231. How TÖST Built Smarter Operational Systems

0:01Welcome to Startup to Scale, a podcast by FoodBevy. I'm your host, Jordan Buckner. Join me as I talk to aspiring entrepreneurs, seasoned industry experts, and everyone in between as we unlock the keys to growing from startup to scale.

0:18Imagine building a premium beverage brand from scratch, one truckload at a time. In today's episode of Startup to Scale, I sit down with Shia Eddington, who's the Chief Administrative Officer at Toast, which is a sophisticated, non-alcoholic, sparkling beverage that's redefining how we celebrate. It's now available over 9 ,000 locations across the globe. And so today's conversation, I really wanted to explore how Toast really scaled from a small operation to a national brand and how they had to overcome challenges of running their business on spreadsheets to really transform their operations to be able to manage that growth.

0:56Shade, thanks so much for joining and welcome to the podcast.

0:59Chie Addington:Thank you, Jordan. Thank you for having me. So I want to start at the beginning for those who don't really know much about the Toast story. I'd love to hear kind of what inspired the original creation of Toast. I understand you weren't one of the original founders, but later you and Brooks came in to run the company. So I'd love to hear about Toast and kind of that early journey. Yes. So 2014, a group of friends got together for dinner and they were talking about why don't we create a sophisticated beverage, you know, without alcohol to give a sensation of the alcohol, you know, without alcohol.

1:42Yeah, without like the effects of having to drink everything.

1:46Chie Addington:The effects of that. And then, you know, to elevate the moment and then to be inclusive with everyone. And this friend's group happened to have a Michelin star chef. And he and the other friends just went back and forth. You know, what do we want for the taste? And then we created the original toast. That was 2014. And then 2017, Brooks has been advising for this company. And he took a position as CEO and expanded the business from there to current situation, situation which is like 9 ,000 plus stores nationally and nine other countries over the course of seven years. Yes. That's really exciting.

2:26You know, I remember growing up and having the sparkling apple juice for like the non-alcoholic New Year's toast options. And love that there's more sophisticated beverages out there now that don't include alcohol. I don't drink much myself. And so options like toast are really great. I love to hear what it was like Like when you and Brooks came in to the business in those early days, can you describe kind of like what the system, were kind of all the systems in place to grow or was everything still kind of ran on like spreadsheets and different software kind of cobbled together?

3:02Chie Addington:Yes, I think, you know, starting from the operations, you know, first of all, the non-alcoholic space wasn't well known as now. And so that movement, we wanted to educate a lot of people. And also it came from the younger generation that the non-alcoholic mindful drinking or sober curiosity became a big thing. And yes, having the one SKU, it was easier with the spreadsheet to manage the management, source the ingredients for the productions and look at the data for the margins and all that. But then like we soon after we launched the Toast Rosé, which is our second flavor, and still managing with the spreadsheet.

3:46Chie Addington:And when we have like three, four team members, it was okay. You know, we all knew where the spreadsheets are, where the data are, and we all can contribute to edit it. But it started becoming a little complicated as we wanted to expand our lines with the small bottles, single bottles, and other flavors which we just launched this year. Yeah, I think that's always something. That's how I started out with my business, T-Squares, of managing everything in Google Sheets. And I remember at one point feeling almost like a software engineer, just in the complexity of the spreadsheets and different like calculated formulas and ratios and comparing different, you know, worksheets within one larger workbook.

4:35I think there were probably like 20 different tabs from orders to inventory, ingredients, forecasting, like all these things going on. And at least for us, the time when it broke was actually when we added a new product because it was designed for one product at, you know, with three different flavors. And then once we added a new product with different pricing and different options, it completely broke everything. And so I'm wondering where things started to became too complex to handle in your own operations.

5:08Chie Addington:I think it's when we added the other SKUs and then also having the warehouses and then also added our team members. That's when it hits that, OK, we need efficiency. You know, where is this data? Who has it? You know, where is it? And who's updating the new price for the, you know, ever changing geopolitical? issues affect our ingredients and who's keeping our track of those. How long does it take to order this? You know, it's a complicated drink. You know, we have a variety of ingredients. It's all natural. But the glass bottles, it takes, you know, three months time. And then we value the data to run the company.

5:50Chie Addington:That's our priority. So having accurate data within a minute, that's became very important to us. You know, I think that's one of the biggest things is as running any company, a lot of jobs are like this, but there's a lot of questions that you actually have because the business is so complicated. And sometimes you can get that answer in, you know, five seconds, right? If I'm looking at my Shopify sales, I can go into the dashboard and look and see what those are. But maybe if I'm looking for my sales across the five different channels that we're selling, or my profitability, then those questions can take days of planning and time to actually sit down and go through the data and decipher and then filter it.

6:30And then that data is not even relevant. And so it's so important to be able to have systems to have that at your fingertips so you can make better decisions, right?

6:37Chie Addington:Yes, I agree. So tell me about like when you're starting to look for another kind of software prior to moving into like a, you know, maybe I know a lot of times people use like ERPs, enterprise resource management kind of platforms. Those are really complicated kind of for larger companies. And then there's kind of the ERP lights or inventory management systems. And so what were you looking for when you were trying to implement a new system? I think accuracy of the inventory and the bill of materials, up-to-date bill of materials, and also the build. When we do the production every time, we are going to the spreadsheet and, you know, do we have the up-to-date price on this or not?

7:24Chie Addington:And more and more production happening. We needed that data as quickly as possible. So that's when I think we came across. I think we looked at, we were using QuickBooks online for inventory management as well. And it became a little bit challenging for the cost tracking and the bill of materials. And that's when we came across the Scene 7 that we just tried out, like, okay, we want to hear what they offer and what the system is like. Yeah, that's when this was probably 2023. Okay. Yeah, so it was a couple years ago. Were you thinking that that transition would be easy to a new system? Or were you really nervous about making the transition?

8:09Chie Addington:I think it's a little bit of both. We were scared to, are we going to lose the data we have in the QuickBooks? How is it going to transfer? How can we back it up? And also, are we intelligent enough to catch up with the C7 can offer? We learned later, shortly after we implemented the SIN7, when SIN7 gives us an error, always have a reason, good enough reason to have an error. So it's our end that, okay, oh, we forgot to move the transfer, the product from this location to that location. That's why, you know, SIN7's given us error. So it all made sense for us. But I think we were scared of those things that, you know, we have to catch up with the smart system and we have to have our team to be ready to use the system.

9:03Chie Addington:So yeah, those were the two fears. Yeah, I think that's so important. I do remember having my own fears of like, oh, a system's not going to be able to understand the complexity of my business. And I've later matured to realize that if my business was that complicated, it's probably not being run efficiently. And there's probably a better way of doing it without all the customizations. And so instead of that being a hindrance, I actually took that as a sign to simplify things so that it can run more smoothly. Yes, absolutely agree with that. You know, the system actually is, you know, well thought out that it gives us this simplicity of the process.

9:46Chie Addington:Yet, you know, we can, you know, think our business is complicated, but it actually is well thought out if we can use it right. Yeah, I absolutely love that. And, you know, I think Syn7 is a really great software a lot of companies are using. You know, this episode we brought you on because we partnered with Syn7 as a sponsor for this episode to really talk through how their system is used. And I just love hearing directly from founders who are actually like using and business owners who are using the software to see like, all right, where's the positives? Where are the challenges? So that, you know, other founders can learn from your experience in terms of how making it work.

10:24And so I'm kind of curious, what made CIN7 the right fit for your team?

10:30Chie Addington:So I think we use CIN7 for purchases, order process, sales, and production. And all those four categories, we have different team members go in and then they are in charge of, let's say, the purchase. Our COO is going there every day to make sure that we have enough inventory for the next production. And then order process or logistic head of logistics going in every day to make sure that, you know, checking the status of the order. And then me running accounting, you know, I go in and I make sure that it's invoiced right. And then we can see the status everywhere. And then inventory management, our CFO and I manages the build and assemblies and inventory stocks and all the transfers.

11:18Chie Addington:So all of us combined, we all can go to any reports that we want and our CEO just goes in and then check the, you know, what's the inventory and where within a minute. Once he logs in, he can find where the, you know, where's this order status? Where's the, you know, how many products do we have anywhere? All that at one glance is benefiting us all the team. Yeah, that sounds really helpful just in having that data at your, at your fingertips. And how has that transformed your business in terms of having that single source of truth to make those decisions? One issue I've known when I ran mine is that operations and sales kind of get siloed differently, where sales are like, all right, we're going to forecast growth of this much.

12:02And then operations are like, well, historically, it's actually been this much. We don't want to overbuy inventory because they have kind of competing priorities in a way. And so how has kind of using one software kind of helped bring all the team members together to talk about, you know, one source of data?

12:18Chie Addington:Yes, I think, you know, we are checking our inventory and we are constantly talking among the team about the sales focus, what we're going to sell, what we're going to produce. And that's really, really important for us for the success. And having as accurate data we can get from the CIN7 is helping us, all of us, to be confident that telling the other team members, like, here's what we sold, here's what we spent for this production and that production. And then be prepared for the upcoming challenges or the positives. So we want to be ready to have enough inventory. We want to be ready, but we don't want to have over inventory.

13:00Chie Addington:You know, all that is helping all of us, you know, to move forward as a brand. Yeah, that definitely makes sense. And I know earlier you were talking about being able to understand what's happening with your product costs, especially as there's tariffs and price changes happening constantly. And so how is using Sync7 impacted the way that you make decisions around things like pricing, promotions or product costs? I think we're constantly looking at saving production costs down. That's obviously our goal, to have good margins, to be successful. And circumstances of this world just changes every day.

13:40Chie Addington:The one ingredient, you know, it's hard to source it. Or, you know, this country is not importing us anymore. Production is so important for us. You know, we want to create, produce this many cases in this month Because we think about, okay, Christmas is coming up, the holiday season coming up, we want to have these cases ready. And to actually make that happen, there's so many little effort has to happen. And that's all in soon seven. So we can be ready for crisis or any changes that we are thinking ahead because of that we have this data in one place. That's really helpful then. So, you know, what's been the biggest benefit of being able to actually accurately track product costs per production run?

14:27Because I've often found that, you know, when I was running T-Squares, we calculated our product costs like once a year, probably, and that needs to be much quicker. And so has it been beneficial to be able to see that kind of per production run to see how your input costs are fluctuating?

14:44Chie Addington:Yes, definitely. And then we can always look at, you know, other options by having the current little cost, you know, to the cents. And, okay, this company is offering this much, including shipping. Okay, we can compare the others, we can always be proactive looking for the others. Okay, that's definitely helpful. So I'm kind of curious, though, it sounds like SYN7 has been a big change for your business. What would you tell founders who feel stuck managing things manually, but are maybe too scared to change to another software? I think for us, we are very glad that we implemented CIN7 at 2022 when we had a few SKUs.

15:28Chie Addington:And we knew going in, it will take a while to implement and integrate the system. The more we use it, I think the more we benefit from it. And the reason why is that we learn from Scene 7. Our book is tighter and tighter because of Scene 7. The more we use it, that's the benefit that we're getting. A lot of benefits, saving a lot of time for all of us. So that allows us to be proactive and innovative and be efficient. I love that, Shea. I mean, it sounds like it's definitely made a big impact. And I've only found that business is getting more complicated now. And so as much as you can simplify your business early on to have a steady view and to make better decisions, the better.

16:19I've often talked to founders and made this mistake myself. We're really like, oh, let's actually look at the profitability of our product selling on Amazon, for instance. And we finally took the time to look at all the numbers. We realized that during a long time period, like, oh, we actually were losing money when we thought we were making a little bit of money because of all the fees and product costs and pricing changes. And especially now when you need to really understand your costs on an ongoing and sometimes daily, if not weekly basis, it really matters. So thanks so much for sharing your experience and building out a solution to better manage your business.

16:55Chie Addington:Thank you. Yes. I mean, definitely, you know, to add that, you know, organizing the business is so important for us. And that's one of the huge help from Scene7 that we got to organize a big part of our business. I love that. Shie, thanks for being on the podcast today. Thank you, Jordan. So I did want to just mention at the end here that this episode is sponsored by Seven, but it's a software that I actually recommend for brands. And I've talked to founders to really understand the benefits. And so if you're looking for a operating system for your food and beverage brand, I have a special offer for you.

17:31So FoodBev listeners can actually get 50 % off for three months when you sign up. And so it's a great way to test out the software and see if it's going to be a fit for your business and how it can transform things. Just go to Send7.com slash FoodBevy. We'll put the link in the show notes as well for you to get that discount. Thanks, everyone.