Blanco Niño: From Burrito Bar Detour to €10M Tortilla Chip Brand with Founder Phil Martin

0:00I literally jumped on a plane to Mexico thinking that I just go there and I'm sure I'll meet someone who can, you know, teach me the bits and pieces. The first thing I did when I arrived is I called this custom tour company and I was like, look, lads, I want to learn how to grow corn. And they're like, Mr. Martin, that is the weirdest request we've ever gotten.

0:24Phil Martin:If you love tortilla chips, you've probably come across Blanco Nino, an Irish challenger brand, which is really taking over the top of the range tortilla category. In this episode, I talk to Phil Martin, the founder of Blanco Nino, and we talk all about why he decided to build his factory and his brand and his products and the way in which he has. And let me tell you, you're probably going to be surprised. It is a totally different conversation from the one I expected and I'm really, really glad we had it. We talk about how he's gone about putting together a factory, his funding, how he sources his ingredients, how he's built his investment.

1:01Phil Martin:We talk about where the brand is now in the UK and where it's going next. And he's got incredible sense of clarity and thoughtfulness about his leadership and I think you're really going to enjoy it.

1:18Phil Martin:phil martin of blanco nino welcome to brand growth heroes how are you doing great great to be here it is just fab to have another irish challenger brand who is soaring at the moment i mean everybody in the uk is talking about blanco nino tortilla chips that's not actually a joke so how are you doing and tell us a little bit about um about the brand the business and how you started it off Blanco Nino, well, in short, we're a traditional tortilla based in the rolling hills of Tipperary there in Ireland. Obviously, Clomel and Tip, it's not historically the heartland of Mexican cuisine. More famous for its pints of Guinness and baked ham, but historically at least.

1:58Yeah, Blanco Nino really, it wasn't the original plan. I didn't set out to launch a tortilla day one. The original plan was a taqueria. Obviously, a taqueria serves tacos. And to make really good quality tacos, you need a really good quality corn tortilla. And no one was making good quality corn tortillas. It was not a thing. People didn't even really know what a corn tortilla was. And so rather than give up on the idea, I launched a burrito bar in Dublin. Because burritos, you use wheat tortillas. And then that was going really good, but I wasn't fully in it. It was my heart and soul wasn't in it.

2:40It kind of felt like the thing I was doing before I did the thing I wanted to do. It was like this kind of a side quest of a sort, let's say.

2:56Phil Martin:Welcome to Brand Growth Heroes, the leading podcast for the founders of Challenger grocery brands. I'm your host, Fiona Fitz. My 25 years at global giants such as Nestle and Challenger brands such as Goo Chocolate Puds, Chobani and Strong Roots, as well as coached to over 400 scaling brands, means I have the experience to ask the questions that truly matter and get you the insight that will inspire you to think differently and drive serious growth for your brand.

3:27Phil Martin:where did you experience that the real like tortillas how did you know that you wanted to to do this i'm assuming you were in mexico yeah yeah i was in california mexico 2009 uh initially you know and so yeah i had this really um tangible tactile kind of this is what it looks and tastes like the real deal and then I just couldn't get that product so I kind of abandoned in the short term the taqueria idea launched the burrito bar and then after about a year running the burrito bar I was like surely these bloody corn to tears things can't be that difficult to make and my solution at the time was just to go and learn how to make them myself and this might all sound very linear and like step by step but it was quite far from it like I literally jumped on a plane to Mexico thinking that I just go there and I'm sure I'll meet someone who can you know teach me the bits and pieces the first thing I did when I arrived is I called this custom tour company and I was like look lads I really want to learn how to grow corn my thinking was to start in the field and work forward I want to learn how to grow corn and they're like Mr Martin that is the weirdest request we've ever gotten um for a custom tour so but let's give it a go um so went out to this amazing farm just outside mexico city well between mexico city and puebla um yeah learned all about the kind of the the way of growing um corn in this mexican tradition known as or practice or methodology known as the mill pest system and then went from there basically to the uh the mills where i learned to cook and grind the corn even like how to carve the stones for grinding the corn and then through yeah and then through to like the tortilla factories and how long were you here doing this for at the time it was i was three weeks three four weeks so yeah it was a lot of fun uh and it was always like just the next thing or whatever i was doing led to the next thing you know it didn't um it wasn't this you know master plan at the time it was just trying to figure out how to make corn tortillas for the restaurant but then i came back and i was like okay this is not going to be a case of sticking a lot of corn in a pot and hay presto tacos you know i'm going to need to launch a tortilla factory to make the corn tortillas for the taco taqueria and then i was kind of going down that street and realized like the cost of getting the building and hiring the teams and all the different equipment and it quickly became this much bigger plan and it became this really exciting plan and felt like it could be its own thing and its own separate entirely from the idea of Attack Area.

6:14But yeah, I quickly realized that it would probably be good to make sure that this customer is beyond Phil for this product that we're going to build a factory. It'd be great to get some people who are trained and expert in running manufacturing companies to join the team. And it would be, we needed like a bag of cash that we did not have to launch the factory. So I launched what was Ireland's then most successful ever crowdfunding campaign, raised more than double what I was initially seeking to raise, ended up being probably about 20 % of what I needed. Everything I could have went wrong, went wrong.

6:51um like the initial equipment for making the tortillas i like quoted at 25 grand and um the main oven the quote was you know correct and whatnot but turned out that like when i was looking to you know see what the duty would be and how to get into ireland the i got this engineering company just to look over it and they're like feel like you cannot bring this bloody thing into ireland like this is the equivalent of like a blowtorch attached to a tractor because if anything happens you know to this to anyone working on this line like you'd be held personally, you know, responsible and whatever else.

7:24So, but it was all the equipment the guys in Mexico used. So I never thought that there was going to be an issue, you know, CE rules and whatnot. And it's, I should say that it's all very valid.

7:34Phil Martin:So did you get it in or did you have to change tack? Completely change tack. We had to end up buying equipment from a company in California. It took about, or took a lot longer, obviously, to kind of re-figure it out. and then it costs, like it went from costing 25 ,000 to like just short of 200 ,000 for effectively the same equipment in terms of output. And even that equipment, like versus now what we're putting into the factory is like, it's a clay stuff, you know. The new line that's going in is it's a 7 million investment in the new production equipment. And what kind of capacity can you get out of that line?

8:15Well, it's bringing, say, we make a range of products, but it's bringing the annual tortilla chip production capacity from like 2 million to 20 million bags in this stint. And there's another investment track for next year that's kicking in again that will kind of release the next set of bottlenecks and so on in the factory.

8:36Phil Martin:A huge barrier to entry that you're creating, basically. You've identified this really clear market niche. Nobody is answering it. And I think you're going to tell us that it has taken you 10 years to get here. But you're now positioned up to be the leaders in this in Europe because you've got the equipment, you've got the know-how, you've got the team, you've got the wholesaler distribution agreements. It's interesting because I have an absolute legend of an operations director who is now with us, I think, four years. A year into the role, I brought him over to the US just to meet other manufacturing companies and meet the equipment suppliers and just build his level of awareness of, I guess, the ecosystem and how different people do different things.

9:22And on the way over, I was like, look, Jer, we're going to get told by so many people that the way we're doing it is fucking mad. Excuse my language. And they're wrong. the thing is like most and this is the benefit of like learning things the hard way as the way I'm going to explain it to the team is that say for example you're walking towards a cliff edge right and you've got a blindfold on and you know the cliff is over there because if you're if you have a blindfold on you're not going to take any step forward because you don't know if you're going to fall off the edge whereas if you don't have a blindfold on you can walk right to the edge of the cliff and be sure enough that you won't fall off because you know where you are.

10:03The difference between knowing where things fail and where they don't means that you can go right to the edge. So when you know all the points of failure in the process and in the product, it means you can push things to the highest possible point of quality without them breaking. And that's kind of the benefit of knowing how to do everything wrong. Now, we've done an awful lot of it uh a lot of things were on but that's the even when we started off with the equipment at day one like the equipment was still like entry-level equipment relative to the big boys so like whether it be the recipes or like the the process we like trialed um tried every different way of doing it and it just meant that we've ended up with a really really unique product the highest possible quality point that we can create because we were always just trying to make it better.

10:53I was just trying and failing all the time to make it better.

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12:43Phil Martin:Huge thanks to Brand Growth Heroes podcast sponsors, Jolson. Now let's get back to the show.

12:51Phil Martin:If another tortilla company, you know, wants to get into this market opportunity and they said, right, well, I'm just going to import the chips and put them into my own branding and packaging. You know, I'll get them from California. I'll get them from Mexico. I'm sure that's crossed your mind. You could have done that. instead you've chosen to have complete control over the product quality on balance are you glad you did that uh 100 100 i know i've been to most of these factories um that make you know product um of varying kind of quality and like people can't it's very difficult to do what we're doing that might sound like we're being you know really patting ourselves on the back but there's there's so much layered up understandings and there's it's interesting because you look at you look at a lot of companies that are out there they tend to fall into two categories you have these like hyper efficient organizations that is you know manufacturing excellence to its highest degree but it's it's it's optimizing for efficiency and it's not optimizing necessarily for quality now they may say that but it's generally the optimizing is towards efficiency whereas and then you have this much smaller guys who are like tiny operators who are mom and pop operations really who are producing really high quality of stuff but there's very little repeatability and you know sophisticated distribution and marketing and so on and so we're we're kind of um in a middle ground and that like you know we've put an extraordinary amount of time and attention into creating the highest possible quality product to the point whereby which may sound excessive but like you know it takes three days to make our product whereas most you know tortilla chips in the market you know they wouldn't take any more than maybe half an hour to make because they're it's a rehydrating of like corn flour whereas we're bringing the corn in from the Americas it's getting cooked for a set amount of time it's then getting rested overnight for 16 hours it's then getting a volcanic stone ground and then made it into tortillas the tortillas are then left to rest overnight to equilibrate before being like you know cut and lightly fried what does equilibrate mean uh basically chill out relax you know okay you want the moisture content of the tortilla to be at a certain level um to kind of get a certain amount of bubbling and the temperature to be a certain temperature so that you don't have too much bubbling or not not enough bubbling so there's all these like little things the whole way down the process.

15:16That if you didn't rest the right amount of time, the flavor would be quite different. If you didn't equilibrate the tortillas, the texture would be different. So all of these things compound to create the product.

15:31Phil Martin:I love this. All the founders I'm working with who have a co-manufacturing setup, they don't necessarily have the answers to the questions such as how do you make the tortilla more crunchy? Not that I work with any tortilla founders, But, you know, how do you make the product more crunchy? How do you make it last longer? What's the water content? They wouldn't necessarily know the answers to these questions because they haven't got into the detail of it in the same way that you have. And so it's such a strength, isn't it? Let's talk about the brand, because I know that I could talk about products and manufacturing lines all day, but I know that lots of the founders out there will want to know, how did you come up with the brand?

16:04Phil Martin:And at what point did Blanco Nino become a bigger brand than the restaurant? Well, I sold the restaurant in 2018. The Black Neer brand, I guess it was quickly became like a bigger thing than the restaurant. Yeah, and it was also quite a different thing altogether than the restaurant. But the retail brand only launched in 2020. So we had like five years of operating as a food service only business where we're selling to restaurants, you know, bars and hotels. So I guess it really became a brand, you know, in 2020 when people could see it on the shelf. Whereas up until that point, you know, we were a brand and we were very cohesive in how we spoke and very, yeah, very considered with like how we communicated with customers.

16:56Phil Martin:But you were a B2B brand? Yeah. Why did you start that way around? It comes back to actually just the manufacturing of the product. It's quite modular in that you cook corn, you grind corn, you bake tortillas, and then if you want to also fry them and package them, they're the next capital investments. But in the factory, you're walking around a factory and you have a piece of equipment that costs the amount of a semi-detached house. So just to raise the money and also prove credibility and traction and momentum, there's a kind of sequentialness to it. And look, there's certainly easier ways to do it.

17:36And it has been, it had been, you know, very challenging in the early years just to figure out all of these like manufacturing challenges. Because it wasn't like we had a population of, you know, tortilla makers or stone carvers that we could just call on to sort out certain things. Like, you know, I had to teach guys how to carve the stones. You know, we had to like learn how to run the equipment. Like, there's all of these tiny little things that you just never think about, like the tension in the wire on, like, the tortilla cutter. Like, you know, if it's too tight, it kind of breaks too off and it's too loose.

18:11It messes up the tortillas. But you're fecking around with these things for, like, so long before you actually get them to work. but when you do get them to work and you kind of compound up these learnings you know you can really you can really have like a domain expertise and push quality to where you know it can be and like i just i have no interest in doing things in a way that might you know maybe you can get commercial traction faster but like it's very very important that we do things that are really, I'm quite proud of and I think this is something I'm proud of where it kind of irks me if I see something that kind of feels like it could have been better but there's a shortcut taken That's amazing

18:57Phil Martin:If this episode is inspiring you to think about new ways that you can drive growth for your business don't forget to click follow or subscribe on your favourite podcast app and even leave a review, your small gesture has a big impact on me and my business and will be truly appreciated and so what size was the business when you were just in food service and wholesale what size was the business at that point oh um i'd say it was around the market maybe two million um pre-retail no go on and are you able to share where you are now we'll do 10 million this year that's amazing and that's that's revenue for you rather than market sales yeah exactly so you've got a hefty chunk of the, certainly leader in the Irish market, probably a good sized player in the tortilla market in the UK.

19:47Phil Martin:I mean, Old El Paso and those, who else is in that market? You'd have Doritos and you'd have Manamasa. Consider Doritos, do you? That's really funny. Well, I don't really think if you look at the occasion, you know, you could basically say anything from pita crisps through to carrot sticks, you know, any kind of snack. But I don't really spend too much time thinking about what the lads are doing. Anyone's doing really. I focus on ourselves. No, but I'm just interested that you could see your market that way. Of course, now that you say it, it's obvious. But in my head, you're like this amazing, like authentic Mexican tortilla chip.

20:23Phil Martin:And I would have said, yeah, the Maso, what are they called? The Mano Maso people? Mano Maso, yeah. Mano Maso. I love them as well. They've got gorgeous products as well. But I never really considered the Doritos, because I would never eat Doritos. But of course they are. Of course there's somebody else in the space? Yeah, well, if you when you go into your annual brand planning sessions with your, you know, the retail partners, they are comparing your performance and who your customer is versus, you know, our friends in Doritos, you know, it's, it is, it's the other player in the category. And now we happen to have a massive category, massive category incrementality.

21:06So we have a A lot of customers actually only are quite unique to ourselves or are unique to ourselves so that they're not even switching from Doritos. They're just, they're new customers.

21:15Phil Martin:That would be me because I would never eat a Dorito tortilla chip. I see it more like a crisp in the shape of a tortilla. Now, I mean, when I was younger, when I was a teenager, they came out first. That's how old I am. And it was like so exciting that there was these like things called tortilla chips that we'd seen on American TV shows, right? And back then I would have thought that they were tortillas. But over the years, you know, especially having spent some time in Mexico and the Yucatan as well, you know, you think, well, they're not tortilla chips. They're just like pretend tortilla chips.

21:42Phil Martin:They're like they're fake tortilla chips. I would never buy from that category. But if I saw you or the Maso guys, I would definitely pick those up instead of crisps because I feel like I'm eating real ingredients. I feel like I'm eating good quality corn and I love the earthy taste. You use regenerative corn, don't you? Yeah. Yeah. Talk to us about your supply chain. yeah the guys we work with in the us are uh regenerative farmers are certified farmers and then the guys we work with actually in spain as well they're using a lot of what would be described as regenerative practices um but they're not quite certified yet and we are going through this kind of um well they're not certified yet we are going through this process at the moment around like this this term regenerative farming has become a bit fucking waffly you know yeah i mean the guys at Wild Farm have the same issue because there isn't really any like agreed legal term.

22:37I kind of want to get away from it because I feel it's almost distracting. I come from a farm. I come from a farming background. And when I actually was starting the company, a big part of the excitement was potentially growing all the corn in Ireland because I was told very early days actually that corn was the perfect replacement crop for sugar beet. And anyone who's familiar with the history of the sugar beet industry in Ireland knows it was a bloody disaster when that industry shut down. So that felt really cool. It's like, okay, we can grow the corn. A lot of my family used to grow sugar beets so could grow their corn for the factory and so on.

23:11So I'm very familiar with the pains and pressures of farming. And I love the idea of integrating incentives into the supply chain to drive some of the... Behavours or choices. Yeah, so there's four things that I think matter, by my kind of assessment, and it's like bacterial composition, fungal composition, water retention, capacity, and earthworm density of soil. If you're improving those four measurables, everything is downstream of there. And a lot of these certification programs, they're handing over bloody Bibles to people. and I always, any system that has that many rules, I always, you know, have questions about.

24:00Like if I went to Fiona, right, and we agreed like, whatever the hell we were working on, we agreed, you know, 10 very sage, sensible rules and they all made sense. And then all of a sudden an 11th rule was introduced and it made no fucking sense. And you're like, what are we doing with that bloody thing? And the problem is what you find on a system basis is that the adherence to the first 10 starts to fall off because you have one stupid rule. So, like, I'll give you an example. We've got these amazing farmers that we work with over in Illinois in the U.S., a great bunch of lads, and they're all behind this, you know, the principles and objectives of this, like, regenerative move, like the idea of improving the soil, improving the quality of food, improving the health of people as a result of improved quality of food and soil health.

24:49They're all behind that. but then like they have say the certification one of them at least, I won't name any names now but that requires that they graze they have animals in the land for a certain amount of time in the year so I'm all for that because obviously animal husbandry if you're familiar with rejando farming it's very important for the health and quality of the soil how like the trampling of basically the soil is improved and the dung on the ground and so on But if you go to Illinois, there's no bloody fences as far as the eye can see. So then there's not these wild roaming herds of cows.

25:28So I knew that like, okay, a lot of these guys are signing up to a scheme and they can't, literally cannot adhere to one of the components of it. So you start going, okay, well, in the same way that Bruce Springsteen went in and looked for the blue M &Ms, he wasn't looking for the blue M &Ms because he was a cantankerous character and he wanted to basically catch people out. He knew that the second he'd walk into his dressing room and there was an absence of blue M &Ms, it meant that what else in the contract wasn't read. It was an indicator of how orderly his partner was and how on the ball he was.

26:07So anyway, you tend to like, these systems need a lot of work and there's a lot of room for improvement. And yeah, we've got a few really interesting things coming down the track around how we're going to try and incentivise basically the farmers we work with to make measurable improvements against those four metrics. And rather than trying to like work within an existing system, we're going to look at basically building our own that kind of serves our desired end.