SPRING ‘21
SPOTLIGHT S USTAIN A BI L I T Y IN CPG How to get
ORGANIC CERTIFIED
Sustainable
BRAND FEATURES
PLUS Founder feature SETH GOLDMAN Q&A with Rocana Venture Partners
INSIDE POP UP GROCER
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THE SPOTLIGHT SPRING 2021
TABLE OF CONTENTS 03
Letter from the Founder
04
Meet the Startup CPGer
06 Social Etiquette 5 Tips to Get Started on Social 08
Q&A with Emily Schildt, Pop Up Grocer
10 BRAND SPOTLIGHT: GROOVY BUTTER The CBD Nut Butter That Makes Sustainability Groovy 14 Getting Your Products Organic Certified
HIGHLIGHTING BRANDS FROM THE EARTH DAY EVENT 16 Trends in CPG Sustainability 18 UPCYCLED INGREDIENTS Fighting Climate Change from Your Kitchen 20 REDEFINING CONVENIENCE The 21st Century Milkman
22 Q&A with Gurdeep Prewal, Rocana Venture Partners 24 READY FOR RETAIL? Slotting Watchouts and What To Do About Them 26 FOUNDER SPOTLIGHT: SETH GOLDMAN Partnership: Finding a Co-Founder 30 HOW IT STARTED, HOW IT’S GOING Bare Bones 2
32 Startup CPG By the Numbers
OUNDER'S LETTER
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DEAR COMMUNITY, Startup CPG was born out of a desire to help brands start up easier, faster, and with access to the best resources. Today we launch a new platform with the first issue of our digital publication, The Spotlight. Our organization still feels brand new. It’s hard to imagine that we had our very first meetups in late 2019 — so much has changed since then. In early 2020 when in-person events were no longer possible, we quickly pivoted to become the first online national CPG community. Hoping to help brands adversely impacted by delays in resets, we built resources to offload excess inventory, connect with e-commerce sites, and find 3PLs. To foster community, we hosted bi-weekly mixers where everyone got to connect via small breakout rooms. To support brands where it matters most (funding, press coverage, and distribution), we launched Pitch, which sent samples directly to VIP audiences and awarded 100K in prizes. We launched Spotlight as a blog in early 2020 to highlight brands and experts. That first coverage you get as a brand can mean so much, and we hope to continue to help brands achieve that through this magazine. A year later, we now reach over 20,000 CPGers. As we continue to grow, so does our value. Emerging brand founders now get access to a network even larger than the massive CPGs. Through our Slack channel, even the most obscure questions rarely go unsolved, and we love seeing the major connections happening as our community finds their co-founder, connects with a buyer, or gets much needed support on a hard day. This publication marks just another step forward in our journey to help brands working toward a better food system. We hope that you learn about a new brand, get inspired by an incredible founder journey, and gain wisdom from experts across the industry. We thank all of you for building this community with us. We’re so proud of all that we can accomplish together, and I can’t wait to see what’s next.
Forward together, Daniel Scharff Founder, Startup CPG
Daniel Scharff is the Chief Executive Officer of a venture-backed, Miamibased beverage launching in Q4. Formerly Eat Just, Mars Chocolate, and Deloitte Consulting, he's a Wharton MBA/MA (Spanish/Portuguese), and the lead singer/frontman of the Super Fantastics, an indie pop quartet releasing their debut album in May '21.
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THE SPOTLIGHT EDITORIAL TEAM Jenna Movsowitz Editor, The Spotlight Erin Fasano Managing Editor
CONTRIBUTORS Daniel Scharff Founder, Startup CPG Victoria Eklund Founder and Creative Director of Jungle Social* Melanie Kahn Founder and CEO of Poppilu Steven Chen Operations Manager at Wildwonder Seth Goldman Founder of Eat the Change Andy Kurtts Founder and Creative Director at Buttermilk Creative* *= Partners of Startup CPG 4
WWW.STARTUPCPG.COM
MEET THE STAFF
OF STARTUP CPG Quick 7 with Erin Fasano, Managing Editor for Spotlight
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TELL US ABOUT YOUR BACKGROUND IN 3 SENTENCES. I often tell the story of my 7th Grade Science Fair submission - I studied TV advertising to prove my hypothesis that ads are targeted based on the media content (toys on Nickelodeon, beer on Football, etc). My partner and I won first prize, and my obsession with marketing, media, and branding was born! I've funnelled that interest into a career in advertising and branding, and am now taking my first steps into entrepreneurship with my baby, Starryside Company.
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HAT ARE YOU PASSIONW ATE ABOUT (IN 5 WORDS OR FEWER)? My Family, Food & Bev Startups, Gross Margin, and anything Italian.
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HAT'S BEEN THE MOST W REWARDING PART OF BEING A PART OF THE STARTUP CPG COMMUNITY? There has been so much! The Startup CPG team, especially our founder Daniel, is a passionate, experienced, well-networked group all focused on delivering for the community, and I've learned a ton from them already. And the community writ large is SUCH a rich resource - I truly believe you get
out of it what you put in. I make it a point to be active on our Slack as much as I can, helping out with a random experience or quick vendor recommendation that could save someone hours of research. And when I have a question, I have felt reciprocated with helpful advice from the community. I really couldn't imagine my current role or trying to start my business without the support of Startup CPG. I'm also deeply appreciative of the experience as Managing Editor; working with a team to pump out quality content with the help of the community has been both challenging and fun!
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AVORITE SNEAK-INTOF THE-KITCHEN-AT-MIDNIGHT SNACK. McConnell's Sea Salt & Cookie Ice Cream! We have a shop near our house so even late at night, its just a Postemate away!
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A CPG BRAND YOU USE/EAT/ DRINK EVERY DAY. I'm so obsessed with brands - I often joke with friends that "Instagram made me buy this." One of my current faves is Bev, the female-founded, canned-wine - I always have a few of their sparkling in the fridge. I can't say I drink it every day, but I do love it!
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AVORITE PODCAST OR F REGULAR CLUBHOUSE CHAT TO TUNE INTO. I'm a not-so-secret political junkie so a lot of my pods are from the Crooked Media family of pods, but I also love Taste Radio and our Startup CPG podcasts! On Clubhouse, I really enjoy what our team has been putting out in our Club, really great conversations delivering incredibly relevant advice.
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EST ADVICE YOU'VE EVER B BEEN GIVEN AS A CPG FOUNDER YOURSELF. Progress over Perfect. I also hear often (on one of my Crooked pods, Pod Save America) that President Obama often said, "Don't let perfect be the enemy of the good." Its great advice because I come from a corp CPG background where the product had to be perfect to launch because we were going to invest heavily in slotting to secure wide distribution right out the gate. We spent months, and sometimes years, perfecting the product, the package, tweaking formulas, validating shelf life. When starting small like we're doing at Starryside, we can just GO! I'm really excited to get our product out to market and continue soliciting feedback from consumers, improving along side them on this journey.
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WWW.JNGLSOCIAL.COM
SOCIAL ETIQUETTE
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TIPS TO GET STARTED ON SOCIAL
By Victoria Eklund of Jungle Social
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ot too many years ago, it would have been unfathomable to have a direct line of contact with your audience. Today, we don’t just have that line of contact, but a deeply rooted connection to consumers through a little something called social media. Through social platforms, brands have the opportunity to ask questions, take polls, provide customer service, and even take a peek directly into the lives of the individuals that make up your audience (that’s called social listening!). But with all of these resources at your fingertips, how do you make the most out of your social strategy? As a Creative Director in Social Media Marketing, and now an agency owner, I have some guidance for founders who are ready to launch their new brands online. Keep in mind; it’s a full-time job. Successful brands have large teams and a significant budget allocated solely to social. If you’re not ready to hire help, start where you can. But whatever you do, do not underestimate the immense power of marketing through social media. Here are a couple of things to keep in mind when it comes to building your initial social media strategy.
edgy creative, but more importantly, this creative was informed by data on their very specific target audience. If you do one thing only, do this: create consumer profiles. Know your consumer like you know your best friend — their purchasing habits, lifestyle, behavioral traits. Spend time on this, and use it to inform your creative or provide to your creative partner.
LIMIT THE PRODUCT IMAGES As a new brand, you want brand awareness and for people to recognize your product packaging. However, don’t expect to get away with simply posting pictures of your product all the way down your feed: your product on a rock, your product held in someone’s hand, your product on a colorful background. Think from the audience’s perspective; what are they gaining from your images? What value do they bring? Don’t be the brand version of someone who only posts selfies!
BRANDING Ideally, you’ve worked with a branding team to develop your visual identity, color palette, brand story, core values, brand voice, and so on. At the very minimum, you have your logo and colors for your packaging. This look and feel needs to be consistent throughout all of your outward communication to the world — including your social media platforms. If you do not have a dedicated team working on your digital content, make sure that you have a brand guide that you can share with anyone creating content for you. If you are working with a photographer or videographer for example, make sure that they have access to your color palette and any mood boards that represent your desired visual creative direction.
KNOW YOUR AUDIENCE I can’t stress this one enough. Every day, I have brands coming to me asking to be just like *insert your favorite cult brand here*. The reason these brands (think: Oatly, Recess, NUGGS) are so successful is partially thanks to innovative,
VALUABLE CONTENT Once you have a solid handle on your target customer, start thinking about and researching what interests them and what kind of content will excite them. You can provide valuable content through humor and entertainment (everyone loves a good meme), useful recipes (not only using your product), or a place to connect with like-minded individuals. Try to think outside the box, while staying relevant to your specific consumer persona. For example, Oatly created an instagram account to highlight baristas, the meme account @fuckjerry promotes their product Jaja Tequila, Barilla used Spotify to share playlists that correspond with the cooking time of their pastas. Try to focus less on ROI and more on how you can give, give, give to the consumer.
TONE OF VOICE This is something that is underrated and rarely consid-
ered enough. Again, develop your brand voice based on your consumer profile. Do the research. How do they speak to one another? How can your brand be one of them? Are you a relatable brand whose consumer communicates through abbreviated texting and slang? Do you want to establish yourself as a go-to source of information in your industry and build trust with your audience? What words do you or don’t you use? How do you want to make your audience feel? Developing a consistent, intentional tone of voice is key in building authentic relationships with your consumer.
Victoria Eklund is the Founder and Creative Director of Jungle Social, a creative agency specialized in making CPG brands look their best on social media. Victoria strongly believes that creatives carry a responsibility to output imagery that is genuinely inclusive and meaningful. When she is not working she spends her time styling her dinner plate for IG stories, lurking on Clubhouse and most recently; rollerblading and dabbling in NFTs. www.jnglsocial.com jnglsocial @jnglsocial
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WWW.POPUPGROCER.CO
Q&A WITH EMILY SCHILDT OF POP UP GROCER Startup CPG WHAT IS POP UP GROCER, AND HOW DID IT COME ABOUT? Emily Schildt Pop Up Grocer came about all by accident. I was a brand marketer, who got my start very early on at a tiny little yogurt company that is now the behemoth you know as Chobani. I was a Jane of all trades there, but really specialized in building the brand. This was an amazing experience which led me to become a consultant for emerging food companies and bring their products to market. Through that work, I realized that there wasn’t an ideal retail environment to launch products. You could only be so lucky to have one SKU among 500 in a grocery aisle. And this isn’t that exciting, beautiful experience that I felt new CPG products warranted. A lightbulb went off; I decided to create that ideal launch environment for a few of my clients. Once I understood the appetite and excitement for it, we grew very quickly into something much bigger. We opened our first pop up location in April 2019 and had around 120 brands featured.
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SCPG HOW DOES A PRODUCT GET ON YOUR SHELVES? ES Sourcing new brands is my personal favorite activity and it’s truly at the core of what we do. It’s where we spend the most of our time. A brand that qualifies to be a part of Pop Up Grocer meets three key criteria. The first and most important is that the brand or founder is doing something truly novel, innovative and compelling, whether that be their founding story, a sustainability component, or a new approach to ingredients. We also look for founders who
WWW.POPUPGROCER.CO
are underrepresented or under-resourced. Next, we look for a level of responsibility and thoughtfulness in the selection of ingredients and nutrition. And finally, we look for an aesthetically pleasing packaging to take to our shelves. SCPG WHAT DOES A PARTNERSHIP LOOK LIKE FOR YOU?
Emily Schildt, founder and brand marketer, is a four-time entrepreneur. Prior to Pop Up Grocer, Emily created and operated brand consultancy Sourdough, where she brought new products to market and collaborated with brands like KIND, Lavva, Ugly, and Seedible. She also co-founded the event series Thing of Wonder and the food conference Bitten. Emily founded Pop Up Grocer in early 2019 by combining her love of marketing, branding and her network to build the ideal retail environment for new product discovery. www.popupgrocer.co @popup.grocer
ES Mass retailers charge small brands exponential fees, from slotting fees to marketing fees, it can be exceptionally costly to get into a grocery store. It also can be really difficult to get through the door. If you don’t have relationships with distributors, brokers, or salespeople, the system is highly competitive. Our model eliminates all of that difficulty. We work directly with brands. They ship directly to us, so we don’t require that the brand have a distribution network established. We don’t even require them to have UPC codes. We’re a really efficient path to market. We charge a flat advertising fee in exchange for the visibility we offer, and the brands in our space make 80% of the revenue from the sales of their product at their established price. SCPG WHAT ARE SOME TRENDS YOU’RE SEEING RIGHT NOW? ES We’re coming off of a year that completely changed our habits, and
that’s not insignificantly related to food. We’re all cooking at home, and as a result we’ve see baking mixes and bold flavors in the form of spices and condiments emerge. We’re also seeing a lot of non-alcoholic beverages, which has really exploded as a result of people drinking more at home this past year and wanting to find opportunities to decrease consumption. And of course, were seeing a ton of adaptogenic fill-in-the-blank. Adaptogens are being infused in everything, which goes along with this trend of “chilling out” or “calming” in response to what has been a very tumultuous period for all of us. SCPG WHAT’S NEXT FOR POP UP GROCER? ES In Q4 of this year, we will be opening our first permanent space in New York, where we will rotate inventory on a quarterly basis. We’ll also continue to pop up, so you can expect three more locations from us next year. We open in Chicago at the end of this month! If anyone is interested in getting involved, they can reach out to hi@popupgrocer.co. We review brands on a rolling basis and slot them in according to their market of interest. We love connecting with founders, and encourage anyone who might be interested in exploring working together to reach out.
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WWW.GROOVYBUTTER.COM
BRAND SPOTLIGHT: GROOVY BUTTER
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WWW.GROOVYBUTTER.COM
by Jenna Movsowitz
THE CBD NUT BUTTER THAT MAKES SUSTAINABILITY
R
achel Weber really loved The Lorax as a child. At least, that’s the best explanation she can offer for why she has dedicated her life to protecting the earth. From her work with plant-based brands and sustainable clothing choices, to her obsession with Woodstock era music in all of its planet-protecting glory, Rachel’s identity has always been tied to her passion for sustainable living. In June 2020, Rachel created a CBD nut butter — and poured her identity into every jar. Meet Groovy Butter: the vibe enhancing nut butter that makes sustainability groovy.
The Plastic Problem in the Wellness World
After graduating from college in 2016, Rachel followed her passion for plantbased wellness and started her career at a major juice chain. In her role, she worked on everything from product innovation to development and operations for their 85 restaurants. By her fourth year in her role, she had launched over 100 products for the company. While Rachel always felt passionate about health food products, she became increasingly concerned about the way many healthfood chains were using single-use plastics and bioplastics. “Although bioplastics are generally considered ‘compostable’, they often confuse the plastic waste stream. When bioplastics are accidentally recycled, they can ruin an entire
Groovy
recycling batch,” Rachel says. When she left her role in 2020, she knew that she had to create a wellness product herself — one that would meet her sustainability standards.
A Routine-Worthy CBD Product
In the middle of 2020, Rachel began to notice the impact of the pandemic on her and her family’s mental health: her increased anxiety and her father’s difficulty sleeping. Taking CBD was a no-brainer for her — something that made her kinder, less anxious, and improved her sleep. She knew that people in her life could benefit from it, too. But she quickly realized that her family and friends were reluctant to touch the many CBD products she placed in their laps. CBD tinctures are often bitter and unpleasant to take, and CBD gummies add up to just another item in a crowded medicine cabinet. So Rachel made it her mission to transform CBD from a member of someone’s pill collection into a craveable, healthy treat in their routine — and Groovy Butter was born.
Sustainable From Farm to Jar
While nut butter entered the scene as a vehicle for the star ingredient of CBD, Rachel was never going to settle for your average creamy peanut butter. As a nut butter aficionado herself, she knew that she wanted to create a raw, stone-ground almond butter and a sweeter, hazelnut cacao variety — like Nutella without the sickly-sweet stomachache. From the start, she was devoted to finding the highest quality ingredients to craft her products. This meant finding low-water usage, organic farms. Rachel quite literally spanned the world to find her ingredients: the raw cacao nibs come from biodynamic farms in Peru, the hazelnuts are grown in Italy, the unrefined coconut palm sugar is hand-picked from a sustainable farm in Bali, and the broad spectrum, regenerative CBD reins in from an organic hemp farm in the Colorado Rockies “where they are obsessed with soil health.” Rachel was also dedicated to finding a co-manufacturer who fully aligned with her brand’s mission. “I knew I needed someone who has the same
Rachel made it her mission to transform CBD from a member of someone’s pill collection into a craveable, healthy treat in their routine. 11
WWW.GROOVYBUTTER.COM What’s Next for Groovy Butter?
VIBE ENHANCING NUT BUTTERS
passion for organic plant-based foods and sustainability,” Rachel says. “I couldn’t work with a co-man who just pushes products out. You need to find someone who is as excited about your brand as you are. When [my co-manufacturers] talk about nut butter, their eyes light up.” As far as packaging, “single-use plastic was a nonstarter. There was no way I was going to send out any product in single-use plastic. I knew it had to be glass and I knew that our cardboard boxing had to be recyclable,” Rachel says. She’s currently working with a company to create custom-grown pulp holders to protect the jars in shipment.
Inside the Jar...
During R&D, Rachel was particularly attentive to texture and nutrient density. “The stone ground almond butter doesn’t have any oil rising to the top or dry butter you have to scrape from
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the bottom. It’s smooth and perfectly creamy from top to bottom.” Stone grinding at a low temperature also keeps the complete nutrition of the raw nut, unlike steel grinding which destroys sensitive vitamins. The extra-creamy result of this slow process helps emulsify the CBD into the product. The hazelnut cacao variety has quickly become a crowd favorite for its unique texture; when you refrigerate it, it scoops out like a creamy hazelnut truffle (like the inside of a Ferrero Rocher), and when you leave it out on the counter, it is warm and drizzly. Rachel’s friends and family, who were at first reluctant to try CBD, now are drizzling Groovy Butter on their oatmeal in the morning and scooping it by the spoon at night. She is thrilled that her dad’s sleep has genuinely improved, and even more thrilled that her friends can’t stop raving about the taste and texture.
Groovy Butter is currently being sold in a few retail locations in NYC and direct-to-consumer. Looking ahead, Rachel plans to rework DTC operations and focus on carbon offsetting. As far as retail rollout, she’s thrilled to be expanding to LA and throughout the country in wellness-oriented shops. As she continues to scale, she will be thinking about refining processes to ensure sustainability at every step. Though Rachel is currently a solo act, she will continue to rely on and contribute to the natural foods community through Startup CPG. “Startup CPG has been an amazing resource as I’ve built this brand. The Slack is fantastic, the Clubhouses have been fantastic, and the founders have been so willing and open to talk. I’m so grateful to be a part of this community.” In the long-term, Rachel is excited to expand her product line to include more delicious plant-based CBD products. We cannot wait to see what’s next — and to know that supporting Rachel’s work will always ensure a promise of saving the Truffula trees.
Rachel Weber is the founder of Groovy Butter, a line of decadently creamy vibe enhancing nut butters – made with pure, radiant organic ingredients and infused with broad spectrum CBD. www.groovybutter.com eatgroovybutter @eatgroovybutter
CONVO OF THE QUARTER
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WWW.DRINKWILDWONDER.COM BLOG REPORT
GETTING YOUR
products ORGANIC CERTIFIED
Org
Steven Chen is the Operations Manager for San Franciscobased Wildwonder. They make delicious, bubbly drinks that combine live probiotics with prebiotic plant fiber, superherbs, and fruit all in one bottle to support your gut health. Wildwonder is female and BIPOC-founded, and its mission is to create wonders in everyday life and for those under-voiced in our communities. The company’s drinks are all USDA organic certified and vegan.
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ic n a
G
etting your products Organic Certified can be a confusing process, but with a little guidance, it can be done! Check out our learnings below that might help you get these important claims approved for your products.
ORGANIC VS. NON-GMO
ingredients and products to ensure they meet USDA organic standards. If self-manufacturing, the facility will need to get certified through a more intensive process that can take anywhere from 6 months to over a year. The USDA breaks down the steps to get your facility certified in this helpful article. The process is a bit easier if you are using a co-packer that already has an organic certification.
With all the labels and certifications out there, many consumers are still confused by the difference between USDA organic and Non-GMO. People are always surprised to find out that organic certified products are actually nonGMO and much more. USDA organic certification prohibits the use of GMOs, toxic chemicals, artificial flavors & preservatives, synthetic fertilizers, pesticides, and more. While “organic” has faced its own host of controversies over the years, the USDA organic seal is still a symbol of reliability, especially in packaged food and drinks. Organic-certified products uphold some of the highest standards of quality and sustainability in the industry.
ORGANIC CERTIFICATION
GETTING STARTED
Once your co-packer agrees to sponsor your organic certification, either the co-packer or the organic certifying agency will ask you to provide a bunch of documents from your raw ingredient suppliers. Basically, the certifying agency needs to confirm that all the ingredients in your product are 100% organic, organic certified, or organic compliant (up to 5% of ingredients can
The process for getting your products organic certified differs when you’re self-manufacturing or using a co-packer. The USDA works with a network of ~80 accredited certifying agencies, which are basically organizations that can issue organic certifications, after reviewing a brand’s
For brands using a co-packer, it’s likely your co-packer already has an organic system plan and an organic certification in place. Ask your co-packer to “sponsor” your certification with their certifying agency, which means your product will be added into their existing set of organic certified products. While this process is much shorter, it can still take anywhere from a few weeks to a few months, depending on the certifying agency.
MANAGING YOUR SUPPLY CHAIN
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be nonorganic). To speed up this process, ask your suppliers for the following documents upfront and keep them on file and up-to-date: »O rganic Operating Plan
(a comprehensive list of all the supplier’s organic ingredients) »C urrent Organic Certification »S pecification Sheet, for each ingredient » Certificate of Analysis (COA), for each ingredient with the most recent lot #
Make sure to keep track of your entire supply chain so you can trace every ingredient from beginning to end. Keep records of all COAs, spec sheets, and lot numbers for all ingredients used for a production. Organic certifying organizations conduct regular audits and will need to confirm that your prior productions and ingredient sources are well documented.
CONCLUSION
In the growing natural food industry, certifications can add value to
Steven Chen Steven is the Operations Manager at Wildwonder, a San Francisco-based functional beverage brand. Prior to wildwonder, he led Supply Chain for venture-backed ice cream chain, Smitten Ice Cream. Steven is an avid home chef and urban gardener, and he's never met a dessert he didn’t like. www.drinkwildwonder.com drinkwildwonder @drinkwildwonder
your products and build trust among consumers. While getting any type of certification can seem daunting at first, speak with your co-packer, the certifying organization, or reach out to other brands for tips on getting started. USDA organic is a great certification that speaks to quality and sustainability, but it’s up to you to decide whether it’s right for your brand & product (it might not be)! Using all-organic ingredients will raise your costs and certain raw ingredients are hard to source / not widely available as organic. In some cases, conventional ingredients can be processed with equally high standards, if not higher, than organic ingredients, and be more sustainable. Applying for certifications can also become a lengthy and expensive process for new brands starting out. If you’re trying to get a new product to market as quickly as possible, consider launching the product first and applying for organic certification later. Your product can meet all the standards to become organic-certified without getting certified, which will make your life much easier when applying for the certification down the road!
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TRENDS IN CPG SUSTAINABILITY Transparency
“Consumers will demand more transparency into packaging recyclability and recovery. With the environment and waste top of mind, consumers are becoming more aware of our broken recycling system and will question what sustainable actually means. They will raise the bar to the materials being used to store and ship products, trusting companies that have a transparent supply chain, local/domestic sourcing and those with a net positive impact on the planet at large.” Elena Guberman, Givr Packaging
Upcycled Food
“Upcycled foods are finally getting their spotlight with all the exciting brands making it an accessible conversation. Though I hesitate to call it a trend! Reducing waste and our carbon footprint through delicious, innovative foods is a way of eating that is here to stay.” Kayla Abe, Ugly Pickle Co.
Measuring Impact
“Now more than ever, brands are expected to show—and measure—value beyond the bottom line. Their theory of impact may include anything from decarbonizing a specific sector, to saving water in parched places, to regenerating soil, to strengthening local economies and beyond.” Seth Sheldon, Rho AI
Messaging
“While the initial assumption might be that brands address sustainability by simply using more "green" materials in their packaging, for Aid&Abet, it's more often that we turn to a brand's messaging and how we can better communicate on the packaging a brand's mission and commitment to sustainability. Whether it's environmentally conscious ingredient sourcing, hyper efficient factory practices, or innovative farming methods, underscoring these as essential brand components to be conveyed on a product's packaging is becoming more and more imperative.” Ken Beasley, Aid & Abet
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PRESENTING SPONSOR
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RAMPING YOUR BRAND: THE OPTIMAL PATH TO SCALE FOR FOUNDERS, INVESTORS AND FANS
ADVENTURES IN VENTURE CAPITAL: INVESTMENT TRENDS IN FOOD AND BEVERAGE
TRENDS IN FOOD PRODUCT DEVELOPMENT: DOING GOOD WHILE FEEDING WELL
SPONSORS
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by Jenna Movsowitz
UPCYCLED INGREDIENTS
FIGHTING CLIMATE CHANGE FROM YOUR KITCHEN With Caroline Cotto, Co-Founder of Renewal Mill
W
hen you Google the word “upcycled,” you’ll be met with results ranging from trendy vintage furniture shops to reworked Levi’s. While upcycling has quickly become trendy in home and fashion, it’s still a relatively new concept to CPG — but Renewal Mill is one of many emerging brands who are trying to change that. Renewal Mill is a next-generation upcycled ingredients company, devoted to reducing food waste at the manufacturing level. Claire Schlemme originally learned about produce pulp waste when she co-founded Boston’s first organic juice company. Every day, they were left with copious amounts of pulp that ultimately were trashed. She knew there had to be a better solution, but it didn’t exist yet. This problem became her driving force, and it turned out to be a much larger problem than she ever could have imagined; it existed at every level of the supply chain. The co-founders of Renewal Mill learned the true scale of this issue when they met the third largest tofu producer
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in the US. In his manufacturing process, nutritious soy pulp was purely labeled as waste, then taken directly to landfill or to animal agriculture. In other words, a perfectly healthy byproduct was either being tossed, or used to fuel the meat/dairy industry — a truth largely unknown by many plant-based or vegan tofu-eaters. Upon seeing this, the founders knew that there had to be a better way to keep all this valuable nutrition in the supply chain and bring it back to people's plates. The answer? Turn it all into a nutritious ingredient. Through dehydration and a milling process, Renewal Mill created their flagship ingredient: Okara Flour. Okara is a byproduct of tofu production, high in fiber and protein, and completely gluten free. It looks very similar to a traditional all-purpose flour,
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and acts very similarly to a coconut flour, making it great for people with grain-free, gluten-free, low carb or keto diets. Their second ingredient came about with the rise of the next big dairy alternative: oat milk. Their oat milk flour, which is 50% protein, is made from the byproduct of oat milk production, giving new life to the remnants that don’t make it to your oat milk latte. Renewal Mill sells these flours as ingredients, but also as the base of their line of gluten-free, plant-based
Caroline Cotto, Co-Founder, COO
baking mixes.These range from their best-selling, decadent, dark chocolate brownie mix to a classic sugar cookie mix, and all you have to add is oil and water. Their products aren’t just sustainable and high protein, but are also ridiculously scrumptious — created by a five-times James Beard award winning cookbook author and alternative flour expert. Recently, Renewal Mill carbon offset their production — because having a 60% lower carbon footprint
IT’S NEVER BEEN EASIER, TASTIER, OR MORE IMPORTANT TO START FIGHTING CLIMATE CHANGE FROM YOUR KITCHEN. than traditional wheat flours already wasn’t enough. Since founding, they’ve diverted over 100,000 pounds of food waste. “Reducing food waste is the number one thing we can do to prevent two degrees of global warming in the short term,” co-founder Caroline Cotto says. “We want to put that power back into the hands of the consumers. We want to empower them to help reduce food waste at scale, without having to sacrifice. Sustainable consumption can still be absolutely delicious.”
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WWW.ADDJOI.COM
By Jenna Movsowitz
REDEFINING CONVENIENCE
THE 21ST CENTURY MILKMAN
S
ustainable innovation doesn’t have to be a brand new, never-been-seen-before product. Rather, sustainable solutions can come from looking at an existing product and rethinking how it can be delivered in a more eco-conscious way. That’s exactly what the founders of JOI aimed to do: create a more sustainable alternative to a sustainable product in the marketplace.
AN ALTERNATIVE TO AN ALTERNATIVE
The co-founders of JOI met in design school. They each brought a unique perspective to the table. Izzy wanted to reduce her carbon footprint, Dave was lactose intolerant and Tony wanted fresher-tasting milk for his vegan diet. Together, they decided to rethink almond milk — the most prevalent alternative to dairy at the time. Although almond milk is plant-based and dairy free, the team had several qualms with the way almond milk was being produced and packaged. They discovered that traditional almond milk contained only about 2% almond content and 98% water. This meant that plant-based milk products were essentially shipping around water — an inefficient practice that secretly contributed to the conscious consumer’s carbon footprint. And though the cartons often wore the word “recyclable,” their three-layer packaging was extremely
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WWW.ADDJOI.COM
If you’re a CPG brand looking to reduce your carbon footprint, Hector recommends starting with looking at how you define convenience. When “convenience” is reduced to single-serving sachets or bubble-wrapped shipping boxes, it will never be seen as compatible with sustainability. But what if “convenience” was seen in the ease of less packaging, carrying around less weight, or having something on your shelves to make at home as-needed? Taking time to look outside of the box (literally and figuratively) won’t just make your brand more eco-friendly; it may just retrain consumers to see “easy” and “sustainable” as synonymous.
challenging to recycle in practice. With this knowledge, Dave, Izzy and Tony saw an opportunity for higher-quality, truly environmentally-friendly plant-based milk. They worked closely with scientists to find a product that met their needs, and would meet consumers’ need for convenience. Their answer? Concentrates. Essentially, these concentrates – which now come in several nut and oat varieties – are pastes of your favorite plant-based milk. They are 100% of the raw material content, and use no water in the manufacturing process. The resulting paste can be blended easily with water at home to create a DIY-esque high-fiber, high-protein milk product with no added preservatives or sweeteners.
REINVENTING THE MILKMAN
Each container of JOI’s plant-based paste produces an equivalent of seven cartons of milk. One truckload of JOI milk shipped direct-to-consumer equates to five to six full truckloads of plant-based milks, which are often lugged around to several middlemen before reaching the consumer’s grocery cart. “We like to think that we’re reinventing the milkman for the 21st century,” says Hector Gutierrez, CEO of JOI. Not
only does their fully direct-to-consumer operation eliminate excess transportation (and thus carbon emissions), but it also redefines convenience. No longer does a consumer have to heave cartons of mostly-water around at the grocery store. Instead, they can receive a small package at their doorstep and make fresh-tasting, nutrient-dense milk in only 30 seconds at home — just add water.
SUSTAINABILITY FROM A-TO-Z
The core of JOI’s mission is to design products that empower the consumer while reducing carbon emissions and packaging waste. But their sustainable practices go beyond the innovative product itself. JOI is also thoughtful about sourcing from farmers with strong irrigation practices, who isolate their irrigation to specific trees rather than relying on mass irrigation. “We are thinking of sustainability from A-to-Z. We want to source the best product, put it through the best manufacturing processes, and put it in packaging that allows the consumer to feel really good about their environmental footprint,” says Hector. Looking ahead, JOI is working on expanding their sustainability efforts by introducing completely compostable packaging to create a zero-waste product.
Hector Gutierrez, CEO: Two-time founder and entrepreneur with over 12 years experience in the food industry, both startups and large corporations. Former 3G, former COO of Jugo Fresh. Cuban-American, Miami based, Fitness junkie, food-obsessed and new father. www.addjoi.com madewithJOI @addjoi
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WWW.ROCANAVENTURES.COM
Q&A
WITH ROCANA VENTURE PARTNERS
Startup CPG TELL ME ABOUT ROCANA VENTURES AND YOUR INVESTING PHILOSOPHY.
Gurdeep Prewal, Co-Founder We launched the fund with a very mission-driven approach to supporting brands that we felt were going to make a transformational change in the food and beverage world. When we started zeroing in on the better-for-you CPG space, we started to uncover a lot of problems that exist in the food system today. Growing up, I never questioned anything that I was eating. I blindly ate a lot of the big legacy CPG brands, cereals, chocolate bars, soda, and I had no awareness of what was inside of those products. Decades later, I realized that many of those products have created systemic issues with respect to health and environment. So our mission at Rocana Ventures is to support brands and entrepreneurs that are going to create systemic change. We are the enablers; they have the vision, and we invest in them to support their mission. SCPG WHAT CATEGORIES ARE YOU MOST INTERESTED IN? GP The two mega trends that guide our selection process are plant-based and clean label. For us, clean label means natural ingredients, no preservatives and low-to-no sugar. Beyond these main
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categories, we focus on sub-themes like alternative proteins, alternative dairy, functional beverages, and healthy snacking. We also mainly focus on DTC brands. Investing across categories in category disruptors and category creators is really what we aim to do.
WE HAVE TO BE MORE INCLUSIVE TO DEMOCRATIZE HEALTH AND WELLNESS. SCPG DESCRIBE YOUR SELECTION CRITERIA. GP We invest relatively early-stage compared to most VCs. For us, it has to start with absolute conviction in the product and founder. For product, we have to believe that every brand we’re investing in is either going to be a category disruptor or category creator. We don’t look for incremental innovation. For example, we haven’t invested in a bar company because there are a lot of options for bars out there, and
typically the innovation that we see is marginal. We try to zero in on categories where we think there hasn’t been a lot of disruption and there is potential for dramatic change. One example is a brand in our portfolio called Three Wishes cereal. When you look at the cereal aisle, there’s been very little innovation in the past few decades. Three Wishes is really disrupting a sleepy category. Another example is Kettle and Fire, a brand in our portfolio that we feel has really created the category of bone broth, which didn’t exist 10 years ago. Because we take minority positions— we don’t look to acquire or control brands—the character of the founder and ability to work alongside them is an important piece of our selection criteria. We want to see how much conviction they have in their business, what kind of vision they have in building the brand, and how they plan to take this thing from product to brand to platform. It’s a really fine balance between having total conviction in what you’re doing, but also having humility and a collaborative spirit to make those small pivots when necessary. Small pivots in a founder journey may not be what a founder initially envisioned, but they may end up being the most important decisions they can make. At the same time, you can’t make too many changes all the time — you have to be confident in
WWW.ROCANAVENTURES.COM
your vision. So we really look for that balance in a founder. SCPG HOW EARLY IS TOO EARLY FOR A FOUNDER TO PITCH? GP We typically don’t do pre-revenue; we need to see some consumer validation in the market. But that doesn’t mean we can’t build a relationship earlier than that. We talk to a lot of brands that are still pre-revenue just to build knowledge and a relationship, and it can be months before a check is actually written. Brands also should be dialed into their gross margins and can demonstrate that they can get to 40+ percent gross margins. It can’t just be about top-line growth. It has to be a business that can be sustainable over a long period of time. We know in early years, many brands have very low gross margins, even negative gross margins. But we have to be able to see a path to get to 40+ percent. SCPG WHAT CAN A BRAND SAY IN A PITCH TO DEMONSTRATE THEIR VALUE? GP Data-driven velocities are so important. If they can show that they’re achieving velocities that are top of their category relative to competition, that gets me really excited. Also, if they can show me a high repeat purchase rate, that is really exciting for early-stage brands. But typically, we really do start with the mission. We’re always most interested in seeing that a brand is doing something transformational. That, for me, is the number one thing that gets me hooked and having a conversation. SCPG WHAT INNOVATION/TREND IS EXCITING TO YOU RIGHT NOW? GP I’m fascinated by gut health, and one of our brands is doing something really unique and exciting. Olipop has disrupted the soda market with a digestive health soda, rich in prebiotics and fiber. What get me excited about Olipop epitomizes exactly what we like to see in a brand. It’s visually dynamic packaging, it tastes great, and it’s disrupting a massive category in soda. When you look at the formulation, it’s deeply rooted in science. They’re doing a lot of independent
Gurdeep Prewal (left), Co-Founder and Managing Partner. Sumesh Sachar (right), Co-Founder and Managing Partner.
research and studies with the world’s leading microbiome experts to validate the efficacy of their formulations. This sets a new standard in CPG — rarely do CPG companies back their claims with real science and independent studies, which is exactly what Olipop is doing. SCPG WHAT ELSE SHOULD FOUNDERS KNOW ABOUT ROCANA? GP If you look at our portfolio, every one of our brands is based in the US. But we have a truly international network: 75% of our investors are international.
We really see this as a global movement. For many entrepreneurs, the US market is a massive market opportunity. But we are looking to connect the dots to other parts of the world. We really believe that a lot of these trends move West to East, and our brands have potential to succeed in other parts of the world. We bring this unique international approach to this space because we really believe that it is a global movement. Even within the US, we don’t like to focus on brands that are solely bi-coastal — we really like to think about the rest of the country. We have to be more inclusive to democratize health and wellness.
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WWW.POPPILU.COM BLOG REPORT
by Melanie Khan
READY FOR RETAIL? SLOTTING WATCHOUTS AND WHAT TO DO ABOUT THEM OK
I admit it, I thought I knew what I was doing when launching Poppilu Lemonade at retail a few years ago. But I really didn’t appreciate the pitfall of slotting, or at least take it seriously enough to think it would be a problem for me. (Famous last words!). So to spare you the growing pains of learning about slotting the hard way as I did when launching at retail, here’s my guide on how to think about slotting and how to handle slotting that’s beyond your budget.
WHAT IS SLOTTING?
It’s the upfront pay-to-play that a lot of retailers charge. Yes, after you’ve gone through the hardship of getting noticed, being granted a meeting, making your case and impressing the category manager enough that they’re interested in taking on your brand, then you have to pay for that glorious opportunity. It pretty much sucks.
NEVER BRING IT UP FIRST
While I always want to know if there’s slotting, ask your industry peers but DON’T mention it to your category manager. Let them tell you if they have a slotting requirement. They’re not going to charge you slotting if you haven’t agreed to it.
RETAILERS’ PERSPECTIVE
Your category manager has their own P&L to address. They have an annual slotting budget they need to fill that’s
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usually an internal mandate, and if they let you in without slotting, they’ll have to make it up with another brand. So while it’s never fun to spend your hardearned capital on slotting, sometimes
it’s the only way in. Category managers are people too, of course. And many of them can be understanding that slotting is harder for the small guys than it is for the
WWW.POPPILU.COM big guys. So they’ll often reduce it for you and sometimes they’ll even waive it. But many times, they’re going to require it, no matter how compelling your case.
PLAY UP YOUR DIVERSE CERTIFICATION
Other than your category manager’s goodwill, there’s another way to reduce or eliminate slotting: Being a certified diverse supplier. Target and Kroger are two of the biggies that have supplier diversity programs. To successfully use your diverse-supplier card (and why wouldn’t you?!), approach the supplier diversity team and your category manager concurrently so that they can work in tandem to get you in slotting-free. The supplier diversity team can make recommendations to your category manager and often has a lot of influence.
UNDERSTAND THE TRUE COST
If you’re stuck with slotting, evaluate how big the bill will be. Slotting ranges from 1 case per store per SKU (known as a “free fill”) to more than $50 per store per SKU. That can add up really fast when you’ve got multiple items and the retailer has hundreds of stores. I made the dumb mistake once of accepting outrageous slotting because I felt I really needed that retailer – my P&L wanted the volume, my ego wanted the prestige, and my unbending category manager viewed me as a naive target to quickly fill up his slotting budget. (Yes, in hindsight, I realize he totally took advantage of me). All the marketing support that could have helped drive velocity instead went into the black hole of slotting, my brand’s performance was poor, and my items were discontinued the following year. And the retailer made out like a bandit with the exorbitant slotting I paid to get onto the shelf. What I should have done instead – and what I encourage you to do – is to truly evaluate the cost. Don’t forget that distributors will tack on a fee for the free-fill as well, often 18%. Do you know how many cases you’ll need to sell to recoup your investment? How long will it take? Here’s a handy free fill calculator from my friend Alex Corral at TheAccountrepreneur to understand the full cost.
EVERYTHING IS NEGOTIABLE
If the category manager really likes your products and isn’t just looking for you to fill his/her slotting budget, he/ she will be willing to negotiate. I recently received interest from a category manager for several hundred stores. When I learned that the cost of entry was 3 cases per store per SKU, I was devastated! I countered at 1 case per store per SKU because that was truly the maximum I could afford. The retailer countered at 2 cases per store per SKU and I walked away. I knew I was doing the right thing for the business even though I desperately wanted to tell my investors and the (LinkedIn) world that I had scored a HUGE new customer. And guess what? After I walked, the category manager met me at 1 case/ store/SKU (and my ego will be sharing that news on LinkedIn in June – stay tuned!). I wasn’t playing hardball, I wasn’t bluffing. I knew I couldn’t afford it and I had to stick to my guns.
the category manager came around. But it didn’t leave me in his good graces! So don’t fall into that trap, make sure you negotiate slotting as part of the total package, and get the commitment in writing in case the bill doesn’t match what you had agreed to.
WALKING AWAY
If you can’t agree on slotting and need to walk, don’t worry about burning your relationship with the retailer… as long as you walk away early and don’t mislead the category manager into thinking you’ll accept the fees. They’ve got a business to run as well, and if they’ve planned on adding your items to the planogram and you back out at the last minute over slotting dollars you’ve known about for several weeks, then you’re leaving them in a bind. Be upfront. Try to negotiate. And if all else fails, walk.
NEGOTIATION EXAMPLES: • • • • •
1/2 case free fill per item Free fill on 2 of your 3 items $30 per store instead of $50 per store Ask for ads if you commit to the slotting Ask for a reduction in their margin requirement for promotions so you spend less on trade
VIEW SLOTTING AS PART OF THE PACKAGE
When you negotiate slotting, remember that it’s part of the total package. This year, when confronted with slotting for a retailer I really wanted, I reluctantly agreed to the slotting requirement but assumed the category manager was also agreeing to my pricing recommendation. After all, I had made the recommendations multiple times by email and never got pushback, so I assumed he was agreeing to my price proposal. But only after I agreed to the slotting did I learn that the retailer was NOT going to agree to the pricing recommendation. So I was in a situation where I had committed to slotting, but the category manager was taking so much margin that the retail price would be too high to sell a single unit! It was a bad situation, and eventually
Melanie Kahn is founder and CEO of Poppilu® lemonade, which offers a boldly flavored, healthier alternative to traditional kids juices. Kahn is a veteran of CPG, having cut her teeth in brand management at companies like Kraft and Sara Lee before creating and nationally launching the fairlife dairy brand, at the time a joint venture with Coca-Cola. Poppilu was a finalist in StartUp CPG Pitch II. www.poppilu.com DrinkPoppilu @DrinkPoppilu
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WWW.BAREBONESBROTH.COM
by Andy Kurtts
HOW IT STARTED
HOW IT’S GOING
BEF
Andy Kurtts, Founder and Creative Director at Buttermilk Creative, discusses the Bare Bones Broth packaging evolution with Co-Founder and CEO, Kate Harvey. Bare Bones was started in 2014 by Kate and Ryan Harvey to breathe new life into a timeless staple: bone broth. Since launching, they’ve become one of the leaders in the category and continue to grow their distribution on a national level. Andy Kurtts TELL US A LITTLE BIT ABOUT THE PACKAGING ORIGINS FOR BARE BONES. Kate Harvey As with most startup
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ORE
AF T
brands, we bootstrapped in the beginning. The original packaging idea was limited by a couple of points: materials, minimums, and lack of experience in packaging. Our first bags were stock bags with printed labels because we did not meet the minimum order quantities for custom printing. We initially worked with a local San Diego designer whose specialty was restaurant branding and design. Since the designer was more accustomed to restaurant design, translating to packaging was tough. The designer explored shapes related to the history of stock making, prehistoric shapes and hieroglyphs, but those details were lost on the consumer.
ER
AK WHAT PROMPTED YOU TO REDESIGN YOUR PACKAGING? KH While our original design was steeped in research, the concept did not communicate the brand’s core message and differentiators that Bare Bones would need stake our claim in the category or resonate with our audience. We knew that packaging was a priority, so we included packaging design into our first round of investment. This enabled us to work with a studio that specializes in packaging. The idea behind the first redesign was to convey home cooking, transparency, and farmto-table. To do this, we included a large window and animal illustrations.
WWW.BAREBONESBROTH.COM This first redesign had several shortfalls, including missing flavor cues, which led to customers having trouble differentiating between the flavors. The window took up too much space and the animal illustrations were off-putting to customers. They liked the product— they just didn’t need to know how it was made. Seeing the animal made it very literal. AK WHAT WERE YOUR GOALS FOR YOUR SECOND REDESIGN? KH We really wanted to bring attention to the flavor and product name, to bring them front and center and let the brand recede into the background. We also wanted to highlight valid claims on the front of pack, such as Whole30 Approved, USDA Organic, etc. These were certifications we had invested in, yet previously had hidden on the back. We realized they were important to our customers—and to us—and deserved more prominent placement on the packaging. In our research, we noticed the soup and broth set was stale and dark, so we wanted to infuse light and bright into our packaging. We also removed the animal illustrations and added illustrations of ingredients such as herbs and vegetables, to really bring home the farm-to-table feel. Lastly, you’ll notice the product window is framed by a mug—we wanted to show customers a common use case for our broth. AK HOW HAS YOUR PACKAGING REDESIGN IMPACTED SALES? CUSTOMER REACH? WHOLESALE ACCOUNTS? KH We started shipping the new packaging in the fall of 2020 and have seen velocity lifts of 20-45%. Buyers have been really excited to see the new packaging as well—especially sans animal illustrations. Also, the previous packaging design made it difficult to differentiate between the various SKUs, but our most recent redesign solved that problem. We attribute a lot of our success to ensuring meaningful differentiators were on the front of pack, specifically callouts like protein level and “gels when chilled”. We knew these were messages that would resonate with our core customers. The new packaging has also opened the door
to more conventional retailers and given us flexibility to explore product development and line extensions such as our Instant Bone Broth line. AK WHAT WAS YOUR BIGGEST SURPRISE DURING THE REDESIGN PROCESS? KH Despite being operationally prepared for this process, it still took five months to transition to the new packaging. We just didn’t think it was going to take that long! Between all the different channels where our products are sold, we felt like we were not in full control of the process of transitioning the packaging on the store shelf. AK WHAT DID YOU FIND TO BE THE MOST CHALLENGING PART OF THE PROCESS? KH Finding consensus amongst the various stakeholders. We would get feedback from board members, then we would synthesize and share with the designers. Then they would design and tweak and present back to the board. It took about 3-4 rounds of revisions to finalize the design. AK WHAT ADVICE WOULD YOU GIVE TO OTHER BUSINESS OWNERS CONSIDERING A REDESIGN? KH Invest the money in hiring people who know what they’re doing! Do your research and familiarize yourself with the major designs in your set. Have an understanding of what resonates with your target customer as far as imagery and messaging. Make sure you highlight what makes you different and superior
on your packaging and create clarity in the hierarchy of information on your packaging. Last, invest in mockups—we actually took them to a tradeshow and were able to gather feedback! AK WHAT WAS THE BIGGEST TAKE AWAY FROM REDESIGNING PACKAGING? KH On the second round of packaging, we let an aesthetically-driven approach drive the lack of marketing callouts; we wanted a clean design but did not realize the opportunity to market on the front of pack. This made us think about how there wasn’t enough emphasis to help customers make the decision to purchase us. We learned our packaging can work much harder for us. AK HOW HAS THIS PACKAGING REDESIGN INFLUENCED YOUR OVERALL BRAND MESSAGING AND IMAGE? KH While it did not change the identity fully, it did change the direction of lifestyle photos. We are rebuilding our drip campaigns to better highlight and support the new packaging. We want to get more mileage and allow the claims that matter to us and our consumers inform our marketing strategy. AK WHAT WAS THE BIGGEST LESSON YOU LEARNED FROM THIS PROCESS? KH That you are never done with the process and evolution of optimizing your communication—visual and otherwise—for consumers.
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WWW.EATTHECHANGE.COM
By Seth Goldman
PARTNERSHIP: FINDING A
I
CO-FOUNDER
’ve written before about how my wife, Julie Farkas, has been the most important partner in my career, not to mention my family. But in addition to Julie, I’ve been fortunate to have three wonderful business partners and friends who have been critical to the success of each enterprise: Barry Nalebuff at Honest Tea, Ethan Brown at Beyond Meat and now Spike Mendelsohn at Eat the Change. Here are some thoughts on why it makes sense to have a partner when starting a business, what makes a great partner, and how to find one.
FIRST, WHY HAVE A PARTNER? BUILDING A COMPANY IS TOUGH.
No matter how capable you think you are, almost every task comes out better when there is more than one brain, set of eyes and hands to help carry the load – sometimes that means pitching a retailer, speaking with investors, travelling to a conference, or tasting samples at a production run. Whenever possible, it’s great to share the load; the general code is that if both co-founders are in the same meeting, one of us isn’t getting much work done.
IT’S LONELY.
Even when you have a great team around you, there are certain conversations – usually the tough, existential ones — that you can only have with a partner. How do we keep an upbeat attitude while we’re bleeding chips? Do
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we sell, and if so, to whom? It’s tough to have those kinds of discussions with members of the team because they can easily morph into worries about job security. During the first five years of Honest Tea, Barry and I would have a phone call almost every evening. Sometimes we would talk through a strategic challenge, sometimes he’d give me a pat on the back, and other times a kick in the pants. My main takeaway from those calls was that I wasn’t in it by myself.
BETTER IDEAS CAN EMERGE WHEN TWO PEOPLE ARE LOSING SLEEP OVER A PROBLEM.
While launching Eat the Change, we were trying to understand how to dehydrate and flavor mushrooms for our jerky. After spending time on the phone seeking advice from farmers and scientists, I might wrap it up for the day, but Spike would then work hours in the kitchen, often late into the night when inspiration strikes.
KEYS TO A SUCCESSFUL PARTNERSHIP
ALIGNMENT ON LONG-TERM GOALS.
The weekend before I handed in my resignation at Calvert Funds to launch Honest Tea, I took the train up to New Haven to spend a day with Barry across his kitchen table. We talked about the business, but more importantly, we talked about what we wanted out of
life and the role that we hoped Honest Tea would play in it. As a result of that day-long conversation, we spared each other hours of wondering how the other would respond. Our partnership, as well as our friendship, never wavered. Of course, we had moments of disagreement, but they were usually around petty things like label language, which my wife Julie usually settled by telling us to “keep it real.”
CLARITY OF ROLES.
It is essential to have clarity on who does what, and to share that understanding with the team. Teams need to understand who is driving the bus, and who is helping with directions. At Honest Tea, Barry was Chair and I was TeaEO. At Beyond Meat, Ethan was CEO and I was Executive Chair. Although I was in the office for several days a month, I made a point of never having a permanent desk. Now at Eat the Change, Spike is our Executive Chef, and I’m our CEO, though my official title is Chief Change Agent (I’ve never been one for traditional titles).
COMPLEMENTARY SKILL SETS.
Though it’s great when partners are on the same wavelength, it’s even better when they bring different skills and ways of thinking to the opportunity. Spike is a classically trained chef, and my cooking “specialty” is peanut-butter and jelly sandwiches with banana slices in them. Spike’s creativity in the kitchen gives our products a “chef-crafted” quality, which
WWW.EATTHECHANGE.COM
Seth Goldman (left) and Barry Nalebuff (right)
Seth Goldman (left) and Spike Mendelsohn (right)
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WWW.EATTHECHANGE.COM
is something I could never credibly claim to bring to our brand.
SHARED STAKE IN SUCCESS.
It is important each partner feels a meaningful sense of ownership in the business and its success. There will inevitably be challenging moments, and you never want to create a scenario in which a partner might feel like the load, and the upside, is not fairly distributed. The most common vehicle for creating a mutual sense of ownership is equity.
CONSTANT COMMUNICATION.
Every start-up enterprise goes through frequent changes – sometimes multiple iterations even in a single week. Ethan and I had scheduled calls every other day, and Spike and I are in touch every day. Barry would call in every night (often during dinner). It might feel like overcommunicating, but each time you discuss an issue, you get the chance to reprocess it in a different way.
HOW TO FIND A GREAT PARTNER
Great partners can be found anywhere. I met Barry in the classroom where he was my professor. I met Ethan after I read an article about the company and emailed Beyond Meat with an offer to help out. I met Spike at a conference on diet and health. So how do you recognize that someone could be the right fit? For me, I want
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Seth Goldman is Founder of Eat the Change®, a platform to inform and empower consumers to make dietary choices aligned with their concerns around climate and health. Eat the Change® recently launched a line of organic mushroom jerky as part of this mission. Seth is also the Co-founder of PLNT Burger, Honest Tea and Chair of the board of Beyond Meat. He has been widely recognized for his entrepreneurial success and impact, including Ernst & Young’s Entrepreneur of the Year in Greater Washington, the Washington DC Business Hall of Fame, Beverage Industry magazine’s Executive of the Year, Beverage World’s #1 Disruptor and Partnership for Healthier America’s CEO of the Year. www.eatthechange.com eatingthechangenow @eatthechange
to see evidence of original or creative thinking – Barry had literally written a strategy book entitled “Why Not?” which challenged many conventions of daily life (including the right way to peel a banana). When I read Ethan’s article about transforming the grocery meat case into a protein case, I immediately connected with his vision. Spike’s advocacy work in food policy and culinary talents, along with his enjoyment of surfing in the Potomac, helped me recognize that he would be a fun and creative person to work with The next time you’re in the classroom, at an incubator, chatroom, or even in Clubhouse, listen to what you’re hearing. More importantly, listen carefully to who you are hearing. Who demonstrates a willingness to challenge conventional thinking and to act on their beliefs? That person could be the missing piece that makes your entrepreneurial puzzle complete.
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