PACHA

0:00Maddie Hamann:Welcome to the Emerging Brands podcast. Sharing the stories behind brands you'll want to shop next. I'm your host, Kelly Bennett. I am a New York City-based brand strategist for CPG Food and Beverage Brands. In each episode, I'll take you behind the scenes of founders that are building better-for-you products and bringing them to market. it. Also, I talk to brand builders, retailers, industry experts, and tastemakers who help bring those cool products to your shopping cart. You will hear stories of real-life founders, their launch strategies, and practical advice you could use to grow your own brand or simply discover what's next on shelf.

0:42Maddie Hamann:And the best part is you could shop all the brands featured on the show. This podcast is brought to you by Glimpse. Glimpse is an AI powered deduction management tool that disputes and recovers invalid deductions, winning brands, thousands of dollars and hundreds of hours back to founders so that they can focus on what really matters most. If you're a brand selling in retail, go to tryglimpse.com backslash trial for 30 days free and let them know I sent you. Now let's dive into the new episode. Hi everyone. Welcome back to a new episode of Emerging Brands Podcast with Kelly Bennett. Today I have Maddie Heyman.

1:29Maddie Hamann:She is the co-founder of Pacha, which is this really cool, innovative brand that is built on organic, gluten-free, plant-based, regenerative bread that doesn't make you bloat and also has this really incredible purpose and mission behind it. And I really love when brands check all of those boxes that consumers are looking for and also scaling and showing that you could do both. So Maddie, I'm so happy to have you on the show. I'm happy to be here. Awesome. So let's first start with the concept because, again, you're checking so many different boxes that is hard to do. And I would love to hear how did this concept first come to be?

2:19So actually, the original bread came from some friends of ours, one of whom was from Argentina and his mom used to make this like buckwheat sunflower flax, very seedy loaf. And it was the only bread that I knew of that didn't have gums or other allergens and also didn't have gluten in it. They were making it on like a cottage industry, kind of like 40 loaves a week and selling it to friends and family. And actually my co-founder and now husband, Adam, introduced me to the bread the weekend that we met and connected um he was like here you should try this bread I was like oh I can eat this really I can I can eat this it's like real food yeah okay all right I'm in and then I'd never stopped and um that couple they split up and the the um boyan moved back to South America and after that Adam was like you know this bread is ridiculously good like somebody should I mean he was telling them the whole time that they should make a business out of it, but they didn't really want to.

3:29And then when they left, he was like, okay, I'm going to, I'm going to make a business out of it.

3:34Maddie Hamann:Wow. Okay. So this was originally a recipe that you all had, had yourselves really fell in love with it. And then were you then set out to figure out how to do it yourselves? So Adam is a cereal entrepreneur. We call him a pseudo cereal entrepreneur now because he's a buckwheat guy. But he, so he had, at the time that we founded Pacha, he was actually kind of, he had hired himself out of his position of director of marketing at Boochcraft, which is the company he founded prior to Pacha. It's like a high alcohol kombucha. It was actually the first, and they were the first, like his brother-in-law invented the high alcohol kombucha.

4:22So there was like a new category, kind of totally new product, which is in a lot of ways similar to Pacha. Like obviously like high alcohol beverages, not a new category, but made differently, pretty new. They were doing like all fresh pressed juice, all organic, all like putting money towards regenerative agriculture and just proving that like something that was made with really high quality ingredients was actually just better. um and yeah over time that has proven to be the case although they didn't scale as fast as some of their competitors so and um with pacha we um so he he jumped on to pacha and he was kind of ready for a new project um okay at that time and it just the opening kind of arose um where it was like okay boyan and brooke are not making this bread anymore i'm looking for a new project I really think people need this bread because it's like changed my life and people and actually people were we were kind of making it with our community house like all of the people that we lived with would make the bread and like make different flavors and it got to the point where we had people that were like asking us oh can you can you like bake it for me every week and we're

5:32Maddie Hamann:like no I'm not no I have a job right and but like then then restaurants and other like businesses started asking us if we would be able to make it for their special events and do other things like that. And it was like, okay, it's time. And where were you all located during that, that you were able to get that initial community buzz going? Yeah, we're in San Diego. So definitely like that California vibe of health forward and looking to check all the boxes. We have those kind of customers around us. Which is great to then see that there's real demand for it and to be able to still have that integrity of the ingredients that you wanted.

6:16Maddie Hamann:So what was your background? What was your day job during all of this before you made the leap into co-founder? Yeah. So I was actually – I had finished my PhD in like ocean physics essentially about a year before we started the company. And so I was actually working for the Navy at the time. I was like doing like classified work on submarines and wow. Not related at all. Totally different. Totally different. Totally different. And also a lot of the, like what I did during my PhD, I actually like went out and got grants and organized teams to execute research at sea. So like I actually did quite a bit of administrative work as a, as a PhD.

7:02And, you know, I'm just good with working with teams and people. And so that those skills definitely did translate.

7:09Maddie Hamann:And it also seems like the environmental aspect also was connected. Absolutely. I mean, the reason essentially what happened with that is that I went into oceanography with this idea. I grew up in the Midwest and attended school in the Midwest and just had this idea that like, wow, if we knew more about climate change, we could really do something about it. And so I came to study ocean science and make a difference in our understanding of the climate. And about, you know, three years into my PhD, I was like, oh, wow, like, we know a lot. We know a lot already. We don't need to know more to be making changes, but we're not making changes.

7:48So what else needs to happen here? And I was already like pretty clear that I wouldn't be just a professor or like a strictly just research. I knew that I would have some element of my career that wove in activism or educating children or just like there's going to be something else. And then this opportunity literally knocked on my door. And yeah, I just realized watching Adam do what he did with Bouchcraft, where he was actually taking people's energy in the form of money coming into a business and redirecting it towards helping farmers do things like sequester carbon by taking care of the soil.

8:38I was like, oh, okay, this is like a way you can actually start impacting solutions for climate change. And I was like, all right, I'm in. I want to help.

8:50Maddie Hamann:So can you walk us through a little bit of the environmental aspect of the brand? Because you're using buckwheat, right, as the main hero ingredient. What makes buckwheat different? Like, What was the connection on the environmental side, then also the digestive side? Yeah. So buckwheat is not wheat at all. It looks nothing like wheat. It's actually like a green plant with leaves and a lot of little white flowers. And it's actually used, it's kind of like inherently a regenerative crop because a lot of a lot of farmers even if they're doing conventional row cropping they will use buck wheat as a cover crop to um to keep soil in place and it also is a nitrogen fixer so if you plant it and then kind of tamp it back into the soil it fixes nitrogen and makes the soil more nutritious um and a lot of farmers like who use buckwheat don't harvest it they don't let it go to seed um but you can you can and you can actually like put it in between it's it's a short season crops crop so you can actually put it in plantings put it between plantings of other things on your field and get like an extra an extra harvest off of of a field um but yeah so buckwheat helps keep helps keep the soil in place and um you know pacha in general we're like one of our missions is to support regenerative agriculture and just like a way of farming that actually supports the health of the soil and the ecosystem.

10:33And buckwheat is just like an amazing tool for that. And on top of that, we're working with farmers to convert to regenerative practices in all aspects

10:46Maddie Hamann:of their their firm which is really interesting and i've been doing more research uh with my work of consumers wanting to find regenerative options and just how this is a niche that is becoming more mainstream have you seen a shift in just consumer demand so far in wanting more regenerative options Or is it more so like this is a better option in educating consumers on it? I would love to hear from your perspective how that's going. Yeah. I mean, there's definitely a shift. It's slow. I would say that the recognition of the term regenerative has grown pretty significantly since we started. to where maybe 60 % of consumers know actually what, like have some idea that regenerative is better, but may not actually have a full, full deep understanding of what regenerative actually means or entails.

11:52And in some ways that's because it's not defined and it's a little bit nebulous.

11:58Maddie Hamann:Right. But, you know, I think the other, the other component, there's just a, there's a lot of factors that go into consumer behavior. And, um, you know, right now regenerative means a higher price point is just like to get the certifications and to help the farmers transition. Like part of what enables the farmers to transition is the fees that go into the certifications and, um, being able to put a higher price point on their product, um, to put a premium on it. So what's happening right now is consumers are starting to recognize like, oh, yeah, regenerative is better. I want to buy regenerative.

12:39But the gap in the price between the conventional options and the regenerative options is actually too big to get over that hump of like, oh, I want regenerative. Oh, but. Right.

12:52Maddie Hamann:And as all prices have been going up in the grocery store. How have you all strategized around that to keep the integrity, but also scaling? I know you're in Whole Foods, Sprouts, and really scaling production. How do you all manage both sides of that? yeah i mean honestly it's really it's tough um one thing that one thing that's like definitely working in our favor right now is that we were that we source i have everything everything except for our tortilla bags are domestic so we're we've avoided a lot of the tariff nonsense and also just you know like locally more locally sourced stuff like it you don't you're not paying as much in transport.

13:41Right.

13:42Maddie Hamann:Cause you're based in California too. Okay. So that makes sense. Yeah. And I mean the other, but that, yeah, there's a lot of, there's a lot of pressures on the business. And I think that one of the things that we are, one of the most important things that we are paying attention to is just like, okay, our customers really like the biggest thing we have is the trust that our customers have in our company. And so making decisions like, okay, well, let's actually, let's start to use some non-organic buckwheat. Like that's just not, that's just not a part of our brand. And we have built a customer base and like in, in the more recent times, instead of, instead of like cutting costs on the actual product or trying to like switching back to plastic bags, which would be cheaper.

14:40We use compostable film for our bags right now. We are, we've cut all of our meta ad spending and we're now our e-commerce, we've actually like transitioned. Our e-commerce is not really a focus. Like we still have our website. It's available for our dedicated customers and we still are doing like special release flavors, but we're with the rising costs of shipping the product out, that channel went from being kind of like neutral, net neutral to being net loss. And we were like, okay, no more e-com. Like, I mean, we can't.

15:20Maddie Hamann:That's really interesting. So you're finding that it's more scalable to go through more traditional retail channels versus growing D to C? Well, I mean, it's scalable. Like basically what's happening is that now that we've reached the point where we are in national grocery, we have distribution. We can go out and we can talk to all the independents and say like, hey, you should really bring your product in. We have sales data to show that the velocities are like the dollar velocity is where we want it to be. And like, you know, that's totally right. Right. Whereas like in the beginning, it's like, hey, our bread is really good.

15:57Maddie Hamann:I bet your customers are going to like it. I don't know how to tell you. Right. So how did you get the interest of, say, the Whole Foods and the Sprouts, etc.? How did that start? yeah that's actually so that's a that's kind of an interesting story so and again sticking to the integrity of your brand it turns out to be like intangibly valuable um so we we started off the brand with the idea that we would go to retail like we weren't like oh i got a great idea for a ddc business frozen bread let's do it right and it's just not how consumers really shop also. Yeah, totally. I mean, it was COVID times.

16:37So, you know. Okay, fair. Yeah, that is a weird

16:40Maddie Hamann:time. But we, yeah, so we were having, and again, it was COVID times, we were having a lot of trouble, just even like a lot of the buyers were just not doing their regular category reviews. Like they were just like, we're just like keeping the rail, like keeping the train on the rails here like right right right shaking it up and so getting the bread onto the grocery shelves was challenging which is why we pivoted to d2c in the beginning we were like okay well we didn't actually pivot we continued to pitch retail and at the same time we were like well let's see if we can sell it online and got it that and we continued to sell into retail and then what happened is like so in 20 it would have been in yeah i guess it would have been in the of 2023, which was, you know, no, 2022.

17:31I can't remember. I know.

17:34Maddie Hamann:And in entrepreneurial years and COVID years, it gets very blurry. Yeah. Yeah. A couple of years after we started the brand, we'll just say that. Um, we, well, there was two things. One, we, in the beginning, we were so small that we didn't, we couldn't, we didn't have a slicer for the bread, right? Oh, okay. We have like a very – we have a custom slicer that's from Sweden because our bread is so like – Thick? Yeah. It's just – it's not a white bread. Right. And so most of the slicers that are here in this country are for that. So we got this like – it's made for like barley, rye breads, you know, like heartier bread.

18:15Right. Right. And what we what we ended up doing to get the Whole Foods deal was we just Adam like very meticulously hand sliced so that it looks like it was done by a professional and sent the samples and sliced. And so they got the sliced bread samples. And then in the conversation with the national Whole Foods buyer, basically, basically she brought us in because we were the only only brand doing compostable film.

18:46Maddie Hamann:Oh, really? She like it was it was a very large part of our conversation. She was like, OK, so like this compostable thing, your bread is really good. I think it has promise. But but like you're selling it in compostable film. Every brand that I talk to says that this is impossible, that the technology isn't there yet, which is true in some regards. But in the frozen bread set, most breads don't actually need a vapor barrier. And so it totally works to put the bread into a compostable film. And we were, yeah. So she was like, okay, you guys are doing it. I'm bringing you in nationwide right off the bat.

19:33Maddie Hamann:Wow. Yeah. That's incredible. Yeah. so if someone doesn't have composting in their uh city or state is it still compostable like can it still break down yeah it's actually like it is it's a certified home compostable so if you have a really good okay yeah it's still it will still work it doesn't break down as fast as the rest of the compost so that like i'm a i'm a home composter so like i know the ins and outs of this you have to compost it like three times like you have to like filter it and then keep putting it back in but it does break down that is really cool and that it sounds like no one else is doing is it still the case that no one else is doing this yeah it is still the case yeah actually interestingly um walmart had this they they they had a push where they did uh one of their lines they were putting it into this compostable film.

20:36But then just with like cost of materials, they just pivoted. Right.

20:42Maddie Hamann:But that's cool that you all are setting that trend and hopefully it's not a trend in that the technology then catches up so more brands can do more sustainable practices. Because I feel like if it's easy and simple and doesn't cost an absorbent amount, people want to do small changes, right? It feels good to do something small and easy. It's just like, to your point, the technology, the cost just has to level set a bit more for consumers to want to make more switches. Yeah, totally. I am so curious, where do you see the brand going in the future? Yeah. So our number one product right now is our original English muffins.

21:33okay they're really good but you know one of the things about our bread is that um it's not trying to be a white bread replacement like it is kind of its own thing right so educating consumers on like okay this is this you're not going to use this bread the same way that you would use your sourdough slice like it's you know better for open-faced toast but it's also like so amazing just as a snack, like just have it with some toppings. And like you said in the beginning, it doesn't bloat at all. Like it feels so good in literally everyone's system. Like everyone comments about, wow, I feel really good after eating this.

22:12Yeah.

22:12Maddie Hamann:Which you can't say about most breads. Exactly. Exactly. Do you do a lot of sampling and tastings in stores for people to experience it? Or is it mostly online that you're educating? Mostly online educating. Um, you know, as much as, uh, as much as the industry wants you to think that everything is shifting and like online is the, is Instacart is the new way for brand discovery. No, like still something like 70 to 80 % of brand discovery happens in store. Right. Looking at the grocery shelves. So one of the things that we have done is our packaging is like, we, we have this, we have a, we do a brand block basically.

22:56So all of our packaging is this bright yellow color with like, you know, accents to differentiate what the flavor is. But when you look at the door, you just see this like yellow patcha. So that kind of acts as a little bit of a billboard. The frozen set is hard in the sense that like if someone's not like going into the frozen bread door very specifically looking for something, it's kind of it's kind of even hard to see into the door sometimes right so we have been doing things like static clings and irc coupons i mean the ircs are on the package but the static clings or like coupon booklets on the outside of the of the grocery door if they're allowed at the retailer um and you what did you ask about we are on instacart and all of that um have you found

23:44Maddie Hamann:that that's been helpful because people aren't necessarily needing to go into the frozen section if they're shopping for their groceries online, like in Instacart or. I mean, like Instacart is definitely with like sponsored products is definitely one of the best ways, one of the best spends that I, that you can put forth on exposing your brand to new people.

24:12Yeah, that's definitely effective. And yeah, you asked about demos. That's what you asked about. We have done demos. They're just really, really expensive. And I haven't, you know, I just feel like I haven't found the unlock with finding a really good demo company that just like hits the demo at the right time and executes it really well.