The Key To Finding A Gap In Any Market

0:00The product that we developed in my little San Francisco kitchen all those years ago is pretty much the exact recipe of product that is our almond latte today. We were very clear on those guardrails and sticking to them. Yes, does it add complexity? Of course, does it add cost? But it was all very intentional. Hello, welcome to Shopify Masters, your companion for starting and building a business. I'm your host, Schwang Esther Shan. Can your ideal coffee come out of a can? Josh Mehta and Blair Fletcher Hardy are making it their mission. Josh and Blair launched Pop and Bottle in 2015, making plant-based lattes with no refined sugar and pure purposeful ingredients.

0:46Pop and Bottle stood out amongst the competition and the brand has grown year over year to become a seven-figure business. Josh joins me now to share how Pop and Bottle found a gap in the coffee market. Welcome to the show, Josh. Hi, Shrein. Thank you so much for having me. Thank you so much for being here. I would love to start the show to hear about your relationship with coffee and how it's evolved since you first launched. It's a very deep relationship. At this point, we know each other very well. Before starting Pop & Bottle, of course, I was just a consumer of coffee and of course, enjoyed it very much tea as well, which is also part of our Pop & Bottle brand.

1:26But I think that as we have grown into creating a brand in this space and as we have put our own unique spin on it, of course, I've started to appreciate coffee in a much different way than what it was originally. I think the ritualistic nature of coffee is what I really appreciate the most now. And so, yes, it is a functional drink. Yes, it has benefits. But for me, it's so much more than that. And of course, not just for me, but for so many of us, Your daily coffee, your daily tea, it's a moment of indulgence. And I love everything ritualistic that comes with that beverage. Maybe you're meeting a friend and having a coffee or tea.

2:08Maybe it's your pause in the day and you're enjoying your coffee and tea. For me, I really celebrate that aspect of what we do and of what the beverage offers. And that is something that we also really celebrate at Pop and Bottle. I certainly look forward to my afternoon beverage. so for yourself and Blair what was missing in the market that you couldn't find? Back when we started our brand and to an extent still today the idea of wellness and coffee or tea didn't really exist in the grocery store format so what we were really looking for is something that matched the convenience factor that we needed as you know two young busy people wanting to have options when we go to the grocery store of things that we could consume on the go but then really not finding what we needed in terms of wellness.

2:56So there were options, especially at the time and even today, the store was full of products that talked about hypercaffeination, triple shots, double shots, not very clean ingredient profiles, very difficult to find an organic option, equally difficult to find plant-based options, lots of added sugars, nothing that we felt particularly good about grabbing and nothing that really appealed to us as consumers. And it was really that desire to feel really good about what we were putting into our bodies that was genuinely delicious, but also had great ingredients that fit what we were looking for in terms of being dairy free and being really responsibly sweetened, but without all the compromises that sometimes that meant.

3:40And it was really kind of that white space that we identified and looked to develop our product within. To your point, especially at that time in the market, it was all focused on energy and how long of an energy it will give you and how awake you will feel. So before Pop and Bottle, you actually worked in management consulting in London and you were helping other brands. So what was it about Pop and Bottle and its concept made you confident to leave behind a stable job and venture out on your own? a few different reasons one I think that I was a stage in my life where it felt okay to take a bit of a risk I was younger in my career I didn't have so many responsibilities on my plate you know I had the time and energy and I knew that if it didn't work out I felt confident in my skill set I felt confident that I could go out and find another stable job if things didn't pan out so there was an appetite at that time for me to take the risk two I always wanted to follow an entrepreneurial journey.

4:43It was something that growing up part of my family's identity. My mother was an entrepreneur. I saw her build a business from scratch, really grassroots, dedicate her life to it and really achieve and struggle and do all the things to build something really quite wonderful. And growing up with that modeling, it made me very excited to follow in her footsteps. It also gave me just a vision of what that looked like. It wasn't an unfamiliar territory because I'd really seen it while she was growing her business. I'd been there alongside her as part of her family, seeing her every step of the way.

5:17So it didn't feel like the unknown. It felt like something that was modeled for me and it felt like something I could do. And I think that was extremely important to see. And then three, I had a little bit of a life change that kind of opened a window for me to do that. And I was a management consultant in London. I really enjoyed that career, but I moved to San Francisco for some personal reasons. So I had to leave my job behind. And so I closed that chapter of my life in moving to San Francisco. And just the move gave me a moment of time to really think about what I wanted to do next. I also had a great canvas living where I was living with so many people doing so many entrepreneurial things and a new adventure in front of me.

5:58It made it easier to take that journey because I was kind of in a forced new stage of my life. New founders with great ideas, they often struggle with carving out a space within the market because there's coffee groceries competing in the space. There's consumer packaged goods that are also trying to make canned products. How did you set yourself apart from the competition in the early days? I think looking back, it was not as intentional as it seems now, I guess. I think that there was a lot of trial and error involved. And I think ultimately, many entrepreneurs who are developing a new product or starting a new journey or thinking about a new service, you don't know until you have something together what the feedback will be.

6:47And that was the same for us. All we knew is that something that we wished, my co-founder and I, something that we wished to exist wasn't available. And our hypothesis was that there's other people like us who want this too. And we were willing to do enough of a minimal viable product to understand if that was true. While we didn't fully understand the white space that we were in, now looking back, of course, we see it very clearly. But at the time, we believed that this existed. We believed that people wanted this, but we needed to refine it. We needed to test it. And we really needed to validate from a wider market if that was true.

7:22What we did know is we were willing to take the risk. So we put together products, we developed products that we would want to consume and then slowly tested it, you know, first in a very small setting, then in a larger setting, then on a grocery store basis. Hitting each milestone and having each piece of feedback gave us the confidence that we had something and that there were legs to what we were doing. So you do have to do intensive market research, but oftentimes when you're seeing the established businesses and how much they've done and how big of a footprint they have, it might feel intimidating.

7:56How did you balance that kind of mindset of research, but also not getting scared and intimidated by the competition? There's almost this sweet spot, right? It's doing all the research and doing your due diligence. But then there's also putting up a boundary where you do too much of it, where you have kind of analysis paralysis.

8:21In that case, when you kind of really deep dive into anything, nothing is worth doing because there's always someone doing something adjacent. There's always something that could be competitive. Or there's a company today that could go into your space tomorrow. And, you know, it's very difficult to have that confidence and you have to have the appetite to try and take a risk. I think for us, you know, one thing that just helps is a little bit of naivety. Honestly, you know, we were actually newcomers to this industry. I had a business background. My co-founder has a design background. but neither of us had a food and beverage background.

8:53We had a lot of passion for it. We were super excited about it. We had a lot of drive and kind of entrepreneurial spirit, but we were not jaded by the industry in any way because we were only an outsider. We were never an insider. And I think that's a little bit helpful too in helping us take that risk. So that gave us kind of the benefit of not knowing too much. And then I think the other part of it is just really being confident in what your product is. If you can stand behind your product and you know that you would choose it over X, Y, and Z, and you have a very clear understanding of why, I think that's a very good place to start.

9:31Of course, for us, we had to understand and we had to test ourselves that it wasn't too niche because there was a risk that it was. It was plant-based, it had very unique ingredient profile. It was absolutely different to what was available in the grocery store at the time, but we felt very confident in the quality of the product, in the taste of the product, and also in the kind of unique proposition of the product, where we felt it was really sufficiently different to the channel which we were entering, which is the grocery store channel. I mean, the person who is going into a coffee shop and choosing a fresh coffee or a fresh latte to their exact taste, yes, that is our customer.

10:10But when they're coming to the grocery store and they're buying it in a ready to go format, that's not necessarily who we're competing against. So knowing that we are bringing this convenience and this form factor to the grocery store and understanding the potential and the market that is the grocery store space, that was kind of an important part of our consideration. And being outsiders, you had to start from basics. I understand Blair and yourself actually tested recipes in your kitchen, and you also had a process of enlisting feedback and iterating. Tell us about that process. We did not have a big budget.

10:45We had a little bit of mine and Blair's personal money is what we agreed to put together. Luckily, she's from a design background. And so we're able to do a ton on that side in-house. But yeah, we agreed. You know, the first step was we're going to invest a small amount of money, get to this next stage of having a minimal viable product and getting feedback. And if at that point it feels like we have something, then we'll get to the next stage. So for us, not having a ton of investment at the time, the best way for us to get feedback was to interest our friends and family to help us. And so after doing lots of batches and batches of testing in my small little kitchen in San Francisco, we developed five products, essentially, that we felt very good about and wanted to get wider feedback.

11:31We hosted a friends and family tasting event in my apartment. We invited about 30 of our close friends and family. It was exciting for them. It allowed them to understand what we were doing to get a little sneak peek into what we were working on, try some tasty beverages, get some breakfast and give us their feedback. So it was totally bootstrapped and really simple. We had giant vats of product. We had an iPad set up with a quick Google form where we asked them lots of questions of what, you know, to rank the products. What were their favorite? Why? Which ones would they buy again? How much would they pay?

12:13Anything they didn't like? All of these kind of basic kind of product feedback questions. The result of that was actually very helpful. We had five products going into that tasting that we felt good about, but we honestly were not sure of those five which to launch with. We knew we couldn't launch with all five. Every additional product that you put out there takes resources, investment, shelf space. It's very unlikely for a new brand to walk into a grocery store and they give you five different SKUs that you can put on shelf tomorrow. We knew, especially in beverage, it's an extremely competitive part of the store.

12:46That's just very unlikely. And so we wanted to launch with three. And this simple exercise gave us enough feedback where there was consistency in the feedback provided from our friends. and that was really helpful. We left that event with three SKUs that we knew that we were going to launch with and two in our back pocket for another time. So yeah, that was kind of our first opportunity to get feedback. Once you collected that feedback, you also had to move into a larger set of production and actually package the different beverages. How did you manage the scaling from kitchen to now actually producing the products?

13:25This is a really exciting time, but it was also a very steep learning curve for us. Again, we'd never been in commercial food production, neither of us. And so we were learning everything from scratch day one. And it was exciting. It was also a little intimidating. Food and beverage, of course, there's lots of regulation. And we needed to understand that quickly. And we wanted to make sure that we also understood it very well. You know, we weren't looking to outsource a lot of the hard work because we wanted to make sure that we filled in the gaps of what we didn't know and learned it quickly.

13:54And we also didn't have the budget to necessarily get outside consultants and hire people to do it for us. And I think that that was absolutely a blessing because we learned a ton in a very short period of time. We looked to understand the kind of commercial processing regulation very well. We actually got food service licensed ourselves, which meant that we could operate a commercial kitchen in order to produce the product ourselves. And that helped us understand food safety and a ton of information that was very important. Also, you know, how to go from R &D stage to scale up and what were kind of some of the necessary steps in order to do that.

14:27So we did that. We got licensed ourselves. We found a commercial kitchen. This was kind of very first baby step to commercial production. We found a commercial kitchen set up kind of like for food entrepreneurs like us, where you could rent the space on a daily basis or an hourly basis. And you could produce products within that space under licensing. So we started there. We had a very small team. We were part of the production team and we would produce the product on weekends and then we would sell it, market it, brand it, do all the other things Monday to Friday. And our goal at that stage was just to get 20, 30 grocery stores in the local area to take the product, try the product.

15:11And again, just get that next stage of feedback. Are they willing to order it? What price are they going to sell it at? Are people willing to buy it at that price? Will they come back and buy it again? Which SKUs are doing the best, et cetera, et cetera. Being in California, being in San Francisco, we were lucky and we are lucky that there were some great local natural stores that really welcomed local entrepreneurs who were making good products and making clean products, especially if they're organic, especially if they're locally made. These things all resonated with them from a values perspective.

15:43And that's exactly what we were doing. So we were really grateful that we got those opportunities reasonably quickly. And again, we stood by our product. It was a good tasting product with really good ingredients. And the buyers really welcomed that into their stores. And it was different to what they had available. So it generally was adding newness to the category and adding incrementality to the category, which is exactly what we were hoping for. That was kind of our next day just to get those 20 to 30 stores and our little small weekend production line enabled us to do that. Great to hear about how scrappy the early days were between you and Blair building out Pop and Bottle.

16:22And we'll definitely get into your partnership as well as the growth of the company. I'm chatting with Josh Menta, the co-founder of Pop and Bottle. We're talking all about ritual of coffee today, and I hope Shopify Masters is a part of your podcast listening ritual. If you haven't already, be sure to follow or subscribe to Shopify Masters wherever you listen, and let us know what you think by leaving a review. Thanks. So as pop and bottle scaled, you definitely do need a longer runway and also more funds. How was it as two female founders entering the fundraising realm and speaking and pitching to different investors?

17:05This was another huge learning curve for both of us. Had never raised capital before, had never pitched to a VC or any type of investor. We were absolute novices in this area. And so we've learned a lot and we've raised several rounds of funding. We've probably done it in more painful ways than we needed to if we had been much more versed. in the process. But, you know, we've done it. We're really proud to have done it. We have a good set of partners, a good set of investors that we're glad to be on this journey with. Being women in business and raising money back then, even today, there's just not a lot of us getting those VC dollars.

17:42And that's something to just be aware of. And we try to use it as a strength as much as possible. You know, being a female fan of business, but also making a product that a lot of women were buying, you know, that was kind of our core demographic. We made sure to really fly that flag. Like we are the most qualified to be building this business because we are the customer. And so we really owned that story. We made sure that it was seen as a strength, not anything else. At the end of the day, the investors that really believed that and were ready to champion that are the ones that we ultimately found.

18:18So yes, a lot of VC money doesn't go to women, but how can you make it part of your story? How can you make it a strength? And it was just such a core part of what we were doing and who we were creating a product for. And we made sure that we took that, ran with it and made sure that it resonated. I would say advice for other entrepreneurs, other female entrepreneurs raising capital. And this is something that we've had to learn, you know, the hard way sometimes is make sure that you're really ahead of when you need investment. It's just something that one, always takes more time than you think it's going to.

18:54If you think it's going to take three months, start six months earlier. Two, fundraising is actually something you have to do 365 days of the year. It's not something that you actually are just doing in those six months or three months. Yes, you might be actively raising money and actively pitching in that short time period. But in all of the other times of the year, you're getting to know investors. You're meeting people for coffee. You're asking for advice. place, you're cultivating the group of people, you're figuring out who do you want to be part of your business? You know, who is a really fantastic investor, who really understands your space, who has a skill set that you don't have that you want to bring onto your board, onto your board of advisors, onto your investor network.

19:35It's something that is very difficult too, if you're operating to then also be working on all of that. But I can say one thing I've learned is that you have to invest that time in cultivating those relationships year round. And that'll make the process of actually raising capital a lot shorter, a lot easier and bring better people to the table. You and your co-founder, Blair, have actually been friends for many years before launching a business together. How did you know that the two of you would also make great business partners? Yes, so that's right. We were friends much before we started a business together.

20:09So this is definitely a new chapter of our friendship, which, again, was really exciting and we felt very good about. but also was another element of risk. Starting the business itself as a risk and then doing it in partnership is like a different, but also risky endeavor. It's been so wonderful because one of the challenges of entrepreneurship is that it can feel lonely. Navigating these new paths together just made it one, a lot more fun. It was really fun to build something with a friend. And two, it helped us be resilient and it also helped us be accountable to each other. In the absence of that partnership, it would have been hard for me individually to wake up every day and say, hey, I'm going to keep going today.

20:48There's so many knockbacks every day. A grocery store would say no. People would not show up to work, our production line, and then we'd be behind on orders. And in those early days, if you're doing that by yourself, it takes a lot of inner strength to just keep going and keep taking another step forward, another step forward. But when you have a partner and someone you enjoy working with, it really helps and it really grounded us. It really helped us. And we were accountable to each other. So it really helped motivate us to do all the things that we needed to do to keep marching forward. In terms of, you know, what gave us confidence in doing the business together and taking on the partnership together, definitely some faith.

21:24But also what I knew was that there's risk to our friendship and also to our business relationship in doing this. But would it be more fun to do it together? Yes. And I had a lot of reason to believe that she'd be a great partner based on our history of being friends for a very long time. And even in those early days, we were very much on the same page when there was nothing that had been created, nothing tangible that we'd done, but we were just taking these very early steps. We were on the same page. That was kind of a good testing ground for continuing to grow the business and for our partnership.

21:56So what makes Pop and Bottle unique is all the ingredients that you source. It's not only contributed to the quality of the products, but they also play such a huge role in your branding and marketing. What are some of the guidelines that you follow when sourcing ingredients? We were mutually very clear on that because it was, you know, one of the most fundamental reasons why we were starting the brand is to offer a cleaner, better for you product in the space. And so that was a very firm guardrail that we held and that we agreed to. Establishing that up front was very important and sticking to that was very important.

22:31The product that we developed in my little San Francisco kitchen all those years ago is pretty much the exact recipe of product that is our almond latte today. So we were very clear on those guardrails and sticking to them. Yes, does it add complexity? Of course, does it add cost? But it was all very intentional. And we knew that that was one of the most significant differentials of our brand and our product and something that's very important to stick to. Supply chain has been crazy the past many years, COVID, so many restrictions, there's always things to navigate. And we've continued to do that knowing that this was our North Star and something that we wouldn't stray away from.

23:12And what kind of advice do you have for founders who also want to utilize ingredients and really set the tone for their brand identity and also just incorporate that storytelling for each product launch. As much of the nuance that you can agree to and understand upfront before you've ever taken a stake in the ground is really, really important. You know, for us, and especially in food and beverage, there's so many different versions of what you could be doing. So it's what type of ingredients are you sourcing? What location are you sourcing from? What packaging are you designing? it's organic or not organic it's non-gmo or otherwise is fair trade important to you is direct trade important to you the list goes on understanding all of that as much as you can up front and really setting those guardrails up front is really important of course internally and in terms of understanding cost in terms of developing the right product but it's equally if not more important externally.

24:17When you're trying to explain to a consumer what you're doing that's different, what values you have as a company, what your mission is, why they should pay an extra 50 cents or a dollar for your product versus somebody else. You want to make sure that you're able to articulate inside and out what that looks like and what is important. And that's something that we did our best to get clarity on before we ever bought a product to market. But there's also constant growth with customer feedback to see what kind of new products that they demand that therefore kind of changes how you source your ingredients as well.

24:56Yeah, as we've grown, as we've added new flavors, as we've added new products, we're continuing to make these decisions again and again.

25:07As we span into new areas, everything has different sourcing requirements. Everything has different packaging. And so, you know, we have our North Star in terms of our values and we stick to that. But it has a different lens depending on what we're creating or what we're developing. So customer feedback is really, really important. It's something that as we've grown as a brand, we've tried to put processes in place to get more and more of that. And of course, one thing that's been really helpful to that is just really understanding who our customer is, what demographic they are, who they are, what they do, where they purchase the product, how it fits into the lifestyle.