lot of people are like they have trouble hearing back from them and they get so many applications. How did you actually get on their radar?

31:11
Clara Paye
So FDM got us the appointments and got us kind of started there in that process and then from then it was like you have to ask quick to kind of capture a national retailer pretty quickly. And so were lucky know, we're with Kehi and for Kehi they serve Meyer and HEB and Sprouts and we're in all those stores and so when you have relationships with their larger anchors, then it's easier.

31:39
Daniel Scharf
Okay. Awesome. One of the questions that came in from Sabrina is did you have or need a minority certificate as a women founded brand? Did that help you with some opportunities?

31:53
Clara Paye
Absolutely. If you're minority certified or woman owned certified, it does unlock some opportunities to pitch, for sure. It's not going to be the deciding factor, but it will get you a foot in the door.

32:05
Daniel Scharf
Great. Okay. Thank you. Okay. And then just to round off with some of the same questions I asked Paul at the end there, and then I'm going to come to Mitch. So first is, all right if you wipe the slate clean, like starting over, same product, same story, different environment now. Right. A little bit like where the resets are actually happening, not in the middle of the pandemic, what do you do?

32:28
Clara Paye
I think I would have formulated more from a cost of goods perspective and really understood margin. When I formulated my product, I did it in my kitchen, so it was like, what would I put in it? It wasn't in a lab, so it was like very expensive ingredients. Right. And that's what I formulated with because those are the highest quality ingredients, like almond butter or really high quality proteins. And I realize now that major CPG companies, they formulate from a cost perspective first. Like, this can't be more than x cents per dollar. Right. And so it's a different tactic to how you get there. So I think cost of goods is like something to pay attention to from the very beginning and aim for the highest amount of margin that you can.

33:11
Daniel Scharf
Get early on and knowing what you know now, would you have just gone right for a formulator or flavor house or something? For anyone who's not aware there are flavor houses, some will do your product development for free, but then you have to buy the flavors from them forever unless you reformulate. But then there are also formulators you can hire to develop your product for a fee. So what do you think you would do in retrospect? Clara?

33:36
Clara Paye
Yeah, I would have worked with a formulator to really help me understand because I was like, how hard can this be? You just mix these things in a cuisinart and you make a so there's a lot more to it, whereas the shelf life and everything else that you want to maximize. So I would have invested in a formulator earlier.

33:59
Daniel Scharf
So and then also, just because we have Expo West coming up, what's your strategy around trade shows? How do you get ready for them? How do you try to make the most of them?

34:08
Clara Paye
I love trade shows. I think that they're the best ROI on marketing spent. I'm super excited to be at Expo West. It'll be my third Expo West, and for me, it's about capturing the most amount of value while you're there, I can't tell you how many expos I walk around and people are on their phones or distracted in their booth and you're missing it. You're missing the whole point of being there. Your job is to engage with everybody that walks up to your booth and be really badge agnostic and create genuine connections. And I can't tell you how many press things that's resulted in, how many points of new distribution that's resulted in new major retailers brought on just by being engaged with people that walk up to your booth and really not just like scanning to see are they a buyer or not?

34:53
Clara Paye
And then just ignoring them if they're not.

34:56
Daniel Scharf
I love it. I think you've probably heard my trade show tips before, but I'm never behind the booth. Even I'm out in front of the booth, I'm flagging everyone down. At the end of the day, my eyes are still moving left to right in my sleep because I'm just badge hunting the whole time and trying to talk to as many people as possible. So, yeah, I definitely agree with making the most of it cool. Okay, so Mitch, thank you very much for your patience. And I know you always like kind of hearing from the brand. I mean, I guess just starting, right? Yeah. How are brands like Paul's in the early stages and Clara when she was just beginning? How are they getting your attention if they're not lucky enough to be on a panel with you?

35:41
Mitch Orland
Well, I guess one thing I neglected and I'll take a step back, but I think it'll help you understand how to work with Earth Fair. A lot of people don't know, but Earth Fair was started dinner for the Earth in 1975 in a 1200 square foot store in downtown Asheville by Roger Duroau and took a long time to grow. But then I was with him. Previously, three venture groups bought into Earth Fair and it went south pretty bad in the CBG industry from five, eight years ago. Earth Fair didn't have the best taste in people's mouth and they went bankrupt. So actually we're a scrappy startup. A lot of people don't realize we've been like, Claire 2020 is when we started. Bought out of bankruptcy with no stores and went from zero to nine zeros pretty fast.

36:34
Mitch Orland
So we got 18 stores now, but we're lean and mean. I got seven people on my team as buyers. We're super scrappy. We like to have fun. I got some great people. They all came from the store, which is super important to me. We're a store first company and we like to play. We have the ability to turn on a dime, so we're a good retailer to work with and we anchor Atlanta so we can open up for people, which we love to do. We especially love watching the good West Coast brands and get them first on the east. So getting into Earth fair. Was that your original?

37:20
Daniel Scharf
I mean, well, that's incredible to hear and thank you on behalf of everybody because there's nothing quite like a really great retailer who also is excited to anchor you into distribution because that's how we get going. How are the successful brands getting on your radar? How are they reaching out to you? What are they doing that catches your attention?

37:45
Mitch Orland
Sure. And there's multiple ways, obviously. Grocery kind of has their way where wellness supplements has their way. Our fresh departments, you might catch them differently. But for me personally, I actually look at Instagram. It's kind of funny, but people could put on a nice show on Instagram, but it kind of shows me what's hot, who's vibing, who's got a good packaging, as you were talking about, reminds me of like, Steve Jobs and the Apple boxes even, are cool. And like, our grocery guys, super Tech, Zach and Jaden, they look at spins Southwest brands. Who's coming on? How do we get them? First, I'll go walk farmers markets in Asheville. We're lucky to have some great brands, and we like to say farmers market to shelf. We've done it in eight weeks. So the other piece know, finding a champion I find is really important.

38:48
Mitch Orland
Like, who's going to champion your brand to like, find somebody a great example for us. Lately, I don't know if you guys know JAMBAR, if they're part of startup CBG, but the woman who founded PowerBar started a new company that supports musicians, but she had a representative that actually was in Asheville. I'm on the board of Asheville Community Yoga nonprofit yoga studio, pay what you will. Adam started coming and just dropping bars and giving them for free, hundreds of bars at a time, and they were selling them and make money. He started coming to the yoga classes. My buddy who's the director called me up, told me about Adam. I'm like, okay, I got to meet this guy. He came to the store. He was ready. He was delivering direct. I said, let's put you in the small local distributor.

39:39
Mitch Orland
And why he was so successful for us is Adam shows up at every event we have. He's local. The runs, the re grand openings, the holiday event. He's there with a booth passing out Jam bars. So he is a favorite partner now of the we got lucky with Claire. There's the really cool brands and then know, LinkedIn doesn't really work for me and my team so much there's so much people reaching out. But if you got someone from LinkedIn that I know that reaches out to me about you have a much better chance of getting a reply. Our grocery guy, though. Yeah, go ahead.

40:25
Daniel Scharf
Yeah, that's pretty interesting for me to hear. So when that happens, who's the kind of person that you'll listen to? If they're telling you a brand is great, it's like another brand that you already work with that you like, or it's another buyer or who are the kinds of because that's super interesting advice to hear is like, maybe try to find somebody who already has a good relationship with you to see if they're willing to advocate on their behalf. So, yeah, who are those kinds of people where you've seen at work?

40:54
Mitch Orland
Yeah, you can have fun without digging through LinkedIn. For me, I know a lot of retailers in the industry. I've worked with a lot of people, so I talk a lot, know our competition a little, but also not we don't compete with quite a few chains out there, especially west coast, so that's super helpful. I'm doing great, know fresh time. I'm good friends with Jonathan over there. We only compete in one market. He sends me a buz, and I'm like, okay, check it out. And there could be someone as little as like I said, someone who I'm familiar with because I'm on a nonprofit board with them. So it's kind of anyone who you can get a personal in with.

41:33
Mitch Orland
A lot of people I know probably buy your guys products or want to, so that's a good way to do it with finding somebody and other brands. Like, I still haven't heard your story while you know, Daniel, if he called me and said, hey, this brand's cool, I would look at him. Now we have a relationship. So it's about building relationships and being creative, too, at the same time. We like fun. We like creativity. We like people that aren't scared a little bit. So don't be shy, but don't be rude.

42:13
Daniel Scharf
I love it. You mentioned Instagram, which is also pretty interesting. Is that, like, you looking at specific pages for brands, or are there certain accounts that you follow to learn about new brands?

42:27
Mitch Orland
Yeah, both. Erwan, new season, a lot of the west mothers, moms, really, I like to pay attention. But also that's how I find a lot of the really emerging brands for local and Instagram. I kind of watch who's kind of vibing in Asheville, and sometimes they want to do business with me, sometimes they don't, actually, and I'm following them around going, you have the best vegan pastries I've ever seen. I need them. And she's like, I'm not ready for you. I'm like I respect that. So, yeah, it's some of the hunter gatherer aspect that's fun for the job, and it's connections, I think. And sometimes something looks really cool on Instagram, and you walk in that restaurant and you're kind of like, no, that was like a show. So that can happen, too.

43:19
Mitch Orland
But I think if you're putting the effort in, it's worth a look.

43:25
Daniel Scharf
Wow, that's super interesting, actually. It never just kind of occurred to me that buyers are looking at pages from some of the other kind of tastemaker retailers to discover products. And also quick shout out for our startup, CPG instagram. I hope you guys will follow it and everybody out there. Also, we have about 17,000 followers growing every day. So awesome. So then, Mitch, fast forwarding to the point where they managed to get on your radar and now you guys are talking about a submission. What are you looking for from an early know, a lot of us mean, I know we should always look at it as an investment with you, but know, we also have to be mindful of cogs.

44:09
Daniel Scharf
So what are the kind of bare minimums that you look for and what are the things that get you really excited when it's part of a submission that think will be really effective?

44:19
Mitch Orland
Well, it's very wide ranging, right, for a super small emerging brand that we decide to champion. Don't tell people I'm saying this, but we may not ask for anything. We may support the promotion ourselves. I'm doing that right now for this brand I found at a farmers market because they need it and it's also bring them in your store. You don't want them to fail. Right. That's harder on an emerging brand. So you got to have a plan to help them. And then on the other side, if you talk to Zach, who's my grocery gate holder category manager, he's super busy, right? Like crazy. And Zach will tell you 24 weeks of promotions. Everyone kind of knows that's what Zach would like and he thinks that's what he needs to make your brand successful.

45:10
Mitch Orland
On our, that's maybe a reach for a starting brand, an emerging brand, you got to think about your spend. That's better than a free fill, in my opinion. But UNFI, you may have to give a free fill. So you got to look at all those different things. Are you hitting the price point that's going to make sense? How do you fund it? So I would say it's a real menu and on the fresh side, it's kind of the wild west, really. You come in and give us an offer, tell us you're going to go to all the stores and demo and cook it off. That's good enough. Or if you're Apple gate, we're going to inspect everything. So brokers help. I used to not believe in brokers when I was a culinary only guy, but I've come to see their value.

46:03
Mitch Orland
And like you said at the beginning, a lot of buyers work with certain brokers and really appreciate it and they bring them a lot of value. So I would find out while you're looking at a retailer, who are those brokers that make sense? And sometimes they're just a southeast broker that's going to give you better focus than an Acosta. Not that I like Acosta, but they're big.

46:32
Daniel Scharf
Yeah, got it. Clara, I'm interested to hear your perspective on what are some things that you've learned about what you're putting into submissions and how you're talking to buyers about them. Maybe any lessons learned kind of along your journey. And I'll just share a quick one of mine, which is, I think I learned if you can build a relationship with a buyer, you actually can often ask them, like, hey, help me out. Obviously, if they're talking to you, they're supportive of your product, you can often ask them, Please take pity on me. We're a small startup. What really is it going to take to get it done here? And you can kind of appeal to their compassionate side, which I know Mitch always has that compassion out and forward, but buyers have targets.

47:19
Daniel Scharf
They have A-P-L that they're minding, but I think often if you ask them it in a way I think they will share with you, like, all right, it's got to be not two case free fill, but half a case. I can do it. What do you think, Clara? Have you ever had that or any other lessons?

47:34
Clara Paye
Yeah, everything's negotiable, right? And if you can make a buyer want you more than you want them, then you have the leverage. Everything is negotiable. I like to build in an ROI before I approach, so I know how many weeks of promotion, what it's going to cost me, when does it break even? When do you turn it around? And really, I think building that relationship is not to be underestimated. I often say your network is your net worth and your ability to network figure out will create a lot of value to you. And I know people think networking is just socializing, but it couldn't be further from the truth. And networking from a place of what can I give first versus what can I take, is where the most value gets created.

48:19
Clara Paye
If you are helping as many people as you can, it's the laws of the world, right? The more you give, the more you receive.

48:27
Daniel Scharf
And any specific learnings I learned, you can also ask the buyer, like, hey, what do you think are the best tactics if I have to prioritize more weeks on deal? Or that end cap? Like, often they'll tell you, hey, that one display, crushes it. You should definitely go for that.

48:43
Clara Paye
And you can set up your own tests. Like, maybe you don't talk to the buyer, but you can do your own tests and you can start to learn. That's kind of what Paul was saying, like testing different merchandising strategies and test different things. Don't be afraid to test, but yes, ask the buyer and then ask if there's any special end caps coming up that you could participate in. Whatever fits your brand. For me, Women's History Month. Is there a Women's History Month something that we could participate in or any kind of special marketing that they're doing? Can we talk to your PR people and get on your social media? Can we cross promote? Can we do a promote?

49:17
Clara Paye
There's so many different out of the box ways, but it comes back to relationship and really having a good relationship with either your broker or your salespeople and the buyers. But if they can know you and that's why trade shows are also important because that's usually the only time I ever really speak to buyers in a very real way is at trade shows.

49:40
Daniel Scharf
Awesome. Hopefully you don't mind me saying, I think just everybody also likes your personality a lot and is excited to see you. So I think probably trade shows especially like, hey, if you're somebody that does well in person, probably trade shows are going to work really well for you. So there may be something to be said for also kind of knowing what your strengths are. I know other people who are just LinkedIn pros and they can crush it. Mitch, I was also wondering, because you're so interested in all these emerging brands for Earth Fair, despite all the brands that reach out to you, what are some of the categories where you think, really there's a big opportunity for innovation. Or there are holes where you just aren't seeing a lot of brands doing anything interesting or any products that you're yearning for.

50:32
Mitch Orland
Well, and I got, I think quoted on this one in the natural food merchandiser. But craft vegan is something I kind of coined and it's kind of where I feel like the vegan industry has gone. Not industry, but beer. You had Budweiser, then you had craft beer. So I think we're at the inflection point now where there's some amazing craft vegan charcuterie deli meats, cheeses filled ravioli. This stuff gets me really excited because there was the first wave of kind of a big more processed, more ingredients, just a replacement, not healthy. And now we're getting some artisanal handcrafted page AIDS. So that's really exciting for me. It's kind of my background. So I love that. We have some amazing ones in Asheville. Dare vegan cheese, no evil foods, miso Master is actually out of here, so we're very lucky here.

51:33
Mitch Orland
I think also kind of Claire pointed to it. It's just like, what's your cause? What are you about? What are you trying to it's? It's becoming really important not just to be there for health and profit, like what are you solving as a CPG brand that can help me at my store? And there's all the new ones, right? Regeneration upcycle, BIPOC. So there's a lot going on, but I think it's also back to the roots a little bit is like kind of what's old is new. Like value is really important right now. Help me move more cases in a more affordable way for my customers is really coming back. I mean, this is the year people are going to have to get on it after all the COVID surge and inflation surge we had. So we're going to have to get creative.

52:27
Mitch Orland
But I'm really excited about it and I think there's just more customers out there to get. So we're big in grass fed beef. We do a lot of regenerative hickory nutcap meats is in our backyard, who we kind of grew up with. So that's going to continue to be a huge push. Probably one of the biggest ones. Zach was just saying today, he's like, I had a regen end cap, like, two and a half years ago, and it didn't sell because no one knew about it. So sometimes it's like you're too far out almost, and you got to be careful. Same thing women like, she meant we had a women's end cap, but we didn't have the distribution. Right. So there's a lot of good ideas that you really need to work backwards to make sure they're going to work.

53:14
Daniel Scharf
Makes sense. And just in terms of the story that you see, when people get to the point where they get to pitch you on something and there's stuff in there, how much do you discount stuff? Or how do you look at when we're telling you a story about, hey, check out our velocity in this one store, a lot of brands have to advocate for their data, right? So they're picking one of their performing stores where they have the data, and they're showing that to you. And if they're talking about who buys our product, we don't have perfect data on that. Sometimes we're just really trying to feel it out or based on anecdotal stuff, or we're figuring out, so how much do you care that it's exact versus, like, okay, it fits the general story and feeling that I have about your brand.

54:01
Daniel Scharf
How do you interpret the stories that we tell you.

54:07
Mitch Orland
Through a glass lens of rainbows? No, I think it's relationship driven, right? So it depends, really. Like, I couldn't give you an exact answer. Everyone's different, but for me, it's important, right? Like, you want to know it's successful somewhere, you got to start somewhere, too. It's also almost what's more important for me is you've thought out your plan of kind of like you were saying at the beginning, okay, I'm going to start out of my car, then I'm going to get a local distributor, or maybe I'm going to skip the local distributor and go to the medium. And then I got a plan for UNFI. I'm going to hire a broker here. You have a plan. You know what you're doing. Especially important that you've been in our stores before. You pitch us, you will learn so much, and it's almost rude not to.

55:04
Mitch Orland
I know sometimes you can't. So I think that's really important. And we use spins, we use data, so we could find all that once you get to that level. So that's not as important for emerging brands. The data is a little skewed at that point.

55:23
Daniel Scharf
Okay, thank you. Makes sense. And then we just have a few minutes left here. One interesting question that came in was when you're starting out, trade shows are expensive. What about just walking the show? Does that work? And so maybe Claire and I can give our perspectives about how to walk a show and then I'd love to know from Mitch's perspective, how does it work when people are trying to get your attention if they're walking the show? So, for me, yeah, never have unlimited budget for all the shows. I will walk the show, but I know who to look for. If you don't know who to look for, you're going to be in trouble if you haven't done the research all year to figure out who are the buyers that I'm looking for.

56:00
Daniel Scharf
Or I mean, if you're there and you see somebody who walks by who's from a retailer, you like, I would at least just make sure you have the courage to go and say, hey, is your whatever buyer here? Is your snack buyer here? Because I actually have never had anyone say no to me if I just ask them that, like, hey, is your snack buyer here? What's their name? Okay, cool, I'll look out for them. And now, you know, and you can write that down or get them to try your product and be like, great, can you tell them about it, please? Text them a picture of it if you love it. That has worked for me.

56:28
Daniel Scharf
And then if you really need to go on the cheap, maybe you have a friend who has a booth who will let you post up on a quarter and sort of just stand in one place. I actually prefer the approach of staying in one place rather than walking the whole show because everybody's walking the whole show, so you'll never see most people, but if you stay in one point on the stream, the whole world will pass you by at one point. So see if you can post up at a table or something with your product out and just try to fish the stream and grab people. Clara, what do you think?

56:58
Clara Paye
You know, what I did was, the year before I launched, I volunteered my time to work a booth for a friend in exchange for a badge. And I went to the education stuff that Expo West did. And so that's an invaluable learning opportunity is to just help somebody else with their product, see the kind of questions they get. You'll be so much better equipped when you have your own booth the next year. You're not going there to sell your product. You're just going there to learn, to absorb, to help it's more in that spirit of give first and then go to the education things and you'll learn a lot and that starts before the show.

57:29
Clara Paye
And then there is a lot of value of walking the show in terms of getting boots, inspiration or what would you do if you had kind of like a dream and then, yeah, I would agree. There's lots of good networking opportunities like cocktail parties and everything else, but out of respect. I mean, a lot of brands will know. They call backpack trade shows, or they just take their brands out of their backpack. And I know you have that cocktail party there that you do, Daniel, which is very well attended. So there's definitely opportunities beyond just being on the shore floor.

58:00
Daniel Scharf
Yes. And always wear your swag and always have product. And don't be afraid to approach people. That's what you're there to do. You Mitch, do you get approached by people a lot on the floor? Are there ways that people can do it kind of with grace versus feeling stalked by people? Just given everybody kind of wants to get into Earthbear?

58:21
Mitch Orland
Yeah, that's a tough one. It kind of depends, right? A lot of times, I'm like, man, you've got that in your backpack. It's kind of annoying. What about all these people that paid? Like, you're stopping me in the middle, and then I take a step back and, you know, like you said, the empathy. Maybe I'll try to help this guy, at least talk to him. I'll grab a bar. Everyone's got a bar. So congrats to Claire on winning in the bar category. It definitely needs innovation. But on the other side, if I'm on the dance floor and we're having fun or we're at a networking session and we meet and you got a product, that's probably a better chance for me to pay attention and have a conversation and get to know somebody. But I will walk around.

59:08
Mitch Orland
I try to stop at almost all the food. I will, like you said, I will say, hey, Jaden, my buyer's here. I'll send them around, and then I'll not shake hands and kiss babies. But I like to thank the brands. That's part of my reason for going to the show is thanking the brands for supporting Know. That's how we all make it work.

59:31
Daniel Scharf
Yeah. Okay. Yeah. Really well said. And I like kind of what both of you guys were alluding to about. Yeah, if you see a retailer on a panel, go to that panel and here, listen to what they say, because you'll get good tips. And then go talk to them after. Or then you have something to talk about with them when you message them on LinkedIn, it's hey, thank you for those insights. I really listened to what you said, and I'd love to pitch you on my product. Taking all of that into account, especially when you don't know a lot of the buyers yet and you're just starting out. I think that kind of would fall into the category of use everything at your disposal to try to build those relationships. So we just have hit time here.

01:00:12
Daniel Scharf
So I really just want to thank definitely everybody who attended. This was one of the better attended ones that we've had. I think this is a really great topic that we'll continue to explore and thank you so much to Clara and Mitch, who were both on the panel that we did at expo east on this topic. And each time we talk about it, I just learned so many new things from both of you guys. So congrats to Clara on all the success. And thank you so much, Mitch, for being, I think, just one of the most supportive people in the industry for emerging brands and one of the people who has the power also to help us so much because of the platform that you guys have. So thank you to both of you guys and also Paul, who had to jump off.

01:00:53
Clara Paye
And thank you to you for creating and holding this space for all these emerging brands. Danielle, it is so appreciated.

01:00:59
Daniel Scharf
Absolutely. All right, everyone, don't forget to follow us on our instagram. There's a very good meme up there today. I think you guys are going to love it. Check it out. All right. Thank you, Mitch. Bye, Clara.

01:01:09
Clara Paye
Bye, everyone.

01:01:10
Mitch Orland
Earth fair has instagram too.

01:01:12
Daniel Scharf
Yes. Everyone follow the Earth fair instagram. Also discuss new products.

01:01:18
Mitch Orland
Hi, Bye.