🍞 ADAM HINER // CO-FOUNDER & CEO @ PACHA

0:00I'm Sam Rose, and you're tuning in to Commerce is Chaos, the podcast for consumer brand founders who know that building a business is messier than the highlight reel shows. Your supplier just missed their deadline, your top product is out of stock, and your competitors somehow launched the same thing at half the price. Sound familiar? Every week, we dive into the real problems that keep founders up at night, from inventory disasters to supply chain nightmares, because surviving the chaos is what separates brands that fail from brands that scale. Today, I'm joined by Adam Heiner. Adam co-founded the first organic hard kombucha brand, scaled up past 15 million, and then walked away from operations to build Pot Chef, an organic sprouted buckwheat bread company, taking on the gluten-free aisle.

0:41Bread, the equivalent of firefighting in bread production. What is the, okay, now this is the podcast. We're starting right here. Hi, I'm Sam. And I would like to know what the equivalent of firefighting is in bread production. In fact, I'm not sure I can go another minute without knowing. uh it was just there was some stuff happening with some our tortilla um equipment and there was uh there were some people here to pick up there was just like a lot of things happening all at once there were some people here to pick up we just started working with this company called plastic beach yeah for plastic plastic film recycling because otherwise it gets thrown in the trash and so that that guy showed up and he didn't really know what was going on he was dropping off our bins but then picking up stuff he wasn't sure what was happening and yeah i was the only person that was available that knew what was going on.

1:27So I was kind of like running between two or three days. Literally firebiting. Yeah. Nothing. But mission accomplished. You did it. Accomplished. Yeah. Are there worse fires? That just sounds like commerce chaos to me. That's pretty normal. I don't do that every time, but sometimes. Worse fires would be like an equipment, something critical breaks down and all of a sudden our production is just at a halt and we have 18 people standing on the floor with their hands in their pockets, like waiting for something to do. So that would be more of a real fire. Yeah. From my life as in 3PL ops, like in factory ops, that is the worst nightmare, right?

2:12You're like, all of these people are waiting on this one thing to get unblocked. And it's like, it could be another human being. It could be a conveyor belt. Yeah. Actually, I could tell you the worst fire we've ever had. Yes. This is the content we want. is someone from our team who does like our, you know, organizes our products in the freezer and, you know, logistics and inventory. She bumped a sprinkler inside of our freezer with one of our pallets of frozen, like finished goods. It knocked the sprinkler head off. And then a fire hose amount of toxic black water that had been in the sprinkler lines for, you know, who knows how many years maybe 20 30 years or whatever like who knows when the last time that thing discharged was um started spraying all over our finished goods and we had to basically throw away almost all of our product in the freezer and we ended up with like a 200 000 insurance claim holy smokes you didn't just call that everything flavor everything but the bread uh no and i was on vacation and i like landed i was landing my We were touching down and I checked my phone and it was like popped up.

3:26It was like, you have 35 text messages. And I was like, all right, this is not good. So that's how I found out about it was like as I was landing on vacation. Yeah, I guess a thing that's not often enough discussed is how do sprinkler lines get cleaned out? We don't. We don't. Yeah. I guess if the building is literally on fire, The fact that you cleaned it with moldy water is probably the least of your worries, but still. It was gross. I mean, we had to hire a professional cleanup crew to come in and clean the freezer. I mean, that alone cost like 20 grand just to have them come in and clean the freezer.

4:06How long was production down for as a result? What did that do to your inventory? It knocked out a lot of our inventory. I mean, the insurance covered everything. and then of course they subsequently dropped us from insurance coverage at the end of the term. But yeah, it didn't damage production because we were able to keep making product. It wasn't in our production facility, it was in the freezer. So it was its own isolated thing and we had to rent a bunch of freezers that came to drop them off in the parking lot and we had to clear the parking lot and put all these freezers in the parking lot.

4:41So I made logistics really hectic, but it didn't stop production. That's good. And we didn't miss any orders. We actually were able to keep up with all the orders. Oh, wicked. All right. Silver linings. Like, you're all right. Yeah. I feel like you're the type of friend that I would want to call in an emergency. You seem really good at dealing with horrible... What's going on here? I do get asked that a lot. Like, people are like, do you ever get, like, stressed out and, like, hectic? And I'm like, ah, I stay pretty calm most of the time. Yeah, still pretty calm. I think that that's probably like a common thread amongst multi-time entrepreneurs.

5:17Like it's one thing to say, I want to do this once. Anybody, you know, has the right to want to try it out. Right. And then there's another thing, like if you come back for more again and again, because it is so hard, one must assume that you're either really, really good at stress management or you just complete glutton for punishment or both. Yeah, a little bit of both. Um, okay. Speaking of which, and since we are just doing it, uh, you've, you've like done this a bunch. You've like been, you know, a startup founder four times. Uh, let's see. I don't want to date you, but we're not, we are going to count.

5:58The catering company, the restaurant, the acrobatics festival, Boochcraft and Pacha. That'd be technically be five times. That'd be fine. We did not have acrobatics company in our show notes. So I got to know more about this. Are you an acrobat? Yeah. Tell me more. Yeah. So I, I kind of just, you know, for fun, I started doing partner acrobatics and acroyoga and I just got really, really deep into it. I ended up taking a teacher training and then I partnered with the folks that put on that teacher training to put on some acro So Acrobatics Festival is called Acro Love Festival. And I ran that festival with those partners for about 10 or 12 years.

6:41And then actually just this year, this is the first year I finally told them, like, I can't do it anymore. I don't have the bandwidth. It was always just like a passion project. And it did support me financially through some of the years where I was like in between startups or starting a new thing. It was not getting paid and investing all my money into whatever it was I was doing. Like I actually lived off of that. for a few years. So it was, it was amazing. And I can still, you know, I'm still, my community, my like social community is still very much overlapping with the Acropatics community.

7:13So it's, it's a lot of fun. I feel like the danger of introducing a concept like this to a person like me is that now for the rest of our conversation, I'm going to want to say things like, did you have to jump through hoops to get that done? And I'm just really going to try hard. So I'll frame it a little bit. I'm mostly a partner acrobat, which means like if you go to Cirque du Soleil show, people balancing people on top of people. So people doing handstands in each other's hands, people standing in each other's hands, people throwing each other in the air and catching them, people swinging, you know, humans swinging humans and tossing them, things like that.

7:50You're the base of the pyramid. I'm actually the base and the flyer. They call me a mid. I do. I do both. I find really big guys to base me and I base people that are smaller. And I made sometimes, sometimes someone's basing me and I'm basing someone. It's like a three high towers, things like that. This sounds like a metaphor for company management if there ever was one. Right? Teamwork. It's all. But yeah, in all seriousness, are there things about running that business or being a partner in it that were transferable to you or particularly helpful in your catering business or the restaurant or the CPG businesses that you're running?

8:30Well, I launched the catering company first, and then I launched the restaurant and sold the restaurant. And right at the time when I was selling the restaurant was when I got into acrobatics. acrobatics. And, but my experience catering was immensely helpful in organizing acrobatics festivals because catering is way more complicated and way more like, you know, everything has to be on time when you're catering someone's wedding. When you're organizing workshops for a bunch of acrobat, like, you know, they're like, oh, cool. The workshop is 10 minutes late, like no big deal. So that was very transferable.

9:02And I was definitely the guy on the team that was very organized. I had all my spreadsheets. I was the admin side as well as other parts, but that was helpful for sure. What made you want to start Pacha? Pacha. Well, it was good, kind of perfect timing for me. I was slowly hiring myself out of my roles at Butchcraft and figured out my partner, Todd, had put in the land share of the capital and was leaning towards wanting to be the CEO. So, you know, he became the CEO and I was running basically like finance, marketing and sales at Butchcraft and also kind of helping with all other things too. So I hired myself out of those roles, like found a director or a VP level of kind of person in all of those roles.

10:01and then I just kind of quit the day-to-day there I was still doing impact so I was doing like all of our b-corp stuff I was helping with sourcing a little bit mostly just to make sure it lined up with our impact strategy in the b-corp and simultaneously I wasn't eating bread I was not eating gluten and I was avoiding most gluten-free products because they were just like all the substitute parts were just filled with a bunch of garbage and so I was just not eating those things. And I came across this bread recipe from a friend at a spiritual retreat up in Mount Shasta. And I just immediately fell in love with the recipe or like the product.

10:39And I was like, man, where can I get this? And he's like, oh, I make it at home. You know, I can make it for you. So I started buying it from him and his girlfriend who were making it together. And I became obsessed with it. And then they kind of like split up and they left town and he went down to South America and she went somewhere and I was like, and they weren't making the bread anymore. I was like, you guys, you can't stop. What's going on here? So I got the recipe from them and I started iterating it and just like making it for friends and making different versions of it. And then throughout that time, I just kept like emailing them or calling them and saying, hey, we should, like, if you guys want to start a bread company, like really do it.

11:20I'm here to support you. I'd be interested in investing. I'll get like X, Y, and Z. And they were kind of just like, no, we're doing, we're traveling or this and that. And they were kind of both doing their thing. And then the stars kind of just aligned. And the girl that was one of the partners had invested in this restaurant that was, they're really good friends of mine that on the restaurant concept and the, and the folks that own that restaurant and yoga space and event space wanted to partner and do the bread company together. And they were looking for an organic gluten-free bread for their restaurant because it was all organic.

11:53They're like, we can't find organic gluten-free bread anywhere. Like it doesn't exist. And that kind of like was the light bulb for me. I was like, what do you mean organic gluten-free bread doesn't exist? And so I searched the market and it was like, oh yeah, no one is making certified organic gluten-free bread in the entire country. Which is really surprising actually, because you would think that the audience that is identifying into both of those buying profiles is super high overlap. Yeah. I was surprised. And I was like, oh, okay, well, then this is a no-brainer. Let's do this. So we got together.

12:25We started, like, we had a few conversations about it. And, you know, within four months, we were, we had a kitchen. We were making bread. And did you, so you started at a community kitchen, but it sounds like from your stories now, you're pretty vertically integrated. Walk us through, like, that path of just, what were the stair steps of, I don't know, like building by building that you went through to get to where you are now? Yeah. So we started in, it was actually a really cool concept. These little 350 square foot kitchens. It was one big building and each company had their own kitchen. No one was sharing a kitchen with anybody, but they were all these little, you know, they were just a little room, but they were all health code, like ready to go.

13:04They had sprinklers and hoods and, you know, just bring your own ovens in there and bring your own refrigerator and like, you're ready to go. I poured everything in and start. Did you check the quality of the standing water in their sprinkler system at any point? I didn't. I hadn't busted a sprinkler head up in any way. I didn't know that that was the other thing. That can be like Adam's bucket list. Yeah. Every building it goes through. I did check the height of my pallets and the height of the sprinklers. And like that was, that's a thing. We adjusted the height of our freezer shelves after that.

13:34And so for sure. Oh, there you go. It's like another level of spatial awareness that you never lose. Yeah. You know, you never lose after that. I had like switch with despair every time she put a call away. That was actually what I could get affected. Um, so yeah, so those were pretty cool. Cause we got to have our own space. The idea of working in like a communal kitchen where there was like 30 companies in there and booking hours and stuff. It didn't really work for our flow. So we started there. We ended up writing two of those kitchens. We had like two of them side by side. We actually had a company right in between us.

14:04This is kind of a funny story. coyotes is a company that they make organic gluten-free tortillas they're kind of a direct competitor of ours now for our tortillas but they had a little kitchen right in between us and we had the two kitchens right on either side of them and we were like really good friends with them there was a couple other cool brands that we became friends with inside those kitchens and then i found this space that we're in now we were looking for a really long time we were thinking about building out a brand new space and we found this space which is 10 000 square feet in an 80 ,000 square foot building and the other 70 ,000 square feet is occupied by a Dunkin' Donuts manufacturer.

14:40Amazing. Quite the opposite. But they have actually, they're kind of our landlord now. They sublet to us. And they have also invested quite a bit of money into our company. And they saw the opportunity of like, hey, we are mostly invested in Dunkin' Donuts and Jimmy John's and some other stuff. And like, this seems like this is actually the future of where food is going. It's like a hedge. Yeah. It's like a CPG hedge. They gave us free rent for a long time as kind of an investment. And so that's been a good partnership and we're able to work well with them. And, you know, as we've grown, we've been able to take more space that they've carved out for us and stuff like that.

15:18So we have completely separate facilities. We're not like making donuts and pots of bread side by side, but you walk right out of our, you know, through a door and out of another door and you're, it's a bunch of Dunkin' Donuts in there. i mean i feel like a pacha donut sandwich is in your future at some point you can slide it grease floor like you can just do like the dirty dancing or like the risky business you can slide it all the way across the entire facility because of the grease on the floor i actually feel like a i feel like a pacha pacha donut sandwich would be the perfect like marathon food it's got like some basic simple carbs just like straight sugar to the veins Then there's like complex carbs on either side.

16:01This is like, you can take this to the masses. You could do a special release on one. Yeah, should consider it. I actually do wonder, that seems like the type of, you know, fun guerrilla partnership that would just be totally subversive and like shocking to everybody. However, it does not, it does not respect the gluten free. Yeah, we're pretty strict about like, you know, sequestering our gluten-free facility from their products, which is important. Do you find this, this is a left field question, but do you find that your customers are customers who are trying to buy gluten-free very, very specifically?

16:45Or have you kind of transcended some of that, you know, needs based to like, well, this is just damn delicious bread and like, I want it because it's so delicious. I think we have like probably, I mean, we probably have like three main buckets. We have our serious allergy, like celiac or other crazy allergies where they can't digest things or they have autoimmune stuff. We have like the folks that just really need our bread. They just can't digest other bread or they can't digest gluten. Then there's the folks that are maybe avoiding gluten or maybe they're kind of like your gluten light folks.

17:21And they're also kind of like your healthy label folks so they appreciate potha i think because we have a clean label it's all ingredients you can recognize it's organic kind of checks all their boxes but they probably also eat a slice of organic sourdough every now and again like i'm actually one of those people i'll eat organic sourdough you know when when it's really good it's you know on occasion um and then i think those folks there just generally eat our bread because it's delicious or because you know a friend shared it with them and they would have never bought our bread otherwise, but then they just became a big fan because of the taste.

17:56Yeah. And the function. Our English muffin is the, is the top selling gluten-free English muffin in the entire natural channel. So that's like Sprouts and every independent natural store and a lot of like small independent chains. So it's, you know, it's definitely transcended like the gluten allergy. It's definitely the top selling English muffin in my household too. And mine too. The kids love them. Like, we'll not eat other English muffins because they really like yours. The kids in our house call them circle toast. That's really cute. And then they call, like, glutinous, like, whatever bread.

18:32They call it squishy bread or, like, soft bread or something. I forget what they call it. When I was really little, my mom would make what I later found out. Some people call it toe in a hole or egg in a basket or, you know, like a bread with a circle cut out with an egg put in it. and my name for that was toasted bread on the stove and the more butter she used the more yeah it's so good when you saute pacho on like a cast of paper and butter it's so good yeah um i want to go back to something that you were sharing a little bit earlier in the conversation around sort of handing off these operational tasks and responsibilities back at uh back at bootcraft and And I'm curious when you felt in your gut or you could kind of, you know, see in data around the business, was the right time to hand things like that off?

19:26Was it you'd built a system that, you know, you could go on vacation and aside from like the sprinkler test, like would sort of run for a couple of days or a couple of weeks without you? Or was it more needs based for you of like, oh man, like I got to get out of doing this. So let me kind of build some infrastructure and then like train someone up on it. How did it feel to be in sort of that decision matrix? And maybe what were some of the signals that you were tuning into that told you it was the right time? Cards on the table. Your tech stack is held together with duct tape and prayers. If you're a brand founder or COO juggling Shopify, your 3PL portal, three different inventory trackers, and yes, that one crucial Google sheet, you know exactly what I'm talking about.

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20:51Yeah, at Bootcraft, there was a little bit of, there was a couple factors. One was that it was clear that Todd was moving towards the CEO role. And, you know, we were kind of like co-CEOs for a little while. We were both kind of wearing a bunch of hats. And then it was clear that he was moving into that CEO role. and I was wearing too many hats and things were falling through the cracks. I was doing the marketing, but was I really doing it as well as it could have been done if there was a real director of marketing focusing on it? I was doing the finance, but was it really getting handled in a way that would have been handled if we had a CFO?

21:27And then there was also a piece of me. I wasn't really drinking alcohol anymore. I wasn't as passionate about the company, mostly just because I wasn't drinking alcohol. I still loved what we were doing. And I was like leaning more towards the impact role because I felt like what we were doing on the impact side was felt really important to me still. So I was kind of handing off the other pieces and then moving myself towards kind of a part-time role because I wanted to explore what else, what maybe I would move into after that and still willing to hold that impact role because it was important.

22:02And I thought we were doing really important stuff there. So, um, and then, but then with Pacha, you know, the same thing has happened over time with Pacha. I started out wearing all of that. My wife, who co-founded the company with me, quickly took over marketing and she runs marketing. So that was a role that I haven't had to think about since early on, but I've had the, you know, operations, logistics, admin, finance, um, and sales kind of all into my purview. And so slowly as the need has arisen, I've handed those roles off. And now I'm actually mostly sitting as a CEO and really just doing a CEO role and having touch points with people that are really pulling those roles.

22:44So that feels really good. But that's kind of just been like, as budget all else, as need arises, you know, we get to the point with sales where it was like, this isn't really just working with just us and our broker anymore. Like the broker does okay, but I feel like I could be managing the broker better, but I don't have time to manage the broker better. And so I felt like we really needed someone that could interface with the broker and I could just interface with them. And that's been really, really impactful. And then same thing goes with finance and bringing on a contracted finance team.

23:22We have a lot of contracted people here. Sales, we have a contracted VP of sales. Finance, we have a contracted the cfo and a contracted bookkeeping and kind of finance team and so we outsource a lot of that we have um and then we have like in-house admin and we have in-house like my my director of operations is in-house as well and but you but you've kept production in-house of like the core so we have 20 people out there on the floor and my director of operations and he manages the logistics side and the production side and he comes with he just came on in january and he came with a lot of experience in this industry and before that we had a guy that was more of like you know like a restaurant management type of experience and was a little a little over his head as far as like experience and as we were growing we were starting to just like feel that and so it's been really um really amazing to have ramiro who's our operations manager on and that's been like a big weight off of my shoulders and I've been able to zoom out a little bit and focus on the big picture.

24:28Ops managers are heroes, man. I'm a good ops manager. It's interesting too, to watch you kind of build a complex business and just being in CPG period is complex. You've got regulatory concerns and then there's packaging, there's all the retailer compliance and, uh, but you've got two ingredients, which I find so appealing. Um, without giving away anything that you view as a trade secret, um, can you talk us through a little bit of what the production process looks like and maybe how much patience it takes to like, uh, you've done this a couple of times now, like work with a thing that requires fermentation and time and like nature to sort of run its course.

25:17And also there's a live aspect to it too, of like things could go wrong because there's a, there's, there's living things that have, have an impact on, on the final product. Um, so anything that you can share about just like, almost like the, the illustrated how it's made, uh, for, uh, for your original loaf would be right. Yeah. It's not really a big secret as far as how to make it. I mean, there's home, there's versions of the of the recipe online you know and in websites and whatnot and people all around the world are making some version of this bread it's pretty simple you basically just soak buckwheat in water and then you you know strain it and then you blend it with maybe a little bit more water and some salt and you let it sit out for you know um for overnight or eight hours or whatever and then you bake it so it's like it kind of becomes like a pancake batter consistency, pour it into a loaf pan and throw it in the oven and it comes out.

26:14So you get the soaking sprouting benefit, you get the fermentation from the wild yeast and bacteria, and then you bake it off. And so at face value and doing it at home, it's actually pretty simple. Building the process and figuring out what equipment could do that at scale has been really challenging. yeah and we are about to graduate from the version actually let's call it version two right now we're in kind of version two right now because we had a very manual low tech version and now we're in kind of like a medium tech still manual process and now we're about to move to a more automated process um and we had to bring in a bunch of equipment that wasn't necessarily built for this process, but it was a good fit for this process.

27:00And we've had to kind of piecemeal things. So no one else in the country in any manufacturing facility can make our product as it currently stands. It's not possible because they just don't have the right match. They don't have the right mix of equipment. You know, like a bread bakery is going to have a big dough mixer that has a big hook on it that mixes flour with water and mixed dough. We don't do that. We blend our, you know, buckwheat, we soak buckwheat and then blend it into like a batter. So soaking and sprouting was like a thing to figure out and then rinsing and then getting that into something that could blend it all in that kind of quantity and then getting that and fermenting it and then moving it into, you know, basically loaf pans from a batter consistency.