Capturing A Not-So-Obvious Consumer

0:00This week on the NOSH podcast, what was on the minds of brands at Expo East, and how to find your target consumer and reach them online.

0:19Hi everyone, I'm your host Carol Ortenberg on the NOSH podcast. We go inside the business of natural, organic, sustainable and healthy food. Today, the team discusses some of the business trends we talk to brands about at Expo East. Then we hear from Ron Shah, the CEO of wellness company Obvi, about how the nascent brand identified its very specific target audience. Joining me today are reporters Adrienne DeLuca. Good afternoon, Carol. Afternoon, and reporter Brad Avery. Cheerio. Cheerio, Brad, it's so exciting to have you with us today. Yes, welcome. We don't get to hear from you enough. Glad to be here.

1:01Thanks for having me on. So Expo East has wrapped up for good, it seems like, with New Hope announcing this was the last year the show will be run. Instead, it's going to move to a smaller format. And what that show looks like, you know, I think we're still waiting on details a little bit. But we do know it has the very exciting name of Newtopia. Sounds like, I don't know, it sounds like something from the Jetsons. I'm jiving with this. What did you guys hear from brands about this shift? I heard some pretty mixed reactions, I'd say. A lot of those early stage smaller brands that are based especially around the Philly area were definitely a bit upset about the move because this is one of the more convenient trade shows for them to attend.

1:47But I heard from a lot of others that I think they're excited about the new concept, but wary just how it will complement such a massive show like Expo West where they might not be able to exhibit. So definitely some mixed feelings around what can happen. But I think, as you mentioned, as more details come out, maybe that will improve. Definitely a lot of confusion, it felt like, on my end. I think no one was really expecting it, per se. And I think announcing it on the day the show began sort of set a weird tone for this final Expo East. I know a lot of brands that I talked to where it came up, sort of the question was, what exactly is this new show supposed to be?

2:35What's it going to look like? And, you know, what's that sort of mean for these last days here? it did sort of cast a weirder tone over the show than I think might have existed if not for that. So I am a little curious about their decision to announce at the top. Maybe they were trying to build buzz at Expo East, but I think it gave people this sort of weird sense of like, oh, I guess this is the last one. And not as much about what Newtopia is going to be, although I did hear a lot of people saying like Savannah in August. Yeah, my hair is going to be amazing there. Let me tell you, as someone who grew up in Louisiana, get your anti-frizz products prepared now, Adrienne.

3:18Oh, don't worry. I'm well prepared for my summer here in Washington, D.C. and college years in North Carolina. You can take a good ghost tour in Savannah. They got a lot of ghost tours there when I was there. It's a very pretty city. All the buildings are still pre-Civil War because pretty famously, when Sherman was marching south and burned Atlanta, Savannah got wind of it. And Sherman and his army show up at Savannah and they're like, okay, we gave. You're good. We give up. Please don't burn us. And he said, yeah. Some good architecture then while we're there. You know, if you listen to Taste Radio, you hear a lot of, you know, soccer news.

4:03And I guess this will be, you know, Civil War History Hour. There we go. I could get in on that. That fits our vibe, I feel like. Definitely. That's the Nosh vibe. Weird random facts. That's Nosh. There's a lot of waiting to see what this will be. one thing that did seem to have a positive response was the fact they said this will be a little less expensive to attend and that the pressure will not be on as much about creating these like really big booths. I heard more tables set up in a neighborhood. The idea is kind of building out the way you'd walk through a grocery store. We'll have to see what that looks like.

4:44certainly as a Southerner, I got to say, despite the hair concerns, it's nice to see a show moving to Georgia. Uh, you know, there's certainly one, you got fancy in New York and Vegas, you've got Expo West hitting California. This will put a fairly significant presence on the South. And if it is cheaper, maybe we'll get to see more brands coming from my hometown of New Orleans. And I'm hopeful. I think right now we maybe just have brass roots and maybe we'll get a couple more, though. We do have NACS coming up in Atlanta. I think it is. Brad, are you headed to that? No, I won't be at NACS. Jeff will.

5:26I know that. You know, I kind of miss when Expo East was in Baltimore. That's right on the Mason-Dixon line. And I don't know, Baltimore is a great city. Everyone always acts like I'm insane when I say that. But I think that That was my favorite city we would go to regularly for any sort of show. It's got true character. And, you know, it's sort of right. Some people might consider it the South. It's right on the line. All right, Brad, I sense a story on the brands of Baltimore coming up soon. Deep dive on Baltimore natural products. A lot of Old Bay. There's a cohort of Baltimore-based natural products brands.

6:06Yeah. Okay, Old Bay. There we go. Yep. Michelle's Granola, for one. Oh, we'll have to fight over who gets to visit Michelle's. I win. We'll be waiting on details from Newtopia. In the meantime, another point that seemed to come up a lot with brands was distributors. Certainly, there's always gripes around this. But I thought what was interesting in particular was that one brand mentioned to me, you know, we're hearing so much about retailers and brands and ingredient suppliers and the role that they're playing in rising food prices. But what role are distributors playing? I actually had a very similar experience, Carol, speaking with Harmless Harvest who shared, you know, they have not taken any price increases across their product line past few years, yet they have recently become aware that Kahi has implemented a bit of an uptick on their price tag.

7:07So they're working diligently, they said, to get that resolved because their goal is to not be raising prices for consumers right now. But I did hear from plenty of other brands just how expensive selling into retail has become. Retail is just becoming increasingly expensive between distributor costs, but also brokers, merchandising, everyone involved in getting that product to shelf, which has led quite a few brands to look into other areas such as food service or selling an ingredient wholesale just to add another arm to their business and make those margins work. Big picture foods, which makes regeneratively grown fresh olives, peppers, ingredients of that sort.

7:56Recently launched a salad with Sweetgreen. Their founder shared that just that one product alone has helped their margin exponentially. She's like, I just send them off massive pallets of our olives. That's the only product they want. They pay me right away and we're done. She's like, it has really improved their cashflow, especially in recent months. Yeah, I wonder how you kind of square how expensive retail is getting. Because I mean, I did hear from a few people that some very big natural retailers have increased their slotting fees. It's gotten more expensive to even just get in in that sort of buy in element of getting the product on shelf.

8:40So with distributors also kind of increasing prices as well, it does sort of pose this overall issue. I think we sort of saw in a way consumers having the inflation problem of how do I afford all my groceries at the store. Now on a macro level, inflation is leveling out, but the prices are still high. So consumers are still feeling the burn. They still look at the grocery price and they say, this is so much more expensive than it was two years ago. So, and it sounds like a bit of what we've been hearing, like sort of having the brands now on the backend with a lot of these issues as well. Retail is just getting more expensive.

9:19I don't know how you really necessarily solve for that other than like Adrian, like you just said, finding those other avenues to broaden the business and bring in more revenue that you can help afford this retail push. Sweetgreen in particular seems to be a partner for a lot of these CPG brands, at least in the news we're getting. You know, Siete did a chip line with them. I think it was their first chip that they had offered. Certainly a lot of drink brands. I think they have Olipop as well. And I'm reminded that I talked to their CEO right after they did a collaboration with Luke's Lobster for a Boston-specific bowl.

9:58And he told me or reminded me that they also had been one of the first accounts that Meaty went into. Granted, it was a limited time offering, but it gave Meaty a way to just get feedback very early on before they launched a retail product. It is a really interesting business to be selling into, as well as just a dynamic it can add to a CPG company. In talking to Big Picture, they had a very similar experience. Their salad started off as an LTO this summer, and Sweetgreen decided to quickly keep it on. In talking to their founder, she was mentioning that the initial interest actually came from Sweetgreen themselves.

10:39A lot of the reason she believes that they're partnering with these CPG brands is the company itself has a really strong focus on sourcing. You walk into their store and you can see every farm those ingredients came from that are at the bar in front of you. So when it comes to CPG brands like Big Picture, which is sourcing entirely regeneratively from farmers. They know those aspects of the brand were really important beyond just, you know, those fresh ingredients that they were then putting in the salad. So in her mind, that was the push around Sweetgreen and CPG Collabs. Adrienne, it's not a podcast unless you use regenerative ag.

11:19I think I want a bingo card, like millet's definitely on there. I was going to say ancient grains, really any of my weird ingredient interests maybe i'm pickles i'm not sure i i love pickles we can't go down this rabbit hole brad i'm proud of the world of jeff today on that note i mean a lot of plant-based seafood brands are also just going that uh food service route get the product on menus uh mind blown good catch you know both have sort of taken you know very you know focused strategies on let's try to get this into food service along with retail in order to it's a trial driver in a lot of ways.

11:56I mean, you see it on a menu and it's eye popping. I think for a lot of consumers, you might just be willing to, all right, let's roll the dice this one time and try it. And then you see the brand later in the grocery store and you buy it. I think you also get like, if you get into nicer restaurants, you get in, you know, with like chef driven restaurants, you know, pro chefs taking these ingredients and, you know, really whipping them up into their best form. And that way you're not just like, oh, I tried that product and it was terrible. Well, It's like, you just didn't prep it the right way.

12:25You know, I think that's like one of those little things that I think could play into consumer psychology here, where trying it in a restaurant first, you're going to know how good it can be if it's done the right way. Of course, another way that brands are saving costs on retail, also a topic that came up at the show, is by avoiding it at the start, focusing on D2C and online marketing. Brad, you talked to Ron Shaw, CEO of Obvi for our interview today. Tell me a little bit about their sales and marketing strategy to date and what we're going to hear about in the interview. Well, with Obvi, they are a flavored collagen brand and they are now expanding their platform.

13:07They've acquired a brand called Coffee Over Cardio. They are building in-house brands, including a pet supplements line called Paw Rangers. And what they did is from the start, they focused in on a specific consumer demographic, which is women in their 30s to 50s in primarily the Midwest. And they built that business online, honing in on this very specific consumer demographic. Now they are rolling out into retail finally after four years in business, hitting Walmart nationwide. And they're using their online platform and their community that they've built to drive sales from their website to the stores.

13:49Ron and I talked a lot about how they identified that consumer demo and how they communicate with them and how they built a community and try to really pick apart, how does this work and how did a couple of guys in New Jersey figure out that they could sell to collagen to middle-aged women in Iowa? I got to admit, I'm excited to learn that myself. So let's get to it. Hi, I'm Brad Avery. I'm a reporter with Nosh and BevNet. I'm here with Ron Shaw, the co-founder and CEO of Obvi, a brand of flavored collagens that has been sold primarily in e-commerce and now reports over$55 million in revenue. They are recently rolling out into retail with over 4 ,100 Walmart stores.

14:35Ron, thank you so much for joining us today. Tell me a bit about just a quick rundown of Obvi's history. Yeah, we're about four years old, a little over half a million customers worldwide. our goal was to disrupt the collagen market by saying, you know, you don't have many things unflavored. Why do you have your collagen unflavored? And so our whole goal was that if collagen can taste good, you probably would be more excited to take it similar to like your whey protein or your other protein sources. And that was our goal was to make collagen fun, sexy and tasty. That's what we set out to do four years ago.

15:11And after about 27 new flavors since then, some collaboration partners with Entenmann's, and our rollout into Walmart as well, like you mentioned. We think we've gotten a little bit of critical mass and proof of concept is there. So now we're just looking to scale that more. I'm very curious just to learn a little bit more about how you initially built the brand. Who were you targeting? What was the idea in mind? Like you said, there's a collagen user out there, but a lot of the collagens on the market don't have those types of flavors that you're offering. When we set out the market, what we wanted to go out and do was there's a lot of people who get at the ages of especially 35 to 50, they start getting recommended to take collagen, okay?

15:58Because their collagen is depleting by about 1 % per year after the age of 30, 34. The people who are being recommended to take collagen, a lot of the people who look at what's out in the market, it's unflavored vital proteins, collagen, this blue tub. And you saw, if you look at the feedback and a lot of the reviews on Amazon, the negative people would always say, I couldn't take this more than a week. I can't stand that it's unflavored. I can't, I can't drink this. I don't like it. It doesn't taste good. And it's unflavored. It shouldn't taste good. So our goal was, we're going to go after 35 to 55 year old women who are the anti-unflavored market, but still need college.

16:44And that sort of was our starting point back in 2019, June of 2019, when we launched, was to target that set of women. And they predominantly lived in the Midwest. They were predominantly people who made some bad decisions with their food habits and their health habits, et cetera. But they're the market that takes gummy vitamins instead of regular vitamins. They're the market that tries to look for the unhealthier version of something healthy. So that was our initial demo that we sought out to get. How did you kind of key in on that demographic? So this is who you initially set out to reach. That's right.

17:24So this was coming out of just the idea of you wanted to do a collagen product, so you wanted to see who was buying collagen to start, or you sort of figured that out that this was a demographic that was being unmet? No, we sought out when we started the business, we said, we want to go after this demographic. And so the minute we started, we're marketers by trade, myself and my two co-founders. And so we ran ads from day one, like 1201 when we launched the website, we had ads running that day. And so our ads were targeted towards people who said, tired of the unflavored collagen or can't take unflavored collagen anymore or sick of the taste of something unflavored.

18:07And we targeted that demo right out of the gate saying, you wouldn't have your cereal unflavored. Why do you have your collagen unflavored? And that messaging was like, that's who we want to go for. I don't want the girl that goes to Equinox and takes vital proteins, you know, unflavored collagen, two scoops a day, and then also does hot yoga three times a week. That is not my demo. I want to go after the ones that hate this blue tub that sits on top of the refrigerator and never takes it because they hate the taste of the unflavored concept. Now, this may seem obvious, but Ron, you are not a 50-year-old woman from the Midwest.

18:42Yes. Obvi is based in New Jersey, correct? That's it. That's correct. How did you even begin to start figuring out how you communicate with this consumer? Right out of the gate, when we launched our product, we had done everything. The entire business is actually built off of Typeform. And what I mean by that is everything that we've launched or done was all done through surveys. Till this date, 47 SKUs later, we still use Typeform surveys to figure out what we're going to do. So when we started the company and we knew this is the demographic we want to hit, we even surveyed groups of women that we found through little focus groups or facebook groups or mommy groups etc and we'd be like hey we're launching a new brand first of all we'll send you the product for free if you take out this survey and give us some feedback on flavors and stuff like that we probably surveyed about 250 people across a few months of while we're doing r &d and they gave us which flavors what key vitamins they're going to care about and what type of benefits that they're looking for, which was they really care about hair and skin even more than nails.

19:49So that gave us that starting point. Then from there, everything we've launched, we have a really large community on Facebook, which is about 72 ,000 women actively talking about coffee collagen all day, every day. That community is all built off of the fact that we would ask the community, what do you want to see next? We literally take that to our manufacturer and say, hey, we need to go and create this because this is what they want. And we kept launching things based on what people wanted. So to be honest, the reason we actually have very little to say in the company is because we are not the demographic that's being sold to.

20:26We are the opposite of that. And so we actually just went and asked the demographic what they want. When you think about the brand when you first launched it to where it is today, Have any examples of ways that you've altered or changed the products or your messaging just based on those results? I mean, are there some concrete examples you can give? Yeah, very, very, very good question. So I'll give you a couple of examples. When we launched the collagen, we called it super collagen protein. And that's like our V1 of Obvi. We altered that in this past year to more than collagen. When we first launched it, we want it to feel like we are the most elite collagen.

21:09And it's elite because first of all, it's flavored better. It has more collagen per serving. And we added things like vitamin C, vitamin E, et cetera, to amplify the benefits. So we were like, this is a super charged version of the collagen that's on your refrigerator. More recently, because the barrier to entry is almost, There is no barrier to entry in the collagen space. You see a lot of copycats. You see a lot of things happening where, well, now everyone's adding the vitamin mineral profile we had. And so what we went and shifted to was like, okay, you guys want to copy this. Now what we're going to do is elevate beyond collagen.

21:50So we switched our flavor name now, I mean, our product name to more than collagen instead of super collagen. And the more than collagen is like, hey, I'm still going to compete with everyone in collagen, but we're way more than that. We have hyaluronic acid now and we have keratin. Both things are going to transform your skin and hair to a different level. Keratin is usually found in shampoo. We found a way to make it a digestible format. So we're like, hey, collagen's there, but we're way more than that. So I think we've had to compete with the market copycats with that type of shift in messaging.

22:24Thinking of that consumer demographic you've honed in on, how has that sort of guided your approach to rolling out into retail? I know Walmart was a very specific retailer you sought out specifically for that reason. Could you maybe talk about that? The selling to the masses is always going to be, for us, an easier challenge to overcome because if we can attract them for what they're looking for, but then power them with really good results, we'll be able to keep them sticky. Versus if you go after, again, the Equinox customer, okay? Which is your two times a week Equinox, three times a week Hot Yoga, and then seven times a week going to Erewhon to shop.

23:13That customer, first of all, there's only two or 3 % of that customer available. and they are a lot more actually loyal, but they are more expensive to kind of attract. So we wanted to go after and say, hey, if we're going to go after this market, we don't want two kind of challenges. We don't want to have something that's expensive to attract and create an expensive formula. Let's just create an expensive formula and cater it to the masses so that we can only have one challenge that we need to overcome. So that's how we kind of chose. And Walmart is that juggernaut retailer that attracts the masses, but doesn't attract that top 2 % of people.

23:58And that's where we found the most alignment. And so how now do you support that? What kind of field marketing are you preparing? What kind of merchandising are you, you know, what's your strategy there? the the way we're approaching it is we're taking the route of using our community to become like our super women our community so i'll give you a few different examples that i think are pretty cool one thing is we instantly activated when we launched in walmart a rebate program where the first thousand customers that go and buy at walmart we will if you upload your receipt and tell us which store you bought in and some other first party data, we will completely give you back the money you spent on the Walmart order, but we'll give it back to you in the format of a gift card to shop on Apple.

24:59Within 48 hours, we went through the first thousand like instantly. Walmart literally emails us the following week saying, this is one of the largest activations we've seen happen for this category. So now we're supporting our community by saying, hey, go and buy, we'll credit you back, but at least we're getting the credit back on our website. So we're able to keep it omni-channel and not lose a ton of value by just, you know, comping orders. Secondly, I think another thing that we've done on the activation side is a lot of our messaging now, everywhere that you'll see our ads, or if you go to our homepage now, or if you go to landing pages, product pages, everywhere includes available in Walmart.

25:51And our goal is that, yes, will they maybe come to our site and leave? Sure, that's fine or the people who come to our site and see it will this strengthen the ability to have confidence to buy and i think that's what we've we've honed in on um and then lastly what i'll say is is we've just really really focused on um working with our buyer to just do different activations so like for new year new me we already have a two-month um sidekick rollout throughout every single store. In April, we're going to be doing Spring is Here, Get Your Skin Right thing. So there's a lot of different things we're working on with them.

26:33So a little bit of our community and brand presence along with taking activation stuff that Walmart has available. I think kind of going back to that word community, a lot of brands talk about community a lot, building community. Could you maybe dive a little deeper into how you were able to take those online shoppers and use that rebate program to activate them in retail? What does that really take to have that type of loyalty and the ability to pull that off? I think what it takes is you need to have a really, really authentic community. You can't just have a group of people and ask them to do something.

27:14our community um they they know we're authentic because what we say we're going to do we actually do so when we say hey listen we're picking 10 giveaway winners to get a hundred dollar gift card for obvi if you do this this and this we announce those 10 giveaway winners and and they're all celebrating when we say hey you guys get to pick the next flavor for obvi and everyone picks pumpkin spice we actually launch pumpkin spice within six weeks from that point so they know what we're saying and doing is actually going to be followed through. There's a lot of authenticity. So I think when you look at it, it's kind of like a cult following to the point of like, okay, whatever it comes from direction, direction wise from these guys, you know, we're, we're going to talk about it.

27:59The other thing is we're also very authentic in our messaging myself and my two partners, we're South Asian males in our twenties and thirties, trying to sell to predominantly currently Caucasian women in their 40s and 50s. And we've actually gone in the community. We go live every week and we actually talk about that. We're like, hey guys, we know we don't look like you. But here's why we're doing this. Here's why we believe in it. And here's how we're going to approach it. You guys are going to build this brand. We're just going to be here to talk to the manufacturers, make sure everything is running right and make sure you guys do it.