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What you’ll hear in this episode:

• Curiosity as essential to the entrepreneurial perspective
• Innovation versus differentiation
• How to use marketing and distribution strategies to increase sales velocity

Raised on microwave meals in Beaumont, Texas, Clayton Christopher is not a food snob. While he has brushed up on his palate since childhood, it was his perspective and not his taste buds that kickstarted his impressive career in the food and beverage industry.

After leaving college, Christopher spent a couple years traveling the globe. This experience broadened his mindset, sparking his curiosity and giving him a taste for adventure. Sweet Leaf Tea was the first step towards satisfying this newfound appetite for new possibilities.

“Launching a business is a big adventure, full of good, bad, and danger,” Christopher explains, diving into the details of his first company from its conception as an organic tea based on his grandmother’s recipe, to its early operations in Beaumont and journey to Austin.

Once Sweet Leaf landed in Austin, Christopher saw that he was among the first on the consumer packaged goods (CPG) scene in an entrepreneurial city. This triggered his adventurous, pioneering spirit and motivated him to work harder on selling his product, which he could see was needed in Texas. Building on this foundation that he helped lay, Christopher created Deep Eddy Vodka next and is currently a partner at CAVU, a venture-capital firm that backs high-quality, innovative brands.

Christopher explains that his success in a competitive market like CPG was due to his ability to differentiate his product. Sweet Tea and Deep Eddy were launched with a unique focus on authenticity, using natural ingredients, and creating a fresh connection with the consumer’s experience of the product.

Christopher also relied on authenticity in his marketing and distribution tactics. By focusing on Texas until his products ranked among the best with consumers in that local area, Christopher was able to perfect his strategy and earn what he sees as the most important marker of success: high velocity sales, which he touts as the most “defensible revenue.” He encourages young brands to learn from his experience and start in their own backyard.

After a brand has mastered their domain and spread to new markets, it’s time to evolve existing products. Christopher sees brands as “living, breathing people – look at them as if they are alive.”

If Christopher’s brands are a “living, breathing” doppelgänger of himself, it’s clear that “authenticity” is the core value he transmuted to them. He urges entrepreneurs to figure out their own values and let those inform their product and their business decisions. Once you understand your own values, it’s “easier to inspire” and achieve the crucial quality of a long-lasting brand “significance rather than success.”

A fascinating episode full of detailed advice, listen to hear Sweet Leaf Tea’s origin story, learn how to differentiate your product as successfully as Deep Eddy Vodka so that consumers and distributors say “yes” to your brand, and discover the three main things investors like CAVU look for in new companies.

Don’t forget to like and subscribe, and catch the next Packing Taste episode (or dig into the archives) here!

Host: Axel Brave

Guest: Clayton Christopher

Transcript:

this is a founding media podcast hello everybody and welcome to another episode of packing taste I’m your host axel brave and today our guest is Clayton Christopher the co founder of Cavu venture partners and the co founder of sweet leaf tea and deep Eddy vodka so I know that you guys know what that is we talked a little bit about its history and why you got into C. P. G. then dive right into innovation versus differentiation within products as well as the importance of branding here’s my conversation with Clayton

thank you for being on the show with us today thanks for having the actual course as a you know we might have to do a couple different offices when you get back from vacation because I loved our conversation about sailing and skiing but for the purpose of the show will stick to food but I think I want to start a little bit in your younger days when you were a kid what were you like where did you grow up did you always have this fascination with food or how does a lesbian I grew up in garland Texas seven kind of a small town in southeast Texas lottery find res down there so I see great great place to grow up but I don’t want to get out of there after high school still some dear friends there but yeah I’d grown up there is just magical news you know since we get out of school is riding bikes all over the town and building forts in the woods and he’s just a really charm just beautiful childhood it was and and where you find where you like to trouble maker dealing building thing yeah are you always fords are very mysterious you know we were sneaking out to wrap the houses of friends and girlfriends and the and then I was sneaking cars out when we were fourteen fifteen for it to really drive wrecking cars and yachts thankful to still be alive and and what what was %HESITATION what kind of food were you eating number one because I know I know nowadays there’s a lot of food coming out of that region kind of but as a kid what did your mother make for you guys

we had a single mom my parents divorced when I was younger so the the sound of the microwave you know team that was usually a sign that dinner was ready so we did kind of learn to cook a little bit on our own early age I can remember my brother getting really upset with me missile kids kids I would whenever she go to the store and he she usually get lucky charms and I dump them all out and pick out all the marshmallows every kid right yeah I know my little brother would usually come down a little later than me sucks a little later and he’d be down put out there be no marshmallows lasted start crying and so %HESITATION multimillion learn how to make multi millions to that was a staple with multimedia was kind of like an oatmeal that super fine a second Gretz systems like Gretz but I had it like and had really tweak it I put like a public a little bit of knowledge and that little bit of cinnamon butter a little you know little milk after his fantasy I kinda whom a multi year Olson yeah in college some grown up but I never really I was never really a foodie because I was just so broke in yeah what was the food was being a foodie a thing back then now in noon and what that was until years after college at so and your mother would do the cooking in the microwave would do the cooking which I use and not the microwave but now I’m learning that it’s kind of a great instruments have insufficient than it is for sure she she did make some incredible gumbo she wanted to cook she can turn it on and so I at least knew it really good food tasted like yeah and where you were just telling me about your travels in Europe and in the Middle East did you get any inspiration for food there because I was you said you attended St Edward’s university for a bit decided to leave and then is that when you started traveling around yes after guy didn’t win over Europe the Middle East North Africa a couple times just living out of the tent and I’d love to love to say I have you know discovered a passion for food there but I was so broke I couldn’t afford to you know eating much besides spaghetti and Raman noodles so it was

do you guys have a lot of kebabs there because that when we go to Europe now it’s because I’m reading some of the Middle East Cairo there’s a lot of kebabs yeah we had a lot of street food yes when I did when I did my first year road trip by myself and twenty thirteen twenty fourteen whenever you said a hostile you know you go out with friends or whatnot at the end of the night you have a combined over a year we’re a slice of pizza for two euros so that’s kind of kind of the first foodie experience that goes on with travelers there but I didn’t know if back then you had the kebabs on every corner as well yeah they’re they’re probably even the street food oftentimes is too expensive little are among my budget was five hundred dollars a month so you can imagine that five dollars a month I’m cooking over a fire pretty much every night sleeping in a tent every night and what would you like to find spots to camp out just where those like we look for parks in the city like park seat in the middle of Paris or Munich we spent a lot of times kind of like right outside the city would find campgrounds and we find national parks yeah that was I think I think the most impactful part of of those trips we will certainly win any exerted influence like I think on food it was more of just creating a mindset like anything is possible the like life is a big adventure and anything that you want and you put your mind to you can do and that Justin I think had I’m not taking that trip I probably wouldn’t have started my first business sweet leaf tea and hot I just gone the school probably would work for my father had a medical supply company and you know yeah I think I think we have a bit of an age difference here but I on that advice I totally agree with you I think without a trip without paying money around you would probably be kind of a different person right as I said

what do you what do you think did you see some sort of medium there and while you were traveling that kind of connecting people %HESITATION you said food did it like he right in the face but the idea that anything was possible and like sharing those moments with people or friends you just met was there some sort of medium that connected everybody that everyone was young and traveling there everyone was allowed to does that make sense but I think I think the the biggest part of axles probably just this that really you know when you travel it awakens in us a fascination about other cultures there’s something that you know helps us realize that the world is much bigger than just us you know the the western world that we live in and with all the media and everything it kinda encourages us to put ourselves at the center of the universe which is never a healthy thing it’s definitely had a recipe for for long term happiness or joy but I think when we travel in other cultures and you learn about other cultures it really sparks a curiosity and fascination about other people other places in other beliefs I think it increases tolerance in just curiosity and so that’s what I really did for me is just like it made me just really curious yeah

I agree with you I think I think what you said earlier as well that you kind of realize that anything is possible and it’s funny you say that because we stayed at this Riyadh and Morocco and the one thing the hosts there would always sells was always possible as possible so that became the theme of this whole trip that out I was on with two of my best friends and utility right I think moving around and see new cultures expands your mind which makes you feel a little bit smaller like you not insist this western world that you grew up with grew up in but it does what it did to me and what it sounds like an idiot like made you hungry for this exploration for the discovery of new things which I guess is totally necessary to be an aggressive entrepreneur is wanting to like fill in that city yeah I think I think you have to have you have to love adventure yeah because launching a business is a big adventure an adventure means the good parts and bad parts exactly in the adventure usually has some danger hello yes ma’am this will we get addicted to

okay so kind of fast forwarding into when you know becoming a grown up you know can’t travel your whole life maybe now you can but you wanted to start a business and you wanted to move back to Texas which is kind of an interesting choice right after seeing all these wonderful places all over the world all these open people you want to come back to Texas which it took me awhile to fall in love with but did you want to come back here because of home or use opportunity to start a business here so it was really I was living on a sailboat you know I almost who’s who’s very selfish my first reason for starting a business which is sweet leaf tea it’s my first business hours are living on the sailboat down the Florida Keys my girlfriend parents books although her family taught me how to sail then he can threaten to pull the plug on the charter boat operation a random lowers the sorrows of foods a forty foot cat your dad wouldn’t allow G. on it because when you know all it was a beautiful forty foot cat and I knew that if I ever wanted to own a boat I was gonna have to go get a real job but I didn’t want to go work for somebody and I didn’t want to like a typical real job site heard about a guy in Alabama a company called Milo’s tea which is just this and you know at the time and it never heard of it before but the owner of the sailboat had told me he knew this guy and this guy had crushed it building the site’s ice tea company was doing really well and so I asked him if he’d make an introduction and so on a road trip back to Texas I sat down with him for about an hour and a half runny Carlton her brown is still alive is dated for spend time with me and he didn’t give me like trade secrets or anything it was just I was really impressed with this operation with the quality of the product is only T. I’d ever tasted that tasted like my grandmother’s iced tea like real homemade iced tea the only package T. you’ve ever tasted right only package T. I’d ever tasted because most all the teas out there at the time looked in nasty Snapple’s all like high fructose corn syrup not not made from the best stuff on earth M. like Snapple really best stuff on earth high fructose corn syrup solids caramel colored yeah my grandmother to use that stuff so yeah that was really the inspiration she tried this relief was to create something that tasted really like homemade and so so you move in from Florida back here and and I was talking to our friend Scott about this one didn’t the C. P. G. because if you guys were he he was doing stuff in school and you were doing the T. was there anything else going on in Texas like I was in your face all this is there’s a C. P. G. C. not much there is  and what time was the psoriasis was I started the company I believe in like ninety seven ninety eight and then moved to Austin in two thousand he started started involvement Morris brown tea and put cases phone bottles with garden hoses but moved that did did that for three years in Beaumont and moved to Austin and at the time the only other company I can think of that was here was Michelangelo’s resonated frozen kinda high and lasagna is eggplant parmesan micrantha is a dear friend he sold that company couple of years ago but he’s kind of under the radar screen

yeah there there just was not much at all there is Texas coffee company that made some spices and coffee in southeast Texas I would you know hassle those guys to try to learn whatever I could so so there was it was hard to find mentors okay though and that’s what I was gonna ask there’s no one you could bug says be like Hey can you what what do I do here you know I try to hang around Scott Jensen he’s usually too busy for me really and he was kind enough to give me some advice here and there along the way I guess I guess he started they started started in the eighties they were they were older more developed yet older sim guide beside stop by his office every now and then asking for advice to share some rooms and talk about the but it I mean totally different market right you’re talking about high velocity tease that a grocery will lease for distribution model DST primarily through beer distributors all over the country yeah interesting

I’m trying to imagine myself in the in the late nineties looking at Austin’s being like Hey is anybody anybody other it definitely felt like we were on the island yeah I know it’s not much of a community at all when it comes to you know there is there is definitely kind of a feeling there isn’t there’s still an entrepreneurial community button definitely C. P. G. community okay so so explain explain this a little bit how what exactly you felt when you’re like I’m gonna do this I’m gonna make this tea company I have no idea what I’m doing because I’ve never worked in C. P. G. CB you probably didn’t even exist at the time the G. men at the time yeah so like how do you feel that you feel comfortable doing this how was that was I think it goes back to the start anything’s possible the unknown and adventurous curious mindset and attitude and I just didn’t like add up for a fall as single I was broke I had kids that I had to take care of you know college dad wouldn’t paying off calling college does because in your graduate from college so it was more of just you know it it felt like the right thing to do I felt like that we needed this type product out there Milo’s tea was only in Alabama and we moved outside the state of Alabama so we really didn’t have anything like that in Texas where we drink a lot of T.

murdering oddities like that has the potential is there and you know it and sure enough we got it out in the marketplace and people bought it packaging was horrible you know I wish I wish you had some here so I can see it also got old bottle I myself am office let’s say after this and so and I think you’ve said this once in one of the talks about how important do you think it was for you to just start doing this and start taking action verses sitting around talking about it researching it thinking about the label thinking about the flavors versus just doing the damn thing and I had I’m done but I had I got my degree and you know read the full on business plan and done a bunch of research and we were never lost it because I realize how hard it would have been six nine I’ll call like single serve beverages one of the most challenging categories and you know all of all of C. P. G. has it always been like that it’s got its continued to get more and more and more competitive back in the day like when they’re building Snapple distributors used to actually go do sales work for you you know most of these distributors charge twenty high twenties thirty percent margins and for that much margin may not see that your sales force yes but yet there’s so much competition they’re going to be so much competition they just don’t really do sales yeah anymore you’re lucky if they drop a product off yeah having to pay somebody thirty percent yes to drop off my product to the stores and so the you know having to build your own sales force on top of that evidence I don’t call it a broken business model but it’s a very expensive business model you know it’s like that in spirits too yeah really it’s good that you didn’t know that before starting price would be a factor what I would say IT

I use this a lot with our floors you know perfection is the enemy of good you know if if you’re if you’re trying to get it perfect you never going to reach perfection yeah you got to be committed to but you got to just launch and then you know fix the plane while you’re flying that’s that’s beautiful I think the kind of feedback on that growing up one of the sayings in our house was love love specifics Yannis does not load another which translates to the perfectionists don’t get anything done you just have complete anything because first off I think perfection doesn’t really exist but working towards something that’s impossible you’ll just keep doing that instead of just doing the thing right well more importantly get lost get on this get on the shelf within this you have to continually iterate unite yeah even what’s in the product you know are stealing the product itself packaging especially I think it’s kind of a never ending pursuit profession and we went through six packaging changes in five years at the body so is this we’re constantly like tweaking probably what I was told that you’re a huge packaging label person you love re doing it and just a minute the day after yeah and that’s a lot of times you know ideally you lots of something it’s really good and then from that it’s an evolution here ideally you don’t have to make a revolution or something on the apogean communication I mean that’s that’s going to happen sometimes the idea is just an annoyance because brands are like living breathing people I mean you have to look at them as though they’re alive and the most dynamic brands and they’re constantly innovating you know minor packaging tweaks and consumers can and they can tell when those brands are so much like a six sense we have in those brands that are most dynamic their most authentic that really speak to the deeper why and have beautiful packaging and product is you know the ones that succeed are the ones that are usually continuing to focus on kind of the evolution toward perfection yeah you never going to get there but you gotta continue to try exactly yeah I like that the brands that breeze the other kind of nature and make sure they continue to stay alive

okay so kind of the dive right in I wanted to have a conversation with you about some innovative products immerses differentiated products and they kind of could mean the same thing but the way I’m gonna define it for our purposes today is innovative products which are kind of new to market products alike bone broth a couple years ago or gluten free pasta a couple years ago verses differentiated products which are products that are already out in the market but you’re gonna differentiate yours because of X. Y. and Z. so like flavored vodka or sweetie I think there was flavored vodka before D. buddies or there was but you guys differentiated it by using natural flavors verses are free to use yeah and then the the T. there’s already I guess there was a lot of tea but there is the T. in Alabama but most of the TV’s weren’t really tease it was just for toast and high sugar verses your recipe was your grandmother’s recipe realty lease yeah real cane sugar organic yes so buzzer do you like innovative products more than differentiated products do you see one being easier run than the other apples to oranges and yellows the holy grail is I think if you can get something that is like really innovative the has not been out there before because then you have a lot less competition so you know when when I create a sweet leaf tea it was differentiated but there is lots of other teas on the market place so I I’m a big believer when you’re in a very crowded category the lesson thank you and have a reason for being the launch gotta be different shit you know there has to be a reason your product you know it exists in the consumers minds like like why should this product have a deserved to be on the shelf and so sweet sweet leaf was was very different than the products around it on the shelf but it was a small difference it wasn’t like a a massive difference in in those situations there’s a lot of them out there I mean you look at most categories like do we really need another tequila there’s tons of keyless lunch right now do you really need another straight five code one of most the categories out there but if you have a clear different Tatian there then I think it’s really important to have a strategy that scenario in the verses wide and shallow

so it is all about getting started it just three leaf tea I mean we we focus just on Beaumont Texas in southeast Texas and within a couple years and were outselling any other TV and that area and then within about four years were outselling Snapple in taxes and we will come up so much that they ended up switching from high fructose corn syrup sugar folks around the office started freaking out and I was like no this is a good thing with the big guys are changing and they’re changing for good you know because we’re we’re making them when that was taken by it out of there hide so let’s feel amazing yeah I loved it I loved it maybe be moot yeah I was definitely one of those moments we act like we’re doing something really good yeah and this is good one of the bigger company copies you like I understand the people in your office freaking out like oh man how are we going to do this but I think feeling I would have sold so excited like this is awesome first it’s good that they’re switching to natural ingredients right but it’s like okay I’m I’m teaches in people’s lives right in something right yeah so you see I think and it was the same thing when we launched Deep Eddy are sweet tea vodka was was differentiated from the two competitors on the market firefly Jeremiah weed but those guys reason high fructose corn syrup caramel colors cheap vodka we just had a more premium products for using honey to sweeten the product with real tea leaves in but on that one I said we’re not setting foot outside of taxes and tour number one in the fourth category because if we can’t be number one in taxes our own backyard we don’t have a chance to be a number two nationally and we need to be the number two player in the school category and so we focused all of our resources on just taxes there’s no way we could spend as much as you know Sazerac that fire fly more Diageo that had Jeremiah we thought we could spend as much as those guys an

awesome yeah you know in a really small area so that’s what we did is we is we we really hyper focused hyper focused just on taxes and within about a year and a half we became the number one selling sweet tea vodka and taxes and then we began to move outside the states because had we started this launch in multiple states right out of the gate we would’ve spent exponentially less money and have less resources the fight those battles in every state so I don’t get excited about the new doors new markets anymore I get excited about the lost city wins I used to get all excited with lance in the chain no more ring the bell when we landed we read about when we see those see that were in the top quartile philosophy was yeah I I I have a I listen to this podcast this woman it’s called in the sauce in New York but she always says you don’t ring the bell when you get in when you get the first order it’s when you get the third fourth order that’s when you start celebrating because you’re right I did like I mean yeah you should celebrate your wins but the velocity nowadays is kind of what helps so so before before we go into philosophy and whatnot

what was the strategy you guys are using as you focused in Texas and do you still preach that strategy and that strategy today with all the companies you mentor absolutely absolutely so we and on to make sure we stay on that kind of differentiation versus true innovation yes there’s a different strategy basin so hold me to that but you know the things that we would do is restore order you everywhere and we just couldn’t afford to do it and multiple states multiple markets so it was just we wanted to there’s no if if if we got into a bar on premise accounts I was told the wraps it doesn’t count unless role in the menu I don’t tell me landed account if you just want sold a few bottles and they’re sticking it behind the bar because nobody knows who we are we’ve got to be on the menu we have to have ways to activate that account we doing tastings are we doing specials happy hours when I’m gonna be on the drink menu phone in with being a bartender education so not enough vodka with Red Bull T. Betty with rebel yeah or or like in the sweet tea vodka the time like all you need to do is mix it with with club soda or sparkling water or lemonade so you know we want to get it passed people’s lips we’re doing a lot of demos and liquor stores so people can taste it we’re sponsoring events in Texas when we were making sure it was and we focused a lot on premise you know in these these bars but we want to get on the cocktail menus because that’s how people you know people go to cocktail menu a lot time solutions to it today so that was kind of the the heavy lifting that we did in taxes and and another markets but we just we had we had to do it in a small tight area first because I knew that if we were more worried about opening up more distributors and more chains we wouldn’t have the time attention or resources to do all the heavy lifting it was necessary to get the velocities and the product awareness up switching to innovation so what happens is we then ended up developing in ruby red the ruby red R. that was kind of our resources things were going well we came out with ruby red the company room really took off and that was just such a differentiated we we we was such an innovative product because all the flavored vodkas on the market at the time they were all clear so they all use artificial flavoring there was no sweetness to because they didn’t and you sure they didn’t use real fruit juice we use real fruit juice and natural flavors even natural flavoring has residual color CCL he’s clear vodka is unique with that whole like you know they’re all use artificial flavor to use real grapefruit juice is one of our favorite cocktails is just minutes ago greyhound you know vodka grapefruit juice and so we we made kind of a concentrated version of that and that was our ruby red that we came up with and it crashed no there was nothing like it on the market just took off it took off from there have been a hell of a time keeping up with production and we wanted to show us and we moved in three shifts for awhile which is insanity insane

but so in that scenario I think we’re at about six seven states at the time we came out with ruby red in immediately I said the strategies changed we need to get into all fifty states as quickly as possible because we don’t need this narrow and deep purses wide shallow we just need it’s it’s like first mover technology advantage I knew if we could just get it on the shelf because there was no real competition like people would buy it so sure enough we start opening up states is as fast as we could and and are not Parnell and sales people and I guess just to re iterate that innovative product the ruby red when you were like let’s take this all fifty states there was no one else had this product so much let’s fill up every market as much as possible because I actually sell it so in my mind there’s not really any competition yeah I know there’s gonna be copycats so we need to be first to market to establish our brand our product in the minds of these consumers this man it’s funny how the world works on the other night Saturday night I was out with my roommate and we met we met some ladies and they were all ordering if ruby read up on the rocks I was just sitting there awesome yeah I was like man I’m gonna be talking to Clayton on Monday about this is so funny but it’s still a kickass product obviously people still drinking it it’s but I like I like that we’re talking about innovation versus differentiation because as as mutually exclusive as they are we do try to bring them together as much as possible when I was launching my brand my it started with the chimichurri sauces you know like I told you it’s the church it was my toward growing up that’s what I always made and I realized well there’s like two or three competitors it’s all in like portable marinade jars be interesting to put in a pouch and I was like is that a differentiated it is innovative what would work but I ended up putting it in a jar so now I have this product’s let’s enter the market with kind of dead competition it’s like I think some big name brand like make some chicken chili sauce some cattle ranch that’s like four ninety nine they don’t use they put some weird stuff in it that I don’t know how to pronounce stuff I’ve never grilled with so I’d like to consider it kind of the new products but I guess technically is just differentiated but I’m trying as a as I grow my brand I’m trying to learn how to position it should I put it in a pouch should I P Terry Lewis with the meat department at the grocery level and I wanted to get your take on it you know what what are your thoughts about that like it would you consider this an innovative products even though there’s two dead competitors there or is it a dump differentiated product because it comes from an authentic story of growing up in highland learned kind of like the rather tell you the recipe and that was that story is what sold me I think

I think the challenge for you’ll be dead to make it differentiated you know because it’s it’s hard to say it’s innovative because it’s been around for a long time you’ve got you’ve got competitors there a lot of people make it at home I think the a lot of times the way you merchandise it to you mentioned like in the meat department you know a lot of times the way you merchandise can differentiate yourselves from the competition those in putting in places where there’s an impulse buy opportunity such as the meat department it’s kind of like beyond meat when their strategies this been really successful form is they didn’t want to be sold in the vegan frozen section they want to be sold in the meat section like in the with the butcher you know in the in the department because they want to go after consumers that weren’t necessarily just vegans they want to go after mediators that we’re just looking to help the planet and help their help to help the body help their diet you know taken a little less red meat by maybe substituting red meat once a week for the on the inside going into the meat department I saw a significant lift in sales yeah that’s very ballsy stuff that’s like David and Goliath going against the big guys and that’s a and I I heard you know my days he gave a talk on that bike positioning yourself against the big guys but not stepping on their toes all right you don’t you don’t know where the sleeping giant exactly exactly that’s interesting because I I I I wouldn’t think I would consider my products innovative because like you said some majorities been around for hundreds of years that’s not new you can differentiate them

yeah yeah I like not using scientific unpronounceable chemicals in my product which is a huge advantage for me and I’ve been all natural and being keto and I think the glass packages the right package by the way yes it’s a gourmet product it’s a premium glass says premiums yet I’ve had countless people say switch it’s a blue plastic so it’s cheaper to ship so now I’m in this like man I’m boosting my my online sales through ads but it’s expensive to ship do I compromise the premium value of the of the stars can so I can save just so the consumer can save seventy five cents on shipping on my phone thanks I would rather charge more yeah yeah exactly I love being the highest priced product in the categories of margins are usually better you know she can command a premium price remember none of us are ever going to be the low cost providers that’s with the big guys do because they have massive volumes so we have to be the high quality providers you know that’s where we can differentiate ourselves in crowded categories as proof by providing a better tasting better for you much higher quality product the big guys can’t help themselves they can’t help but like go back towards our fructose corn syrup I can’t help but go to like guns and the gunners and ETL products the little help so you know that they they do everything in our chemistry lab yeah read it and they do everything with an intense lands of margins and costs and driving cost out of the system and so we’re never going to beat him at that game so we gotta beat him at the game we’re about a stat which is creating products that taste badass there is much better the bears and are better for you yeah I might be a little bit more expensive yeah and it should be you should be able to command a premium price and this is coming in November has to kick I have to care as much as we do yeah and and I think the the the sounds right when like our products are coming from the kitchen your products coming from the laboratory later about the pledges of the that’s the name of the game cutting costs cut scene where they can take away so they can increase the velocity

which brings me to my next question is the jungle of the loss of the margin in door county and you kind of touched on all those but is it a different formula for different brands is it a different formula for innovative verses differentiated brands yeah I think I think it’s in the strategy does change some depending on how innovative your brand is that being said in margins are critical I’ve burned my hand a couple times and and business situations not paying enough attention to margin you know that there’s always the age old adage that like margin will always come as volume increases you know as you get to real volume so you know don’t worry about margins too much in the early days that’s what I believe it is true to a certain degree but sometimes you’re never gonna get the volume unless you have margins because margins are what give you money to spend on marketing your product investing in sales infrastructure sama you least need to have clear line of sight to really strong margins if you don’t have a clear line of sight to good margins strong margins it’s a broken business model you gotta have really clear line of sight not like okay for you for doing ten times Amman cells are doing now we just in our guide you know the margins are going to be better you got to really have line of sight and ideally you’re launching with margins that are already strong they’re just gonna get stronger with volume I would never launch a product with with crappy margins right out of the gate you know so outside of that talk about margins nothing’s more important lost city the man I’ll take strong Bossier door count in a day because if you have really strong velocity if you’re winning in the doors here and even if you’re not many doors my mom believes you can get in the in the door you want to like if if I have a strong selling story even if I’m only in a few hundred stores I can create a story for that buyer of that much larger chain because my sales presentations my my favorite way to present these things always like because these buyers are risk averse if if you if you love Raskin adventure you’re not going to be a buyer at Walmart you know holder or target so you have to take the risk away from

what I like to do is to show them like the biggest risk is not saying yes to my brand will come stronger sales story is and you’re gonna miss this opportunity if you don’t jump on the train and that just helps you get the yes that you want to get because so many entrepreneurs like blood on the orders go out of business because they ask themselves to death they’re unable to say no because they’re so desperate for revenue in sales and growth C. but you have to know when to say no you have to know when to say yes and you have to say a lot of those Andrea asses which means philosophy velocity velocity because then you have a cell story and you can go to the retailer that you want to be and you can say here’s why you should bring a product only you’re crazy if you don’t this is regression at but also here’s what I need from you so say someone to take two skews put on the bottom shelf of the petition the crappy zip codes you can say you know you’re not ready for me you got to be able to walk away from the business yeah and I think I think the fact of having a good velocity verses again door count is the velocity means more to the consumer the the velocity should mean more to us because of there’s a loss of the people know who you are and they’re continually buying your products for a certain reason verses like I mentioned this one of our competitors in the chimichurri during a lot of stores are in Kroger’s and whatnot no one’s ever heard of them no no welcome this is now I have a little cool following here in Texas where people I’ve seen your stuff at this event I’ve seen you hand this out here I’ve seen you at central market

high velocity means defensible revenue I said not all revenue is created the same I would much rather and we look at investing in companies now and working with them I would much rather see a company doing five million in sales one market or one state than ten million in sales across fifty states because when you have a high concentration of revenues in a smaller area with one chain and are in that top ten percent of losses in your category that revenue you have high consumer weren’t I showed higher household penetration and you just it’s gonna be really tough to knock you off your little friend yeah as long as that rest of that revenue is much higher quality yeah and that’s what’s going to get you the US’s and on the road yeah each of the doors so before we go into a brand strategy can you quickly talk about very quickly about knowing when to launch a new product within your friend in a basin where could we go where should we go and how do we make those decisions yeah yeah I think I think innovation yeah I think a lot of brands innovate too quickly yeah I think the the things you have to really ask yourself is if you have a product that’s working but you’re only a you know a thousand or so some doors you know why would you why would you elevate the Anna if it goes back to the the the sales tree you know the easiest way to get new sales is selling more of your existing products to existing stores the next step up the sales tree the easiest revenue after that is selling more of your existing products into new stores in the end into new stores and the next one is new products into existing stores soon to you really gonna be in the market place with your existing product line

you know I would be innovate I mean it’s one thing to say let’s add additional flavor you know that’s not real innovation that’s just kind of keeping that brand health alive excitement around it where I would encourage innovation early on I’ve been victims this is a if you have to pivot if you really need to make brands not working if the velocities are if the velocities aren’t working and you’re not in that top half to top quartile of losses within your category central is it a packaging problems at the distribution problems merchandising problem or as a product problem substances races we’ve had dramatically changed the product and the packaging so early on so like the whole the whole move through the whole idea behind I’m in five hundred stores with three skews what have those five hundred stores let me make for an excuse so I can put him in the in the stores that’s kinda silly idea it sounds like yeah I mean again I think it’s like you know adding one to two new flavors a year because you gotta gotta be willing to cut the cut the ones that are are performing as well so I mean sometimes it’s like it’s like add two new flavors a year and kill one flavor a year so you can trade amount to hold that shows us you don’t want the retailer telling young cut E. the skew you wanna go to them proactively and say I want you to bring in these two new flavors but we want to discontinue this flavor and ideally you’re you’re doing that active management you know on on your own the other thing if you are an innovator when you do an update because the most valuable brands tend to be platform brands they tend to be brands that can go into multiple categories but when you think about where you could go the thing that were you know where you should go and it’s really adjacent categories

Burt’s bees for instance you know when they they they were doing a lot of lotion C. shampoos all natural war the the the last year they had he really want to get in the cosmetics but that was a pretty big jump to go from like shampoo and lotion all the way to like eye shadows and so you know and he didn’t feel like they had permission within their consumer base to make that big of a jump jump yet but that’s why we wanted to go into the first thing they did is that looks good and chapstick I said you know that’s you know chapstick it’s like lotion for your lips in circular skin color chapstick thing I get is this just another another another stuff you know yeah but it’s it’s lipstick and then all of a sudden they had permission to start going you know that was knocking on the door of of cosmetics incident when a like blushes and eyeshadows and they’re doing great and because medics now that had to go in there right out and that was that was it two and a half year process that had to go in there right out of the gate he didn’t think they were made yeah so so

so adjacent categories kind kind of baby steps where you feel like you have permission to go muncher consume your consumer base yeah so don’t go from sauces to serial right the idea is to make sure you tell like you know compete with Catherine crier you resemble their okay so let’s let’s talk about strategy what really messaging how important is the messaging between the brand the products the consumer and how much do you love packaging and a clear message yeah it’s it’s critical to me it’s funny we did this my mom my wife she she was in CBG world as well search we love she does the stuff with their kids will should go take him to the grocery store in order for a half year old shel shel the two packages next to him and said you know James which one which one you want which one do you like better he always goes for the one that has like the more attractive brighter packaging you know it’s the it works on adults do not just kids you know you got two seconds to make a first impression with your packaging so it’s it’s got a pop it’s got a standout you know I see a lot of people make design mistakes by creating in a vacuum you know you can make packaging looks great when it’s sitting there all by itself on your computer screen or like on the shelf and you know you’re in your office your queue but when you put it next all the competition it can get lost really quickly you know some of your design you’ve got to put it on in a competitive chefs you know group stink in the you know wrap the label around it stick it on the shelf next all the competition and doesn’t really jump out you know and then I think it’s like there’s brand attributes and then there’s product attributes then it’s like what’s going to resonate more with the consumer and so a lot of times doing some basic consumer research can be highly effective in nineteen have all these different product attributes but what’s gonna you know what’s gonna resonate most with this with the consumer because what may be most important to you may not be most important to your consumer so knowing what it is that it’s gonna track and your product can really help you prioritize when you’ve got limited real estate

yeah so Kate so have I have some kids so they can do the research for you much cheaper way to research because like as but that’s very interesting you say you have two seconds to catch someone’s attention talking to a branding agency right now and their lives this Facebook marketing woman called me not the branding agencies Facebook marketing lady called me she’s like you have ten to fifteen seconds to get someone’s attention on Facebook with the nav and hearing you say you have two seconds for someone to catch their eye on your label on the shelf that makes a lot of sense to me literally there’s hundreds of items on the shelf and when when someone might turn their head to the left and catch a glimpse of your label it’s shiny yeah we we don’t think too hard

I mean the the downside risk program is like humans and animals to conserve conserve you know to conserve calories you know to not expend calories and like having to think too hard about a marketing message your packaging it’s just odd that we naturally want to move away you know and and going to the next package so you want it to be super clear very simple you know the most beautiful package on it they’re oftentimes is like very simple messages yeah and how important are like certificates and and claims on the packaging is not as important as the overall packaging I mean I think I think this terms of like kind of secondary communication those can be important you know as an organic in there so that that is the secondary stuff when I’m holding the Waterloo can the first thing that catches me is the orange and the highlight outside of the the tax and then I I notice the zero calories zero sugar zero sodium yeah I mean it’s it’s sex sells so if people want to be associated with brands that have personality and they want to identify with their aspirational you know it’s kind of like a single serve beverages why you don’t see many people walking around with private label single serve beverage Sam’s club Kirkland units is because that that they don’t want that to be they will they want to be in a reflection of themselves so they would rather spend the extra money and and beyond Fiji times like it’s the same stuff news insider Kirkland bottle but it’s just a much sexier packaging so we’re drawn to that it’s almost like a beautiful woman you know and actually she really catches your eye you’re looking at the Waterloo can hear no I got this gorgeous piece of fruit here in the beautiful font and colors that pop you know but then you go on a couple dates inside values become really important you know it’s not just pretty faces it’s nice for a date but after that it’s like you better have strong values and suck okay one of these product attributes here how does it taste like okay this really taste amazing this is non GMO you know this is it’s it’s it’s calories zero sodium is actually good for me it’s good for the environment so yeah I think that that becomes supercritical but the first thing that grabs you is is the is the personality of the brand is the is the visuals yeah I think as as animals when you said sex sells I think that’s pretty pretty on point

okay so kind of kind of hoping to wrap up here but I wanted to ask you how necessary is it nowadays to raise capital to grow your CBG company it’s got a lot more expensive you know over the past decade you know is is is big exits have happened over the years the splashy headlines you know these really high valuations a lot of the C. P. G. brands of sold for more capital is coming to the market place and all that does is drive up the expenses for brands it just makes it more expensive to compete so I would say if when you’re rolling your brand out through retail it’s almost impossible not to raise capital at some point unless you just have something really innovative incredible margins so yeah it’s it’s becoming I’d say more and more important and more capital intensive the beauty of the internet and E. commerce is it gives you a margin advantage that you’re able to bypass the retail area will have a direct listen I love a lot of retailers out there but they’re just a necessary evil between the brand getting to the consumer in a day is a brand owner all you wanna do is have a relationship with that consumer and sell your product to the retailer is basically just this chessboard in between you and the consumer that you’ve got to deal with so by being able to sell directly to consumers to USC which has become obviously very popular food and beverages lagged and and and AECOM historically but it’s catching up quickly I mean it’s growing it’s on fire right now so I’m seeing more and more brands get profitable at a very early stage that would have been pretty much impossible to do had they only had a a retail and wholesale strategy but now we know will sell directly to consumers are able to capture that extra thirty S. forty S. percent margin yeah the retailers would typically take and that’s huge

yeah that can that can be the difference between profitability and do you know cash burn so a lot of a lot of the CPG companies you mentor here young ports you read yeah so so you guys preach them all the time be on Amazon later that’s the number one and I’ve I’ve talked to some of the companies that I believe it is even better even better than Amazon’s if you’re a seller Rackley tomb off your website Katelyn fire had this is bone broth company that we invested in not too long ago the mayor’s brothers Justin neck awesome folks the young guys super dynamic super sharp incredible product they resume the liver ten million in revenue they never sold to retailer and they were never sold on Amazon and they were very very profitable you know they own a hundred percent of the company that’s all because of that and and you know developing a strong DTC strategy so it’s yeah more more more we look for that yeah do investing on that’s kind of what you got to find out how to build that advertisement online to find you already have like that built in consumer base we need to do go to retail that because you have to spend less on demos and promotions yeah because you have a building service sees so so whatever what are some of the key items that investors like you look a look at or looks for really and and these new companies that are popping up

yeah I mean I think so much around the company it’s it’s oftentimes the people behind the company is just as important if not more important than the actual product that they’re selling you know look for entrepreneurs that are highly curious force of nature you know I’d say hi Q. is a nice to have not a need to have more I need to have a wouldn’t be sitting here talking to you I just had our work is because I was never was never that smart but you know I think if you have someone that is a force of nature extremely passionate is often worse we’ll figure out a way to get to the top of the mountain and it’s not always the most likely trail that they start on I think ideally it is a product that is going to make the world a better place and and it’s better for you than that that’s a trend that is here to stay shivers Public Enemy number one we’re looking for better for you products that ideally have a positive impact on the environment as well so the I. great products that taste delicious consumers don’t want to compromise you know they want it to be better for you but they wanted to taste great too so it has to taste great %HESITATION if it’s not gorgeous packaging that can all be fixed but you can’t fix the team yeah it now we can add to the team and and strengthen it but you know if it’s an odd scene it’s just hugely important in our that bad news before before good news in that yeah just find someone passionate and knows that they found their life calling yeah when you meet those people then you know that they found their life calling their odds of success are significantly higher than those who are just in it to make a quick Buck

would you would you ever tell an entrepreneur like you really love this personnel out of town because the curiosities there would you be like Hey you should drop this product or add this product to your line or is that something you don’t you don’t step on someone’s toes like I don’t know it’s only telling us all the time let him you know I don’t know the crystal ball but I keep under my desk yeah I may have a good intuition on things but yeah I I always give entrepreneurs whether I’m an investor in that company or whether they’re just coming to me for advice do you know if they’re sharp there only Justin telling their babies pretty name they want to know what needs to be exactly how they can get better so I try to be brutally honest with them that’s good well I think we’re all out of time unfortunately I think we can both keep this conversation going but I are there any last pieces of advice remarks you’d like to make any any new things on your horizon you’d like to share yeah yeah anything I would encourage entrepreneurs out there to you know if figure out your your your deeper why you know because we don’t know what the what is the product does but like what your deeper why and your values I think in your values your own for your plan for your company for yourself they should all be pretty aligned in in your deeper purpose you know are you put on this earth you know because we figure that out it’s a lot easier to say no to all the bright shiny objects and distractions and that’s also very inspiring the people around you and a lot on floors don’t focus on that stuff soon enough second half alive sort of stuff you know significance for success yeah hi again I agree with you I think if you love the chance to take a trip like a month or year of fully able to realize some of the stuff but anyways

I’d like to thank you again for coming on the show with us some packing taste I had a wonderful conversation and I wish you all the luck in the future and I hope you have a wonderful time in Jackson Hole Killington to have the two major tonight for dinner on on on some steaks yes I’m beyond me awesome awesome thank you well thanks again for stopping by claim I think we had a wonderful conversation and thank you for taking the time sharing all your insight on different products different branding and I think a lot of us are going to take a lot of new information away from this conversation the packing tasting includes me axle of a producer Mariah gossip an audio engineer Jake Wallace thank you everyone that found the media for your support make sure you guys have subscribed to the show so you never miss an episode also if you’re really enjoying it you should totally leave us a review on iTunes it helps other folks find the show for behind the scenes and more photos you guys can follow us at packing taste podcast thanks for this