Advice Line with Andrew Abraham of Orgain

26:09Grape juice and vodka. It just gets you through the round. And anyway, we're fumbling around with these plastic cups and lids and straws. And I'm thinking, you know, I can get a beer or a seltzer or a malt-based drink in a can. man, why is this not in a can? And so that was right before the COVID era. And so that idea lasted about seven minutes until I lost the next ball or whatever. And then enter COVID where my day job slowed way down because imaging centers shut down for COVID and can only help homeschool the three kids for so long. So got that idea again and started having some sleepless nights about how do you produce a cocktail?

26:50How do you can it? How do you sell it? And I just kind of went down that rabbit hole and started it. Andrew, a man after your heart, because this is like, I'm hearing so many parallels. A lot of parallels. Yeah. Yeah, it's pretty incredible. And first, I want to say that, you know, Turner, congratulations on the journey and what you're doing here. And it takes, you know, a special type of courage to do what you're doing and keep your daily job and venture into beverage, which I would say is my favorite and most exciting category by far and away. Well, I appreciate it. I feel like, you know, it's a little bit of yin and yang, where I feel like I'm doing good by day and, you know, I'm selling alcohol by weekend or whatever.

27:28But, you know, I think having that entrepreneurial spirit, I didn't know I really had it until a few years ago. And once you realize you have that passion to do something different, it's hard to let it go. And resiliency and hard work have kind of gotten me to be able to do both. But it's like having two full-time jobs now. I'm sure. I'm sure. Yeah, I bet. I mean, Andrew was a full-time resident when he launched Organe, and so I can't even imagine what your day is like. Turner, tell me how, I mean, you launched this relatively recently. Tell us a little bit more about the business? Like, are you doing over$100 ,000 in sales yet?

28:11Is it wide distribution? Where is it available? Yeah. So started in 2021, launched the product in May out of my garage, sort of like you, I think, Andrew. And, you know, my wife and I were driving it all over the state of Virginia on my days off. And when she wasn't ferrying around our three kids to sports and, you know, got a lucky break. Got in with a distributor here in Virginia in 2022. And since then, we've grown to 10 states of distribution with different distributors. We've got six flavors on the market. Sold in convenience stores or? Yeah. So another thing I've learned after the fact is how difficult the alcohol business is.

28:52So each state has very different laws and regulations. Virginia, I'm fortunate because it's even though it's spirit-based we can sell it in grocery so we're in trader joe's and total wine and kroger uh top golf places like that whereas the other states i'm in is more independent liquor stores restaurants bars and so each state's a little different and and golf course like golf clubhouses too and that's right yep okay yep and and and how do you do you mind giving us a sense of how big the business is at this point are you uh below five hundred thousand dollars a year or below a million a year? Yeah.

29:26So I like to say we've doubled year over year. So from starting in our garage to now, we've doubled each year. We're a little shy of half a million last year. And I think we're going to, we just launched three new markets this spring. So I feel like it's got some potential for exponential growth. And that makes it tricky. It's hard to predict how much to produce, how much, you know, how much ingredients to order, how much money to put forth toward the next production run. So it is growing, and I think in a pretty exponential fashion. All right, let's get to your question. So you want to think about maybe bringing on investors, or maybe you are already having those conversations because you need money if you want to scale this thing.

30:09Tell us a little bit more about what you're looking for. Yeah, I think at this point, like I mentioned, I've bootstrapped it to this point with kind of cash flow from the business and personal savings, the small credit line, And, you know, I think really the key to this business as a David versus a sea of Goliaths is having marketing. I have, you know, I'm not putting much budget other than when I'm doing Instagram ads, you know, trying to bulk it up a little bit. Or I have one influencer that sort of, you know, I pay each month to kind of promote the brand. But I think the key to this brand is getting it out, getting the word out to the golfers out there to know it's at the golf course or at the grocery store.

30:51And so when you're looking at raising capital, you know, obviously I've thought about friends and family, but I'm always nervous about losing other people's money. I thought about bringing in other investors, but that brings challenges as well. And so really I'm looking to see what kind of guidance you might give someone that's in that growth phase that has success. And it's how do you do that? Because again, I'm very intimidated by that process. Andrew, you brought in investors, I think for the first time, you had investors earlier on Gary Hirshberg and others, but Butterfly Equity came in in 2019.

31:25You decided to partner with them. That's correct. How do you begin to evaluate these things? I mean, if you were in Turner's shoes, how should he start thinking? So I'd say, Turner, it's a very good question. And I think it's important to think about it both ways. Meaning, what are you looking for for an investor? from an investor and what is the investor looking at your company for and what's going to be the best. So the most important things I would say without question, integrity, transparency, and making sure that the investor that you bring on is going to be truly value add. In other words, you want investors that you could really trust and trust you, but you want them to be more than just a check.

32:04At my fund, for example, Humble Growth, if we can't catapult the business or really progress the business in seven tangible days on day one, you shouldn't take our money, nor should we invest in you. So I think that value add piece is very important. From an investor perspective, and just to be transparent, I want to ask you some questions. Do you think it's limiting for you to be catering just to the golf community? That's a great question. And actually, in the first month or two of my harebrained scheme to do this, I actually was able to talk to a consultant who was an expert in the alcohol world.

32:40And he said two things. You need a million dollars to start and golf is too narrow. I said, well, I don't have a million dollars to start. And I think with 16 ,000 golf courses and 25 million rounds of golf, I feel like it's a blue ocean. I truly see it as an opportunity that maybe that's ignorance. but I also feel like if you can make a good product and brand it properly and sort of build this grassroots foundation, there's nothing that can stop it. And so I think, again, maybe that's my mistake, but I've doubled down on the golf branding, thinking that golfers play golf, but they do a lot of other things too.

33:20They go to the beach, they go to sports events, they boat. And so our product is intended for that market. I like that. I mean, look, I think it's a very good answer. The one counterbalance to that that you're going to hear from investors is, Turner, if you and I were to go fishing and I'm going to take you to a lake that has 16 ,000 fish, but just down 15 miles from that lake, there's a lake that has 6 million fish. Where would you want to fish? So that's referred to as total addressable market. And that's one thing as an investor, putting my investor hat on, we want to make sure the total addressable market is huge.

33:57Now, what I do like about what you're doing is that it's narrow in the sense that your marketing is very focused. You're going to be disciplined. You know you're kind of the category and what you're after. But that's one thing to keep in mind. The other thing from an investor perspective is they have to know the beverage realm very well. Distribution, sales, marketing, you said, cost of goods improvements on your ingredients, your cans. Taking it a step further, you want an investor that knows the alcoholic beverage space, is familiar with the strategics that you're going to ultimately partner with or acquire you.

34:29And I think that's the ultimate investor for you. I just want to make sure that you understand the questions that are going to come your way. And there's going to be many. And the biggest one is going to be, how big can this business get? Is there a ceiling based on what you're doing? Those are wonderful questions. And look, I'm the first to admit I'm no expert. I have zero experience in alcohol, zero experience in business. So that's where I think, like you said, I don't want to check. I can always borrow more money, which I don't really want to do. But I need more than that. I need networking.

35:01I need that business expertise, the connectivity to be able to really grow the brand. And that's not your average investor. Yeah. You need somebody who also loves this brand. And the other thing I would think is particularly interesting, because I think that this, like, can you turn this into a lifestyle brand rather than just a golf lifestyle brand? And I think you can. I mean, these are nice cans. The colors are pop. The flavors are nice. You can imagine just a cooler of these at a backyard barbecue. you. Yeah. I think, I think guy that's spot on. And I would also say Turner, you could still market and be aggressive to the golfing community and do everything that you want, but then you open it up where this weekend I'm having 20 friends over and I'm going out to buy four and no one golfs by the way, in, in these 20 people that are coming over, but it doesn't matter now.

35:51And if you have that moment or that pivot where it doesn't matter, you're going to open up into that much bigger lake. And I think then you have no ceiling, right? Yeah. Well, and I like to often think about how many celebrities you see, for instance, at the ATT, Pebble Beach Pro-Am, Bill Murray, Justin Timberlake, Jimmy Fallon's big golfer. These people that are doing other things, they play golf. And so it's not just the diehard golfer every Saturday on his foursome. This is the person that's going to Topgolf with their family, for instance. And he's like, I want something other than beer. I feel like even though it's golf branded, we do have more of a slightly universal appeal.

36:31At least that's what I tell myself. Yeah. We had Gary Erickson on the show. And if you remember with Cliff Bar, he started that brand with cyclists and triathletes. That was his tribe at the beginning. And of course, eventually grew into something that had mass appeal. I mean, even Oregon started something for people in hospitals, right? And now it's for athletes and people and kids and moms and all kinds of people. Similarly, I mean, you have this opportunity to build this through that tribe of golfers, but really with a vision to make it a non-golf specific product. Yeah. And I've become pretty good on the USPTO.

37:08So I trademark a lot of sayings, one of which is drink like a golfer. So it's implying that even if you're not golfing, you can still have a cocktail when you're skiing or doing other things, right? So - Hopefully after skiing. Hopefully when you're down the mountain. Yeah. That's a great point. That's a great point. Yeah, no drunk skiers today. Andrew, any last words of wisdom for Turner? No, I think, Turner, you're doing an awesome job. And I would encourage you to think a little bit broader and certainly bring on people. I think the good news here is that there's a lot of people in this space that are eager for brands that are doing something special and unique.

37:45It's up to you to unlock and find that pivot. the same way the Cliff founder did, the same way I did at Oregon, the same way others are, open that up as wide as possible. And I think you'll see a lot more opportunities. Turner, don't just drink like a golfer. Think like a golfer. I love it. Can I trademark that? Do you mind if I grab that one? I think it's yours. You got it. It's yours. You got it. Just send me the residuals. Turner, congrats. Thank you so much for calling in and we'll be watching. Thank you both. I'm humbled by this opportunity. Thank you. Thank you. Thank you. Hey, radiology into canned cocktails, it's pretty cool.

38:22I mean, it's not every day, Andrew, that you come across, or maybe you do, I don't know, people who are in your profession who basically want to make a pivot into the world of entrepreneurship. I'd say it's exceedingly rare, but I think I love hearing stories like this. And I think doing things that you've never done before is the most exciting thing. And there's growth, but there's also, you know, I would say growth and comfort never coexist, right? And you have to kind of get out of what you're accustomed to to find that growth. So it's great to hear these stories. I love it. All right, Andrew, we're going to take another quick break.

38:56But when we come back, a founder who's got their product in over 200 Target stores, but still can't get any love from investors. Stay with us. I'm Guy Raz, and hopefully we've got the answers here on the advice line on how I built this lab.

39:20hey welcome back to the advice line on how i built this lab i'm guy roz so andrew uh let's bring in our last caller i think we've got katherine on the line katherine hello hi how are you katherine welcome um please tell us your name the name of your business and where you're from? My name is Catherine Smart. I'm the co-founder and CEO of Not Just Co. And we make really delicious, very versatile, I should say for this crowd, no sugar added, no junk added, pasta sauces and salad dressings to really support busy families with a weeknight dinner juggle. Nice. And where are you based? Where do you live?

39:55Somerville, Massachusetts. Oh, cool. Nice. All right. So Catherine, what is the question you brought for us today? My question today is around fundraising. So my co-founder and I are raising our seed round of a million dollars. And we have the first checks in. And the feedback that we're getting from a lot of investors is we love the brand. We love the product. We see the vision. Please come back when you have$2 to$5 million in sales. And we're going to do about a million dollars in sales this year. We launched in 240 targets. We have nationwide distribution, strong velocities. But my question is, how do I connect with those right angel investors, family offices, maybe VCs that are interested in a company at a stage like mine.

40:34Because Andrew, I know you know that it takes capital to get from point A to point B. Sure. Okay, we'll get to the question in just a moment, but a couple questions for you. So not just code, these are sauces, dressings. How did you get this idea? Tell me where it came from. You know, I spent my whole career as a personal chef and a food writer and a culinary instructor on television. And I realized like most people cannot afford a personal chef. And I just really wanted to help a wider audience get dinner done because, you know, as I think you both are parents and know what a challenge it can be to get dinner on the table.

41:12Yeah, it's not easy. Yeah, I do it every night. And it's my time to myself, but this is a lot of work. And so this is basically you decided that you wanted to create ways to make it easier for people to make dinner, but with sauces, which really is what it's all about. Like you can throw a piece of fish in the pan, but if you got a good sauce on it, then you have a really good dinner. See, you know that guy, but a lot of folks don't. So our flagship product is called our 10 Veggie, Not Just Pasta Sauce. And it actually came about because I had this personal chef client with a farm share. And every week, I'm like, how do I turn this box of vegetables into something the whole family's going to love?

41:48So it started as a sauce for spaghetti and meatballs. It was like, oh, this is a shakshuka base. This is an enchilada topper. I can throw it in an Instant Pot. And so I cornered my co-founder when she was six months pregnant. after a cooking class, we taught together and said, what if we put this in a jar and made more of these kind of meal starting sauces? And, and Catherine, what, tell me, like, how are you? How did you initially finance this? Did you just kind of bootstrap it? Or did you raise a little bit of money from friends and family? Yes, it was a combination. So we actually started back in 2018.

42:21But at that point, my co founder and I were working nights and weekends, we were putting sauce runs on credit cards. We were delivering sauce to local specialty food shops. Eventually, I convinced some of my personal chef clients to put in the first money. And that was a really hilarious pitch, right? Like, give me your money so I can stop making you dinner and go do something else. But they were supportive and really great. And we have raised 1.7 million to date. So that we were able to create our first five SKUs, we gained distribution. But we're at a point now with the growth that we need to raise again.

42:55So question for you, Catherine, as you're thinking about the business, one of the most important things for investors is to understand the use of proceeds. Meaning if we're going to invest capital into your brand, how exactly are you going to use the capital and in what way? So we're looking to raise a million dollars. I think we have about half of that left to go. The primary place that that's going is supporting our recent retail growth and distribution. So a lot of it is going to marketing. Our growth has been 100 % organic until now. There is also some production, but the day-to-day business supports most of the payroll and it really is just able to take advantage of these retail opportunities that we won't be able to unless we're able to support them.

43:39Got it. So Catherine, curious just to understand a little bit more about the business. Where are your biggest sales today? Is it online? Is it in the stores today? or it's in the stores today so we do have a direct-to-consumer business but shipping glass across the country we learned pretty early on back then we were bootstrapping that our stronger velocities and interests were actually on shelf so we do a lot of sales through target in the 240 doors which are across the country and then we're also in a lot of grocery stores like central market and nugget kind of regional chains um in the natural grocery channel and how are they doing I mean, you're on a shelf at Target or elsewhere with 7 to 10 to 15 to 25 other brands.

44:22How are – I mean, you mentioned your sales so far. How are you getting this in front of consumers? Yeah, so it is a challenge because we have – we don't have a massive budget. But we have, as I mentioned, we raised money previously. And we find that what works really well for us is a high-low promotion strategy. So people love our products. And once they try them, they come back and buy them again. So for instance, we just ran our first promotion at Target and saw 300 % lift in sales. There was places where 10 jars were flying off the shelf in one week, which when you're not a salty snack or a beverage, that means something.

44:57That being said, we have to be really judicious and capital efficient because we're not Raos or one of those larger brands. Yeah, I think what you just said, Catherine, goes a very long ways. And I think step one, one of the most important things you can do in looking to raise money is craft that compelling story, right? So as an investor, investors all, they want to understand your vision, of course, the market opportunity and how it's differentiated. But they also want to know exactly how you're going to use the money and what it's going to do to catapult the brand, right? So a concise and compelling pitch deck that highlights your brand's uniqueness and the fact that this is how you're going to use the money and you're going to get to this stage, that goes a very long way.

45:36So I would say that's number one, show your traction. What you just described, showcase your achievements, your distribution, your velocities, your margins. All of those things I think are critical and that's the base and the foundation. And then as you go out, I think, think of it a lot like a lot of people say finding money is difficult and it absolutely is. but it becomes a little bit easier if you go out there and you date as many people or as many investors as you can. You're getting out in front of family offices. You're getting in front of the angels. So like networking events, pitch competitions, which there are many now, right?

46:09Joining angel investor groups to kind of build relationships. And I'm happy to send you some, so that helps. But getting out in front of as many investors as possible, I think will go a very long way. Andrew, tell me a little bit about the, I mean, just anecdotally, I'm hearing that the funding opportunities are harder now, you know, for a variety of reasons, especially around consumer and especially in food. Doesn't mean that there isn't money. It doesn't mean it's not available. There is money. But is that true or is that just kind of, you know, mythology that you hear people talking about? No, I'd say it's accurate, Guy.

46:47It is a bit more difficult today, for sure. I mean, a few years ago, there's investors throwing money at anything and everything. That has since corrected. So I think investors are looking for a sound business that's on the road to profitability, that shows those velocities. It's one thing to get into a thousand stores, but it matters more to investors to be in a hundred stores and sell the daylights out of those shelves, right? So I think it's just a little bit different mindset. Investors are being more cautious and more prudent. So you have to keep that in mind as you proceed with investors.

47:16What I like about this product is the branding, the design is so nice, so clean. It reminds me of like a crate and barrel. It's just very clean and you can see the ingredients inside. But in order to get people to try it, right, Andrew, what, I mean, with limited money, with limited funds, because they're not going to be able to hire 400 different, you know, samplers and stores around the country. what are ways to get people to just taste it, to try the pasta sauce or the salad dressing? Yeah, today we live in a digital-focused world, and you're in the best category for that. People are eager for recipes, for food, to see it from chefs, to see it from moms that have five kids and don't have time for things.

48:00I think in your case, Catherine, you have a very interesting opportunity to partner with a lot of micro-influencers. I'm not talking about the expensive celebrities that have millions of followers. I'm talking about that parent of four that has no time and is looking to find a great recipe, but has 10 ,000 super engaged followers. I think that's how you get more and more people to try your product because they're going to follow the people they trust. Are you doing any of that, Catherine? I'm nodding sort of ferociously here because we literally just launched our micro-influencer campaign. We're actually looking to connect with more.

48:34So that's something we're absolutely doing. You know, I think about, I mean, of course, influencers have a huge impact on products. And I think about there's a brand called Graza. Graza, Graza. It's an olive oil brand. You see it everywhere. Yeah, it's squeezable. You knew this, right? It's amazing, Andrew, like that you knew this. It's a relatively new product and brand, and they've just gone everywhere. I think that whatever playbook they used, and maybe they raised a bunch of money, I don't know, but it's been really effective. And I think that there are things to learn about that. I don't know if it's certainly not so easy.

49:07but it seems like they worked with certain types of influencers to get that product in front of people's eyes. Yeah. And I would, I would add to that guy and say, cause I've, I was fascinated by that brand because more and more people that didn't use olive oil are using it now. And I think there's a convenience form factor. Catherine, you talked about earlier, glass is very hard to ship and that's very true. But I think there's a major unlock for you. Amazon for us is a major business. It's huge. And I think it's a major opportunity for you. I was looking prior to our call, the number one selling pasta sauce on Amazon is in a 45 ounce plastic jar, right?

49:43That may compromise the product, but taking a page out of the book of Graza is maybe you can eventually have something, a different form factor. Maybe you don't do it today, but something for investors to show we are going to revolutionize the way this is shipped and the way this is stored and the way this is used. So people are using a lot more of our sauce. I'm not saying that's the concept, but you have to think like that for the next investor unlock. Absolutely. I mean, it wouldn't be as beautiful in the jar form, but maybe a Tetra Pak, for example, that's not plastic. And maybe there's an online strategy and an in-retail strategy.

50:17And what's nice about that is you have your price pack architecture where it's different prices and they're not fighting with each other. So I love that idea. And I think it's something that could be a major unlock for you, something to keep in the back of your mind. One other quick question that I had for you both is, you know, as I said earlier, taste and nutrition are really table stakes for us. But what I think is a real differentiator is the versatility of the sauce. I mentioned I was a personal chef and that's how I use the sauces. The great for a grain bowl, for a marinade. There's so many ways to use them.

50:47But educating the consumer on that can be challenging. And I'm curious, you both have such incredible creative minds. How would you suggest that I focus on that education piece? Yeah, I mean, today it's a QR code, right? And that you also have kind of on your bottle, you say different things on the front of it. Maybe it's a starter for a chili or shakshuka or things like that that I saw in the jar, which I thought was smart. So I think one question that I have for you, back to you, Catherine, is it confusing at all for consumers as they see your product as not just pasta sauce, that maybe it's actually something that might be not helpful?

51:19Or do you see that it's super helpful? Yeah, so it's interesting. The feedback was a little mixed. But as the business has grown, what we've heard is people pick us up as a pasta sauce. And then once they engage with the brand, they start playing with these different ways to use it. And that's been the same with buyers. At first, there was some hesitancy. And then there was sort of a light bulb moment. But I still feel like we could be doing a lot more with that in order to just benefit our customers and, of course, increase velocities even more for us. I wonder if there's a way without throwing too much stuff on there, and maybe QR code is one solution, that instead of just saying start a chili or simmer shakshuka, you literally say, crack two eggs in this or pour it over a piece of roasted salmon or just something where people are like, oh, yeah, OK, great.

52:06I'm going to get some salmon and I'll do that. We just need your voice to say it, guys. Yeah, that would help a lot. That was perfect. The other thing that I was thinking too, Catherine, is like, you know, putting those, the veggies that are in there. I think that's very differentiating and very unique, right? But it's something that you kind of have to discover and know and turn the back. I think leading with that maybe could help. The other thing is like use 10 veggies. It should also be 10 veggies, 10 uses, right? Meaning like leverage what you're already pushing on and use that front of pack.

52:34And I think that's going to help with value and people will get it right away. And you could distill that down to the right marketing language, but I think there's something there. Okay. For sure. For sure. Catherine Smart, not just company. Good luck. Congrats. It's awesome. Yeah. Congratulations, Catherine. Thank you. Thank you so much. Yeah. I mean, golden beets, carrots. There's all kinds of things in here, Andrew. All kinds of goodness in there. You got to bring that to the front sometimes. Yeah. Got to bring that to the front. Yeah. Andrew, thank you so much for coming back onto the show.

53:08It's been amazing having you. Always an honor for me, Guy. Thank you for inviting me. Thanks for sharing your wisdom and advice. Great advice. Super, super valuable. By the way, if you haven't heard the story of Orgain, Andrew's incredible story, really, I mean, I'm just going to say it. One of the best episodes of How I Built This Ever. So good. Thank you, Guy. Go back and check it out. You can find it on your podcast. We'll put a link in the show description. And thank you, of course, for listening to our advice line this week. if you are working on a business and you would like to be on the show please send us a one minute message that tells us about your business and the issues or questions or challenges that you'd like help with and of course make sure to tell us how to reach you you can send us a voice memo at hibt at id.wondery.com or you can call 1-800-433-1298 and leave a message there and And again, we'll put all this in the show notes.

54:04And we'll see you back here next week. Thanks. And thanks so much for listening to the show this week. This episode was produced by Carla Estevez with music composed by Ramtina Rablui. It was edited by John Isabella. Our audio engineer was Sina Lafredo. Our production staff also includes Alex Chung, Casey Herman, Chris Messini, Elaine Coates, JC Howard, Catherine Seifer, Carrie Thompson, Malia Agudelo, Neva Grant, and Sam Paulson. I'm Guy Raz and you've been listening to the advice line on how I built this lab. If you like how I built this, you can listen early and ad free right now by joining Wondery Plus in the Wondery app or on Apple Podcasts.

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