Forget Sexy. Be Incrementally Better. And Balance Your 'P's.

25:48It was actually interesting recalling his presentation, him talking about the value of his brownies. Now, you buy one of those brownies, and I think it's like$7.99 or$6.99, something like that. It's pretty premium price. Maybe higher. I think it's higher. Depending on where you buy it. It's like$10.99. $10.99, okay. But he talks about how, I guess, the price per ounce was actually pretty competitive with other types of indulgent slash better for you dessert bars like a Honey Mom. That's enough to share with the whole table. It's super dense. Yeah, I'm going to give Ray a bite after I get my mitts all over.

26:20Yeah, don't do that. Really, just get him in here. I will fully admit. So I don't have one in my hand because I already ate mine, actually. I don't know whose it was, and maybe it wasn't anyone's, but there was one in the upstairs fridge in the kitchen. That was for you. Was it for me? Okay, good. I took it home. No, he sent them for the crew to try. I munched on it late nights, I think over this weekend. You put some Oli on it? I woke up with a big smile on my face. Did you try this with some cookie granola? I'm going to. It can be a breakfast food. I'm going to. You do not need to combine it with anything.

26:48I mean, again, this is about as much breakfast food as that purely Elizabeth chocolate chip granola. Okay. I have in my hand a bottle of Irva. Yay. Irva is a brand of cold-brewed Yerba latte beverages, And they actually presented as part of the new beverage showdown in December of 2023 as well. You know, I'm kind of embarrassed because I have not tried this product. Yeah. They had it at the show. They had it at BevNet Live. I've not tried it. But I recall people raving about it, people raving about the flavor in particular, judges. And I'm going to read the front copy here. It says, Rise Above the Grind with a refreshing, uplifting, and cool beverage.

27:27This is their Move Mint variety. Let's try it. I was a raver. and I also like the product. Yeah. I like what you did there, Mike. Oh my gosh, this is so good. Oh, wow. That's a really good beverage. As soon as you get one sip. You can't just take one, no. I'm going to sound like really crazy here. It feels like it transports you to another place. I love this. It had that effect on people and. Oh, wow. That's so good. Yeah. That's one of the best beverages I've had in a long time. I'm not kidding. Dang. That's really good. That's the same way I feel about this weekday vibe stuff here. Yeah? Yeah, it's really solid.

28:04This is a, you know. Is that the de-alcoholized wine product? Don't think so. These are just sort of spritz-type products. Okay. And I guess dry January is technically over. Is anyone sad? Technically over, yes. Technically, yeah. But this bitter. Also actually over. Bitter orange spritz here. Yeah, it's fall down February. Anyway, go ahead. Make up for lost time February. These are delicious. Really like this bitter orange spritz, 45 calories per little eight ounce can here. And yeah, good stuff. They also have this grapefruit rosemary sparkling rosé flavor. Really cool packaging. Definitely evokes that sort of early 70s kind of vibe with their wavy, kind of groovy colors.

28:48The only thing that kept me from cracking a can of this open was the sucralose. It is sweetened with sucralose, which I'm not a huge fan of. But otherwise, really cool looking product. Why does that stop you in a cocktail situation? I don't know. Why would you add sucralose to a cocktail? Well, I mean, you're trying to have something that's better for you and tastes good in a situation where you're trying to have something that's better for you and tastes good in a situation where you're poisoning yourself with alcohol. So why isn't sucralose a little better than that? Okay. So, well, sucralose is an artificial sweetener.

29:23That's Ray's point. But yes, this is the de-alcoholized wine-based product. I apologize for not getting that right the first time. No problem. But it does not taste like, well, at least this one does not taste like it's trying to be a wine alternative. I need to try that bitter orange spritz. That sounds like it's going to hit the spot. And then also, there's some really good words on the front of that can. Grapefruit, rosemary, sparkling, rosé. Are you kidding me? Yeah. Beautiful looking can. I do look at the ingredient list. And I don't know. Sucralose for me is just there's something about it that just, I don't know.

29:55Isn't there, am I thinking of aspartame? What's the branded word? Splenda. Is it Splenda? Correct. Okay. Splendid. My thought was that those were a THC beverage from the packaging. So when I looked at it, I thought I was going to get a two milligram THC and maybe that's part of their roadmap. Who knows? But yeah, those are, those are super intriguing and I, I just haven't gotten around to trying them yet. I'm not sure that anyone's putting THC in something that even has less than 0.5 % alcohol on it. True. True. Very true. I think the word vibes and sort of vibes very true the sort of groovy kind of feel yeah definitely yeah it's true to uh i'm thinking that actually it had cannabis in it while john is sipping on that jackie uh what are you sipping on over there is it just tea i have matcha oh drinking a lot of matcha we have matcha on tap over here instead of cold brew uh oh they're going fully anti-coffee in san diego i do two days and then the rest of the time it's matcha.

30:58I just don't crash as hard, you know? Clean caffeine. Doesn't Amanda Smirlinski, she's not on the matcha kick yet though, because I see you on her Instagram. She's bone broth. She's bone broth and... Lattes. Yes. What about Intern Viv? Intern Viv. She doesn't drink any caffeine. No caffeine? Yeah. She's naturally just got the energy. These kids today, what is wrong? I mean, that kid's got the energy. Yeah, I mean, Gen Z like doesn't drink alcohol either. So I don't know. Just a bunch of them. Just a bunch of clean living freaks. They're basic. Clean living basic, man. What do they do for fun? Hey, just to come full circle here to Weekday Vibes.

31:34Yes. I had not tried this Grapefruit Rosemary Sparkling Rosé. Definitely tastes more like a wine product. I guess I got kind of enamored with this. You had me at, you know, Bitter Orange Spritz. It was kind of Negroni Aperol Spritz-esque. Yeah, John's going to be putting that in his pocket. No one's getting that. No. All right, let's get to our featured interview for this episode. Last week, I was in Vail, Colorado for a leadership summit hosted by Manitri, a private equity firm that holds stakes in several mission-driven, better-for-you brands, including Gotham Greens, Verde Farms, The New Primal, Urban Remedy, and HealthAid.

32:13Manitri is also a shareholder in Good Culture, a brand of clean label, dairy-based foods, whose co-founder and CEO, Jesse Merrill, I sat down with for an interview published earlier this week. In a follow-up conversation, I spoke with Jesse, along with Manitree Managing Director, Steve Young, about how the entrepreneur and investor align on values while maintaining an emphasis on business fundamentals.

32:40Hey folks, it's Ray with Taste Radio right now. I'm honored to be sitting down with Steve Young and Jesse Merrill, Steve of Manitree Partners, and Jesse of Good Culture. Steve, how are you? I'm good. How are you, Ray? Fantastic. Jesse, great to see you. Doing great. Yeah, good to see you. Yeah. You look like you got a little bit of a tan. Were you traveling recently? No, I live in Orange County in Irvine and I swim every day, so. In the ocean? No. Okay. I wish. No, but I have a community pool and I do laps there every morning, so I get a good tan. What else is part of your morning routine? I start with the swim, come home.

33:15I take all my supplements. I have like a collagen powder because I got to stay young. I do a green drink powder, various supplements outside of that. And then I do about a 10 minute meditation in the morning. Yep. Nice. Yep. Steve, yours is exactly the same. It's exactly the same. Exactly. You know, I will say like, if you don't, if the workout doesn't happen in the morning, it's just, there's too many things that happen during the rest of the day that can take it over. And so, yeah, I mean, whether for me it's biking, cycling, running, and then I've been trying to do a lot more strength training.

33:47and trying to integrate that in more and more. You know, it's sort of like the older you get, the more of that stuff is important. So yeah, that's my morning right now. You almost broke my hand when you shook it this morning. Okay, good. I can tell. It's working, it's working. There you go. Steve is jacked. No, yeah, far from, far from. I gotta stop from getting unjacked, I guess, though, so. How often do you wake up in a cold sweat thinking about your business, Jesse? So I've been very intentional about not doing that. I think earlier years, I used to go to sleep in a panic and I would wake up in a panic.

34:18And that wasn't really helping. It wasn't helping me. It wasn't helping the people around me. It wasn't helping the company. And so now I've been intentional through meditation, through reading a lot of books on leadership, through interacting with really smart people like Steve Young. It's given me perspective. It's given me the ability to kind of take a step back and realize that success is not linear. There's lots of ups. There's lots of downs. and you have to just welcome the downs and think clearly and bring clarity to the situation and think through what the best solution is and partner with the right people to get through it.

34:49And when you do get through it, it just feels that much better. So I try really hard to not wake up in that panic. I wake up and I try to be really excited about the day. And like I said, I do my morning meditation and that helps me to reset or recalibrate if I do wake up with any anxiety or panic? Well, it helps if you have great partners. And it seems like you have a ton of respect for Steve and his team, investors in good culture. And I've talked to founders who wake up in a cold sweater or nervous and anxious all day because their investors are all over them. And, you know, it's the nature of the business.

35:22People invest money and they want to return. They want to see how your business is doing. They maybe want to see your business running a certain way. It doesn't seem like that in this case. And I wanted to talk about how you interact as investor and entrepreneur and being aligned on mission and values because monetary, and Steve, you can talk about this, has a very specific way of investing. And could you talk a little bit about? Yeah, yeah, I will. Yeah. So the capital we put to work is all done through this mission of improving human health through nutrition. Our mission is to invest in companies that are designed to improve human health and nutrition.

36:01And it's a common theme on everything that we do. And our belief is that if we do that, we're not only going to kind of have impact for consumers, improve the healthfulness of the choices they have to make each and every day, but we also just think it's going to be a good way to drive investor return. I mean, when you think about the macro trends, I mean, I just think if we learned anything from COVID in the pandemic, it was that your health and well-being has so much to say about how you weather certain storms and how you weather certain illnesses, how you stay healthy. And anybody who's tried to kind of be healthy knows that it all comes back to sort of what you eat.

36:37You can't out-exercise a bad diet. And so our belief is that when you think about what the consumer wants, health and wellness, it all comes down to ultimately having like great food choices to be in front of them. So we think if we partner with people like Jesse who are really trying to do just that, it's ultimately going to deliver a great return to our investors as well. Not every consumer is completely focused on health and wellness. There is a long-term runway for it though. And as we heard this morning, we're here at Monetary's Leadership Summit in Vail. And as we heard from this morning in a presentation from Nick McCoy from Whipstitch Capital, the younger generation of consumers, Gen Z, Gen Alpha, they are very much focused on better for you products and investing their dollars in those products right now before they even have the amount of money or before they even have those kinds of jobs where they can really start spending.

37:29But it's going to take time and good culture is going to take time before it's in every fridge in America. And Jesse, when I think about what you guys do, and I was just looking at your Instagram page, you really have a focus and a belief system that is well beyond just being a food brand. In fact, this one Instagram post that I see is, we're more than just a food company, is what you call yourselves, you describe yourselves. We're a movement that's changing the way people think about food. Now, I imagine that there's only a handful of investors that are going to look at that and say, great, we're really interested in working with a company like this, especially because as we heard this morning, it doesn't necessarily seem like the acquirers that can put you in every fridge in America are really looking at brands like yours at this point.

38:22Has that affected how you think about your mission and strategy and how to get to that acquisition? Not at all, because we have strong values that we believe in. We're a mission oriented company. We will never stray from that mission, regardless of what the climate looks like, how strategics are looking at businesses. Certainly we are focused on profitability more so than we probably were, you know, five years ago. The growth at all costs model no longer exists. Revenue and growth is almost table stakes now. So you have to make sure that the unit economics are strong and that you have a healthy overall business.

38:54But from a mission standpoint, from a value standpoint, you will never stray from that, right? Our mission is to change the food system from the actual ground up. And we are going to stay hyper committed to that. And as you said younger generations, Gen Z, Gen Alpha, they are looking at that. It's significant. That's going to impact their purchase behavior. And strategics know that, right? So even if it's not something that is influencing purchase intent today, even if it's more of a brand affinity or a loyalty play today, over time, it is going to start to sway that shopper, that consumer. And so we need to stay focused on what we believe in and build this company the way we know we need to build it.

39:28So absolutely, we should never let the way strategics are looking at businesses in a moment in time influence the way we think about mission and values. Well, and you know, Ray, what I'd add to that too, I agree with everything Jesse said. I mean, you have to remember too that in our business, an acquisition is an outcome, you know, or an IPO, it's an outcome. And the way you get to that outcome is by creating a great company with great DNA that the consumer wants. You got to build a brand that the consumer will irrationally sometimes pay more money for than they could if another alternative was available.

40:02You know, and my belief is that if you do those things, the end takes care of itself. It might not look like it did three years ago. It might be a different route. It might take a different shape. But at the end of the day, if you build a great company with great consumer loyalty, I just think that the outcome takes care of itself. And the other thing I'd tell you too, that like, and this is maybe a bit more of a, more of a pure sort of investor take on it. In our business, one of the things we look a lot at are, you know, what are the biggest categories in the store? What are the biggest categories in the store that are sort of in need of modernization and reinvention?

40:39Where are there maybe competitors who are trading on their past? Where are their categories where the consumer is maybe older, not attracting younger consumers? Our belief is that if you can go into those categories, those big categories, and then figure out, okay, how do you reinvent them? How do you reinvent them so that younger consumers really want them? That that is ultimately a way to go and underwrite a good investment. And what Jesse's done with Good Culture, I mean, cottage cheese, I mean, cottage cheese is almost like the poster child for a sort of old, staid category that's sort of been under-innovated.

41:14Turns out it's actually an amazing category. It's an amazing food as it relates to protein. The way Jesse formulates his product, it's a really clean source of protein. And so we think that what Jesse's doing is going into a really big multi-billion dollar category and reinventing it, modernizing it so that younger consumers see it as their own. I think the obvious question then is, how long are you willing to wait? How patient do you have to be before you get to that outcome that benefits Monetary and its partners and benefits Jesse? Look, one of the things to remember about private equity, and this is sort of a...

41:48it's a broad private equity statement. Private equity is by its nature more patient. I mean, most private equity funds that are raised have got sort of fund lives of 10 years, maybe plus or minus, you know, one or two, depending on the type of fund. And obviously, the longer you wait, the higher the bar gets on, okay, how big does this need to be to generate the rate of return that you need to? But what I'd tell you is that, you know, private equity and mandatory and our peers, I mean, we tend to be pretty patient capital. We don't have a fuse. I know we certainly don't have a fuse on our partnership with Jesse.

42:24If it takes more time to go and achieve his objectives and realize his goals, we're very flexible on that front. I mean, at the end of the day, like the last thing we'd want to do is force a company to go and sell in a suboptimal manner just because he had some trigger. And that's not what we're dealing with in Manitri. And Jesse, you know, how do you stay patient as an entrepreneur? How do you stay patient as a founder and think about the value you're bringing step-by-step as opposed to, you know, that big outcome, that big acquisition that I'm sure would be great for the brand and great for everyone involved.

42:57We're focused on consumer love and consumer demand more than anything else, right? So if the consumer loves what we're doing, if they're showing up in a significant way, then we know we're doing something right. And we're just going to continue to kind of grow that and to see that snowball. And right now, if you look at our data, it is going in the right direction, right? We're seeing significant growth from a top line standpoint and from a bottom line standpoint. So we know we're doing something right. So we're patient. As long as we keep on seeing the trajectory head in the way that it's headed, then we know we're doing the right thing.

43:26We'll keep our head down and we'll keep pushing. As I mentioned, monetary has a specific focus when it comes to their investment strategy. But I think more and more investment firms, PE, venture capital, are seeing the writing on the wall. Consumers are looking for more sustainable options. They're looking for environmentally friendly brands. They're looking for brands with clean labels, etc. And so while balancing returns and mission may not be the ultimate or may not be the primary focus for a lot of these investment firms, it's going to be more important in the future. It's going to be more important down the line.

44:01So I think this is something that's applicable to anyone listening and whether they're like, oh, no, this is, that's just how mandatory operates and how they work with good culture. No, I think this is something that, you know, whatever private equity firm you might work with or VC firm you work with, it's going to be incumbent on you as an entrepreneur to think about these things and realize that they are attractive to investors. But again, how do you weigh mission and values versus return? It's a really good question. And I will say it's one of those things where I'd almost love to say we spend a lot of time talking about that balance, but I don't know that we do.

44:36And part of that has to do with the fact that I know we are just wired to believe that it's not balancing mission and return. It's a belief that the mission actually drives the return. We believe that if we're able to go and reinvent a category like cottage cheese with an elevated mission, and that that allows you to go and attract Gen Z, Generation Alpha, and modernize this category, that ultimately creates the value for our investors that we ultimately want to get. So we really do see mission as a means to an end. And by all means, like we're not not-for-profit companies, you know? And so I think that the challenge is, and this is true for Jesse and he can talk about how he does it.

45:16It's true for any business in our portfolio. Part of what we want our companies to do is to say, okay, we want you to be mission led, but if the consumer's not willing to sort of pay you an appropriate price for the impact you're trying to have, then that might be a clue that the impact you're trying to have is not all that valuable to them. And so it's maybe time to go and like redirect those efforts into something that they do see as more valuable. So I think if you keep that mindset and you're always thinking through, okay, is what I'm doing to drive mission and impact? Is the consumer bought in?

45:47Are they buying? Are they paying me an appropriate amount for what I'm trying to do? You're going to be fine. It's when you get out of whack on those things that you end up doing things that are mission driven, but they don't translate into your bottom line. Yeah, I agree 100%. And I think mission driven brands today really are table stakes for younger consumer segments, right? This is not looked at as an anomaly, right? This is not some, some special agenda that only, you know, a few companies have in place. This has become a table stakes for younger consumers. So you have to lean in there, you have to create positive change.

46:21And if you do that, the consumer will come. And as I said earlier, you have to do that in addition to also creating a kick ass brand from a product standpoint, from a unit economic standpoint, standpoint that is going to create a healthy, enduring brand and business. Steve, your expectations for good culture might be that this brand should grow 30 % in 2024. How do you weigh that versus the social and environmental impact of the brand this year? So first of all, at Manitree, every year we really work and we work with an outside best in class, you know, provider that basically can come in and evaluate.

46:55It's an ESG evaluation, but it's, you know, get beyond the title for a minute. it. It's sort of looking at, okay, what are you doing to go in and drive diversity? Like, what are you doing to go in and improve the sustainability of your offering? What are you doing for community development? You know, kind of, it really spans a whole number of different sort of scores and dimensions. And we work to score and grade our entire portfolio every year on, okay, how are we doing? Is it out of a hundred? It's on a rated scale, basically. Like you put basically each company and score them on different metrics.

47:28And this is not frankly done without the companies. I mean, the companies are super involved in this, but we partner with somebody who can come in and really give us sort of best in class reporting on how the companies are doing across the myriad of sort of impact measures. Had good culture do last year. Great. Great. Yeah. We were number one. And I'll come back to that because like, again, like, you know, there are two reasons we do that. One is, you know, we have capital, we have investors to whom that's important. And so we want to make sure we're sort of reporting out on that appropriately.

47:57But the biggest reason we do it is that, again, I go back to where I started or what I said earlier. We just believe that actually doing good on those measures is actually going to translate into doing better on the top and the bottom line. And that if you don't do that, you're not going to attract those Gen Z, millennial consumers, Gen Alpha consumers for whom that stuff is really important. And so, again, we just view those things as sort of beyond the jargon, being really linked to a good outcome. And again, there's good dialogue between us and our companies on opportunities we see, opportunities they see, really good kind of dialogue about how we can up our impact game while still driving the bottom line.

48:36And Jesse, again, it's a question of we're doing good. We're doing good for the planet. We're doing good for society. We have revenue targets. But let's say you don't necessarily meet a revenue target or a profitability target. Can you still be satisfied with the mission and the achievements that you've made from a social and environmental impact? 100%. If we're making real change to the food system, then we would certainly be proud of that. But I don't look at those things as mutually exclusive. I have to do them all. I would never look at a year. I would never grade my year strictly based on mission.

49:10I would grade it based on the holistic picture. So I would look at how we perform from a mission standpoint. I would look at how we perform from a top line standpoint, from a bottom line standpoint. And if all those things performed well, then I give myself a pat on the back. If I only performed well in missions, still certainly proud of what I did there. And I'll still certainly continue to push in that area. But I would know that I would have to also quickly pivot and ensure that I'm also creating a healthy, enduring business. Well, this morning, the M &A chief from General Mills had said that everyone's looking for the next Jobani or everyone's kind of excited about what's going to emerge as the next Jobani.

49:46And everyone started pointing at you, Jesse. And I feel like there is real potential to be that next brand, that next great brand. But it is important to stay on mission, stay aligned with your values and your goals and have great partners. And I think that's all kind of come through in this conversation today. Jesse, Steve, thank you so much for taking the time to sit down with me. It's always amazing to have these kinds of conversations. Yeah, perfect. Thank you. Yeah, thanks, Ray. That brings us to the end of this episode of Taste Radio. Thank you so much for listening. Taste Radio is a production of BevNet.com Incorporated.

50:23Our audio engineer for Taste Radio is Joe Cratchy. Our technical director is Joshua Pratt. And our video editor is Ryan Galang. Our social marketing manager is Amanda Smirlinski. And our designer is Amanda Huang. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues. And of course, we would love it if you could review us on the Apple Podcasts app or your listening platform of choice. Check us out on Instagram. Our handle is BevNetTasteRadio. As always, for questions, comments, ideas for future podcasts, please send us an email to ask at tasteradio.com.

50:59On behalf of the entire Taste Radio team, thank you for listening, and we'll talk to you next time.