How Proper Good is Making the Soup Aisle Cool Again with Chris Jane

19:32Chris Jane:Okay, wow. So from that, Walmart then reached out, right? I'd imagine probably a handful of retailers, other retailers reached out too. Why did you decide, hey, let's try going mass and be our first big swing in retail, be mass and be with Walmart. Yeah, yeah. But I think to keep a very long story short, again, it wasn't an obvious decision. We did all the math and we sat down and said, look, now my previous experience, as most case studies we all read in this industry, are prove it locally, prove it in natural, eventually cross the chasm, fix the price pack architecture for mass, blah, blah, blah.

20:09Chris Jane:We all know this. That was honestly the end goal, right? The end goal was to get there. So we were like, huh, well, you know, We're a couple of years into business. We've got this, obviously, the world's largest retailer, the retailer that, what, 90 % of the country lives within 10 miles of it, I think is the math or whatever that note is. Why don't we explore it? So we went to Bentonville. We met with a number of layers of management and just went through it all of how could we de-risk this? Because obviously, a lot of times you launch in a retailer. If in 90 days, your velocities are not performing, you're in trouble, right?

20:41That's just a harsh reality of the industry. But it was really fun, honestly. we formed a really close sort of partnership and collaboration with them of like, look, we want to sort of reinvent this category, which is exactly what Proper Good was trying to do. And how can we do that together, knowing that we are a small business? And that was really unique. And I think I would really struggle to say a bad word about it. I think over the last three years, it's been a tremendous testing and learning ground for us, which may sound strange to think of Walmart as a testing and learning ground for a young emerging brand.

21:11But it worked. And I think we de-risked it along the way. We sat down with our board of just, look, we want to get here eventually. This is where we think it can work from a price point view, a contribution margin, et cetera. If we're going to try and do this in a few years, how do we feel about a big swing today instead? And what's interesting about it, for those who obviously work in this industry, is it's a direct ship usually to Walmart. It's a pretty clean margin, right? Because it's an everyday low-priced retailer. So there's not a ton of deductions. So you get to this world of, well, wait a minute, if we're going to launch in natural and go through a KHE or a UNFI, we're going to get different pricing, we're going to get different billbacks.

21:46So that's actually a different infrastructure. If we can actually just do one thing very well with Walmart, which is supply them at the rate they need to be supplied, right? There are fines related to obviously things if you're not shipping in full and so on. Let's just assume we can do that. What's the worst that can happen here? So we just decided it definitely took a few months. There were definitely some heated discussions. Some investors disagree, some don't, et cetera. But it got to the point of, you know what? you know don't buy the hand that feeds you type thing the world's largest retailer wants you to help them reinvent a category let's give it a go and that was kind of yeah i mean i think i think

22:19Chris Jane:what's also really interesting is you i feel like it also you know and i know that only very few brands are kind of in that position where hey walmart wants us do we kind of make this take the big swing now actually go go mass from the beginning or or very early on but it kind of also saves you time because i know that you you didn't want to build a brand that was just in the natural channel and crossing that chasm going from natural to mass like then you have to redo your pricing structure and everything although to be fair in natural like you do have a distributor then as well and a few more hoops.

23:00Chris Jane:So your pricing structure is, it's going to be higher, but at the same time, other people have to take more margin from it. So you do have that luxury of Walmart of kind of going direct. But at the same time, you don't know if that's going to work for that customer base. Whereas now, since that was kind of the goal the whole time was building a big business, going into mass, it kind of saves you time to see, hey, let's actually see if we can prove this right now as in versus the lane. Yep, that's exactly the right summary. And I think it's especially true, I would say of our sort of categories where again, they are just naturally lower velocity, right, that center store part of it.

23:36So you do need points of distribution to hit scale. So to your point about natural, I've only got a few friends, right, who have built sort of five, $7 million businesses in natural and then basically kind of plateaued because you've saturated that channel and they've realized they can actually make the price and margin work for mass or club or anything. And that's a really tough spot to be because you build like, you know, it's a great product. People love it. The data is good, but the data is good within a kind of a subset of the market. And it is obviously a much smaller part of the market.

24:03So yeah, we, we, to exactly your point, we were like, if, if it's not going to work, I'd kind of prefer to know it's not going to work early. And we're willing to take that risk and do all of that. But it was, it was by no means a done deal, right? If you're going to plant a flag and die on a hill, you do have to be prepared to die on that hill.

24:19Chris Jane:How did, how did the pricing structure that work in Walmart? And how are you thinking about it? I know that you were thinking about, okay, our products are going to be like five bucks a pop, right, for soups and everything. But then you have Campbell's selling at probably half that price or even less. How did you kind of approach that? Is that pretty nerve-wracking to be on the shelf against that product? Going up against that product and your product might be double the price? Yeah, and especially on a price per ounce basis, right? You get down to it. You're like, it's significantly more expensive, of course.

24:53And what was interesting to that exact kind of brand architecture, right? Are we trying to get people to trade up from Campbell's? Well, that's a tough ask, right? Especially with the economic position and so on and so forth. However, let's pull the data for that category. And you see, you know, most of the customers of that aisle are older and are lower income. That's just the demographic, right? That's the reality of that category. That's a real macro problem, right? It's a big category, right? Now, most retailers you speak to, well, they sell a lot of soup, right? It's a lot of soup, a lot of packaged meals.

25:24If it's naturally an older and lower income demographic, that is a problem that's only going to get worse over time. So the goal was less how do we trade up and cannibalize sort of the camel sales more. How can we make this aisle cool again and bring in a slightly younger customer, a slightly more affluent customer? And, you know, it's not crazy expensive. Obviously, it's still a$5,$6 meal. It's not$20. dollars. But it's, you know, let's say a lot of just to give you an example, a lot of our customers are nurses and teachers and just general office workers, right? You've got a decent salary, you've got a nice job, you're doing your thing, but you're not spending$20 every lunch on DoorDash, right?

25:59You're just not. So we are that customer. That customer also doesn't want to eat the canned brands, right? They don't want to open that up in their office break room. It's not aspirational, it's not exciting. So we kind of brought that younger customer in into the category. And that That was really the goal of how do they reinvent the category as opposed to how do we go head to head with the incumbents? Because obviously we're just not going to win.

26:24Chris Jane:How do you think about bringing that younger consumer into the category? I know that obviously you've built up at that point, you know, a large or a steady D2C business, especially with, you know, the Shark Tank, especially with the Shark Tank fame and all of the awareness that generated. How did you think when you launched into Walmart, oh, shoot, we got to bring these people into stores and make sure? and Walmart has been really innovative in a lot of different categories of bringing in better for you brands. But how do we make sure these people stop by the soups? Yeah, yeah. Man, that is the question.

27:02That is the question. That's the only question. It's funny, right? Because you get to the point of where we saw, you saw millions of meals online, you got tens of thousands of reviews, the repeat rate's good. Like, you know, fundamentally, there's something here that people like. But your point, you know, you go to the average Walmart, I don't know the number, but it's got to be 40, 50 ,000 different SKUs, right? Across 18 aisles or something, whatever that is. And you've got your little 12 inches on aisle seven on the bottom shelf or whatever it is. And you're like, okay, yeah, to your point, how do we get these people in there?

27:32Well, that is a really difficult question. That honestly doesn't have a point and shoot solution, right? There is no silver bullet to that. But I can give you a few examples of the journey from DTC to Walmart, which I think will illustrate. So DTC, our original packaging was very clear. It was like transparent, right? You could see the soup, had a lot of call-outs, a lot of keto, dairy-free, etc. We launched with that in Walmart. And what was interesting, it just didn't do super well initially until we did a rebrand, in that the DTC customer was actively hunting for what we call lifestyle-based solutions, right?

28:04Chris Jane:They were typing in dairy-free meals. They were typing in plant-based soups, whatever. The average customer that's just walking down the aisle that's going to make a quick decision on the fly is not looking for that. And actually, they may be turned off by that. We did a lot of research. We actually work a lot with the Walmart Data Ventures team, which is genuinely amazing. And that you can see, wait a minute, the more we highlighted those lifestyle attributes, the less people wanted it because it gets to that game of, you know, does a dairy-free, plant-based, low-sodium soup sound particularly tasty?

28:33Doesn't sound that great, right? Now, if you have that as a dietary need or a medical need, you know, fabulous, right? We solved your problem.

28:41Chris Jane:That's the only thing you look for. Right, we solved your problem. Yeah, that's the only thing you look for. Awesome. that works great dvc because you can funnel those people through click-through rates and landing pages and all the rest of it that in a return environment just didn't work at all it became polarizing almost too too healthy i would say which is funny so whilst keeping all the same ingredients we focused on what it is which is a you know it's a ready-to-eat soup with clean ingredients some you know low or no added sugar and it's just going to be a totally different positioning to the incumbents and so to your point like how do we then tell people about that in store, extremely difficult, right?

29:12I mean, the last data I saw on this was, what if you go to the grocery store, what, 85 % of your weekly spend is essentially repeat purchase, right? You say, buy the same butter every week, the same jam every week, the same milk every week. You maybe got 15, 20 % of that wallet share every week on stuff that you just may have not seen the week before. That's an extremely difficult thing to obviously capture, especially as an unknown brand, especially in a shelf-stable aisle. So it got to the stage of, to be honest, the pack price architecture has to do a lot of the work, right? We can send as many emails as we want.

29:45We can work with 1 ,000 micro-influencers. We can use all the platforms that exist. The reality is, Mike, if you're sat at home and I send you a Facebook ad for a free$5 meal, are you going to get out of your chair and go to Walmart and get it? No. Not a chance. I'd have to give you$500. You know what I mean? It's just not, even a free meal is not enough to change your behavior. But there are certain obviously platforms in store, there's the Walmart, Walmart Connect is an example, obviously for online, there's Ibotten things for in store, those things do work, and they do drive real volume, but they cost a lot of money.

30:17So then you have to obviously capitalize the business to say, look, like, there is a real challenge here that people love the products, we know we can solve a category problem through a younger, more affluent demographic. But there is a real awareness problem. And the way we are going to have to solve that through some marketing spend, there's just no other way to do that outside, of course celebrity and virality and some sort of outliers like that so what was then and maybe

30:41Chris Jane:this is more of a question for jennifer but then but then but what was then like the approach when it comes to marketing spend in order to because it's easy well not easy it's hard to get a walmart don't get me wrong but what i've heard is like getting in is the easy part if there is an easy part but stay on shelf that is yes that is that is everything that is a hard part so what was kind of the approach to stay on a shelf at Walmart. Yeah, so I would say marketing is a piece of it. But honestly, before all of that is the contract stage, right? And the discussion with the buyer. Again, I remember sitting in Bentonville with the super buyer at the time saying, look, like to your exact point, if you're going to comp me to the incumbents at six months in, we might as well not do this, right?

31:21We're not going to hit the velocity goal.

31:23Chris Jane:So meaning like what the expectations are for them. Exactly. We honestly, we laid out, I can't remember the numbers out, but it was like a five to seven year vision. It was like a five to seven years of reinventing a category. Because to your point, there is no realistic amount of money I could spend as a brand the size we were at the time that could possibly compete. We could show you all the shiny decks and all the influencers and pretend we can. But the reality is at that scale, right, in thousands of stores across 50 states, it's a giant amount of geography, a giant amount of income demographic changes.

31:55What can we do as a small team that's realistically going to drive people to that aisle? That's an extremely challenging question. So it was like, we will do all of these things, right? You put your marketing mix together and you show the money you're going to invest both within the four walls of the store, obviously within the programs that exist, and then sort of just general sort of brand awareness. But knowing that honestly, time on shelf, awareness, repeat rate, and just true collaboration of, this is a big category with a real challenge. This is how we're going to solve it. Like that might take a few years.

32:24That is honestly the most valuable thing. Because to your point, Otherwise, you just couldn't possibly do it. There's no way you could sort of match those velocities immediately.

32:33Chris Jane:How did you think about financing the business? Obviously, I know you added$3.5 million seed round. You then did raise another round as well. But how did you think about raising equity? Yeah, I think kind of at the very beginning of the call, I think it's so easy to start a food and beverage brand today, right? Like you literally do it for a few hundred dollars at a farmer's market, mock-ups and packaging. Like it's so easy. And at true scale, it works. So you see these public P &Ls, like there's real margin at true scale. That middle ground is just capital intensive. It is. Now, some categories, obviously, there are some sort of DTC and supplement categories that are very, very high margin.

33:09But, you know, you can go and look at the Campbell's P &L as public, right, obviously as a public company.

33:13Chris Jane:Yeah. It's pretty tight, right? You've got to get to scale before the money really, really exists in an absolute dollar sense. So we knew that was going to be a challenge. We knew, though, to the point about just launching in retail and building a category, it's not going to be a hockey stick, right? It's going to take a few years to truly reinvent a category. So we raised primarily from family offices, right? We didn't do what I would call like any true traditional VC per se. It was mostly family offices or some smaller seed funds. Just because, honestly, I'd heard some horror stories from friends, right?

33:47You know, as soon as they took some of that money and gave away some, you know, God forbid, majority board seats, they got to the stage of every 30 days. What are your numbers? What are their sounds like? Especially with things like super, there's seasonality, there's summer, there's obviously those things that are fine in a macro sense. But if you have an IRR hurdle as a fund and a very short timeline, like, yeah, that's a challenge to put on a business, especially in our category. It's just different.

34:14Chris Jane:No, that makes sense. How did you go around meeting funds and family offices? I found, I'll be honest, I found meeting family offices is the hardest segment to meet. But maybe I'm totally, totally wrong. No, no, you're not wrong. I would say it's definitely the hardest to meet because there's no website. Right now, we can go on LinkedIn. Yeah, marketing's hard. Like, I mean, if you've been to like past episodes on this podcast, there's very, very few family offices. And I would love to have them on the show, but there's very, very, very few family offices. I'll do my best to help. I'll do my best to get you on.

34:54I think that'd be great, great, great insight for the group. And to a point, it's funny because you go on LinkedIn and you type in, obviously, you know, who are the influencers in the space, the VCs, et cetera. It's very easy to find because, of course, they want to deploy capital. It's their job to deploy capital. They're very visible intentionally. most of the ultra wealthiest family office folks I know they don't even have LinkedIn right it's like it's one of those it's like be successful enough where you don't need a LinkedIn right and that it's the classic joke um so to your point it's a lot of networking it just is right I mean I've been to every trade show for 10 years and we've been at every networking event I would say one of the things we hit really hard as an example was whenever there was like a guest speaker at my MBA we'd take them for lunch afterwards because you know they're guest speaking because they've exited a company right so it's like right especially if they're in your space and you get to that game i mean early on you know you're trying to raise your first maybe 750k as a lot of people kind of just do to get kind of going you can piecemeal that together with 100 100k 50k checks from those sorts of folks and that's exactly what we did right it was all individuals those first sort of convertible notes at the beginning were all individuals writing sort of roughly six-figure checks and that just gets you off to the races because you're too small for VC, obviously way too small for PE.

36:06But you've got an idea that could work, but you don't want to put it in yourself and you can't personally guarantee your house and all the rest of it. So like that small family office slash larger angel network is definitely the best. But to a point, it's incredibly hard to find. And people are tight knit about it, right? I mean, I've got plenty of friends who I know have wonderful investors. They won't introduce me to them, right? Because it's just a tight knit community. And it's one of those things that you kind of have to go fishing for yourself and it's it's a very annoyingly tough one and maybe we should put together some sort of database of this it's so it's so funny i was talking to i was talking to a family office at uh at expo west and it seems like once once you are a family office or work

36:47Chris Jane:for a family office then you it just almost like it's like access to other family offices it's like kind of just a funny thing he was like he was like yeah like i work has like a ski trip with like all these family opposites and i'm like what like that's that's amazing that's awesome um yes like it's just it's just it's just i'm like oh my gosh like it feels like once you're kind of in then you're then you're kind of in so that's totally funny but i mean from like investment perspective it seems like as you said it seems like like like like the perfect match for cbg because cbg takes so long to build just like as you were talking about with walmart you wanted to have make sure your buyer is invested in the category with you know or or with you there's like a five to seven year timeline or a long timeline.

37:27Chris Jane:That's the same thing that you need as an investment partner. Because you say, if you have like our hurdle rates, and of course you like return capital quite quickly, it's just really hard to do it in CPG. It's really hard to do it in consumers. So having that flexibility is really useful. Anyway. No, but I couldn't say it better. It's true outliers who don't do that, right? I mean, I have a little notes that I put together of like everything I can find publicly on, you know, sort of all the brands we all know. And, you know, the average, I mean, they're raising tens of millions of dollars with a decade plus of building.

37:58That's just sort of the net reality of most. Of course, there are exceptions. But that's a lot of time and a lot of capital. And that doesn't necessarily fit everyone's investment profile or founder profile, right? You've got to put a lot of time into this and be willing to take that risk.

38:12Chris Jane:I wanted to go back a little early as well to your journey. I mean, I think in the beginning you were launching SKUs like every six weeks, which was nuts. Or is that right? um and there was this one story i found the oatmeal story where your instinct said no added sugar but the data said yes added sugar and you listen to the data when did the data tell you something that you really didn't want to hear and what do you do with it oh fun fun question you've got some homework mike hello um so i would say give you A couple of quick examples. Yeah, so we're big data nerds. We are, right? We just did the top of the list for us.

38:55What's fascinating though, so we launched this year as a soup company, right? But that was the whole purpose of the brand. And that quickly evolved DTC for people asking for breakfast, lunch, and dinner options, right? So we tested it. And to your point, we had a very nimble manufacturing setup. We did all the recipe development in-house. So we could do low MOQ production and we would test and learn every six weeks, like seasonal drops, whatever. Now, what came about was some breakfast options that people were really interested in, people interesting to oatmeal. Now what's interesting is soup, you can get wonderful flavor, wonderful texture from spices and fats and all different things, right?

39:27Chris Jane:Oatmeal, yeah, you kind of need some sugar, right? If you just have a plain oatmeal, it ain't good, right? So we got to the stage of, wait a minute, like this is one of our brand pillars, right? It's on every landing page, no added sugar in all the soups and all of that. But we just made that up to be clear. Like Jennifer and I just decided that everything should be no added sugar. Like There was no necessarily reason for that. And it's obviously a spectrum. It wasn't in like the overall brand ethos, like every product is going to happen. Yeah, it's not like we could prove in the data that, you know, we'll sell 10x the volume if it's no added sugar.

39:58There was just sort of one thing. Again, as health and wellness folks ourselves, we're like, we're trying to cut sugar, we'll make all the soups no added sugar. So no added sugar appeared on lots of pages. But then you try to launch oatmeal and you're like, well, I really don't want to go the Stevia monk through Aguilow's route. Really don't want to do that. Let's add some sugar.

40:14Chris Jane:Why didn't you want to do that? yeah i don't know i think okay there's a personal side of stevia what's your opinion of stevia and monk fruit so there's a personal side which is i am very sensitive to it i have literally never tasted a product with any of these ingredients that i like like i have that weird aftertaste that weird sort of thing it's hard to describe even i remember being at expo west with one of the coffee brands and there's a friend who ran it and they were like man try the new blueberry flavor and it was all monk fruit and stevia i couldn't drink it man it was absolutely horrendous and but you look around and everyone else seemed to like it i was oh interesting so i guess i'm more sensitive than others and obviously that that's a you know an end of one um so just the personal side i found it really tough for our team internally to like sample and like things which is you know you're going to work on this all day every day you're going to like what you're doing um right and the flip of that is i felt that can be really helpful to reduce let's say you've got a 30 gram of sugar you know beverage you can get it down to a few grams of sugar by using the things you had there the stevens among fruits etc in oatmeal it was never going to be that high right with five grams of sugar you can make a really tasty oatmeal so i was like okay it's not like i'm gonna add 80 grams of sugar and you know send someone off on a diabetic thing like it's five grams or none it tastes disgusting at none and it tastes amazing at five let's go with five um and genuinely i would say we ordered what did we make i can't remember the exact numbers but we had like three different oatmeals i think and one of them had like four grams one of them had five I have one of them on like eight grams.

41:42And, you know, I'm having a panic attack about the one with eight grams. And it was the bestseller by a mile, right? So like you have to like get to the reality of like the consumer, you know, they want to eat healthier. But again, like an eight gram sugar with a lot of fiber with clean ingredients is a totally acceptable thing to have. You know, I work out of Starbucks most mornings at like five or six a.m. I mean, the line out the door for 50 gram sugar drinks is, you know, shows most consumers, especially in the mass middle scale, don't actually care in the way they may claim they care. So we got to the stage of, well, is it clean?

42:18Is it totally, you know, an honest product that we enjoy that is still a very low amount of sugar, especially when you pair it with the fiber, the spike is obviously very low. That's a good item. But to your point, we could have just said we're not going to launch any of these items because we have this sort of flag in the sand as founders that everything's no added sugar. Now, that's interesting, right? Again, founder pillars are important. You've got to enjoy what you're doing. But I think it's very easy to just make up something that you think the consumer should care about as opposed to what the consumer actually cares about.

42:47And I think, you know, not dying on those hills is probably the right approach. So we've been very consumer led in terms of our data. We call it the proper good lab. Honestly, it's very test and learn. It's very nimble. It's very consumer led. And that's really served us well, for sure.

43:02Chris Jane:Is taste king for you? like it has to like taste is is the number one most important thing it is i think you know one of our advisors i think is something like this he told me you know if you list up the top 10 things for food and beverage what's the most important the top three are taste and i think that's probably right right there is obviously a subset that extremely cares about the other items but for us if we can be proud of the product and i would put it in my body taste is going to win outside of that got it that's helpful that's yeah it makes makes a lot of sense makes a lot of sense um how obviously you're in walmart yep and you're expanding is that is that am i allowed to say that yeah yeah yeah yeah yeah yeah yeah definitely yeah yeah that's just dive down that for sure amazing do you because you're in walmart yep and because you also know how the natural channel obviously you've had a lot of experience natural channel and um i've again have never had a brand at all in the natural or retail or anything like that.

44:05But natural, it seems like there's a lot more complexity

44:09Chris Jane:when it comes to natural versus mass. Do you actually want now, since you've already kind of done quite well in Walmart, do you actually want to enter natural? Yeah, it's a great question. It comes up pretty often with our VP of sales. And I would say at the end of the day, we want to sell products to people that want to buy them, right? It's not rocket science, right? If there's demand for it there, we want to serve that demand. Simple as that. We want it to be beneficial for the consumer, profitable for the retailer, and profitable for us whilst doing something that we have fun doing. That's the whole ethos of everything we do every day.

44:42And I think what's interesting is when you look at total points of distribution available, especially for our type of product, again, it is very, very category dependent. Most of the points of distribution occur in either conventional or mass. Natural is just by the way it is a subset of that. At the same time, there's real volume available and a lot of our consumers are there. So, I mean, if you look at our customer service, you'll see continuous emails of, I wish it was in my local XYZ retailer. I wish it was in Sprouts. I wish it was in Whole Foods. And there's two challenges there. Obviously, some retailers don't love the fact that we started in Walmart, right?

45:17That's just a reality of the industry. But I would say it's a very small number. Most actually look to Walmart as a comparison, as a comp, as a proof of success. Obviously, we have unlimited data, right? I mean, the data is insane. And they all have the same problem. I will say you go to the bougiest of the bougiest sort of West Coast small chain retailer through the whole way to the discount channel. You speak with those buyers and they will all say virtually the same thing, which is we sell a lot of soup. No one wants to buy canned anymore. Proper goods and easy yes for us. Like we have heard that phrase on repeat from everywhere we go.

45:52And that's what's happening this year. We essentially took the Walmart data that showed we were a younger, more affluent customer. We're very incremental to the category, all those kind of things. Take that to every other retailer and it's pretty much an easy yes. Not everyone, of course, but mostly. And I think that has been incredibly helpful. So right now, I mean, this year we'll probably 4 or 5x the points of distribution of the business, which is great, right? Less concentration from a revenue risk standpoint and all that. But also just building the halo of the brand, right? Like for me in Austin, for example, we're in both the Walmarts here.

46:25but there's one a few miles north and there's one a few miles south you can't buy our product in downtown austin doesn't exist right so be foolish not to say how do we how do we conquer that problem um so yes it's a short answer we want to now take what we believe is a very proven proven win for the category to pretty much everywhere and how has walmart affected your

46:46Chris Jane:focus when it comes to skews and different products yep so we had a again it's a as i mentioned briefly a very test and learn relationship right we tested some breakfast items we tested some soup items we've tested some pasta items all within this sort of you know affordable ready to eat meal or very easy sort of center store meal and i would say what's interesting is soup has risen as the clear success again we could talk about some of those other categories but they were honestly more sort of test and learn projects and intentionally sort of that kind of skunk works type thing whereas soup has just continued throughout the few years to be like this is where we believe we can really win yeah why do you think that's the case yeah i think it's funny Online, when you do those different categories, you actually get real benefit.

47:26The LTV increases, the basket size increases. We can do all of that. The time between purchase decreases. That really helps. In a retail environment, the logic of that falls apart a little bit. You could say, well, wait a minute, it's going to be great because the customer is going to see your oats in this aisle and your soups in this aisle, and that's going to build the brand. The reality of that, I just don't think is quite as realistic as you might hope. Again, we're a small team, limited resources, right? We've only been in retail a few years, we can do one thing very well, or three things averagely.

47:56Chris Jane:And I think we want to really focus on doing one thing very well. But it takes that test and learn to get there, right? Again, if we could have easily been sat here with a different conversation, right? Like, because we can't design it all from a spreadsheet, right? At the end of the day, the consumers vote with their wallet, the market votes with, you know, everything that's going on from the economic environment to just what retailers want to you name it so you have to kind of be ready to seize the opportunity and and for us that was soup for sure so do you do you consider d2c kind of like a testing environment per se for new categories is that still kind of a focus or do you yeah or because you are you know a lean team um is it really let's scale soup as far as possible yeah to keep it short i would say d2c we love d2c right obviously that's where we cut our teeth we've been doing it for years that that's where we really got our start and all that the key data initially came from the reality is you know we're a lower price product right you're not going to go online and buy 100 soups on our website right so you're only going to get what a 50 average order value maybe maybe a bit higher you're not going to want to buy more than 10 soups from us at a time so how do you make the cac environment work in that again post-covid i think a lot of the subscription food stuff just didn't sustain supplements seems to be an exception to that but most food brands i know cd2c as a discovery channel a nimble test and learn channel you know you build the brand you can build the brand for sure but can you build the business i think that's the total opposite things when what plus 90 percent of dollars spent on food and beverage are in a retail environment so the tailwind is there the infrastructure is there i think you know fish where the fish are our vp of sales says a lot and that is in retail, I think, for soup.

49:37Chris Jane:So you mentioned earlier about marketing and you said celebrity. And have you ever been tempted to bring on a celebrity or even been offered like a partnership or anything like that? Yes to both. Can't name names, obviously, but I was very excited about it. We went down the rabbit hole, lots of contracts, lots of meetings, lots of things like that. And it just got to the stage where it felt, I don't know how to say it. It felt a bit disingenuous. It felt a bit like you're trying to bolt on a solution, right? It felt like this person wasn't there at the beginning. They, yeah, surely have a giant following and they'll do two photo shoots a year and send three emails.

50:16But does it actually fit what we're doing as a piece of the business and a vibe and all the rest of it? It just didn't. We nearly pulled the trigger on a couple of different things over the last couple of years. And when we got down to it, it was a lot of cash. It was a lot of equity. it was a for very unknown deliverables and you you would be paying the cash yeah i mean most of these relationships i mean there are some examples of course where somebody will invest in the brand right a lot of those at least from what i've seen and can be can be for pr mostly um you know a lot of they'll invest and then it'll come back through a payment so that's the difference um but i think what's interesting is can it be a real piece of the business obviously there are celebrity co-founded brands that we all know that have crushed it, right?

50:59It's authentic. It's built into the DNA. It's part of the business. If you're like, hey, we have an awareness problem. Can we bolt on a celebrity and just pump money at that? It could work. I'm not saying it couldn't work. It's just, I would say the risk is very, very high. So yeah, we never got to the stage of pulling the trigger on that. But in terms of the outlier high growth brands, most of them are launch day one with an amazing celebrity piece of it. There can certainly be a door opener without a doubt. it's amazing it's amazing and how on your supply chain how did you figure out your supply chain

51:36Chris Jane:for proper good um sounds to me like a pretty complex um complex business but how do you like how do you all do r &d and then what's the kind of relationship as well with um with the manufacturing partners yeah we knew early on we wanted to be u.s based manufacturing short production runs in terms of both time and water quantity. And that took a lot of time to find, right? As anyone listening to this, who's gone through that process, that is a lot harder than it sounds. And what's funny is, obviously, you know, we could probably make it cheaper and easier overseas. But then suddenly, like, well, now we've got to have giant volumes, we've got ocean freight, we've got, you know, 16 week lead times, that doesn't really speak to what the business was trying to do at the time.

52:20And I think, for us, again, this is all an experiment, right? I mean, most of life's an experiment, right? We had no idea whether this idea for a premium ready-to-eat shelf-stable soup would work. So early on, we said, look, we don't want to have 100 ,000 units of something. We want 7 ,000 units. And how can we find a manufacturer that can work with us on that? Is it a partnership in many ways? So yeah, we just said from day one, we're honestly not going to do this unless we can build as nimbleness as possible into the operational side of things. And again, there are plenty of brands who don't do that, that succeed, right?

52:51It's just our story. But I think for us, we knew we wanted to be very consumer-led, very test and learn. And it's, I could take so many stories along the way. I'll just give you one little example of, you know, we launched, when we launched, we wanted to be a bit bougier, right? So we had a soup that we called squash and carrot with turmeric and coconut. It was very, very nice. And then no one bought it, right? No one bought it. The people who did buy it, we bought it because it was a great item. It was thick, it was tasty, all the rest of it. But, you know, it doesn't sound that tasty, right?

53:21Well, what's the common name for that? It's just butternut squash. So we renamed it butternut squash, and then everyone bought it.

53:26Chris Jane:Brilliant. But what's fascinating about that is, again, if I had 200 ,000 units of the squash and carrot one, I got a real problem. So we knew we were going to test learn recipes. We knew we were going to test their names and packaging and all of it. So the only way to do that is have a supply chain partner that can facilitate it. What do you find?

53:51Chris Jane:what do you think in building proper good is maybe the biggest thing that you and your sister did right and what do you think is the biggest thing or one of the big things that you thought was like the biggest mistakes um in proper goods trajectory that's a lovely question yeah i'll have to give me give me a few seconds on that one so i think yeah no do it i think honestly the biggest thing we did right was so the first brand just go right back to the beginning that we did previously was a lot more one foot in front of the other, right? You just do it, you make it, you sell it, you're scrappy, you're not sleeping, you're driving all around all the time, it's crazy.

54:28This one, we were very intentional from day one, right? Again, I love the idea of this. I brought Jen in as we talked about, but I did a lot of research, like a lot of research upfront. And like that just made it very intentional from day one. From day one, we really had a very clear kind of thesis about what we wanted to do, how it could go, how big it could be, how we could get there, how we could innovate on brand, pack, price, all the things that we know build a brand and not a commodity. We were just very intentional. And again, you can't build a business from a Google doc, but like the North Stars were very, very clear from day one.

55:00And you know, now we're five years in that that is also extremely clear. It's the same goal of going after the same categories with the same, how do we make shelf stable meals affordable and healthier in this big billion dollar category. It's very, very clear. Now, the caveat, actually, I will say, and I would say the Walmart piece on fully on reflection, there's been some ups and downs, of course, but that was definitely the right decision for us, without a doubt. When you look at the data, and now we're taking it to the rest of market, those two swings were key. The biggest sort of challenge we've had, I would say, was probably what I alluded to before of trying to take what worked DTC to retail, right?

55:37Launching in Walmart for a while, we had three different categories. And I think that was fun right it was fun it was cool it looked great the po's were great but how do you cross pollinate those things in store without a hundred million dollars to burn is almost impossible for a brand of our size so i would say the getting over excited about taking some of the category cross success from d2d to retail was probably probably one of the biggest i would say i would say mistakes slash challenges slash too early type type thing do you think long term okay long term you're in

56:13Chris Jane:i mean i know you're already in a lot of retail but but but long term right maybe you get soup to scale yep is would you actually want to be i know you are a platform brand and that you are in different categories but would you actually want to be a platform brand at scale in retail it's a question i don't know the answer to right i genuinely don't and i think it's okay to not know the answer right i think it's one of those things that we will discover as we go i think there are wonderful examples right like kodiak cakes for example right obviously they they built the business in one part of the store now they're in a bunch but to your point of you got to get the first one to real scale before they did the other ones there are a very small example list of multi-category launch emerging brands there's maybe a couple that have done it but to your question of yeah how big i think the good news is soup is a you know depending how you slice ready to eat and so on it's a multi-billion dollar a category in the u.s alone right so there's there's no tam issues there's no ceiling issues there's no any of that at the same time once you build a brand of true trust and true scale is there of course other ways to launch complementing products within that without a doubt of course there is we've seen it many times am i ready to plant my flag of what that is right now no it's very fair very fair uh yeah certainly a heck of a lot of runway um if you could go back and hand yourself one piece of advice or or share one perspective that you've learned so far today when you decided to launch back in april 2020 what would it be i knew you were gonna ask that i should have put some more time into thinking about it um i would say for us the key thing is know what you want to build from day one right i've actually i I've got a lot of friends.

58:03I live in Austin. There's a very lively CPG market here. And I think I meet a lot of young founders or young in brand and age that are just, they're not quite sure what they're trying to do, right? They've got a cool product. Could be they invented it. It could be a family recipe. It could be a new cat. It could be anything. And they've been years, literally years, like toying with it. And I think that's a really stressful place to be because you don't know if the market wants it. You don't know if it's a good idea. You don't know how big it can be. So from day one, it probably, it was on, I remember on the whiteboard, probably got a picture of it of like, we're trying to build the next XYZ brand, right?

58:34How do we do that? And that just gave both me as an individual, my team, my investors, it lays a laser focus. So that advice of treat it like an MBA project, right? Do a pre-mortem, right? Do a pre-mortem. If this fails, why will it fail? That is like the most useful exercise ever. Like, so I would just, although CPG, of course, it's food, it's fun, it's health, as wellness as brands it's all sexy and cool but it's a business and it's a very difficult business right when you line up you know truly the cost of doing business in this channel the failure rate all of that it is it is very difficult um so i would just be very ruthless with myself early on what are we trying to build how are we going to get there if it doesn't work why will it not work like have that ruthless honesty with yourself and i think you'll you'll save yourself a lot of a lot

59:20Chris Jane:pain that's such i absolutely love that um what's my final question yes for you chris is what's one book that's inspired you personally and one book that's inspired you professionally cool fun yeah so i don't i haven't read much research i'm a huge podcast guy not to plug you but um yeah i'm uh i listen to a ton ton ton of podcast stuff um so it's fine i'll give you two Two in the food and beverage space on the business side. So I would say The Mission in a Bottle by the founders of Honest Tea. I don't know if you've ever read that. It was more of a cartoon-style business book. It's very random, but it's a fantastic read.

59:59It's absolutely fantastic. And then Innocent Drinks is a UK brand that I think eventually sold to Coca-Cola. They had, what was the name of it? I can't remember the name of it. Just type in Innocent Drinks book. It'll come up. And that was a wonderful story of, again, building a brand, not a product, getting through the farmer's market stage through to scale. So those two on a business sense were just fantastic. And on the personal side, man, yeah, I haven't read a good personal book in a long, long time. Honestly, it's just a lot of podcasts for me.

1:00:29Chris Jane:A book about Innocent. There you go. Our story and some things we've learned. Very, very cool. Okay, great. No, I really appreciate that. That's great. That's great. I think we've had one person mentioned or a couple people mentioned Mission to Bottom previously. obviously but i don't think anyone has mentioned the innocent drink book so you are very original love it love it um chris thank you so much for coming on this show this has been so much fun i really do appreciate it yeah a lot of fun thank you mate appreciate it thank you man thank you