[featured-video-plus width=770]

What you’ll hear in this episode:

• Jensen’s journey to entrepreneurship and the BBQ party that started it all 
• How to approach manufacturing for your unique product
• How media trends can affect sales velocity

An “OG” of Austin’s Consumer Packaged Goods (CPG) scene, CEO and co-founder of Rhythm Superfoods Scott Jensen is now considered a sage in the community.

Fascinated by the intersection of psychology and business from a young age, Jensen earned a double major at SMU in Dallas and an MBA from NYU. One weekend, C.B. Stubbs (the founder of Stubb’s BBQ) sent Jensen crates of BBQ and sauce via plane as a “thank-you” for a favor. Jensen and his roommate (who was also a Texan) threw a BBQ party for their east coast classmates and everyone was blown away by the quality of the sauce. This sparked the idea to sell Stubb’s BBQ Sauce, and Jensen and his friends began to work on a business plan.

After NYU Jensen worked for James River Corporation as a marketing manager, where he was introduced to manufacturing and other aspects of production. This exposure to a more holistic role combined with his entrepreneurial spirit drove him back to Texas where he could give Stubb’s BBQ Sauce his full attention.

Strategic demos and tastings earned Stubb’s Sauce high velocity sales locally. Jensen and his team expanded, sharing Stubb’s BBQ Sauce across the state in a bus painted with the Texas flag, and then across the country. Jensen encourages new CPG brands to start with their local market and utilize demos to “convert the whole neighborhood to your product” before expanding further.

Beyond the demos, Jensen’s tenacity and persistence earned Stubb’s their high velocity sales. He admits, “I think people finally got tired of saying no to us.” After they sold Stubb’s to McCormick, Jensen was looking for something new in the natural food category. With two core values in mind – “honest and healthy” – he started Rhythm Superfoods.

Initially Rhythm only made kale chips, and when they were new on the scene kale was considered a health food “hero” in the media. This combination brought Rhythm Superfoods high velocity sales right out of the gate, but working with kale also presented unique manufacturing challenges in terms of production lead time and required equipment.

Rhythm got creative to resolve these issues of timing and funding, securing the expensive equipment and coordinating labor in time to stock distributor’s shelves and maintain consistent profit margins. “Don’t be afraid to make your product yourself,” Jensen encourages, telling every CPG brand to consider their specific needs when making manufacturing decisions for their company.

Now, there are many kale chip competitors on the market and Rhythm has diversified their products, distinguishing themselves by ensuring their products have “superior nutrition to the mainstream item that they are competing against.” Jensen encourages young entrepreneurs to embrace the uniqueness of their product and understand that “every single product and company has a different storyline,” and success is all about finding what’s best for your company and pursuing it with tenacity.

Listen to the episode to hear more detailed advice for manufacturing and production, the importance of being careful with your branding and messaging, and how Jensen approached two different company’s unique challenges, earning great results for both.

Don’t forget to like, subscribe, and check out other Packing Taste podcast episodes!

Host: Axel Brave

Guest: Scott Jensen

Transcript:

this is a founding media podcast if welcome to Packing Taste today’s podcast I’m your host Axel but today we’re sitting down with Austin institution master Scott Johnson he was one of the co founders of legendary stuff barbecue sauce and the accompanying stubs music venue and restaurant Scott or as I call them the OG hipster cowboy is one of the original CBG Texas industry leaders who was here at the beginning of the Texas CPGB I really enjoyed having this talk with Scott we got into the details of his career what he is doing now with the rhythm superfoods and what makes us so special for foodies and creatives alike here’s our conversation hello everybody welcome to another episode of packing taste today with us we have Scott Jensen the CEO and co founder of rhythm superfoods a very cool healthy snack company based out of Austin Texas thank you for joining us got thank you for inviting me can’t wait to have this little chat yes I have been very excited high no our friend Houston Houston sorry goddess together but you are a legend here in Austin so I’m very honored to have you on here and I’m sure we’ll we’ll be able to chit chat a little bit about philosophy and superfoods and how brands kickoff kick off in Austin but mainly where I want to start is kind of some background where you’re from how you got started are you a Texan are you in Austin and

I’ve been here for twenty five years so as long as you know most other people have been but or longer I I I was born in the east coast in Connecticut and lived there for three or four years father and mother and sister and I moved to fort Lauderdale was there for like six or seven years and any kind of moving around from one bank job to another bank job and took over leadership of another bank up in New Hampshire so we moved from a four hundred help up into New Hampshire but I really loved the warmth and was you know moved when I was like you know N. or eleven years old in January to New Hampshire so I was like you know let me try to find a way back down to warm through once when it came to going to college I sought out in all the universities here in Texas and Florida and ended up at SMU in Dallas nice and what what did you study there I I have a bachelor of science in psychology and a bachelor of arts in business communication so kind of you know always influentials to consumer kind of focus our feeling yeah I love marketing love business and so it took me an extra year at SMU in order to make that happen but to get it done with the the the victory lap yeah right yeah and it’s like you did you always have an interest in like because cycle when I think of psychology plus business I think of like behavior human behavior and and consumer behavior really does that something that always like spike your interests alike turned things on in people’s brains yeah I mean I was at a very young age I was always buying stuff and selling it at school whether it was a candy that people couldn’t get or fire works that were illegal in one state but we happen to drive through another state so there was always kind of this weird like dynamic of understanding what people wanted and couldn’t get I think I spent my youth doing that sometimes selling things that I shouldn’t have gotten trouble with you know okay like what kind of things just fireworks fireworks fireworks is there is the big ocean they don’t really like that in Florida at the time so you’re like oh my god yeah and my mom and dad and really know I was doing that I was stealing their their fireworks that they would buy when we drive down I ninety five from Connecticut and stop in South Carolina and load up with some fireworks and then I’m stealing them and selling them for a dollar back in school

nice always had some sort of an entrepreneurial spirit and you yeah kind of hustling kinda so anyways SA I works and then so when did you start having interest towards food yes was that also in college yeah I I was enamored with advertising agencies when I kind of added at SMU this second degree of business communications basically marketing you know advertising PR that kind of stuff I really you know got enamored with like the David Ogilvy’s in the Leo Burnett the the classic nineteen fifties sixties seventies they were studying psychology in using that that kind of language of understanding human behavior to create advertising to present consumer products and so when I came out of SMU I got the job at what was then called the bloom agency number one and number two largest ad agency in in Texas at the time it was eventually purchased by Publicis but I have to work on stuff like Kerns nectars in what was called rainbow bread Campbell Thagard was the company big big bakery company grant’s farm bread church’s fried chicken carnation counted in a pasta and in a lot of the the advertising accounts that that agency had work consumer products and at some point being there for almost two years I wanted to be a bigger part of it and just the advertising so I want to work at you know a major corporation yeah and see if I could do more than just the advertising part of it so I decided to go get my MBA and ended up graduating from NYU in New York with my MBA there so you you went back to the east coast yeah hello calling you home yeah and you know for many reasons of the outstanding school Han

but in the end when I was up in New York I really miss Texas I missed my friends down here and had made some really deep relationships and good friends so I was trying to figure out after after I got out of my MBA started working for a company called James River corporation I think it’s now part of international paper but they’re like if they were like a seven or eight billion dollar paper company like Dixie cups and Dixie plates northern bathroom tissue brawny paper towel so stuff like that and I was working on the Dixie cups and Dixie plates business and so that kind of elevated me like I was working with the ad agencies to do some you know marketing but also you know traveling to manufacturing locations to work with our manufacturers and R&D so kinda like became more of them the hub of the wheel verses the spoke yeah as for satisfying but and in certain but what what did you study is there a specific focus for your MBA did you do more to and maybe they’ve changed it now but there was no like major you you just MBA you had an emphasis and and maybe they change it now I don’t know what they call it now but so you would call it computer science now but working with computers and so back then I mean number like the internet so I go to the computer lab and there was a friend of mine from Tel Aviv and and he had a friend who was in Tel Aviv at the university and the beginnings of the internet was peer to peer communication you can get online with you now this dialup modem and then you could type and communicate with your friend without having to pay for a long distance call and so that became the the network of the internet but that’s how I need to just give perspective this is only you know twenty five years ago or thirty years ago but that’s the beginning of the internet so if you think of computer science back then and looking at what we would do is nothing like today when you can like you know when the cavemen first decided that they could make a we a lot of a round stone

I remember when when we play computer games at my parents house we still have dial up so we hear the that’s a beautiful sound and every now and then it let that rings in my head and other things like have LTE access on my phone and everything super fast and I guess speaking of super when you moved back to Texas superfoods was still weren’t a thing right so what all what really other than the warmth and the beauty of Texas what else called you here and did you come here with an idea to start something yeah definitely so actually is very happy working at James River corporation I was doing fun stuff exciting stuff learning all brand new things to me but I did miss Texas quite honestly and what one of my roommates and good friends when I was in my MBA my roommate John Scott and then my good buddy hi Eddie Patterson we were both kind of transplanted quote unquote Texans because I’d spent time in Texas they were born here and we had this great idea when one of our friends scan MCB Stubblefield or stub had call John and said Hey man you know I’m really broke behind on my rent I need some cash and so on we rounded up I think John was tallying up like fourteen hundred dollars we all kinda knew stuff because he had a restaurant here in Austin and everyone in it even there before but John was really close to him so he he kind of pioneered grabbing some cash from friends and relatives and sent them fourteen hundred box and said I hope this helps out man and then and when was it was you guys wanna help just because he was a friend like the grandfather you never had a grandfather passed away at an early age your early age he’s just a great sage and if we ever come and came down to Austin and wanted to eat like he’d sit down at your table and chat with you for fifteen minutes

so I had spent only a couple times previous to that reach out at his restaurant in Austin and it was really because I was at SMU in Dallas yeah we came down to Austin for five times a year to have fun with friends but I’ve known that well but gotten overwhelmed just fell in love with them as a family member but that that money that was sent then was reciprocated back by him a few months later he he counter countered spare freighted a cooler of hot barbecue so back in the day before nine eleven you can go to the ticket counter at not the Bergstrom airport but the Mueller airport and you could drop off a package and the first available flight to wherever American whoever would go it would be there however many hours later so we went out to la Guardia and picked up a cooler and another box of barbecue sauce and brought it back in we we met at a party tonight and because there’s a lot of barbecue so he shipped it from here to New York City York yeah okay so we were still there at the time in New York City and we pretended be cooked on how bocce or something and and had a big party in all of our friends were like this this is Austin’s best barbecue ever had there was no one smoking barbecue in New York City the response call Dallas barbecue there’s five or six locations they were just charcoal grilling chicken and the call of barbecue so to bring something that’s been slow smoked that you’ve never had before people are like what the heck is this is like the first time you tried some sort of cultural food that’s done excellently and then the barbecue sauce bottle so he had he taken some Jack Daniels bottles from the continental club when they were empty gathered up for five six of them had his buddy Joe Healy I’m a little mac computer print out a label with Stubbs face on it and that’s what he sent us with these Jack Daniels bottles with with his face on it and that’s the label right so everyone is trying to is blown away by the flavour the barbecue sauce and we’re like okay let’s start a business well it took us a couple years and we’re still in the York city finishing up my MBA and my partner John his law degree and he was working for for a company there and hit the streets but it took us that long to like accurately build the plan of a business plan and

yeah working with stubborn people down here to give him a little bit of money to make some sauce to sell to other small people but it wasn’t like this big company that was going to take off and you so it was you John and Eddie were units type and stuff but you guys you know Matt and SMU no argument in New York we had mutual friends in Austin John and I did he was really like close friends with our corporate lawyer David would he was roommates with them at one point down here U. T. so you come down and hang out and do something else yes and I was getting my MBA in New York John was going to finish his and do an internship on at the New York Stock Exchange you need a place to live and we and I needed a new roommate for the last semester and so he moved in because he was from Lubbock Eddie was from Lubbock their parents knew each other and connected all three of us up in New York okay and then you guys all had by this time you were seasons students right to getting MBAs so you guys know how to draft a business plan we did I’m held a lot better now and while we still have a copy of that first business planets you guys do is pretty light yeah I mean when you’re like twenty six you know and maybe you haven’t worked at a private equity firm I mean it didn’t even exist back and quite honestly there was no VC or private equity but like to start a company but there wasn’t the path there is right now the infrastructure of information you can find them in books and on the internet and you can find a hundred really good deal docs business plan right now there wasn’t any there’s no internet yeah I mean you go to the you know the entrepreneur professor at NYU and go can you help us on this and so you know we did the basics of competition what’s the you know what the whole scalable market what’s our operations plan when you know where’s the budget for the next three or four years in the course we were going to take over the world

so there’s a huge hockey stick of of revenue court and we found out that it was much harder to get on the shelf than we assumed but you know when you’re that young you’re in you’ll take notes and then you walk out the door and go okay what is come back in three or six months so the nose came but we came back and were persistent and people finally just got tired of saying no to us and they put a product on the shelf and then we work our asses off to to make sure it would come off the shelf whether that was I’m in the demo you know do demonstrations cooking whatever feature entire store five times every single store you have that we can get to we just have this whole bus in the first three or four years it was on hold bluebird school bus that was painted red white and blue just like that a flag of Texas and and we would travel dot like we were in Florida for three months with that bus just doing demos at public schools public so just let us get into their stores are like we gotta make it happen so getting that velocity was just tenacity yeah there was plenty of other multinational multi billion dollar companies that have barbecue sauce on the shelf much cheaper than us and there were some local guys not a lot of them like like you look at barbecue sauce right now in every region’s got twenty five local brands that are trying to be the next dubs I guess but there it wasn’t as competitive and as as it is right now but we were tenacious and it needed that to happen you have to have this like I’m not gonna fail kind of attitude because brick walls are being built to keep you from succeeding at all times

yeah totally agree and I mean so so you guys moved back to Austin you guys were all in the twenty somethings yeah I’m full of energy full of passionate sounds like and you were getting what was it was there like a barbecue spark or a barbecue triangle happening at the time or was it like them there was no access to really good barbecue sauce in other states like it sounded like when you guys had a party in New York people like oh this is what real barbecue is it’s not just open up chicken over coal you know when access when national access starts happening to something that’s great it doesn’t have to be barbecue but like we in Texas yeah you gotta lock card or some of the other cities that have their famous old places Austin has his fame it’s famous all places like those great places around forever but like it’s hard to think back pre internet and pre five hundred channels of cable or satellite TV because the Food Network and the food TV in the fast food and that food in the cell celebration of food that is non existent maybe there was you know you know a couple of magazines that were very high brow they weren’t celebrating the best barbecue in America they were celebrating the new chef you know sauce that that is you know put on your braised beef Wellington I’m just making that up like that’s kind of where the the the the world of culinary was but when you get broader and you have the ability to have it on the internet and so many channels on on on cable that were exploding they need content and so content got down to you know guy fieri just dives drive ins and whatever that show

yeah right like I love that show I’m just saying like you have these group great little slices that can get very minute in what they’re focusing on and so barbecue became a huge celebration you find out that you know three or four regions of the country are claiming to be the best that’s a good hook editorially and then like why do they think is the best let’s let’s go investigate and that’s that’s editorial content right there so we were at a point where the advancement and available information easier to get curiosity of like if you want to learn how to do barbecue back then you had to go to like Barnes and noble and see if in the food section there was one or two blocks you there was no other way to do research she had or get in the car and drive around and interview people but at the touch of a finger fifteen years ago it’s like everything is there for you yeah okay and that kind of switching gears so you guys started Stubb’s barbecue in the venue the company the couple millions of dollars exited and that well I guess you the sauce company was sold to McCormick yeah and and you step down from the CEO position before that and you started with them rhythm yep and so how did that kind of start did you you have left do you want to do something else you had grown stubs to the size you want to grow with how did that all play out yeah I mean I had been there for a long time and you know that period of time when you’ve got investors money and like I’m kind of a growth kind of person and we decided as a board in ownership growth that that maybe we wouldn’t be spending all of the profits on more growth so there was there was a I need internally with our shareholder and investor base in ownership and all of us you know how how do we plan for the taking some money off the table or are we tied up into this forever and for about the year and a half before that though we were here in Austin and the barbecue sauce was damn near every supermarket chain in the entire country maybe within every store but the original barbecue sauce was like in ninety percent of the ACV or all commodity volume number of stores but we weren’t at whole foods because they’re Stubb’s original recipes we’re using you know a specific you know sauce Worcestershire sauce soy sauce based so the ingredients we were using work five fifty five gallon drums commercial level and in some of those ingredients there was like Saul fight or sodium benzoate wishful foods doesn’t allow racked and so we can get in there and we’re just kind of you know scratcher hadn’t gone well I mean can’t we figure out how to make it natural N. not change the taste because we’re you’re committed to not changing the recipe right yeah stubs yeah dying last day was you know in his way of saying don’t ever let anyone mess with my recipe so we were committed to that but like what we didn’t know is the same companies were buying those ingredients from Russell making versions of the exact same thing without sulfide ore sorting bins that we just didn’t ask because we didn’t know the movement that was going on for natural organic foods and you know that the natural products expo west was like a hundred and fifty exhibitors not like twenty five hundred or whatever it is now so small right and both whole foods was growing in there on a raid on the right here and we we knew people that worked there were buyers and said that was one of the things like well let’s see if we can do it and we did do it and the sauce we made was indiscernible is the exact same recipe so that was a successful Mike I think that was one of the sparks in my head because we we end up going to the national products expo I think the first one went to because the timing was exposed east and I was pretty small some smaller than expo west by the time we got around to it and I was blown away at the type of companies that were there and the energy there and then like doing a little bit of research showed me how fast the growth was of this category the natural category in organic category and just in general in our segment barbecue sauce it’s not a growth growth category

right it’s it was a mature category that is gonna grow say the population growth one to two percent a year and that’s it so we were growing up much more than that you know anywhere from eight to fifteen percent a year but that’s stealing market share from someone else yeah but yeah I’ve been doing that for a while and you know our group wanted to slow things down maybe get dividends and on and so we ended up finding a really really good leader to come in there and and and be there for the transition of what eventually resulted in the mock Celta McCormick so Matt case now runs lantana foods here in Austin was the guy that came in I started before I left started you know meeting with various people the see what I wanted to do next and kind of you you were thinking I wanna do something natural exactly yeah so in German version about it yeah I mean it’s like it wasn’t so much trendy but like I wanted to be honest and healthy so honest and healthy and what does that mean it means many different things but when I met this gentleman named Keith war I was introduced to Keith by Clayton Christopher who about the same time we were selling stubs he would maybe as a year earlier they had sold out this way he and David Smith from high brew coffee I had sold sweet leaf tea to Nestle waters so they were kind of trying to figure out what they were going to do Clayton had you know already started and the deep Eddy vodka company with Chad holler here in Austin and David stayed with with this reality company and Nestle to help them in their transition I think for about a year then he went and did a six month sailboat trip on their sailboat that sounds to thank a I mean he was they were working hard to get that company where it was so ended up deciding after I met this guy keep war that it was a perfect opportunity to like look at a company in its infancy he was making these kale chips and I was like okay let’s let’s see if this product is super super high nutrition crunchy snack he let me send it out to a bunch of people and and see if it’s got legs you know brokers buyers you know so we started shipping out some samples and what when you say healthy and I guess so superfoods

just to take a step back never foods essentially means healthy foods because art and this is a question really good question yeah so like beaches and culture Ms that just automatically sounds healthier than a normal lays potato chips is is is just as simple as this is a vegetable place potatoes vegetables well businesses we don’t put any like what what what’s the main difference there so it’s not defined by the FDA so if you were to talk to the subway sandwich shop company because they put avocado on colors super food on sandwiches we called ourselves rhythm superfoods it’s always been kind of a a slightly moving target of what it is and that’s not necessarily great but we I’m not gonna try to remember the exact words on it but we do define what we call it hung on our website because we’re committed to we’re committed to transparency and honesty and you can’t necessarily go out and say that something is a super food F. one person’s belief is always got more than one gram of sugar can be as it referred to the prisons nobody’s got seventeen grams of fiber so it is a super food so all the definitions change I worry about the name super food and and and what will happen in the next three four five years with that name so we we’re nervous about it we don’t like that it it never did catch on to have an FTA kind of like identification for what it is but it is our name that’s what we call ourselves and and so we’re careful about the ingredients and the type of items that we that we try to make and that they have a superior nutrition to the mainstream item that they’re competing against okay so so there’s no there’s no real definition that the FDA has now somewhere on there when there’s confusion in the market place that’s when they step in because they want clarity with the consumers but there is no definition now and so it’s it’s kind of the wild west who ever wants if you want to call you know you know a snickers bar super food you can make a claim that there’s three grams of protein or something like that on there and it’s got plenty of energy because got sugar so yeah you might buy it by consumers be called a fraud but I don’t call him a fraud because I don’t know the definition to it so yes I I guess what you guys do is you take this is what superfoods is and we define it this way superfoods to us means this correct right yeah and yeah N. as in I think transparency there is key because it’s like there’s no real definition this is what we think it is we’re showing you do you agree that it seems like most of your customers agree because they keep buying the chips

yeah yeah they are there totally is way healthier option than most of the other chips on and the two finalists everything we make is organic I’m sure there’s a percentage of the population that would say you know that must be a super for them because there’s there is confusion in the marketplace but if I gave you a bag of sugar that was organic I think ninety nine percent of the people would say oh no it’s not a super food but I guarantee those of people that we think it is of course because they’re confused by what is non GMO verified me what is organic me there’s still massive confusion over what it actually means so we just try to be transparent and and and and and then guide ourselves to kind of the the the the railroad tracks that we style try to stay in between and you you won’t see a white potato potato chip from us because it’s there’s there’s really no nutrition there yeah so those are the things we stay away from yeah and I guess the the way you guys were educating people because when you started rhythm superfoods was a buzz word people love this year it was a health being an awesome like everyone so healthy like health conscious here but the way you were educating the consumers was through this trans method of transparency you cry it’s like it was it was I’ll give a little hitch so when we first started we were really only making the kale chips and there was a movement than that raw foods those being less processed at lower heat mostly low temperature dehydration it is a fact that allows the enzymes inside the the cellular structure of the vegetable or fruit itself to live but the raw foods diet if you will it wasn’t necessary like I’m on the raw foods diet to lose weight is more like that’s when I’m committing myself is to eat more raw foods we were in it we are in the raw food sets of various supermarkets and it really didn’t take off whether the variety wasn’t there or everyone thought that they need to make a kale chip to be in the segment there was like nine people nine companies making kale chips the raw category just didn’t take off so kind of found ourselves a little orphaned early on if that’s not going to take off in more stores are going to put that and then why are we rock and the self reflection and try to figure out if people aren’t adapting to this that we need to make a change that we took her off not because we weren’t making the product the exact same way but it also could have been confusing in the market place and to the FDA when you start making certain claims there are all kinds of folks out there lawyers that gather consumers to be two or three people that seem to have been confused by something on the package so we did not want to go through the legal haranguing of the of the the legal trolls that that look for companies that have a clean that could be refuted and so we asked ourselves could this be refuted and like well it doesn’t matter if it’s reviewed or not if if they if that’s the claim they want to go after then you’re tied up in a lawsuit whether you’re right or wrong yeah and usually you end up settling with them and even then I think because there wasn’t an exact definition or no written real doesn’t earliest defining point for super food is let’s just be transparent as possible because that’s our evidence

I guess so when when you guys started rhythm you’re going from a barbecue sauce you guys started a barbecue sauce company we’re doing that kind of velocity which I’m sure they picked up and it was high velocity by the by the last couple years yeah but when you use your it over to snacks and chips while city in that category not only are you dealing with different buyers but everything moves a lot quicker right yeah so how was that like seeing that philosophy and I am assuming seems smaller numbers with like a bag of chips is where the cheaper than a jar of barbecue sauce I’m not not our chips and now uses so how was it like transitioning and dealing with that kind of production or that kind of velocity yeah we we have very specific situation that I had never never seen and and my limited years in the food business when we first launched the kale chips and started selling them to couple whole foods regions and then we got into some Eiichi bees and some more stores if you think of the supply chain and the manufacturing element of how you have to make the product if if someone like publics wants to put us in five hundred or six hundred stores I even have to go to my farmers and say Hey do you have additional twenty five acres of land can we start tearing that land so that we can get an additional expense you know number of tons per week and whatever time it takes to grow those seeds so we’re we’re having to think five and six months ahead and when we hear you know when we get a yes from a retailer sometimes oftentimes it’s a six month kind of cycle where they’re trying to manage their category but sometimes you get a yes and they want the product in in two months right so managing that part of it when you’re kind of growing relatively fast is a challenge

kale then became its own hero separately like yeah I was on the Kardashian show and all those chefs were cooking and making soups and it you know they they tested salads with kale at McDonald’s and so it had its own like day where it was almost like over hyped but that over hyping meant that everyone wanted kale chips Jones we were chasing production scale like there’s no contract manufacturers that have the equipment that it takes to make the kale chips so we had to buy our own equipment and we were not necessarily interested in getting at that point into our own self manufacturing we wanted to focus on the sales and marketing so we did find partners along the way that would allow us to bring and buy our own equipment and bring it into their co packing facilities and they manage the raw material procurement the food safety the the the labor and the people that make the product and and packing it into the bags and all that kind of stuff so we had a couple partners as we grew but it many people when they grow if you were to make your your brand new you know axle salsa and you give me some of that Jimmy jury here like I can name ten people within a hundred fifty miles here that can make that next Friday for you right you just name the jar size and the ingredients and we’re ready to go because that industry of taking liquid products mixing them in a certain way and filling them through a filler jarring them with the Capper and putting a label on with a labeler and putting into a box is like old is the country right like you made it sound so simple yeah I know it’s imagers but but but I guess if anyone can do that we had to buy our own equipment whenever we scale yes we’re talking about five hundred thousand dollar dehydrators so typically when you’re raising capital you’re raising capital for growth capital we are raising capital for assets and that’s that’s not the easiest professional investment dollars to get you know because but because Kael was exploding we we were chasing it always we always want to make sure we weren’t gonna buy in new capacity to double it before we knew we had retailers saying it but like once the retailer said yes we needed that product in three months or four months so you know that there is a whole rocking this until we finally got like four or five dehydrators where we couldn’t like grow without a bomb yet not know was that

so that that extreme focus in production do you think that’s across the board with all high velocity products or was it because you guys were doing kale chips and the Kardashians are talking about it and everybody wanted to kill if you like or mixture of now it’s like it on the high velocity per as if you were if axles new energy bar right so the new energy bar is an extruded product that gets mixed in the big Hobart dumped into a forming machine are extruded and put onto a flow wrapping wrapping machine if if that company that is making those bars for you can do you your month’s worth of production in one day it’s not hard for them to triple it by just doing two days of production so the equipment is they’re they’re ready to scale they just have to add labor for us it was really the equipment is very you know the five hundred thousand dollar dehydrators six months lead time to buy those you better you know if you’re gonna buy one you better have the yeah you better have the the retailers that are saying yes otherwise you just spend a shit load of money and this thing is sitting there idle so that was the the balance like it wasn’t an unlimited pool of money ready to just buy as much equipment as yet on it and then when you get a is obviously when everyone’s eating kale that’s very helpful to your brand but

was there other methods that you guys focused on to increase a high velocity item and is it difference with low velocity items or if because because I considered my sauces low velocity and I my goal is to make a high velocity but again people use my jar of chimichurri three or four times verses a bag of chips people gone yeah yeah so this is just opinion not fact but to just answer one more thing from your previous question so we have that high velocity when the demand was there and we are darn near the only guys making the Celtics are could do it but shortly there after a couple of sizable competitors should popped up on the east coast west coast we were the only guys on the shelf we were incredibly high velocity he couldn’t believe the turns that we’re having and we couldn’t keep up because the kale chip was this hero and we were the only ones making enough to sell but all of a sudden there was two other brands on the shelf so now they have a choice for it so the velocities went down because of competition the category kept growing but for us the velocity went down we kept growing because we’re getting into more stores but so the velocity can be yes something unique that in and of itself can can drive velocity there’s probably not and when you go to condiment section this probably not seven versions of chimichurri right there’s probably too because it’s not a massive category is not used a lot like a yeah A. one steak sauce both are going on beef but they will say because I’ve been around forever and it’s like a dollar ninety nine for eight ounces instead of something that’s more expensive and dollar amounts so velocity to me in particular when you’re a small company it it’s hard to drive consumers to do what they’re already not doing and as a as a you know a smaller company that doesn’t have the ability to educate on a grand scale you have to do things on a less than grand scale that’s like demo owing a lot of stores so if you’re in thirty stores in Austin due to four hour demos at two different stores that are close to each other on a Saturday and the Sunday so you just knocked off four stores go back the next week and switch the date and do the same stores again because people pattern their their grocery shopping so if you’re at H. E. B. one fifty three on one day on a Saturday morning you went to whole foods number sixty nine on the afternoon if you flip those you have a different type of person and and then all of a sudden you may be met twenty percent of their entire shopping group on a very very busy day and if you’ve converted thirty to sixty people to try your stuff and buy it because you’re there and having them tasted that little circle of five miles around that store or whatever the the G. your geographic you know circle is for that particular store you now have a neighborhood of people that are committed to your products so it’s it’s worth it

like each person that you touch and they buy it if they like it it better be good if they don’t like it they won’t but particularly you in particular her name’s on the packaging you’re actually sitting there doing and so do a couple hundred of those over the next two years and you will see the velocity grow yeah that’s one sure thing for sure being other people to do it is expensive and there’s the balance of and my getting the growth and the revenue by spending a hundred and sixty dollars for someone to be in that store for four hours or is it worth my time for at least a couple hundred of it like I’m older than you some a little bit yeah I know and I’ve got two young boys at home and a wife who wants to see me more I think so Saturdays and Sundays are precious so I can’t do that but like that’s what we did I did three hundred demos in the first three years that we had stubs and they were anywhere from Virginia to Tennessee to Florida to Texas to California and that I believe like you pick a stores say it’s publics and they’ve got at the time eight hundred stores you do a third of their stores you don’t do the small stores is hardly much anything that you can do to pick up the velocity you want to value your time there so do the big heavy weight stores with a lot of people come in and you got three times the touch points at that store for the four hours than you do at one of their C. locations you do a third of their stores a couple of times you’ve got the velocity chain wide now that now you like you can do promotions that matter you can spend fifteen thousand dollars to get in off shelf display and see if you can get more people to try your products now there’s a bunch of other ways of increasing velocity but that that’s the tried and true small person small companies way of doing it before they get to where they have larger budgets and that’s the way we did it yeah and I think you’re right and everyone who’s been on the show says like the number one is you go into the demos and you keep doing them and keep doing and even even when you’re making millions you keep doing them because people want to connect with yeah the people who started the brand and

find ways to do more efficiently like you could be doing demos on fox seven news in the morning showing how to grill a steak with chimichurri sauce for father’s day analysts and whatever their viewership is fifty hundred thousand people that night might see it that’s a demo right you’re not at the store but that’s that that becomes an efficient more efficient demo because your time is now more valuable still get in the store if you wander the stores hang out in the stores you learn more about consumers and how stories work and store directors and how they want to run their stores then you can do by reading any book or listening to someone else so you got to spend a little time in the store no matter how long the company is in business yeah I totally agree with you and us I’m sure when you guys were doing that with us or even the early stages of of rhythm it’s totally different now and I didn’t think of this as an insult you just said that but like going in front of whatever fox news or whatever TV morning station you have a wider audience but now we also have Facebook and Twitter and all that stuff so maybe making a sixty second video loading you making a steak with chimichurri sauce paying fifteen dollars for it to hit twenty thousand quote unquote users yeah it’s also there’s like a lot of new ways to play around with it

okay and I know we’re running running out of time but too bad yeah I know this this is this is getting good I wanted to ask six two things first words was it helpful being in Austin because it could you have started those brands and have been as successful in a different city or state board being in Austin the super trendy hip place help and being in Texas where everyone’s always eating steak in needs help as well I think you know the authenticity of the stubs Brandis was clearly we had to be in Austin that’s where Staub was at the time from had a barbecue restaurant ABC there said we the whole brand was authenticity it was stubs recipe he demanded his face beyond the label and the the quotes on there ladies and gentlemen I’m a cook it’s it was him and we didn’t mess with any of those recipes and he was he was the guy is like the grandfather he never had and and said that had to happen there I would say that the infrastructure of Austin at the time that we started there was no an investor no one talked investor any there was nothing like that going on there was no like the skew accelerator program there wasn’t the programs that are over at UT it wasn’t there was no C. P. G. now like I was saying you know Michelangelo’s Italian frozen foods up in north Austin but he had moved from San Diego and we didn’t know what I mean halfway through yeah we met Clayton and David are like there’s another you know group in Austin that’s making tea but as we get later into the sauce company I personally believe it was a moment in time there was a catalyst like in the two thousand eight the kind of economic crisis there was a lot of people from let’s just say the west coast east coast that found Austin like I don’t know anyone’s personal story but I can’t afford this house anymore in LA this is ridiculous I’m a chef and I’m doing this or you know we had a creative class of people that came from New York and from California and from other places that were like this is cool and it’s not expensive and there’s a great music scene and outdoor scene and so the the M. premature that Austin has and gives to like that class of people it’s like they flocked here and then you start seeing like the food trucks and food cart stuff happening after

that those in the early two thousands late nineties one as I do the two thousand eight when the the the the big kind of I mean everything was cool before that but yes and he was when the economic crisis hit and we saw here in Austin mass of people from California mostly California and and even in New York I think was the second biggest migration of folks that would just like you know they were chasing the dream but couldn’t afford it and found this is a great place to comment seven only food artistry but but artists themselves painters sculptors class order all that kind of stuff help to support you know before the keep Austin weird was hippies for the most part and and in a country western hippies if you will but this class of people came in and suddenly it was a lot of people starting businesses and food and beverage businesses that’s my my belief is that was this turning point that happened and there were people like us hi Kelly and John myself and Clayton and David that had already like broken down the walls of how to do this we didn’t you know we don’t have a book is set this way you do it we were accessible and kind and helpful and if anyone to come out to say well how do you do it what what do you think about this with with this brokers good and that brokers knock at this retailer’s gonna charge you too much to say no to that so having some sages in the group here helped the younger people are the new entrepreneurs and then you have this formalization of things like skew now we have a naturally Austin we’ve got you know private equity firm that invests professional town and so all that stuff creates an infrastructure that not everyone can take advantage of but some can and I mean I meet people all the time I’m like how come I don’t know you guys have been here for two years and you’re doing this really cool thing did no one tell me I’m I got my own blinders on but somehow that’s what happened here in Austin and everyone is willing to share

of course and I I look that’s that’s one of the most beautiful parts about being Texan data and being here in Austin everyone loves to share their information their knowledge their their support so I think I guess in a hundred years from now when people are studying Texas you guys are gonna be that have on guards the hipster cowboys I kind of started the whole CBG trend here during the the a crisis which is obviously a very cool story and the other you told me okay lastly I definitely wanted asses should it every brand grow with an exit strategy in mind mmhm when I was when I saw that question that you had sent me the it was it really hit me hard because I could flip flop in every circumstance right like there’s being a part of the skew accelerator here in Austin like for the first several years of her life yeah in the end we’re gonna have a pitch day it’s hard to grow right now without capital it doesn’t mean you can’t but if a new idea happens I always use this expression of the story to to express what’s happening out there in the market place

like five or six years ago I tasted my first bone broth and I love the product and yeah it’s got it’s own little story about what it does for you with Kalenjin and all that kind of stuff but they launch that product and it was a frozen product and then you know at a trade show six months later and the next trade show there’s another company and then six months later there’s another brand you would never see that happen when we started stubs it was just it was kind of a sleepy in a deal the food industry but because the financing is out there it now escalates the competition so fast and there’s some really really sharp entrepreneurs creating really delicious and good products with incredible packaging so first mover not always but majority of the time that is financed the bass in many of these newer categories particularly ends up winning because money oftentimes wind so there’s certain things I look at I go wow that’s brand new and no one even knows about that but it’s easy to make so unless you move fast someone else is going to catch up to you and I was talking to the CSA founders maybe three or four months ago and they you know they didn’t have to raise a lot of money they raised about the same amount of money as we did at Stubbs but they have a lot of competition out there trying to figure out hot sauces Mexican style of other channels have really taken off in the the the the almond tortillas that they make it really took off to the

the national rollouts at whole foods Chapman but they had such a unique item and it was able to be appropriately margined so that they didn’t have to lose money for seven years to make it work like so sometimes you have these great bolts of lightning that come down that from that when they they were they were skewed graduate and that’s where I got to meet him and and just just so impressed with what they’ve done with their brand but like I just use as an example of like it’s not every everyone has to go out and and try to raise twenty million dollars to win each each each one is a different story and so you do your investors the respect that you’re going to manage their money well give them reporting on what you’re doing and try with every ounce of your body to to give the money back at some point so if you don’t take a lot of that money then you get to call the shots and growing however slowly you you want to grow it yeah

and I guess sure I mean but should it entrepreneurs are new founders say okay I want to grow this super fat next three to five years and sell it at year five for this amount was that totally silly to think and you should be like now start something you believe in and that you never want to let go of all that yeah the star some you believe in there’s no way to go through the battles that you happier if if the objective is to sell it the heartache is way too hard so you have to have some sort of like mission that you’re really really into because no matter what you’re going to run into a lot of brick walls and a lot of nose and problems and a recall or plant breaks down or on wood on that yeah every retailer doesn’t want your stuff for consumers hate it but there’s all kinds of things but you you can also have it then take a left and a right and a left and right so with all that hard it just like any other start up you better be in for the long haul because saying that you know I’m just gonna do this and then we’ll flip it in three to five years for small it almost never happens there are unicorns that defy that logic but it almost never happens so if you’re gonna be you with and marry someone you better like him a lot because you’re gonna be with it for a while particularly if you take capital like you can just like take the first known as you know you’ve taken a million dollars of someone’s money and like things didn’t work out at first you know how how sorry about that like you know this retailer said they’re not going to bring an end so I guess we’re going to you know die yeah that’s the easy one you can come come back six months later in this fifty more retailers you can go to but those kind of like slaps in the face are gonna happen and so if you don’t have the internal you know gumption to like make things work and work and work and work the three to five years is what I’m gonna do you’ll you’ll you’ll turn around and get out of in the year yeah the punches to the face are often did any other but I have some sort of passion to to take those punches will be useful I wish we had a whole nother hour to keep talking about this but is there is there anything you want to add

any any shout outs you want to get before we wrap up well I think one other thing I would just say that’s that that I get asked a lot from people is should we make this stuff ourself and that just that closing thought or or should we have someone else make it like when I said like to every single product every single company has a different story line and you know he can’t believe like what the you know the Talking Heads say Intel you you’re supposed to do you can be at a trade show and there’s twenty different private equity guys coming by your booth and ten of them say you should do this right tenants I do it the other way so the decision to manufacture or have someone else make it is a very interesting one that there’s not one way or the other that is is better it’s each circumstance is different and so on there are things like you’ve got something really existentially like wonderful like it’s no one else can make it are you may not be able to patent it but you don’t want other people to know how you make it so that may be worthwhile of how how you go about making the stop yourself there is an opportunity so if you’re making something that is easier to make where the equipment and the companies that contract packed out there are plentiful and they’ve already paid for all their assets so every new piece of business that they get is is just a valuable piece of revenue for them that they can push across just their overhead which is very low those circumstances give you the ability to make something at someone else’s place and still be able to make an adequate margin but if you can’t get the margin that you need with a contract Packer and you think you can get that that that the amount that you need a margin to be a successful company by making it yourself then don’t be afraid to make yourself

yeah that’s again a whole nother conversation that I can help with but no the the great great words of wisdom give advice and and for you guys listening out there make sure to keep all that stuff in mine because like Scott said there there isn’t a right way to do it there’s not like everyone must go through a co Packer because that’s the way to do it now it’s it’s what works for you it sounds like but yeah I appreciate the conversation Scott and I’m glad you stopped by and I hope rhythm superfoods keeps growing at the high velocity that is that it is great thanks appreciate being here thanks again Scott for stopping by the conversation was great I really did appreciate it and I wish I could slow down time a little bit so we kind of extended our talk the packing taste team includes me axle brother producer Mariah gossip an audio engineer Jake Wallace thank you everyone that found the media for your support if you all been really enjoying the show please rate review and subscribe you know the drill you can also follow along for some behind the scene photos on social media at packing taste podcast on Instagram thanks for listening