🥛 CHRISTINA DORR DRAKE // WILLA'S OAT MILK FOUNDER

0:01I'm Sam Rose and this is Commerce's Chaos, the podcast where we talk about what really happens when you're scaling a consumer brand. No fluff, no fairy tales, just the hard real life moments that every founder faces. From inventory nightmares to PR wins gone wrong to that sinking feeling when your best-selling product just got knocked off, we're covering the chaos that comes with commerce. Because if you're building something real, you know it's never as clean as the highlight reel makes it look. Well, Christina, you've built Willow's Oat Milk from, speaking of far-reaching tech, you've built Willow's Oat Milk from this heritage recipe passed down by your grandmother, and I'd love to hear that story.

0:39And I love grandmothers. To incredible distribution nationwide in grocery stores and markets and, of course, direct-to-consumer. And I have lots of questions for you about like operational frameworks and big mistakes and packaging and all of that stuff. But before I jump into that, I want to set the stage with asking for just one systematic approach or process that you feel like changed your life forever after you put it in place. Like founder mode to scalable operations, even though you're sort of probably still in founder mode. Oh, my gosh, there are a million. And we're constantly trying to optimize our systems and processes.

1:23We're trying to integrate more, you know, all the new AI tools. Well, a really basic one that comes to mind, because in the early days, I think I was still thinking that I needed to like get to inbox zero or something like that. And I was doing so much sales outreach myself. I use superhuman I've been using it since like 2020 I'm sure there are better better tools that have come out since then but now I'm like addicted um and that has been life-changing and some you know some of my founder friends are like you spend like 60 a month on email it's like yeah do you like email yeah nobody likes email nobody is happy with email nobody's like this is a really good way for humans to work so i'm like whatever can make that less painful easier and help me to feel less like i'm missing something important like that has been huge and i have labels for investors i have labels for sales stuff um so yeah that and then you know if you have multiple inboxes from your business you can create up splits so you can see all of them so that that was like life-changing and I still don't think I'm probably using the platform to like I'm probably using like 10 % of its capacity you know because they keep adding all new integrations but for me that was huge and so now my co-founders use it people on our team use it especially the ones that are more you know doing selling and then other systems for the whole team especially I'm trying to think

3:04yeah I mean we are really obsessed with margin so we're constantly creating spreadsheets where we contingency plan and we put in a bunch of different scenarios like what if we can save a penny here what if we can save a penny here if we do a really big run how does that impact cash flow versus margins. Like we're constantly looking at those numbers and, um, you know, that can be really painstaking work. And sometimes you go down a rabbit hole and then you don't find gold at the end of it. And so, you know, that I think it can be kind of exhausting, but I think at the same time, uh, we're really proud that we've improved our contribution margins significantly year over year.

3:46We improved our gross margins, like 10 points year over year, just by optimizing our processes and, you know, finding, you know, synergistic opportunities with our vendors. And our team has been really creative around that. And so, yeah, I'm just really grateful for our team's work on all of that, honestly. That's incredible. I mean, and also the tirelessness that it takes to sort of, you know, run a calculation like that, knowing maybe, maybe we find gold at the end of the rainbow here. Maybe we don't, but if you don't have that, uh, it's, I think it's two things. It's, it's discipline and, and, and then just like complete, like infinite energy to stick into it.

4:36And those two things combined allow you to kind of like, you know, really optimize a business over time. And I so admire that approach. I think the temptation is to say, well, this is just what it is and I'm going to set it and forget it. And I'm going to move on to another task and perhaps a more appealing task, at least for a certain mindset and particularly like a certain founder mindset, like the fun things to do are like to create content, to tell stories, to write the newsletter and like just having the discipline and the energy to be in the weeds in a spreadsheet saying, where can I find a scent?

5:13Because that cent will scale like that is where it's at totally and same thing with cash flow management oh sorry right cut you off no no no you go i was gonna say same thing with cash flow management we've been really actually doing a ton of painstaking work around how we manage cash flow and how we manage you know invoice financing and um that too it could feel like the opposite of creative work you know but I think one of the things that I've learned from our ops team and just you know having been through our all kinds of ups and downs the last five years is when you look at a challenge it's like oh this is a big challenge we have to figure it out and you kind of like frame it as like this really intense obstacle that's going to be unfun it is not going to go the same way as if you look at it as an opportunity for creativity, like, okay, you're telling me that, you know, there's a shortage of coconut sugar.

6:10We're not going to find margin in coconut sugar. What if we try this? What if we try that? And just like trying to find the intersection between creativity and operations can make it so much more fun for everybody, you know, and allow people to come up with ideas that they might've been afraid to say otherwise, you know? So that's, that's been something that I've been seeing a lot just from our amazing team over the past year in particular. Well, and I think you touch on another really important point there too, which is that like numbers can be scary. Most of this is arithmetic though, really for a consumer brand.

6:50So it's like a mission of mine to, you know, just be one of the voices, not that I'm like particularly mathematical or anything, but like to be a voice of sort of demystification of it. Like these numbers are numbers that like, it's basic elementary school math. You can get comfortable with them. And when you get comfortable with them, you can start having fun. And if you, if you spread that feeling across an entire team, then you're right. Like they can, you know, it's like a beautiful mind moment. Like you can start playing in the numbers and start seeing things. And I remember there was like a tipping point for me as an operator where I just like, I started to be able to see things in a spreadsheet and make creative decisions from there.

7:33And it was so empowering and so freeing. It was like a whole other area of play. And it happened when I overcame my fear of like breaking a spreadsheet or getting a number wrong. Like, okay, maybe it's going to be wrong for a minute. But like the beautiful thing about like a number is that you can change it spreadsheet and uh yeah it i i think you unlock like a whole other level of gameplay when you get there yeah that resonates so much i mean i feel like fear for me has been like the constant battle forever for this whole journey and you know that like intimidation around numbers and breaking spreadsheets is real um and i think there's also like a lot of shoulds that come up you know there's a lot of voices in our industry that are like, you should have a 30 % contribution margin always, and you should do this, and you should do that.

8:24And if you're not doing this, you're doing it wrong. And I think those voices are like the least helpful when you're trying to solve a problem. It's like, you are where you are, the numbers are where they are. But you can, yeah, you can find ideas in that, you know? Yeah. Shifting the conversation a little, but, but I'm, I'm jumping off from exactly what you're saying. The power dynamics in creating and managing relationships with retailers always comes to mind in a moment like this, especially when we're talking about fear, because this was my lived experience. And I'm curious if you have a similar story, you know, at the very beginning, you're like, is anyone going to like me?

9:08Are they going to like my thing? Are they going to say yes? Are they going to take it? And like, those are financial make or breaks. They're also emotional make or breaks. And as you grow and scale, the power dynamic, it starts to shift a little bit. People want your thing and you get to sort of choose and maybe use numbers to help you choose who you're going to do business with. And I always found that fluctuation and it is a constant flux. It's not like one day you're in the driver's seat and everyone's just chasing you, or at least probably not. It wasn't for me. But in that moment of realizing that you maybe can choose the right relationships and the relationships that are not only going to be good for brand awareness, of course, and growth, but also profitable.

9:55Do you have like a way or a fallback in assessing retailers beyond just like, well, this is going to be a million dollar account, but is it going to be a profitable million dollar account? I'm curious to hear how you start to synthesize that, you know, problem. Yeah. I, I've always had a lot of anxiety around saying yes to business. And I think it's because my first job out of college was as a business analyst at Target. So I was like managing inventory for frozen food. It was not a good fit for me. After that, I went into advertising and strategy. I was like, this is not me. But I learned, I watched how, you know, frankly, there were businesses that went out of business because they put them on shelf and they didn't turn soon enough.

10:43And the, you know, merchant team wasn't able to be patient with a new brand. So that experience taught me like getting on the shelf. That's actually not the hard part. The hard part, the assignment starts when you're on the shelf. And we've deferred a lot of big business, a lot of big business that I think a lot of people would probably, you know, look at our history of that and be like, wow, you guys are crazy. What are you doing? But if you can't make money at it, if it means that you're just going to increasingly be in the red, and it means that if you look at the cash that you're actually going to make, if you're not actually going to get paid, you know, we know the KHN unifies of the world and how that works, then there's just a lot of things to look at.

11:27And I think each retailer has its own list of pros and cons. So one retailer, you might want a really strong margin from another one, you're like, oh, they pay really quickly. So the margin doesn't matter as much because I'm getting paid right away. But what we tend to look at is, is this a place where our target consumer shops? And do they have good marketing programs that are in alignment for our brand that are going to allow us to, you know, get in front of their guests and make sure that they know we exist and buy it easily. The margins, of course, are a huge thing. You know, our goal is always to have a 30 % contribution margin.

12:08If we launch a new product, usually that first run is not 30 % because we do a smaller run. It's kind of a test run, you know. But we make sure we actually have like a genuine path to get there. and then a distributor of relationships. So we're selling direct to Target, which is amazing. And Target has historically had really great programs for diverse and female founded brands. A lot of founders I know love Costco because they pay right away. We're now working with Rainforest on the East Coast for all of our independent grocers. We had been wanting and fighting to build that partnership for years before it finally happened this year.

12:55And now we're there. Well, this is their only plant based milk. And they're just an incredible partner in every way. So, yeah, for us, it's really is the target there. Do they have good marketing programs? What are the margins and cash flow look like? And then who's the distributor? But, you know, there's all kinds of nuances beyond that, too. Yeah, there's, you know, the infinite game. Like a limitless number of variables that go into all of these things. I want to talk about velocity as one of those variables, because you mentioned these new relationships. Do you have like a first 30, 60, 90 day velocity playbook?

13:37Are you looking for specific indicators in the early, early stages to tell you whether or not like that sample run is maybe going to turn into like a large, larger run? And now you've got to plan for cash flow. And then conversely, if it's not too scary to talk about what happens when it goes wrong and like it's going too slowly and you've got to scramble to like make things move. Yeah, I mean, my background is in strategy. So I'm obsessed with all kinds of consumer research. And I try to get it anywhere. Like I'm looking at those early customer reviews. I'm looking at the emails and the Instagram DMs from people who just found the product for the first time.

14:18I, you know, we launched these new kids products right around Expo West. So we got to sample hundreds, if not, you know, thousands of people and get real time feedback, including some nutritionists and dieticians and pediatricians who came by. And so, you know, I just, I try to consume all of that. And that's, those conversations also inform the margin conversations, right? Like, oh, this ingredient is really important to people. It may be really expensive, but it's important to us. It's important to our values and people appreciate it. And then I think with the velocities, you know, you're looking for those early signs, but I think you also have to be patient.

14:58You know, people need to see a brand many times before they buy it. It takes time, you know, if you're on target.com, for example, and you just launched, it takes time for that algorithm to figure out what works, you know? And so you're kind of, you're doing testing and learning. The way that we approached it is we did some small tests that were of bigger marketing programs that we wanted to do but we wanted to start small you know not blow our wad and then find out oh that that influencer doesn't really actually they're just not as their their their fans are not as interested in willis want to learn that early um those keywords on target.com are they working are they not working you know so it's just a constant like learning and retooling and then when things start to work then we double down but that that That does require a buyer that's got more patience than like the first couple of weeks of sales, you know.

15:55And that must impact your approach to product innovation, too. You just mentioned your new kids SKUs.

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16:48Christina Dorr Drake:Visit endlesscommerce.com. Mention the podcast when you reach out and get three months free. Because your op stack should be your competitive advantage, not your biggest headache. What are you looking for in a go-no-go for an investment of that magnitude to say, hey, we're going to go through a whole new skew or a whole new line as opposed to growing what we have. And that's got to be such a fun and constant trade-off. Yeah, it's like a combination of like intuition, research, little qualitative signals, and then testing and learning with our team because all of our products are created in-house.

17:28We have our own IP. So it all starts with our internal team. Each of our products have had a little bit of a different innovation story. The Willis Unsweetened Original was actually our second product. And it was just one that I felt like we had to make. even though I didn't have actually a lot of research at the time. And then it quickly became our top seller online because when people search for a healthier plant-based milk, it checks all the boxes and it tastes really good. And that's an unusual combination in our category. And then our chocolate oat milk was actually inspired by our fans. We were doing all these events at WeWorks.

18:05We were making matcha lattes or cocktails. People kept saying, my guilty pleasure at night is drinking chocolate milk. Would you guys ever do a chocolate milk? It was like really cute the first time. And then it was like every single event, somebody came over and said that. So we thought, okay, we have to make a chocolate milk. These kids products, pediatricians and parents have been dying to have us make a mini grab and go size kids milk for years. I didn't listen for a long time, to be honest, because I thought the margins weren't going to be strong enough. But after I had our Target broker, who was a fan of Willa's way before we started working with her, she told me that she packs Willa's Unsweetened Original in her suitcase on vacation because she's worried her daughter won't be able to drink anything else offered at restaurants.

18:52I was like, okay, maybe we should dig into this a little bit more. And then, you know, the buyer very quickly got behind it. And all of a sudden we were creating kids' milks that had as much protein and calcium as dairy, all from real ingredients, way less sugar, and that we had done rounds and rounds of testing with kids to make sure that kids 2 to 18 love the taste. And it just kind of came together. And now I actually feel like it's the most meaningful product we've ever made because kids who don't get calcium at a young age, who are vegan or dairy-free, are at a really high risk of osteoporosis later in life, which I didn't know.

19:31And then equally, most kids these days aren't getting the DHA they need for brain health. So we added that from a seaweed source that's really clean. So yeah, I just, I'm really excited about these products, not only because they're solving these big problems that no one else in the category has, but because they're so aligned with our values and our, our vision to create the healthiest products available to help clean up our food system and, and, you know, have a net positive impact, not net neutral, net positive impact on the health of people on the planet. Something that you said in there I want to pause on, which is that that was a decision that you got to make with your head and your heart.

20:10And I feel like some of the most powerful brands and powerful decisions within those brands really do combine those two things. Like you can't just look at the numbers. You got to listen to people. And if you listen to them long enough and they're loud enough, then it's like, oh my gosh, I just feel like this is the right time. And whether it's heart or gut or something in the middle of your body, you're like, okay, I will figure out a way to make it work with the numbers because I can tell in my gut that this is the right thing to do. And conversely, it's like, well, here's obviously a very high potential dollar opportunity.

20:50And I'm going to orchestrate the product development in a way that like, you know, fills so many like quiet, unspoken sometimes needs for customers. When you're doing your research, I'd love to know like what tools are you using? Either where you're sort of like outside listening, maybe things that you read, blogs that you point to for market trends or things that you subscribe to. And then of course, I know you have like a really big internal research team too that I'm sure is using like somewhere cool. We don't have a big internal research team, but we've gotten very scrappy.

21:35Big brains. We've gotten really scrappy with the resources that we can beg, borrow, and steal. So like I have, I found, I actually, he found me. Somebody from the New York Public Library reached out to me and I then asked him, hey, do you have like Mintel reports, Statista reports? Can't ever say that word. And he was like, oh yeah. And so I'm able to get all kinds of free research from the New York Public Library, which any of us can. Yeah. The library strikes again. I know. And it's all virtual. I've never met him in real life. We just email. I'll say, oh, could you send me this? Do you have that?

22:17So that's really helpful when you have an idea and you're like, this is a really great idea, but is this where the market's headed? Is this what people are looking for? Are there a lot of occasions and use cases? Is this a ritual or is this something somebody's going to drink every once in a while? So that's kind of where I combine like the intuition and the heart with the research. And then, you know, I try to encourage anyone on our team who's doing sampling at events or at stores to just be really curious. Like what questions are people asking? Really listen, like dig in I think it's really easy to be like I'm just selling but like that's a huge opportunity to just do a ton of qualitative research like you don't necessarily have to go pay to do an expensive focus group when you've already got people talking to people who are learning about the product for the first time um and then I think customer reviews I I think I think we all have a complicated relationship with Amazon reviews and DTC reviews because you get the most passionate people on both sides.

23:21And then sometimes you get, you know, someone who's like, the glass jar broke. And you're like, these aren't in glass jars. How did you, how, I don't understand. Like, I don't, you know, some of it's not helpful information, but I think sometimes you have to kind of put your ego aside. And if people are having the same complaint over and over, or they are saying they wish your product had something that it doesn't, that might be an opportunity for a new product or a change to a product as well, but you've got to, yeah, it's, it's, you know, it's triangulating all of these things. Um, and also trying to pull yourself away from your attachment to what you think it has to be.

23:59Yeah. Willingness to willingness to learn it. And it's such an interesting, uh, dichotomy is the right word to use here. Uh, like to be in teaching mode, I'm telling you about my product. I'm, I'm selling something, you know, you're sort of like in exposition mode and then also to be able to like really fluidly switch into ingestion mode, learning mode. I'm listening. I'm taking notes. I feel like that's one of the kind of cardinal values of a really great entrepreneur is just to be able to kind of like weave back and forth from that. They're really different head spaces. You know, I associate learning with like sitting, sitting upright in a chair and just like being spoken to.

24:46And the truth is, it is very kinetic when you're, when you're evangelizing or selling a product, it's like, you've got to be ready to switch from telling someone about, I don't know, the nutritional value of your thing to asking them a question about their preferences in like the space of a second. And I really admire founders like you that do it really, really well. Lots of practice, you know. Lots of practice. Yes, that is true. It can be a learned skill. I believe that. Let's talk about supply chain. And you've chosen, and I admire this too, oat milk. Seasonal ingredient sourcing, co-manufacturers probably, maybe many.

25:34cold chain logistics, like, uh, that's a lot. How, how did you make that bold choice? Um, and then also how did you de-risk it for yourself? Do you have sort of like a, okay, I'm going to look for these things for my vendors and these things in my good supplier relationships. And these are my criteria, like these are my have to haves when I'm going to work with someone who's going to help me bring this dream to life. Yeah. In the early days, you know, this really came down to the brilliance of my sister and co-founder Elena and Laura and their background in all things food and beverage manufacturing.

26:10That was not a world that I came from. Although I think, you know, I think most founders probably have the common sense to say I probably shouldn't get all my ingredients from one vendor, you know, put all my eggs in one basket. But yeah, we started with oat milk because it's, it really aligns with our values. You know, it's organic oats are a carbon sequester. They help reverse climate change. Most people aren't allergic to oats. So if you've got a nut allergy or a dairy allergy, you know, it's not an issue. They use way less water than any nuts. They've got protein and fiber, which are so important.

26:46So there are all these reasons. Plus, of course, my grandmother was making oat milk for us kids and grandkids, and we had her recipe. Now our newer products have more protein because we're also adding some really simple, clean organic pea protein. But, you know, when it came to the supply chain, we really, we redesigned the way that plant-based milk is made. You know, Willis uses the whole oat growth. We're the only ones. All of these co-manufacturers, millers, oat vendors were like, yeah, so obviously you're going to filter out the protein and the fiber, and then you're going to use the sugar, and then we'll have a landfill come and pick up the waste, and then you can process it to make it sweeter.

27:21Or you can just use our oat base, which is already pretty sweet. And we didn't want to do it that way. You know, we knew that that wasn't aligned with our values. We wanted to create something that wasn't super sweet, had, you know, a lower glycemic index, had the protein and the fiber, wasn't creating a bunch of food waste. And that also forced us to create a lot of relationships with different vendors and partners. So while that took a long time to do, it was for the best. It created a more stable business. And now we really own our whole supply chain. But we have been through the gauntlet. I mean, after we got through all the challenges of 2020, then it was like the worst oat crop in the U.S.

28:01going all the way back to the beginning of the record books, which is like the late 1800s. Yeah, because of all the fires. No, I'm in learning mode. Yeah, all the fires and droughts we had on the West Coast, you know, just like decimated the oat crops. And thankfully, this was a moment of luck in some ways. Willis was one of the only, if not the only, organic brands at the time. So we were able to garner organic oats from Estonia and Europe, which of course was more expensive. But it also kind of taught us that even if you have a supply chain issue like that, even if one of your ingredients goes through the roof in terms of cost, if you're constantly working on all the different angles around how you can improve your margins, you can still find margin improvements, even if that happens.

28:44So it was a really good learning because, you know, as we talk about tariffs or whatever is coming next, it kind of gave our team the confidence to say, okay, yeah, we've been through this. We're going to figure it out. And we've got all these different ways of tackling margin. And those ideas are fluid enough that we can change them and change course because, you know, we know what we control internally. And we know that we've got more, you know, backup vendors and suppliers and things like that. Yeah. You know, I think one of the things that is so risky about a business like yours is that the timeline of your supply chain is really short, right?