Nuts.com: Jeff Braverman. From Corner Store to Snacktime Powerhouse

26:14In 2003, people were reluctant to do that. So how did you start to use the internet or see the internet as a bigger opportunity? What kinds of things were you doing just to even create awareness around what you were offering? Yeah. I saw the potential with Google certainly in 2003. Once I joined the business, I started seeing it. A book came out. I don't remember exactly when it was one of the first books about how to use Google AdWords. And at some point I just hired the guy. The guy who wrote the book. Do you remember his name? Yeah. Andrew Goodman. A guy named Andrew Goodman wrote a book. It was like a paperback about how to use Google.

26:57for your business? Oh, I'm embarrassed to say I didn't even, and I'm friends with them still, but we don't, you know, we don't work together anymore. But a friend of mine sent me the PDF. I didn't even pay for it.

27:08So we were one of the first, not the first nut guy online. There was a couple other people, but we're in that freshman class, right. Of, of, of people online, you know, so, so there was some distinct first mover kind of competitive advantage and kind of, I looked at it similar earlier on it's like well if we can sell one order to a one customer in every state a day that's 50 orders a day mind and when I had an average average price of what 20 25 bucks an order I have maybe a little more than that and we used to charge shipping then I don't remember what it was back then but it could be a little bit more I don't remember to be honest back then so you know bottom line is I said hey I don't like this wholesale bulk stuff this concession supply stuff i don't like selling i like more building and engineering and being behind the scenes um let's go all in let's take advantage of this early mover advantage and just run faster than this is stodgy industry let's move faster than anyone else in our in our space you know we probably had you know let's say call 150 or so products i started adding some more products at the time, but nothing aggressive.

28:24And let's really utilize the power of Google AdWords. So what did that mean? I mean, this is 2003. You're revamping the website. And again, 2003 websites, these are a different world. Because before, and we're going to get to the day when you launched it, because I think it's December 4th, 2003. Is that right? Yes. Before that date, you were getting what, between one and five orders a day on average? Yes. It could be a few orders a day type of a thing. So what before December 4th, because we're going to get to that in a second. What did you do? What did you put in place that was going to change the equation that day?

29:04So we were spending very small amounts of money advertising. Okay. And the shift was just still not to spend up much more, but it was going from$3 a day to$100 a day. Got it. You were going from spending$1 ,000 a year to$36 ,000 a year. Correct. Which was a big deal. Through Google AdWords. Correct. Okay. So to December 4th, 2003 is the day you relaunched this new revamped site, Nuts Online. We launched. The ad campaign's immediately on. And it's like the floodgates completely open. It goes up 10x immediately. But if we were doing three orders a day, suddenly it's 30. Wow. But the reason why you saw this shift was because of the way you used Google AdWords?

29:54Yes. I mean, that was the... Yes, we launched a much... The site was better, don't get me wrong, and faster and friendlier and easier to use and so on. But then it also then, at that point, I was able to unlock, you know, unleash, begin to unleash Google. When all of a sudden this flood of orders comes in, it's still a small team of people. Like you guys are literally packing these orders. How did your dad and uncle respond? Were they like, oh my God, this is amazing. So my dad, I mentioned earlier, but my dad's a creature of habit. And look in this store, when we would be busy for Christmas, just in the store, he'd be so nervous.

30:31I loved it. He'd just be so nervous. It was busy. But most days it would be dead. Like we'd be sitting there on Saturdays in the summer. And it's like, I did the math. I finally said we're shutting down on Saturdays. We were making$2 a person an hour. It was just like, there was nothing. There were no customers. Nobody buys nuts in the summer unless they're at a baseball game, I guess. But like the retail business was dying anyway. There was nothing doing. So he would be so nervous when it was dead too. So here, right, it just like, it's just like, boom, boom. Like, like, because suddenly you're talking about it could be a few an hour, right?

31:05And he says, shut it off. He said, shut it off. He said, shut it off. because he was so nervous. Because again, it was just us. We have to do the work similarly. You've got to fill those orders. Like, we're the laborers. And, you know, there might have been some expletives said, but it's like, if you can't take the heat, get out of the kitchen. I told him, go home. We got this. Go home. When we come back in just a moment, the online business gets a huge and crazy boost when some TV fans launch a protest against CBS by sending them pounds of peanuts. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

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35:11Hey, welcome back to How I Built This. I'm Guy Raz. So it's early 2005, and the revamped website for nutsonline.com is getting some serious traction. So serious that Jeff has to convince his nervous dad not to shut it down. Meanwhile, most business is still coming from wholesale in the brick-and-mortar store in Newark. But that store? It's about to get razed to the ground so the city can build a hockey arena. There went the retail store. So we had no choice but to find a location somewhere else. Okay, you did find a location, a facility, where you were going to do your roasting and your packing, but no retail store, right?

35:53Correct. Essentially, 2005 was the end of a storefront of Newark Nuts. And it was still called Newark Nut Company at that point. Correct. It's obviously sad from the family heritage standpoint. point, my uncle was probably more sad than my dad, but my dad hated the store. There's no customers and it was hard and people try to rob you. So like, not a great thing. I think the biggest emotion was fear. Because the store still brought in revenue, even though it wasn't a fun place to work, it's still brought in cash. And margin, much better margin than wholesale. You're talking retail margins. You're buying a truckload of peanuts and you roast it.

36:33Okay, Greener, you're selling a pound bag for$1.59 or whatever,$1.79. It's not a lot of gross profit dollars, but there's margin on it. You know, meaning you can't make tons of money, but you can make money. So great. I mean, even though the numbers are small, the margins are high. So there was fear. But do you remember specifically saying or having a conversation that went something like this? We're not going to have a brick and mortar store anymore. We're not going to have customers coming in. The internet seems to be working. The wholesale business seems to be working. We're not going to stand there and sell to retail customers anymore.

37:09We just had no choice, right? This is a store that was already there for generations, right? But you could have. I mean, you could have opened up a new... You could have gone to the suburbs and opened a Newark Nut Company. I'm just saying it wasn't out of... Yeah. But we just didn't know how to do that. Like, would the customers come? Will they come from scratch? Like we already were losing more and more customers. It was just something that wasn't in the family vocabulary and it would be super risky. Yeah. But yeah, when we, but when we moved out, I was terrified. We were now going to have like much more of a real warehouse.

37:42It's about a 15 ,000 square foot building. And I was nervous. We had offices in the front. I was about to sublease it, but then somebody told me not to. And, you know, thank God we didn't. Yeah. Because you were thinking this is too big for us. So, all right. So you guys are now no longer, you know, brick and mortar, no longer face customer facing. Now it's all online and all a wholesale business. When did you start to see the online business just really become the main business? Do you remember when you start to sort of see that happen? Yeah, if not 2004, by 2005, we started adding a lot of products.

38:27Besides roasted peanuts and cashews. Yeah. What did you add? We started with this base of 150 products across nuts and dried fruit and seeds and candies and chocolates and so on. And then some of it was, I would just say to my dad and my uncle, we're selling salted sunflower seeds in the shell. Other products we sell unsalted. Why aren't we selling unsalted sunflower seeds in the shell? That's funny because they would say, no one wants them, right? Nobody wants unsalted. They would say, no one wants unsalted sunflower seeds in the shell. Correct. But it turns out diabetics do, and that's what they want to chew on at a baseball game.

39:04And that became like, at the time, like our top, if not our top five seller. It could have been our top 10. Certainly it was our top 10 seller. So found gaps in the assortment. And, you know, there was a serendipitous moment where my friend wasn't well. And I donated blood for him on the Upper East Side in Manhattan. And instead of, you know, drinking the orange juice or apple juice, I went to Dylan's Candy Bar on the corner. And I had some of the most amazing chocolates. And so I called that. I had to write a letter. I thought the supplier was huge. I had to write them a letter convincing them to sell to me as a distributor.

39:43I knew the Google game. So like these guys invented dark chocolate espresso beans. So I knew how to rank number one for dark chocolate espresso beans. So that one product allowed us to be a distributor for these guys. This was called Cooperman's, right? Coppers. Coppers. Coppers. Coppers. And right. I just called. I said, hey, give me your top 40 products and we're going to sell them all. And that was the beauty. And it was easy then when we had one distribution center and just kept on, you know, going after where like I had a friend who had celiac disease and couldn't get gluten-free snacks. I was like, great.

40:16And in 30 days, we certified 700 products. Bam, organic. We just kept on expanding. We would take catalogs from our suppliers and you dump them into a keyword tool. So you didn't need to do any research. It just told you what people were searching for. The US is a huge place, lots and lots of people. So we just went after it super aggressively and suddenly had thousands of products over the next X number of years. And was your wholesale business still significant? The traditional legacy wholesale business? Yeah. It just kind of stayed the same, right? Because I did put effort into it, and then it was like less effort into it, and then it would just be a slow decline.

40:56But the bulk of your business was basically individuals going to nutsonline.com and ordering product. That was like more than 60, 70 % of your business? By 2010, right? It's the vast majority, right? I know the revenue we did when we switched to nuts.com. And at that point, the wholesale business is like 2 % or something, 3%. So when, I mean, the company is still called Newark Nut Company, right? Correct. Just out of curiosity, when did you finally just change the name to what it is now? Once we rebranded in 2012 to nuts.com is when we changed the name. Okay. So it's still the new work of a company, but it's Nuts Online.

41:45That's really what you're known as.

41:51And I think I've read that by 2006, you're doing about$5 million in revenue. Okay. So you know better than I do, but yeah, something like that. Sounds about right to you. So that's pretty great. I mean, you joined in 2003 officially, formally, and you hit your 5x now, 4.5x in terms of revenue, doing pretty well. And it's all coming from the internet. There was a stunt that you pulled the year after that. I want to ask you about this because there was a show on TV called Jericho about this town in Kansas and it was post-apocalyptic and how they survived this nuclear attack on the United States.

42:28And it was canceled. CBS threatened to cancel it because they didn't get enough viewers. I was looking at it. The numbers by today's standards are insane. They got like 9 million viewers. But in 2007, that was a disaster. and you sort of got involved in the protest about canceling the show. And tell me this story because this is a crazy story and it actually got you tons of press. But what was the story? Yeah. So this post-apocalyptic drama, like you said, got canceled on CBS and fans decided to protest because in the last episode, there was this historical illusion and it talked about the details matter less, but a general says, the US general says to the Germans, nuts, like we're not going to surrender nuts.

43:18So fans decided to send nuts in protest to CBS. In the show, a character said nuts in response to something like - Yeah, it's a true, like I think it's a true story. Okay. I forgot it was the Battle of the Bulge, Battle of the Stone, I don't remember. But the general says nuts, so fans decide that's the rallying cry. Nuts. And they're going to send nuts to CBS. To protest CBS's decision to cancel the show. Okay. Correct. So we see these strange orders coming in and my cousin says, hey, what the heck's going on here? I'm scared. There's people placing orders for one pound bags of different types of nuts, often cheap nuts, like mixed nuts and shell or peanuts.

43:57Yeah. Shipping to CBS. In New York. Yeah. Their New York office. Yeah. Okay. So my cousin was like, hey, we can't ship this stuff. We have to cancel it. And I said, hold on. Let me just do some research here and I find out what's going on. The show's canceled. And I'd never seen the show. And by the way, were they sending it to a specific person at CBS or just a pound of nuts to CBS? I'll get her name wrong. It was something like Nina Tassler or something like that. Okay. Okay. And I just looked her up. Nina Tassler. She was at CBS. There's a lot of energy here. And I said, let's go. let's do something here where you have like all these people it's super inefficient and it's expensive to ship a one pound the shipping is freaking eight dollars or something like that let's harness this energy you know when you're a fundraising drive they have the thermometer type of a thing i said let's go let's get up a thermometer and this is where i've always heard this expression you know man plans and god laughs and then probably for the next three weeks I didn't sleep.

45:04Wait, so sorry. On the website, let me understand this. You had a banner or something that said, hey, if you don't want CBS to cancel Jericho, click here. Save Jericho, right? Save Jericho, send peanuts, and we're going to make it super easy. Give$10, give$20, give$50, whatever this is, because we had a gift certificate. And we'll send nuts to CBS. We'll send nuts in bulk, in 25-pound cases, freshly roasted peanuts, because that was our shtick. still is our shtick and um everyone came to us we start collecting so much money i think very quickly it goes through forty thousand dollars how how many pounds did you end up of peanuts did you end up sending the cbs so the number i remember was we shipped forty thousand pounds so that's that was that full truckload of peanuts what did they do with all those peanuts i don't know i think i don't remember such a long time ago i think they ended up donating donating them.

46:01We gave them addresses of where to send them, where people could use them. I mean, just the publicity that you got out of that, you were in the New Yorker and the New York Times and CNN. National Enquirer more than once, which was quite embarrassing. I mean, and by the way, this was, they decided not to cancel it. They decided to renew it for another few, well, it was only seven more episodes, but they did disagree. Correct. And, and I guess they actually appreciated the stunt. They like invited you to meet the cast. Yeah. They flew me out. I was the celebrity at the fall CBS fall lineup party.

46:38Mind you, I slept at my friend's dorm or whatever the hell I stayed. You know, I walked there, you know, people come in limousines. Um, this cast were kissing me. Um, and these were like famous people, but yeah, they, they, and then when Nina Tassler brought it back and she says, just please stop sending the nuts. But for us, I mean, our website crashed at one point in time. We were on like KROQ and all these places where like the traffic was unbelievable. Interestingly, from a business standpoint, we then did some analysis on, hey, did these people become customers and come back? Not really. But what I realized was we're getting links, as you can imagine, mattered a lot then.

47:17New York Times, that's a lot of authority. It's lending. Ultimately, you'll get a kick out of this. So when the campaign was done, I then redirected that page to our Nuts page. So our rankings would go off once everyone was done with this thing. Wow. Meantime, the Nuts business is growing. I mean, obviously you're doing advertising, but it just continues to grow year after year. I mean, the online business. Correct. And you were, by this point, CEO of the company. Yeah, we didn't have quite titles. But you would say by 2000, certainly once we bulldozed and moved in, I was already calling 90 % of the shots.

47:56Now this is just a very different business. Was your dad and uncle, were they still involved by 2007, 2008? Oh, yeah. I mean, creatures of habit. They're helping us laborers. This is like you get into Christmas season. You don't hire more people necessarily. You bring in friends and family. And it was different with food safety. Now you can't do any of this stuff, but we would just feed them. Let them eat the stuff. So, all right. So let's go to 2012 because this is a pivotal – another pivotal moment. I mean at this point, you are nutsonline.com and that year you would change the URL. And I guess the story I've read starts with Rachel Ray, which I'll ask you about.

48:39But I guess the story goes back even years before that. So you're nuts online, but you realize that actually you'd be better off if you were nuts.com, not nutsonline.com. That would be a better URL for you to have. Tell me about why didn't you register that back in 1999? Was it not available? Yeah, it wasn't available. And I didn't have the money. I didn't even think like hindsight's 20, 20 just because I didn't come from, like we didn't have tons of money. I didn't even think about buying a domain from someone. It didn't even cross my mind. It was like, oh, these six are taken. Let me move on to the next one.

49:16Like I remember in 2005, I saved to my files, the name of the person who owned it. Yes. They had owned a bunch of things and I DM'd him, which I'd never done. And he wrote back. And I feel like I gave him an offer that I thought was quite generous. I think I offered him something like$200 ,000 then. Yep. And he just said, no, thank you. So you forgot about it. Okay. Correct. That was in 2008. Let's fast forward to 2012. Rachel Ray, she's got, of course. 2011, yeah. 2011, okay. She's got her show on TV. And what, you guys provided snacks for her show? Yeah, it was a wedding episode. And we had a nice wedding candy business online.

50:02What's wedding candies? Think of like Jordan almonds in this organza bag. Oh, Jordan almonds pastels. They're pastel colored. Okay. Who likes Jordan almonds, by the way? They're not good. Ours are like super fine. So it's less sugar, but I can't. I don't like Jordan almonds. It's gross. It's just coated. I think one of my kids does, but I think they're gross. But whatever. Put chocolate on them. Yes. Don't put more stupid sugar, candied sugar on it. Yes. Look, we'll sell a better quality than most. And we did ship them to Rachel Ray. And at the very end, she says in the credit, she says, oh, I really want to thank nuts.com.

50:38And we were nutsonline.com. So I was like, oh, man. Oh, wait, sorry. Go slow down. She says nuts.com. Not nutsonline.com. Correct. I was like, oh. When we come back in just a moment, how Nuts Online finally gets a name change and turns into an earworm in the most annoying rap jingle ever written. Stay with us. I'm Guy Raz and you're listening to How I Built This.

51:25Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2012, and Rachel Ray has made a slip of the tongue on our TV show, referring to nutsonline.com as nuts.com, which actually is the name that Jeff had always wanted. I thought it was better. And like over the years, people would often say, wait, what is it, nuts.com? They wouldn't catch the nuts online. I think you know I'll say we but more me I just the foresight that like this Amazon centric world is going to do a great job at intermediating your relationship with the brand think about when you go on Amazon you buy a light that breaks the next day but like it's vendor QBZAY you know whatever from China right so I think I had appreciation for where that was going where how brand even though we had a brand how we could lean in more right certainly like hey if someone sees our ads and it's nuts.com, that's like, whoa, these guys have much more credibility when that stuff mattered more from a retention standpoint.

52:22I did back of the envelope math. If you get a 1 % improvement in retention, whatever, long-term, this stuff can pay off from a recruiting standpoint, from employees, everything. It's just cooler. And then I just asked a friend. I asked some friends what they thought. And they were supportive. So I re-engaged with this guy. and and and in the end what did you agree to what was the price sold to me was seven hundred thousand dollars seven hundred grand and and uh which he never counted he never countered i had to make eight moves in a row he would just say no no no no no he wouldn't even counter you would offer this no this no no so you were negotiating against yourself correct and at the end i just i was getting fed up honestly and i have principles and i was like you know not that this was like a playbook or anything i was like hey this is exploding 48 hours i'm walking and uh he then accepted it.

53:13So 700 grand for a business doing 30 million a year seems very reasonable. Were you nervous about spending that much money? No, it was reasonable. We were very profitable at the time and I just believed in it. And again, my BS back of the envelope math felt like, hey, a slight and change of one of these things, you know, we'll get a, okay, maybe it's not a two-year payback, but maybe it's a 10-year payback. Okay. So you have the domain. I want to go back to the margins thing for a second, because earlier you had mentioned that the retail store did really well from a margin standpoint, even if the overall revenue wasn't so high that 50%, you're selling direct to the customer.

53:53Well, you've got an online direct to consumer business. So I'm assuming the margins are, I mean, you got to ship it and package it up. But still, I mean, the margins are probably great. They were great because also there was different times where, right, Amazon didn't create the table stakes of what they are, right? We used to have shipping actually was a profit center where - Oh, because you could charge for shipping, but that included your costs. And also, look, I wanted to build a business the way I wanted to. So I don't want to condition customers to expect discounts. I actually wanted shipping because I wanted the hurdle, because I wanted to get the good customers.

54:32I wanted to adversely select away the bad customers. And the complaints we got back then, let's say for free shipping, when you would actually look at the customers complaining? This was then. It was a person buying a bag of sunflower seeds for$2.99. You can't ever make money doing that. So, all right, just to be clear, this is Amazon changed the game when they made shipping free because then everybody expected all shipping, which today everybody expects shipping to be free. Correct. And obviously you pay for Prime, but people obviously forget that. You did not. You were charging for shipping up until Amazon just kind of changed that because you could because people assumed you're going to pay for shipping.

55:12But you could charge a premium for it because, you know, you had to cover your costs, the person in the warehouse. And so even though the shipping cost might be$3.99, you could charge$4.99 for shipping. Correct. The economics were great. Advertising, what people call, you know, CAC and so on, back then was very different. So your advertising as a percentage of revenue was way lower. Labor was way lower than what it is now. So, yeah, pretty good economics back then. All right. I want to just digress for a moment and ask about sourcing because you're selling – you were selling at this point 150, 200-plus different SKUs, different items, right?

55:50From Jordan almonds to candy to chocolate-covered espresso beans. But were nuts still the primary driver? Was that still what most people ordered, like cashews, peanuts, walnuts, pecans, nuts? In 2012? What time frame? Yeah, about then. Yeah. I would say by then it's getting closer to a 50-50. Okay. And where, I mean, I know that you're buying espresso beans from Cooper's. Sorry, I keep forgetting the name. It's okay. Copper's chocolate. Copper's. And so where were you sourcing almonds come from California, right? Peanuts are also US. But where are you getting your stuff from? Yeah. So a lot of stuff has grown domestically.

56:35And look, this is one thing that's unique, even though I came into a small business, but because also we had a little bigger aperture than just a retail store, because we had this little wholesale business, we had direct relationships with farmers and growers. And it's like a nice thing, for example, where we buy walnuts in California. Last time I actually visited the farm, the owner of that company, he's a farmer and processor. So he processes for other people too. He's like, Jeff, you're our longest standing customer. His father did business with my grandfather. So if it's still domestic, we're going to go as direct as we can.

57:10When it comes to stuff overseas, it depends. Today, when I think about tariffs and our exposure, I would say direct and indirect exposure to tariffs is like 50 % of our products. Because a lot of your stuff, I mean, cashews do come from, I think, Brazil, right? Correct. Right now, yes, Brazil or Vietnam. Look, my favorite product of ours is an organic dried mango, it comes from Mexico, right? It's not, you know, a lot of this stuff, look, we have a lot of chocolate in our business, ain't grown, not grown, not grown here. And what we'll do is - And chocolate's been more expensive, as is coffee.

57:43Oh, well, that's a whole nother, a lot of stress over the last couple of years. Yeah. These are all time 50 year highs. And well, let's, let's just talk about this for a minute. I mean, climate change, and I don't want to get into this too much, but I mean, it is effective. It's got to affect some of these things, right? Like coffee prices are going up. Chocolate prices are going up. I'm sure that changing weather patterns are affecting certain crops, nuts, for example, right? Correct. And look, we've seen stuff, obviously, we've been in business for a while. We saw stuff where almond pricing went up two to three X our cost years ago because there was concerns about, there was a bad crop, but there was a concern about drought.

58:19And drought in California. I just drove up the five in California's all almond farms. And you're like there's no water here this is crazy this is all being diverted and somehow they figured out better yields and whatnot so then almond pricing has moved a bit but it's come down from that those levels but yeah like one of the few things i lose sleep about these days is cocoa pricing i look at the futures daily because we have a little chocolate business and we buy lots of cocoa both here and in in europe and it's down now you know when i look at let's say the futures In March, it may be down 20-something percent from its peak, but that's 3x where it was two years ago because it's just – it's very hard to grow this stuff as the climate shifts.

59:00There's some insect stuff, but a lot of it's just drought. All right. I want to go back to your kind of fandom marketing side because you bought ad space on SiriusXM in 2015. Yeah. And you And this is so weird You wrote I guess you wrote a song A jingle A help write a rap You help write a rap It's a rap about nuts And it just played on SiriusXM And I've heard it And anybody listening to this You should go just search for the nuts.com jingle Because it is It is so annoying It is an earworm

59:45but really you know tell me the story first about this jingle that you wrote yeah it's super polarizing people either loved or hate it people have remixed it like not our versions people listen to it hundreds of thousands of times but uh yeah look i was just dabbling as i call it 2015 era it was like hey what other channels um so we dabbled a little bit and this was very useful playbook for when COVID hit. We did try TV. We tried some radio. We tried a bit of different things. So look, we're trying to be creative and I don't think it was originally my idea. And then I was supposed to do it, but I'm not really musically inclined and I was sick.

1:00:23So my brother-in-law did the rap and we put it on, we put it on the air. It was again, polarizing.

1:00:45Apparently, you started to get letters in from people saying, stop, you're driving me nuts. Yeah, it was like 50-50. 50 % of people loved it. 50 % of people hated it and couldn't get out of their heads. So was a part of you thinking, this is great. It's annoying. People are talking about this. or were you like, ooh, it's annoying? I think some of the talking and stuff came about actually later too, though, where we already killed it. For me, I was just like looking for a certain return. I think the wrap was just okay in terms of it wasn't super performant. So just the aperture wasn't wide enough for the returns kind of that we were after.

1:01:24So, all right, but all of these different attempts and ways of advertising, like on SiriusXM, I mean, they continue, your business continues just year after year, it was growing. So I would think that really a business like yours, in order to survive and scale, you've got to basically be in every office in America or many offices. And that because you just get repeat. I mean, when you're selling to corporate offices, it's just automatically someone's hitting the, you know, reorder button. And just relying on individual sales, which might be one off sales or maybe somebody might order three, four times a year.

1:02:01It's not enough. Yeah, correct. And in this day and age, it's super hard. DTC space is super hard. You know, what we find with our, call it on the website, but our B2B business, believe it or not, even though the margins, the gross margins are lower, the net margins are higher when you factor in everything. just a much stickier customer and just handling those orders. And what we found was a lot of this stuff was just accidental. And then you just learn from it and lean in. And just along the way, we found stuff where like, I don't know, but we have significant market share of microbreweries across the U.S.

1:02:36Who would have known? I didn't know. Who just buy in bulk. Because they're going to buy their, not their hops or their primary ingredient, but hey, they want to have some toasted coconuts. Right. Pecan flavored brew IPA or something. Correct. And so we found that with offices where the offices may not even be buying the 25 pound cases. They actually put out, they have one and five pound bags, for example, or single serve stuff and they'll put it out. So it's kind of like, and at that point, then let's focus on that and add more and serve their needs better. Never necessarily part of the grand plan, but that's a really healthy part of our business.

1:03:12It was probably 15 percent of our revenue or so. Maybe actually at that point, probably more, maybe 20, 25 percent. All right. So you have – I mean you're growing your corporate B2B stuff and then COVID hits, right? I mean everything closes, offices shut down, and the B2B business must have totally disappeared. But on the flip side, people were suddenly stuck at home, right? So imagine your direct-to-consumer sales must have exploded. Yes. And then you fast forward maybe a week or two, and then schools are closed. And now it became we have infinite demand. How the heck do you ship this stuff? Yeah.

1:03:58Because we're in central New Jersey, which is close to ground zero for COVID early on in the pandemic. Did you have employees who were scared to come to work and scared to be out? Oh, yeah. Yeah, it was terrible. We went to Warren back keeping people safe, tearing down walls of a cafeteria to expand it, putting out bathrooms outside in the trailers. We put in UV light. I was like safety czar as I'm working the plant, yelling. Yeah, just yell to keep people apart. Some people certainly got sick. But one of the worst days of my life, because this was like I was having neurodervous breakdowns every day, was after Easter, the day after Easter.

1:04:37People would reflect. April. So this is 2020. Yeah. Correct. The employees would reflect a lot on the weekends and then more would be scared to come in. And that Monday we had 70 % worker call out. Wow. 70 % of your employees said they can't come in. Correct. They're sick. These are the, because we're making stuff, we're roasting, chocolate coating, packaging, shipping, and I'm just working. I'm literally working, you know, probably like 10, 12 hour days in the plant, then going home, trying to save the business at night. And the employees demanded to speak with me. And it's one of those surreal kind of out of body experiences where in 30 minutes in Spanish, I couldn't find my plant manager.

1:05:14It was a native speaker. I speak well enough. But in 30 minutes, I had to give the speech of all speeches of why we're here and why we need to stay here and how I wish we could close the factory and go home. But we can't. And everyone's counting on us. And, yeah. But it was exciting, too. Scary and terrifying and also exciting. I'm sure you've experienced it. you just put your head down and you go. You know, one of the things I'm curious about is you'd mentioned earlier on about watching your dad just work six day weeks and maybe have half a day off on Saturday and just the grind that he and that when you went to Blackstone, you saw for a version of that there and that you didn't want that.

1:05:55And I wonder whether when you started in 2003 at Newark Nut Company, now it is nuts.com by this point, you know, talking about 2020. you're grinding you're working like your dad was working i mean of course the return is a little different but how did you feel about about that because you wanted to from what i gather you wanted to avoid that you wanted to be able to spend time with your kids and your family and all these things yeah i mean look you didn't have so much time to think um you're talking about like specifically in the covet period yeah and even before that it sounds like you were actually probably working hard but not 60 hour weeks yeah yeah easily that but when you love it it's like i'm sure you ask this or people ask you this and so on it's about work-life balance a lot of theory right now is there's no such thing for me there was no such thing i love it i work all the time and i'm with my family all the time yeah i try to be present like okay if i'm working on the next business idea on a saturday night and my kids ask me to play okay i'm trying to be better about that but one thing i did was especially is when i got married and had the kids hey like i am gonna leave leave work, I had to commute and so on, but I would leave work, you know, five-ish, get home, see the kids, eat with them, and then do work when they're sleeping and so on.

1:07:10And I wake up really early. So I work early in the morning. So look, for me, it's like I rise to the occasion. This past peak, 2024, we sold more gifts than we expected. I was supposed to come in for two Saturday corporate volunteer events for morale because like the workers are working so hard in the plant. They needed me for seven straight days. These are gift boxes, like tins of - Custom gift trays. Yes. We're seasonal. So our business does, December could be double July, but it's not tax. It's like Harry and David sells these things, right? Correct. Correct. So we do similar stuff. Are they a competitor?

1:07:45I mean, everyone's a competitor at this point. Yeah. But no, just in my DNA, nothing's beneath me. You'll see my dad come in, you know, the COVID, we sent my dad and my uncle home, right? We said, this isn't safe for you. Sure. Yeah. My dad's diabetes and so on. They were already in their seventies. But look, my dad will help. He'll help move when we're in the picking area. He'll drag these totes around. And my uncle, he's meticulous about the quality. So we'll bang out tens of thousands of custom trays, which is a unique thing we launched, believe it or not, in 1999. My uncle will be at the end of the line and he'll approve them.

1:08:21And one day they really needed him because we were super busy. He He worked the whole time, like 12 hours. He's got to sit on a stool a little bit. He's older. But then the team gives him a standing ovation. After coming out of COVID, I think understandably because it was a crazy time. In October of 2023, you guys, for the first time, you decided to step down as CEO. You found a CEO from outside the company, outside the family. And you became the chairman of nuts.com. Was this, I imagine you were just exhausted. You didn't want to be doing operations every day and just. Yeah, at this point it was two years before I said I hired a president.

1:09:07What I started, we were picking up our head, let's build out a team. COVID gave us the luxury of then let's go after this and really build out a team and not be so lean. And at that point, finally, I had a friend and I finally brought him as an advisor. so I wouldn't be just alone in this journey because it gets really lonely. And even if you're super successful outwardly, internally, there's this imposter syndrome and do I know what I'm doing? And he helped me see a path where Jeff, hey, in three years, you could focus on M &A, culture and strategy, for example. And I actually heard it on one of your podcasts.

1:09:40It's like, why build on your weaknesses? I don't have to. I could have retired 15 years ago. So why don't I lean into my strengths and do what I love doing and I'm good at? Get exactly what I like. And it could be better for the business too. Yeah. By the way, I think that was Sarah Blakely who founded Spanx who said that. Lean on your strengths and don't worry about your weaknesses. And versions of that have been said by others. But it's true, right? And so today you are – tell me about how you're involved in the business. I mean do you go in every day to the office? You're still in New Jersey.

1:10:20I mean, what's your kind of day-to-day look like? I don't go in that much. I want to give the people space. So maybe I go in a couple times a month. We have a corporate office separate from our manufacturing plant. I would say I'm still more in the weeds than I'm supposed to be. Look, I love being in the weeds. Don't get me wrong. So we'll see. It's still this evolution. And again, I know what I'm good at. I know where I interfere too much. I know things get dangerous and so on. And I'm relatively self-aware. Of course, I have ego. Everyone has ego. But like, I'm okay not being the person, right?

1:10:56I don't need to give the speeches to the employees. I don't need to go to the conferences. That's fine, right? Like, I want to work on fun stuff if I can. Still family-owned, the business. Correct. And your dad and your uncle are still both alive. Yes, they're both alive. And they're not, of course, I'm assuming they're not involved day to day. Are they still owners? So I bought my dad out a long time ago. I probably bought my dad out 17 years ago. My uncle's still an owner. Still a shareholder. He maybe comes in once every couple of weeks. He helps the team on buying. He's got these long-standing relationships.

1:11:38And he still has, yes, can he chisel someone five cents here and there? It's kind of an old-school mentality. Yes. But like the people love talking to him. He goes on vacation with some of our suppliers. You know, it's a nice thing. Or if I'm, I don't want to step on toes, I'll go to him and I'll say, go check the quality of these organic raisins. Because I ordered some and I was like, they could be better. What is, what do they make of this? I mean, just the transition or the transformation of the business from what it was to what it is now. Yeah. I mean, for them, I mean, they're just amazed.

1:12:11They wish Poppy Saul were still alive. He wouldn't understand because he would say, where's the cash? He doesn't see the register and so on. But for them, look, this worked. And it worked really early on. We never took on investors. We grew. We figured out the model. We grew very quickly and profitably. And look, even before the true financial success, they got a second lease on life. I told a story earlier about Saturdays where we're making$2 a day. I did the math. I said, guys, this is not about me shying from work. This is a waste of time. No one's coming to the retail store. So this is like, I don't know if it's 2003, the latest 2004, I said, we're closing on Saturdays.

1:12:51My dad and my dad said, oh, poppy salt would never allow this, right? You just work, you know? And my uncle says, well, can't we just try it out and let's just do a half a day? I said, no, this is a joke, right? Doesn't make any sense for us. we closed and like I made the decision on a Monday and we closed on that Saturday and my uncle on that Monday says oh my god that's the best decision of our life and they got a second lease on their life where they could be involved in the community and go to temple and just do stuff that most other people get to do I bet I mean you know this question is coming but when you think about right this whole journey and what happened and I mean you hope to have five exit And I mean, I think it's estimated you guys are doing close to$100 million a year in sales, much bigger than a million dollar business when you joined.

1:13:46How much of where you are now do you attribute to the work you put in, the grind? And how much do you think had to do with just the luck and timing of the era that you happen to live in? I was born into a family that had a nut business that was terrible. My friend's father, when I was my childhood friend, his father was a dentist and he would make fun of me that my dad sells nuts. No one expected me to go into this business. I mentioned earlier something about man plans and God laughs. Stuff comes your way and it's what you choose to do with it. Are you open to it? And are you going to freaking work fast and hard and smart as it comes your way?

1:14:27Okay, great. I chose to join my little family, nothing nut business and it was amazing my dad gave me the keys yeah and you know my dad will get teary-eyed because he you know what he'll say to the new employees on for onboarding we'll do like a onboarding lunch and he says you know i hated this business i never really wanted to go into this business um and i didn't really get listened to and the thing you know that this I'm speaking for my dad. He says, the thing I said is if I have children one day, I'm never going to make them come into the business. But if they want to come into the business, I'm going to let them come into the business and I'm going to let them do what they want.

1:15:10So this is like a visceral, right? Right, vicarious thing for my dad. And it's special. That's Jeff Braverman, the chairman of nuts.com. By the way, that annoying rap jingle that we played earlier, Jeff says it's still out there and it's still a thing. Oh, I mean, people would jam me with this. They would be talking to me on the phone. They would start playing it. The only thing I do, because I still have it, is when I go to speak at schools and stuff, whether it's executive MBA class or just like Boys and Girls Club, I play the rap at the end and everyone likes it. NerdNuts.com Hey, thanks so much for listening to the show this week.

1:15:55Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, please sign up for my newsletter at gyros.com or on Substack. This episode was produced by Sam Paulson with music composed by Ramtina Rablui. It was edited by Neva Grant with research help from Olivia Rockman. Our engineers are Patrick Murray and Jimmy Keely. Our production staff also includes Andrea Bruce, Alex Chung, Elaine Coates, Casey Herman, Noor Gill, Chris Messini, Carrie Thompson, and Ramel Wood.

1:16:27I'm Guy Raz, and you've been listening to How I Built This.

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