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Hey, it's Guy here. The team and I are taking a little summer break this week, and so we thought we'd replay one of our favorite advice line episodes from earlier this year.
One of the reasons I love the advice line so much is that I get to talk to early stage entrepreneurs from all over the world, representing so many industries from food to cosmetics, clothing to home goods, and together with some of your favorite past guests from High Beltis, we answer questions about fundraising, marketing, manufacturing, distribution, hiring, and lots more.
And we've got some incredible guests lined up for the summer. So stick around, take a listen, and let us know what you think of this new Thursday edition of the show. You can reach us at hibtid.wundery.com or leave us a review on your podcast app and please tell your friends, okay, and now on to the show.
Hello and welcome to How I Built This Lab. I'm Guy Ross. So over the next few months, we're going to be taking your calls about the challenges you're facing, and hopefully we can help you get closer to solving them. And helping me out each week will be a past guest from this show, a legendary founder who is here to help new founders trying to build their own amazing businesses.
And by the way, if you are building something and you need advice or help, give us a call and you might be the next guest on the show. Our number is 1-800-4331298 and we'll also put it in the podcast description. All right, ready? Let's go. Today, I'm so excited to be joined by Pete Maldonado. He's a co-founder and co-CEO of Chomps, the grass-fed meat stick brand that is, man, Pete, it's everywhere.
I just bought a multi-pack of the Micasco last week, actually. Pete and his co-founder, Rashid Ali, joined me in January of 2023 to tell the story of turning their side hustle into a national brand, Pete. Welcome back. Thank you for having me. One of the things that I remember about your appearance in the show is how you really work to learn how to be a better deal maker, right?
Which is a critical skill for any entrepreneur to learn. For sure. Yeah. I think my background was a number of different roles and jobs. I think probably real estate was the one that really got me into deal making, dealing with big numbers and just putting big deals together. I think having that skill set, especially at this stage, just dealing with the big dollar amounts.
I think that could really scare people away or really get them a little nervous. So I think for me, just having those reps in the arsenal, I think that was this. Doing them again and again. Yeah. That was really helpful. Well, Pete, all of our founders calling in today are they're all exploring different ways to reach new customers, especially by trying to build partnerships with retailers. And we thought you would be the perfect mentor to help us hopefully answer some of their questions.
When you started to explore retail partnerships, what is something that you wish you knew at the beginning that you maybe learn the hard way or you just learned with experience? There's a few things. So one of them is, you know, you selling to the retailer and getting out on the shelf is the easy part. That's when the work starts.
Yeah. And I think a lot of new founders or new startups when they're when they're starting to retail, they don't they're celebrating the win. They celebrate the, you know, they're like, I'm on Trader Joe's shelves, but that's just the beginning. I guess and it really is. And so it's everything you could possibly think of when it comes to new quality control issues that you need to put into place. Trade spend and you know, figuring that whole animal out, which is massive.
It's a big part of any any CPG brand or any brand that's selling in retail. It's going to be a huge part of their spend. And how do you manage that? How do you get the most impact out of that? And then on top of it, I think you want you get even just the initial trade spend isn't where it ends. Now you start getting charge backs and fees and penalties.
And there's an aspect the bigger the retailer, the more that they're going to charge you and you need to get, you know, beyond your toes and on your A game. A lot of people realize that retail stores, big retailers are sort of like billboards and Times Square. You actually have to pay essentially to head shelf space and it's hard to get in there. And then once you're in there, if you don't sell product, they toss you out.
So that the pressure really starts to that's when you really have to start selling. Oh, absolutely. You know, and these these retailers most they make more more money from slotting fees and then they do from actually selling products. So you've got it's an amazing business, by the way, grocery stores and amazing because they have all these revenue streams coming in.
Yeah, and that's a thing. You know, you have to understand as the brand owner, you're putting your product in the store, you're taking all the risk there. They're going to do everything they possibly can to eliminate the risk and make sure that they're getting paid up front or along the way. And it's coming from you. All right, peace. What do you say would take a would take a call? What do you think? You ready? All right, let's bring in our first color color. You are on the line. Hello, welcome.
Hi, how are you? Hello, who is this? This is I'm Jennifer Ballon and I own badass bagels. Welcome. We are 100% sourdough and we are the masters of fermentation. Okay, what is your question for Pete, Jennifer? My question is really we're sort of out of crossroads now these days because we've established several brick and mortar locations. We are making upwards of 8,000 sourdough bagels a week.
We participate in a dozen farmers markets. We have a bunch of different products now, almost like a brand, an accidental brand that we call badass. We have 12 cream cheeses, spreads. They're all like farm to bagel. We support the local farmers in our area. And I'm just wondering, I mean, I have franchise companies calling me.
I have investors asking me, do I want money? At this point, I'm really happy being a bagel slinger. I'm always knee deep in dough. It's like super fun. Everyone's happy. Everybody loves the bagels. How do I know what direction to go in? Do I want to put all my eggs in the consumer product goods basket? Do I want to open more brick and mortars? Jennifer, we're going to get to your questions. But before if you don't mind, can we ask a couple of background questions? 100% yes.
All right. So you're based in Norwalk, Connecticut, is that right? Yes. And tell me the story. By the way, great website. I'm looking at badass bagels now. Tell me the story of, I mean, do you come from a, are you a baker? Is that your profession? Did you train? Tell me a little bit about how it happened.
Well, I was a stayed home mom with my kids and I opened a restaurant and was open for years and years, 10 years. The pandemic came. I was thinking about shutting it because it was a good time to do that. I started, I slipped down that slippery slope of sourdough and I started breaking bread like everybody. Everybody. Yes. Everybody. But I figured it out sort of quickly and was making loaf after loaf. They were laying all over my house. My kids were like, please stop making bread.
So I made a bobcat. Chocolate bobcat. Chocolate and cinnamon. And then I started with the sourdough bagels and I realized that there were no recipes. There were no store selling sourdough bagels. Sourdough bagels weren't really a thing. So I love a good challenge because I tend to get bored very easily. So the challenge was how the heck do you make a sourdough bagel? Well, let me tell you it is not easy.
It's not because traditional bagels are made with just dry yeast or sourdough as a starter. I mean, the Bay Area. So there's so much sourdough here. But it's fundamentally a different taste. Well, not only is it a different taste, but when you are making a yeast-leavened bread, a commercially used-leavened bread, you can do that in 45 minutes.
When you're making a sourdough-leavened pastry or bread, it is a slow process because the fermentation is what's good for you. And the bagel structure is very different than a loaf of bread. Many of us bake sourdough bread in a Dutch oven that has sides. A bagel is free, free-standing on its own, on a sheet or on a, in a hearth oven. There's a million combinations and a million ways you can do it.
All right. So you pivoted from the restaurant to the bagel shop. And now I think you've got two shops, two locations in Norwalk, Connecticut. I've got one location in Westchester County in Armonk, New York, and one location right here in Norwalk, right near Westport, where I live, about a mile from my house. I often go to work at night in my pajamas to check on my sourdough starter. I'm about a mile away. It's a lot of work, but now I've got an incredible staff, and we crank out a lot of bagels.
So initially, you know, just listening to your background here, you mentioned that this is what makes you very happy. And so I guess my first question is, you know, what is it about what you're doing right now that needs to change if you're already happy? What is your vision for this that would make, you know, you feel really excited about bad ass bagels?
I think I'm happy because I love my customers, but I do see the scaling potential, and it is profitable in a great and positive way, shocking, as that sounds, because it's not easy to be profitable. Bagels are very labor intensive. I think I could see myself with many stores and many areas of the country. We spend a lot of time shipping bagels, like I spend at least three hours a day shipping boxes of bagels to Utah to Colorado to Los Angeles to Florida.
You sell them, by the way, D to C people order on the website or do they are their retailers that sell them? We are the only distributor really of our bagels, so they order through me. I did just pick up a local distributor a couple of weeks ago. Wow. My bagels are freezable. That's the other thing about sourdough. They're like 70% water, so they freeze beautifully. So if I gave you a frozen bagel, you could pop it in your oven in a minute. It would taste like I just baked it for you.
Wow. So Pete, the question I think that you asked is a really good question, which is, is Jennifer happy? It seems like she's looking for some help and advice to figure out whether she should consider bringing on partners to grow this thing in a bigger way. Let's just say she does. What do you think about the idea of bringing on a partner to maybe try and franchise this thing? I think that could work. I think you've done this at two locations right now, so you were able to replicate it.
I guess my question is here, are you comfortable enough to teach somebody else how to run it in the same way that you do? Because in the franchise model, you're not there to operate it, so you need to find someone that's a really good operator. Is there some special sauce or jujube or things you have going on in your team that you could potentially lose by scaling that through franchising?
Definitely it's scalable, it's teachable. I could show you how to do it without a doubt. I actually started working on a manual that would give everybody a full proof way of replicating. That's one avenue for sure. If you are going to do these things and you expect somebody to come in and pay you money to franchise your model, what value do they get by paying you that franchise fee and what stops them from creating this really on their own?
I guess what they're getting is, for example, our proprietary, we have a whole gluten free line of bagels. So these other locations would be able to then buy from the mothership all of these great products that we've already figured out how to make. I mean, franchising isn't necessarily my first avenue of choice. I mean, I think in the world of cream cheese, do I really want to take on Philadelphia?
I've got really big boxing gloves, but can I do that? I mean, the world of dairy is like a whole another thing. It seems to me, it seems to me Jennifer, that your competitive advantage is your brand, right? And also their sourdough bagels, which is somewhat of a differentiator, but it's your brand, badass bagels, you've got a great logo, you've got a great look.
You know, we have an episode of our show by Dave's Hut Chicken and that brand was started in a, basically a parking lot. It was a couple of friends and they basically decided to sell fried chicken sandwiches within a year. They were approached by somebody who had experience in franchising and paid them a significant amount of money.
And that's actually really worked for them, but you know, he seems to me that if Jennifer were to do this, she would want to really be mindful about who that partner is. Absolutely. I think, you know, finding people that are going to be, this is what they're going to do for a living, not, you don't want to find somebody that's going to be, and I've looked at various franchise models over the years just as looking at like side investments potentially.
I'm not the guy that you want to franchise to, right? Because I've got my main business. I've got my day job. If you're going to franchise, it should be that person's day job. I think that's, that's probably critical to the success of any franchise. If you look at like the Chick-fil-A model, would they allow them to own one unit? I think that's a really, that's a good, probably a better model, more, more chance for success.
Right. That's true. The other thing I would add is that, and Pete, maybe you can weigh in a little bit on this because you're, you've got such a strong brand. And, you know, if you were to look at, I don't know if you can you see, can you see website for bad ice bagels? I do. Can you give Jennifer some helpful feedback on things that you might, you know, you might adjust or you might kind of think about and lean into?
Yeah. So I love the story. Obviously, I think, you know, and going back to what I was talking about, the differentiation piece, like, you know, it was a sourdough angle. And I like, I love the background too of your story about transitioning from a restaurant over to the bagels. I love all that. I think here, if I was to, that make it a little easier to actually order from you, if you think it's something from a D to C perspective,
I think there's a lot going on in the website. So just cleaning things up a little bit would be a little easier. Which platform is this on anyway? Do you have this? Doesn't look like it's Shopify is it? It's not. It's a simple square space and then I have a third party ordering. Both sponsors of the podcast, so we're not going to weigh in. I have to say I love square space. It's fabulous to work on. Fabulous to work on.
Yeah, so I think, and I also here's the other thing I really like the your gift boxes and the way that you package those up or you get the bagels and the shmiers or the cream cheese with it. And I think I thought that was really cool. And you're doing the right thing. It looks like you're by creating more of a higher order value. That's going to allow you to handle all in an absorb a lot of that shipping cost. So I think you're doing a lot of things right here.
To supercharge that again to my point, I was just saying I think if you could if you could figure out a way just to streamline it a little bit, make the ordering process a little bit easier. That's from a deed to see the perspective. I know some of your questions were going CPG and going into retail. What could I answer for you on that? Like what are you thinking? Well, it's interesting because I didn't know anything about this whole industry.
And now I am working with a couple of co-packers. I'm about to start co-packing. So I have three dairy farms, single origin, grass fed milk. Cheese. I mean, literally, I mean, I didn't even know it existed like that in right in my reach. And what happens is it's sort of like, can I sure I can make this product? Can I mainstream it enough? I mean, the flavors we make preserve lemon and fried capers, smoky black garlic, hot honey pistachio, shallot and French vinegar, Habiscus rhubarb.
I mean, which one do you want? Man, you're right. So here's the thing. Like people come in and they buy three cream cheeses and a dozen bagels. That is like the average person. That's a lot of cream cheese. And are your margins higher on cream cheese than on bagels? They actually are. Yeah. Yes. Eight ounces from cream cheese is $10. And you know, people are spending $30 on cream cheese. Now we're doing cultured cream cheese. So this also has the beautiful probiotic quality like yogurt.
I just wonder, can I take on like the big men and women of the dairy world? Because it's really a monopoly, big one. Pete, I'm not sure that she has to worry about taking them on, right? You weren't thinking, how does that work? I'm going to take on slim Jim. You were thinking, I'm going to introduce chumps. Yeah. You know, so like chumps, we've grown up, we've grown substantially. We'll do somewhere around the approaching the half a billion dollar mark in retail sales this year, right?
Wow. I still would never even think about trying to compete with the big guys in the space, right? It just, it doesn't work. And I would, they would bleed us to death. Like it just wouldn't, wouldn't work. But the reason we've been successful is because we serve an entirely incremental customer. So incrementality is a key word for you to think about and how to think.
When I talk about differentiation, I think about like positioning yourself as a brand that's for a different customer that's not currently being served at a retailer, that's how you find success. And now these big guys, they're trying to hit the masses. They don't, you know, they're not going to do all of it and put the blood, sweat, and tears creating those amazing flavor profiles that you have. I don't remember ever seeing, is there a grass-fed cream cheese? No, I don't even know.
There probably is, but you don't, you don't really see anybody's leaning into that. Right. You don't. Yeah. You're in an enviable position, right? You've got, you've got something that's already working right now. And you're just, and you have all these opportunities and people interested in working with you to build it up and build something else out of this, which is great to have, right?
I think what you need to do for yourself, though, is think about, you know, my early, like, question I started with, is like, what's going to make you the most happy? Because running a big business and driving a lot of revenue and making money, that doesn't always make people happy. And you're going to be basically living for this. So, you know, you need to kind of think through what do you want to be doing with all of your time? And what's the most meaningful to you?
So, you could franchise the big old stores, you could go the CPG rat. You could be successful on all of them, but I think it's up to you to determine like, what's, what, you know, where are you going to focus? And then once you get that, then you just, then you kind of back into what's the strategy to get there? Yeah. Right.
Jennifer, my takeaway here is if you go the rat or franchise and interview all of your suitors, study them or research them, and really, really know and try to understand who the best potential partner is, same with distribution. If you can find somebody to help you with distribution, I mean, you should go back and listen to our story about Kava, because that could be really helpful. They also distribute their dips and spreads, and that was a whole business that started before they franchised.
So, my takeaway is really think deeply and carefully about who that partner is. Jennifer Ballon, badass bagels. Good luck. Thanks so much. Thanks that doesn't unhope to see you both soon. Thank you guys. Best of us too. Take care. All right. Okay. This is exciting. We may have, we may be at the cusp of a bagel empire, a new bagel empire. The next Einstein. I like it. Bagel, so I don't, I don't want to say Einstein. I don't think they do sourdough.
Yeah, that's a different, but anyway, it's an airport bagel. Okay. We're going to take a quick break, but when we come back, we're going to take another call and answer some more questions. Stay with us. I'm Guy Ross, and you're listening to The Advice Line on how I built this lab. The service state farm provides to small businesses is best described by their brand promise. Like a good neighbor, state farm is there.
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Hey, welcome back to the advice line here on how I built this lab. I'm Guy Roz. Today, we're talking about when to scale up and how to build the right partnerships. One of the things I remember when you were on the show was that you were contacted by Trader Joe. It was pretty early on in Chomps Lifecycle. Initially, you said no, right? Yeah, we can't support that type of growth. It was more so around the specific ask.
They wanted us to do a private label product line from, which would have been a huge undertaking for a small team like ours. It was just me and Rashid working full time. It was hard enough to manage one brand. As a private label brand, you're essentially adding another brand to the umbrella. I mean, a pretty bold decision at the time because it would have been a lot of cash coming in.
It would have been a nice revenue stream. But at the same time, you wouldn't be able to focus on building the chart. It's on building the Chomps brand, which of course today is available at Trader Joe's as Chomps, not as a white labeled meat stick. Yeah, and being a branded item at Trader Joe's, whether it's a private label shop, that's a big deal for us. There are millions of shoppers that shop there all the time.
All right, let's bring on our next caller. I think we have Brandy on the line. Hello, Brandy. Hey there. Hello, Brandy. Welcome. Introduce yourself. Tell us your first and last name. What's your business and where you where you live? Yes. My name is Brandy Shelton. And I'm the founder and co-owner of just add honey tea company. A thoughtfully blended lucid tea company here in Atlanta, Georgia. Amazing. Okay. And what's the question you brought for a P today?
Yeah, so we've been in business now 17 years, which started as a professional hobby is now a retail facility, a production facility. We just opened a Zinc garden. We sell online. We have some small mom and pop shops at sell our teas around the US. And now we're looking to get into big box. And now it's like, all right, how do we move into this without losing our shirt? Because I'm not getting any younger. Yeah, how do you get into big box?
Okay, we're going to get into that. Let's find a little bit more about just add honey. You started this, I think back in 2006, tell me about what were you doing at the time and how did you get into the tea business? Yeah, I've worn several professional hats. My last one in 2006, I was a wardrobe and prop stylists for print ads, advertising commercials. And it's either in a ramen noodles or steak. So during the ramen noodle times, I would create and make kind of during the DIY phase.
And the Etsy and all of those companies came around. And so I would always make things, but I always found myself holding a cup. It grounded me, it centered me and there was so many different combinations you can do to a cup of tea and solid gave it away actually as gifts to friends and family. And then somebody asked to buy some and I was like, oh, wait a minute, I have a business. And that's literally how it's started.
Yeah, it's how I started. I started doing farmers markets and festivals, open a brick and mortar about 10 years ago and just kind of evolved from there. I say co founder because my husband joined the company about eight years ago. Now our 15 year old is an employee and we have 38 employees. Amazing. It's still fun. And I just want to keep that train going.
I'm looking at your website and see that you a little bit about you here says you're born in New Orleans and you grew up drinking tea because every time you were sick, your grandma had a tea for whatever was ailing you. Yeah, I mean, I call coffee the one hit wonder because you know exactly where it's going to take you. But with tea, it has so many like in uses like if you're not feeling well, have a cup of tea.
If you're feeling great and you want to keep going, have a cup of tea into the evening, have a cup of tea. So I love that she has all of these wonderful endless possibilities. And so we try and do that whether it's somewhere that you traveled far away or if it's a memory of with your grandmother like myself or if it's just some while and crazy concoction that we do like with our teas of the month every month, we create something fun and crazy.
All right, so now you've been in business for a while, you've got a brick and mortar and you've got a deep, D to see business here, you can order direct online. Now you're looking to get into the big time you want to be in the targets and wallmarts and the croggers of America, is that fair to say? Absolutely, want to be the first nationally, so black owned tea company in the US. And I just like I said, I really, really love it.
I mean, nobody does something for 17 years and less than love it or they're crazy or a little bit of bone. All right, Pete, what's your take? Brandy, nice to meet you. Yeah, love here in the story here. Looks like there's a lot of passion behind this. So I guess a couple questions for you. I see here a lot of the packaging and I love actually the way that you're breaking things up by functionality. So like get up and go and then you have your wellness tea, sip and relax.
So from a branding perspective, how are you planning to lead with these things in retail? Because when someone looks at the packaging on a shelf, they know immediately what is going to do for me and why should I buy this? Can you talk a little bit about that? Like what, what did you do when you created this packaging to thinking about retail?
Yes, I use the farmers market as our experimentation with that. All of our jars and our stores and at our farmers markets are in clear containers because people shop with their eyes. So if you go on a lot of retail shelves, you'll see stainless steel tints. So we still offer that with a wrap around edge, but the window on top is clear. So you can see the tea and you know exactly what you're going to enjoy. And so that's our tints that have a longer shelf life.
Our quick grab and go, we just updated it for this big box push that we're doing where it has this really fun hexagon window that's on front and back. So it's bright orange and yellow, which feels fresh. It feels sophisticated and fun. And then that hexagon that kind of sticks with our branding is clear on either side. So you still get to see that with each grab and go back, which is a lower price point to kind of entry rate into those stores.
Awesome. You're thinking about a lot of the right things, which is great to hear. And I love that you're taking feedback that you're learning. You're hearing from the farmers markets and taking that and letting that inform some of other decisions from a scalability standpoint.
How is this a co packer model or it sounds like you're blending a lot of this yourself. Are you yourself manufacturing. Yes, we I travel a couple of times a year. I try and work with as many small growers around the world as possible, whether that's India, Kenya, Sri Lanka, China, Japan. And so it works now because we're just doing a couple of hundred thousand kilos a year in tea. I know as we grow.
I will have to work with a trade organization and or kind of a middle man to help us with that scalability. But China's stay as close to the ground as possible for that week to cut process. But yeah, we still do everything in house. We have machinery. We have equipment where we are packing for consistency. But it is still us and me doing it all. Is this equipment and the facility that you have and the labor that you have right now.
Is that enough to support a big box retailer. Candidly, it's not, but we do know how to get there. We have the equipment lined up to grow. We're prepared for that. It's just one of those things. You know, the chicken or the egg who goes first. Yeah. You know, I wonder, Brandy, have you guys and you may have done this. Have you approached Whole Foods locally? Yeah.
The reason why I ask is because Whole Foods is a company that is interested in local brands. They are really open. The regional buyers are really open to bringing on local brands. They have great testing ground. You start with a few stores and sample the product and build it out from there and focus on getting national distribution. It's a great launching pad to get to the targets and the croggers and the other places we've seen this with other brands on the show.
And that's why Whole Foods comes to mind because it is a pretty innovative company when it comes to being open peep you guys I know you're at you guys are at at Whole Foods. I'm pretty sure right? Yeah, we're at Whole Foods and most most retailers nowadays and I think you know God, it's a great great idea too because starting small and regionally like that It's for one they're gonna they're gonna prioritize you guys and they actually have a nice end cap in a lot of stores that
Yeah, you know drive trial But what it's gonna do for you is let you see what the velocities might be so you can forecast If you know if I am successful here, and then I have a national rollout This is what it could potentially look like Brandy can I I want to give you some feedback on the branding side and on on what I'm seeing on your website because What you've told us here is not Clear on the website. I mean you're you're doing three four trips to Asia
To to source these T-leaves. I want to see you there. I want to see pictures of you at those T-farms I want to see I want to read more about that. That's incredible that you are sourcing that also There's something about the story of your grandmother and just the warmth of a hot cup of tea that I feel needs to be told
Somehow on the bag in a small way. I don't know if you're doing that But I feel like that story about your grandma having different teablands Growing up in that environment in New Orleans is so powerful It's so much so that I part of me is like I wouldn't even consider having blends with I don't know some names Maybe your grandma's name, you know or just names that evoke your direct connection because you've got this double connection
You've got your grandma and growing up and then going to the the T-farms and sourcing the tea yourself I mean that is an incredible story and I want to see more of that up front I totally agree and we've got a brand video which is very prominently displayed on the website and we've got It's it's Rashida and I my co my co-founder and I at the farmers Pastures you know with with the animals, you know with the cows that they're raising and and we're out there
Shaking hands with people we're out there eating dinner with them and people love to see that they want to know where their food comes from And they also appreciate I think that the the relationship that you have with those suppliers as well Just for them to see that firsthand is amazing content and it makes them kind of fall in love with the brands a little more And then to guys guys point that that should be all over your website
You've got to tell that story because that's something that no one else could replicate no one else could take that from you Your grandmother's story grandma New Orleans. I mean are you kidding me totally onable totally differentiated and you know It's a crowded market obviously, right? So if you're going into big box like what is it that's gonna differentiate you guys?
It's creating that brand and that brand story around it and A real loyal following so yeah, I appreciate that we do it on social all the time Yeah, but you know because it's quick easy snippets but to have it on our website would be a great place for it to live and And on your bags put on your bags and on the bags I tell that just a little paragraph. It doesn't have to be a novel. Yeah, because she lived to be 96 and She was just just an amazing woman who was a great force in my life
So to pay homage to her. Yeah, I totally should I mean maybe there's even like a stylized photo of her that you would put on On it. I mean something anything like that. It's such a cool story. I'm Brandy my takeaway here is consider starting with Whole Foods and Just scaling from there because I think I mean you have so much experience obviously you're making a great premium product Now it's just a matter of okay
Let me take the next step and then it's like one sort of pretty big step and then one giant leap after that I would say you know with this type of product one of the other things when you go into retail Don't fall into the trap of trying to compete on price You are gonna be the little guy coming into the space lean into your story lean into the premium aspects of the products and Put a premium price on it because people won't have a problem paying for it as long as they you know
You're telling your story the right way. Yep, and Tee is the new wine Brandy. No one's drinking booze anymore Everyone wants to drink so they want the flavors. They want the terroir Well, thank you for spending your time with me the day. I really appreciate all the feedback Thanks Brandy good luck. We'll be following you. Thank you 96 she lived till 96 drinking tea. I mean that's a selling point right there. You want to live till 96 I was gonna say maybe there's a longevity tea that's
We're missing right? I have a single skew and you just roll that out everywhere. I'd buy that right now Right. I know I know and Tee is like a amazing Tee has amazing Impact on lowering like Glucose levels you got it all in tea exactly Hey, we're gonna take another quick break, but when we come back in just a moment We're gonna hear from our third and final caller stay with us
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It's worth the trip. That's the powerful backing of American Express terms apply learn more at American Express.com slash with MX Hey Welcome back to the advice line here on how I built this lab. I'm Guy Roz Pete let's we think should we take another call? Let's do it. All right. Who is on the line? I think it's it's Jake is this Jake. This is Jake. How are you?
Welcome Jake introduce yourself tell us the name of your business and where you from? Yeah, my name is Jake Meyer I own Annie Alaska Inc. I am from Alaska originally and we have a commercial salmon business out in Bristol Bay out in the bush And what's your question for Pete? Yeah, my big question is I'm trying to Take our salmon that we catch and go the direct to consumer route if I should I'm kind of exploring all the different options
We're in the baby stages. I just purchased this operation. I used to work for But the price for salmon is pretty volatile out in Alaska And so what I'm nervous about is putting all our life savings into this company and then if we get a bad price like we're probably gonna Lose a lot of the life we've tried to build so that's why I'm trying to go direct to consumer Get a little bit better margins and make the business a little more stable
Rather than just hope that there's a good price in this baby stage. We're pretty slim on cash We just invested in two boats for nets. I've tried a few different marketing strategies on Instagram and Facebook We've tried Google ads. We've tried really just try to get our Name out there at least here in Utah is where we live currently But my questions are like what's what's the best route to go in this baby stage?
Is it advertising should I approach grocery stores a lot of the stories that even you've told Pete have me kind of worried about even Talking to grocery stores or should I start there then go direct to consumer?
So you you're gonna be spending the summer because that's the season right for fit for fishing You're gonna be sending the summer you yourself presumably Fishing for salmon and instead of trying to sell it to distributors because it's there's less predictability You want to go D to see you want to go directly to consumers Ideally in Utah and sell to people there because you know that you can get better prices. Is that is that more or less right?
Yeah, that's correct and how did you come into this world? How did you do? I mean did you grow fishing like how did you come into to starting this business? Yeah, so I was born and raised small little town, Kenai, Alaska It's funny because I'm not a big fisherman Fishing to me is more of a job a lot of people died to go fish and For some reason go through a line out and wait for a fish, but to me it's a job. It's not my hobby of choice
I used to work for a good family friend. I was a deckhand and kind of got promoted to a captain and I'm making this small percentage on a decent operation where the owners didn't really do anything It was very hands-off and the last year in a month I made $40,000 But I was just the captain and the owners really I saw the potential of I don't I go buy this thing And I would love to be in their position because I was only making a small percentage and you can make enough for the entire year
easily in one season like you can you can if it's a good season you can crush you make hundreds of thousands of dollars, right? Yeah, the last year I was out there the operation in six it's about a six-week season But it pulled close to $350,000 net that's that's after expenses So that basically sets you up to so you don't have to really do you have to work for the rest of the year if it's a good season
Right, yeah, and then on a bad season like this last year it only made like maybe 40 or 50,000 dollars And so that's where the volatility of the prices really scares me so I'm excited for the happy years But I'm also I'm trying to prep for some storms and
DTC. Yeah Jake corrected it wrong it seems like you wanted to bring all the salmon to Utah and then distribute it at a At a site there, but I wonder is there a world where you would consider working with a third party fulfillment group to ship salmon and then and then to maybe expand the potential customer base from just Northern you know just Utah Because I keep thinking about butcher box so we had on the show But it sounds like you want you're you're gonna be fishing these salmon
You're gonna be cleaning them and and butchering them and you're gonna be flying them to Utah and then delivering them to people I mean that is an amazing That's amazing service. So you're really going for a very premium product, but to a relatively small customer base is that fair to say?
Yeah, and maybe that's why we're just focusing on Utah the one thing we do outsource is Felaing so there is a facility next to our operation that will filet it and they have their licenses to filet and things like that But then they'll give it back to us and then it's up to us. I mean who are we gonna sell it to so Pete if he wanted to go into grocery Let's say Well, how would he start so going to grocery is gonna be you know just networking right?
So it's gonna be walking into the grocery store and by the way the way I would start this is not going to the chains I would go to you know independent grocery stores first You're not gonna go to a big grocery chain and say hey, I want to take over all of your salmon
You know supply you're doing to show some track record. I think for any new item going to a grocery store They do want to see some sort of record of success So you've got to you got to show that and get people comfortable with that Few other things I would think about is how are you gonna be packaging this is it is gonna be in the lays I think I read somewhere that you keep the bones in is that normal or is that or these usually D bone because I don't I actually don't buy a lot of
Salmon quite honestly, so I just want to understand no there's bones you got to get pliers and pull them out He's got to eat your salmon Pete Well, I really need Pete is we need to make a salmon chumps Yeah, that would that would sell that so that that led me to another another question free is you know If selling the the salmon fillets if that is kind of a difficult An uphill battle is there some sort of value-ed product whether it's be can salmon or is it salmon jerky or some other format
That you can get into to go into grocery and help build a brand is that something to think about To get in front of people now one of the things that work for us the best is driving trial and driving trial means like sampling Like what can I do to get my product into people's mouths because that's what sells more chumps, right?
I think that's one of the things that you need to do I think it's really difficult to do that through a website So you getting out to are you doing the farmers markets and and getting in front of people and try the product first hand before Assume to buy so not yet an issue with farmers markets. It's right during our salmon season
So we're gone for most of them. We do have a farmer They're pretty popular here in Utah that they sell a lot of fruit and we have him on board He wants three thousand pounds to just sell out of his and that'll hopefully get the word out
We've given it out to everybody we know here in Utah and we've gotten a few orders from there We do have about five hundred pounds ordered But it was just this excitement on like Facebook marketplace was literally where 90% of the five hundred pounds came from and then it's just kind of died
But Jake you now have a few months before the season starts Right before you are actually in Bristol Bay or wherever you're gonna be Fishing for for the salmon you have to use this time to sell and sell and sell right and so I'm looking at your website I'm reading a little bit about you. I see that you were a missionary for the church of Jesus Christ of Latter-day Saints It would seem to me that the natural place to start is in your community, right? It is with the people you know
Emails ask them to email people. I'm sure you've done versions of this But you've got to do it again and again I mean you know this is a missionary. You got not gonna hundred doors before one person's gonna talk to you right?
So it's about persistence About going out there talking about your product and because it's your first year You've got to start with the people you know because it's next year that you're working on It's it's the repeat orders and the other people who are like wow are gonna get that amazing salmon, right?
Does that make sense? Yes a hundred percent and to be honest I also I did after I fish on this boat I went and did five years of door-to-door sales for solar out in California So I amazing and I could go knock doors if that's what it's gonna take But are there better routes to to get it off the ground? What if you can cut a deal with a local restaurant? What if you go to some local restaurants and say look?
I'm gonna bring the best salmon in the United States Here to Utah and I will you know, I will sell it to you for you know $12 a pound or something like that It's just just to see but but in exchange I want you on your menu to say you know this comes from any Alaska from Bristol Bay Something like that. Yeah, I've made a few phone calls there and of course probably not enough I just don't know should I go that route should I keep knocking those doors or which which way to go?
Knocking on doors is gonna be your best bet like hands down I mean if I could scale that with what I do I would do that all day long because I'm gonna get the sale man every time And I was to be honest with you someone actually knocked on my door yesterday selling meat and fish and my wife's like
Took his card and she's gonna call him and she's gonna order stuff so It works and it worked at our house so A few things here so you have a really cool story I was looking on the website just reading about the family the whole the whole family angle
Where you started the fact that you like knocked on doors to go raising enough money to start this business is also really cool I think you have you have a gold mine of various types of content that you should be putting out getting out there getting footage of you guys actually Catching the fish
People want to find out you know they want to know where the product came from this is not cost a lot of money You could use your iPhone put it on you know your social media channels get it on TikTok get it on Instagram I think you had to start telling your story Even if you've got ten followers
People you've got the benefits of wild salmon on your website, but shout it from the rafters go just use your iPhone Go walk around wherever you are if you're in Alaska and you tonsay wild salmon is different than farm salmon You know farm salmon's not the same thing and you only get fresh wild salmon
These months of the year and I can get it to you. Here's what's amazing about wild salmon Yeah, Jake I think you leaning into recipes and cooking if you could work with some chefs Or if maybe if your wife or you were a good cook get started doing that show people how to use the product
I would probably leverage it people getting exciting about the product being delivered to them or just again Reviews like people eating their dinner and enjoying your product and just have them talking to the camera saying this is amazing You should order it what you're talking about is exactly what you should be focused on Jake Which is setting yourself up for year two year one It's gonna be all about knocking on doors talking to people getting people restaurants whoever you can't order
But year two it's getting those people who ordered to do exactly what Pete is saying to write reviews to post them on the website You know have photos of what you're doing recipes I mean you can take one of your salmon you know salmon tails and make grovelocks right salt sugar some dill You wrap that thing up and slice it then you know how delicious that is right?
Yeah, of course now and we're our biggest consumer as if now we eat it all the time. I super believe in it Jake do you have content from you guys fishing? Yeah, it's just not professional and my wife and I were both trying to market it And I'm the guy that I just want to push it push it push it push it push it and she's kind of the one that's like no that That doesn't look good that doesn't look professional
Just get pushed that out. Just put it out. That's it I think if you could just tell your family your your story Exactly as is what's on the website tell that to the camera talk talk to it make a 30-second video and get every everybody You can to share it now giving up for this season
Um, I think if you spend a couple days working on that you can even it doesn't have to be the best in the content The quality of the video do not even worry about that because people totally get up All right Jake my takeaway for you is
Knock knock knock sell sell sell go out there now and start thinking about building your customer base for next season This first season is gonna be a little harder But you got to go out there and you've got to pound the pavement and you've just got to make the sale You know how to do it clearly so you got to start over and do that Pete
I'm fired up by this. I think you're you're on to something big here I think you've I commend you for pivoting the way you have and doing all the things that you've done to get to this point But don't stop now because you used to kick indoors and I think you need to do it again exactly what guy said That's your big opportunity You go shaking hands with people and telling them what you're working on and they're gonna want to support you
Jake Meyer any Alaska could luck will be following you. Thanks so much. I'll be knocking doors And I really want to eat some grovelocks right now. I can't you're like a paleo guy Can't believe you don't eat salmon. I don't you know. I don't eat any fish if I don't catch it And there's no salmon down. Yeah, so I've explored us to warm. Yeah, Tana Mahi a grouper a
Snapper smoke salmon. I've had I've had a front of mine made that was amazing So if I could replicate that I would do it all right come to my house you all my supposed salmon next time you're up here in the Bay area Awesome, I'm then Pete. We've had bagels and salmon and tea
I mean, I love it. I mean this is what I love about our show is that you know Not everyone who listens to not is an entrepreneur or has a business But a lot of people do and they're trying to I mean you were there you were there not that long ago trying to figure out all right How do we get this?
Meat stick into one store and then five stores and then to five thousand stores Exactly again, it's a spin Bold and getting out and doing things that other people won't and I think that's the name of the game And you're gonna get nose. I think that's the biggest thing you'll hear more nose than yeses And I was I preach this everywhere I go, but it's about being resilient set your eyes on the prize set your vision and do not break it
Just keep going. Yeah By the way if you guys haven't heard the chomp's episode it is so good It's full of the best kinds of things that we love on our show failure setbacks You know crises disasters and then this incredible success story
So to check it out and thank you for listening to the show this week if you are working on a business and you would like some advice You want to be on the show send us a one minute message that tells us about your business and the issues or questions that you like help with and please
Make sure to tell us how to reach you can send us a voice memo at hibt at id.wondery.com or you can call 1-800-433-1298 and you can leave a message there and we'll also put all this info in the podcast description so you can see it on your smartphone Thanks for listening Pete. Thank you so much. Thank you for having me. Appreciate it And once again if you want to be on the show give us a call 1-800-433-1298 or send us a voice memo to hibt at id.wondery.com
This episode was produced by JC Howard with music composed by Ramtean Arableui. It was edited by John Isabella our audio engineer was Gilly Moon. Our production staff also includes Alex Chung, Carla Estevez, Casey Herman, Chris Messini, Elaine Coates, Catherine Cipher, Carrie Thompson, Malia Aguadello, Niva Grant and Sam Hulson. I'm Guy Ross and you've been listening to the advice line right here on how I built this lab.
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