234. Scaling Sweet Success: How Clio Snacks Grew Nationwide Distribution

0:01John McGuckin:Welcome 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.

0:19John McGuckin:Today I'm joined by John McGuckin, who's the CEO of Clio Snacks and a seasoned CPG leader with over 25 years of experience, including helping scale Sabra. Since taking the home at Clio, John has led the brand's explosive growth into more than 28 ,000 doors nationwide, including a major new expansion into over 1 ,200 target locations. In this episode, John shares how Clio created an entirely new category in refrigerated snacking, built a high-performing team, and scaling operations, all while staying focused on product quality, brand positioning, and sustainable growth. John, welcome to the podcast today.

0:55Thank you, Jordan. Pleasure to be here. Appreciate the opportunity.

0:58John McGuckin:So this is our first time getting to chat, but I was really struck by just the number of companies and brands that you've worked with along your career and seeing a lot of high growth opportunities. I would love for you to share just a little bit about what led you to this opportunity at running Clio and what are some of the key lessons and key moments along your career? I've had the opportunity in my career, been blessed with working for big, big CPG companies like Nestle and Kraft, but also have had the opportunity to work with a number of different entrepreneurs and engage in helping them scale their company and bring their vision to life.

1:35So Bob Rich at Rich Products, Murray Lender at Lender's Bagels, Jerry Shriver at J &J Snack Food, Yehuda Pearl at Sabra, of course, and now Sergei Konchikovsky at... What was interesting about both the Sabra experience and the Clio experience is that each experience really mirrored what was going on with consumers at the time. So in the early 2000s, you know, the big trend was the Mediterranean lifestyle. And Yehuda Pearl put together that hummus product with, he created a smoother texture with the big garnish on top. And he really sort of anglicized hummus for the American people. And we were able to generate because, A, the quality of the product, and then later the exciting nature of the brand.

2:18and to take that through and take advantage of this Mediterranean lifestyle and just expand and grow dramatically. So we actually went from about 15 million in sales to 500 million in about seven and a half years, which was incredible, right? You don't always find those kinds of opportunities. But when I met Sergey in Piscataway, New Jersey, and looked at the Clio brand, recognized that today's consumer is very different from the consumer 20 years ago. So So what are today's consumers looking for? You know, snacking is huge. Protein forward ingredients, very, very important. And then permissible indulgence.

2:53On top of that, a grab and go sort of on the go culture. And so I saw in Clio what I believe was another opportunity to scale something really special that is very consumer centric based upon current trends. And boy, has that happened. So we've almost quadrupled the business in four years. And, you know, the consumer is resonating not only with consumers, but consumers across all demographics. And we've quickly become an omni-channel. So, you know, you'll find us now in college and universities, convenience stores, airports, retail supermarkets, mass merchandisers and clubs. So, yeah, the opportunity to expand the business, we feel like we're just getting started.

3:35But yeah, it's an item, a brand, and a product that is addressing today's consumer needs in a very worthwhile fashion.

3:44John McGuckin:John, I love that. I'm really curious because I think looking at consumer trends and what people are potentially buying is one thing. But when you're introducing a new product, a new category into the store, there's a lot of challenges and obstacles into that success. And so when you met the team at Clio, what was it beyond the consumer trends that really helped you identify that they had something here? I'm just curious, was it the level of penetration? Was it repeat customers that were coming back? Was it the velocities in the store? What are some of those early metrics when you realized how they found that product market fit?

4:19Yeah, so when I joined Clio, we had actually already experienced distribution at Walmart. There had been some rotations at Costco and Sam's Club, and it already enjoyed a presence at Whole Foods. So I was able through my network to get into some of that data, and I saw that it was punching well above its weight. So when I considered, and similar to Sabra, when I joined Sabra, it was only really a kosher niche product. But I saw the velocities and recognized that once we had a rotation with Costco, we became sort of mainstream. We were able to just explode the business from there. I saw the same opportunity with Clio and it's really sort of, you know, it's better to be lucky than good.

5:03But clearly, you know, I was lucky to recognize that it was an item that was very timely. And now more recently with the Ozempic craze and the GLP-1, you know, Greek yogurt with its probiotics. And then when you add the protein and all of the other attributes that I spoke about, you know, it's really becoming even more appealing to consumers. So we're seeing velocities grow across the omni-channel. You know, one thing that's so important is taking brands from that initial startup phase

5:31John McGuckin:into those growth periods. And it sounds like you really excelled during that time. And so what were some of the opportunities that you identified when you came on board that allowed you to help transition Clio to the growth that it's seen today? So I firmly believe that, you know, this is a team sport. And other than the product itself, the most important thing that you need to do is bring in the right team and create the right culture that's consistent with the personalities of your team and to bring in functional experts that buy into the opportunity and just allow them to go. So we were able to identify the chief of operations and Rafael Rodas that had both experience with big CPG companies and startups.

6:12And then John Thompson, same thing as our CFO. So in each case, we brought in the discipline and created the framework for growth with people who had been through it before, had that experience, and whose personalities meshed extremely well with the culture. So we ended up with a very strong cross-functional team, highly collaborative, a lot of mutual respect, and it all really fits well within the mission vision values that we've brought to Clio.

6:38John McGuckin:I love that. And then as you were looking in terms of growth, was that in terms of launching into new retailers? Was it kind of building out stronger distribution relationships? Were you looking at new product opportunities, new SKU launches? Or was it really just around expanding into more doors with the existing product? Yeah, so we recognize that our vanilla and our strawberry were number one and number two in the category. And we had a line of single core bars that when I joined Clio, we were basically just in the single core bar business. We had a lot of distribution. We were selling like$1.49 bars at a time when the company was trying to scale.

7:17Cash became a major issue for us because we were growing quickly, but we were selling these$1.49 bars. End of 2022, we decided to come with a multi-pack solution. So now we're selling$5.99 bars. And fortunately for us, we ended up getting almost the same unit turn off the shelf with an item that was three or four times more expensive. and because the four packs and the mini eight packs are much more conducive for retail supermarkets, we were able to quickly expand our distribution and then use scan data, you know, to copy from account A to account B to show them, hey, when you bring in Clio and you have the right number of items and it's merchandise in the right place and you have a category destination, this thing is really incremental and you can take advantage of, you know, all of this explosive of growth and snacking.

8:08And then we took our singles and we brought those two away from home. So C-Store, college and universities, as I mentioned earlier, airports, and they're exploding in those channels extremely well in their own right. Yeah, I think it's having not just the right product, but the right packaging design, the right number of quantities of bars in a box, the right retail price, the right promotional strategy. But I'll go back to what I said earlier. It's also about having the right people. I think without the right people, you don't end up with the right strategy and you don't have as much of an opportunity for success.

8:40John McGuckin:I think that's truly a challenge. I work with a lot of brands who are five, 10 person teams. They're starting to see growth. And quite frankly, they're not really sure how to best take advantage of it because the same people that got them to$10 million of sales may or may not be the next, the people are going to get them to 50,$100 million in sales. And so what is it that you're looking for in terms of that talent and able to take them there? Because I've also heard on the other side, brands who have hired talent from large CPG companies. And when they get to smaller startups with lower budgets, where they're the ones having to not just set the strategy, but actually execute it, there's not always an alignment or a match, right?

9:23John McGuckin:Like the retailers might not pick up their phone call the same way they did when PepsiCo was calling. And so what are some of those skill sets that you're using to identify the right people? Yeah. So I think even before the skill set, it starts with offering this promising environment. So when I met with Sergey, it was a big risk because it was really, even though I believed it could be successful, if you just looked at the financials, you'd be nuts. Why would you do that? So first, you have to trust that you have the wherewithal working with the founder and with the board. And we have a wonderful board that shares our vision that says, think this can be something special.

9:59Then you need to make sure that you have the cash on hand. So whether it's working through your bank, working through some of your investors or whether or not it's a raise, you have to create an environment that when you go to attract the CFO, a COO, a CSO, a CMO, you can get them to understand and believe not just your emotional approach to the business or your belief that it can work, even if you've done it before. There's still a certain amount of incredulity around it until they see the numbers. So as we began to turn the corner, you're absolutely right. There There were people with the company that were wonderful people for the time that they were with the company.

10:35But we needed to establish a more sophisticated platform from everything from managing our warehouse and inventory to how we approach the customer. So, you know, we did go through a period of time where I was able to attract people just as we were making that turn. People who believed in the brand, believed in the strategy and saw through the investment group that there were some serious people behind the business that had a strong belief that this could be successful. And if you have all of those elements, you're in a really good position to attract the kind of talent that you need to help take it to the next level.

11:08John McGuckin:Transitioning to gain the product in front of not just into retailers, but actually into consumers' hands. One thing that I'm guessing and correct me if I'm wrong, but building that awareness and household penetration is a challenge for a new product, a new category. And so I'm curious how you're approaching marketing a new type of snack and educating consumers about what Clio is directing them to the store to drive trial and repeat purchase. Yeah, I think our strategy has been a little bit piecemeal in the beginning because the race for us initially was to go get the distribution. And a lot of people would debate with you about that because if you think you don't have the marketing funds to support this wide distribution, you know, your velocities might be affected.

11:52We've been fortunate in that as we've expanded our penetration, our velocities have grown. And from a marketing standpoint, we do a lot with social media, brand ambassadors, a lot of online stuff. We punch way above our weight on Instacart and things like Walmart.com. I can't get into the percentages, but we're significantly higher than the category. I think part of that is it's probably easier to find us often online than it is in the actual store, which will lead to a brief discussion about merchandising, which is very important. And I hope we get to that. Yeah, so a lot of social media, a lot of different types of approaches to college and university students.

12:31And then we did a big program this year with HelloFresh. So we introduced 500 ,000 samples in the first quarter that HelloFresh consumers received with their order. And that was met with tremendous response in terms of the potential for those folks to come back and buy the product. So, you know, that's one of the things like an entrepreneurial company, you can try something new. And certainly in the case of the HelloFresh execution, it worked very well.

12:55John McGuckin:You know, it's interesting. And I'm always curious about launching new categories because back in 2016, the company I launched, T-Squares, was a line of energy bars and kind of bite-sized energy squares with green and black tea for natural caffeine boost. And on one hand, they were kind of a energy protein bar plus caffeine as the kind of positioning. But because the category was new, we were kind of doing a bunch of new things. Getting consumer awareness and adoption was really challenging of launching. And I think we had the problem of not really knowing where to merchandise in the store because we were in the multi-serve pack.

13:33John McGuckin:So it didn't work next to just your standard protein bars, but also wasn't quite granola, which is in the multi-serve pack. And so we didn't fit cleanly anywhere. And it was challenging to drive customers there. So we were doing a lot of demo sampling to get physically kind of off the shelf. And I'm kind of curious if Clio, and maybe it was like this more in the early days, needed that same type of off-shelf sampling tasting, or if the proposition is actually easy to understand where consumers are just see it and they understand it and they're willing to try it because it's, you know, chocolate and Greek yogurt, which they kind of understand the basis of and both sound indulgent is kind of like a healthy indulgence and it's fairly good.

14:16John McGuckin:So I'm kind of curious on getting people to that trial and then we can jump into merchandising from there too. Yeah. There's no question that when people sample Clio bars for the first time, the reaction is 90 % of the time, extremely positive and 90 % of the time, extremely surprised. So both in a good way. So getting people, whether it be through Costco demos, inline demos, trade shows, consumer shows. I mentioned the HelloFresh execution, getting people to actually try the product is certainly critical. Once that happens, the next important thing is to make sure that if they like it and they want to buy it, they know how to find it.

14:51So we've spent a lot of time on the merchandising side of it, working with our retail partners on trying to help them create a snacking destination within refrigerated dairy. So historically, because Clio was a Greek yogurt, It's an$11 billion category. It's great to be in it. But oftentimes, we'd be merchandised like on the top shelf near like Chobani. And that is really not ideal, especially as a new item that's more experiential at its essence than like a commodity Greek yogurt. So we've spent a lot of time trying to build a snacking destination sort of in between yogurt and dessert. So, you know, matching us up with like Perfect Bar and Honey Mamas and some other refrigerated snacks.

15:35Because frankly, the dessert category has not performed that well. And people are looking again, particularly because of like Ozempic and GLP-1, you know, people are looking for protein. They're looking for items that are flavorful, are better for them. But, you know, they haven't lost that sweet tooth. So to have the opportunity to bite into our bar, which has like a cheesecake kind of texture with the chocolate, and yet scores on protein, scores on better for you, and a number of other attributes, we really think that we found a strong solution. And then what we can demonstrate to the trade is that this snacking set can be incremental and draw people from like the grocery shelf, you know, over to refrigerated where they buy other things as well.

16:16So that's really been the challenge, getting the right number of items on the shelf, creating the right brand and category presence, and using all of our category mates, all of whom appeal to consumers in different ways. So we don't look at Perfect Bar as a competitor. We look at it as a companion, and it's a different usage occasion for a different purpose. So if we can create this snacking set, we think it raises all boats.

16:39John McGuckin:So I'm curious, John, at the success you've had so far, what are the obstacles or the next kind of milestones you're looking at for growing Clio in terms of things that you need to work on or overcome to get the brand to the next level? Yeah. So believe it or not, some things are just functional in scope. Like with a lot of buyers, you know, you got a yogurt buyer and then you've got a dessert buyer. You know, there's no snack buyer. And so if you're in the pen of the yogurt buyer, you know, it's difficult to talk about a snacking set between yogurt and desserts because they're focused on yogurt.

17:12our SKU category. Giant, right? And dessert category is smaller and it's not faring so well. So typically the dessert buyer is a little bit more anxious about the category, but typically it's a smaller category. So like getting permission, getting those two on board to say, let's look at this broader category, believe it or not, that's just a functional speed bump that we have to continue to try to overcome in helping to drive value for the retailer. Now, where you have a buyer who's responsible for both, and we do have that as well, that's certainly been easier. Also, wherever Perfect Bar originally existed in dairy, it was easier to kind of suggest to the retailer that, hey, merchandise us next to Perfect Bar because we're both appealing to these people that are on the go for different reasons.

17:59But Perfect Bar is not always in dairy. You know, 25 % of the time it's in produce. So that was also a little bit of an obstacle because we're trying to pioneer as a very small company. We're trying to pioneer this new category. And it's difficult, you know, at least initially to get that attention until you can demonstrate that, hey, you know what? They are incremental. Hey, you know what? The velocities are up 47 percent. And, you know, I got to get behind this brand. So we're still in the process of building the right category destination for the brand and for the category.

18:32John McGuckin:Yeah, I'm curious with that, from your experience of working with buyers at different retailers, what are the key points that they are interested in? Is it that incrementality that they are thinking about to drive growth in the category? Is it velocity numbers? I'm sure it's a combination of all, but I'd love to know kind of how you're thinking about pitching the Clio benefits to the buyer and to the retailer. Well, even more than even a big CPG brand, the trade is very cognizant of consumer trends. So a lot of this is simply conveying, you know, when they're looking for items, you know, because of this Olympic situation, you know, they're looking for items.

19:14And so a lot of times it's just a matter of timing and making sure that you're in front of the right people with the right story. We know, for example, just based on the latest data that's come out is that cottage cheese and Greek yogurt snacks are leading the pack, you know, in traditional candy, traditional snacking, whether it's potato chips or whatever, you know, we're seeing some significant declines in traditional desserts and, you know, traditional snacking that some people would consider, you know, is not that healthy. And the migration is over to Greek yogurt and cottage cheese. What better position can you be in but to have a Greek yogurt wrapped in chocolate, you know, ready to go with, you know, significant protein attributes.

19:54A lot of times it's just a matter of getting in front of the trade and convincing them that you're the right item at the right time. Let's build this thing together.

20:01John McGuckin:And, Jen, are those conversations coming up with with buyers and decision makers around Ozumbic GLP-1? Like when you're talking about that with them, are they using those medications and things specifically and say like, okay, yes, we're looking for innovations that directly can appeal to these customers? That's really interesting because I remember there being a big conversation around it a couple of months ago. And so that's good to hear kind of how those conversations are continuing to go. John, thanks so much for being on today. I'm very excited to hear about all the growth of Clio and everything that you're doing and how you're able to lead the company, bring on great team members and help to shepherd its growth.

20:41John McGuckin:I'm a personal consumer. My family buys Clio as well. Road trip, actually, I think, and stopped and grabbed some a couple of months ago, which was great for the kids. Definitely appreciate all that you do. And we'll continue to watch the journey. I greatly appreciate your time today, Jordan. Thank you very much and continued success. Thank you. Okay.