How Elavi Landed A Million-Dollar Deal With Costco

28:32And so naturally when you work with them, it's such a fantastic opportunity because the volume and the scale and the visibility that they bring a brand is unmatched. And there's no clear one way to get into Costco. Sometimes people use brokers. Sometimes people, you know, get discovered by Costco organically. Sometimes you meet them at a trade show. For us, we went to sweets and snacks for the first time. It was our first trade show. We kind of didn't know what to expect. And we had walked a bunch of other shows. And so since it was a smaller show and we are a sweet snack as a protein brownie, we figured, you know, we'll find some targeted buyers and just get our feet wet in the expo world.

29:13And so we ended up meeting our Costco buyers there. They actually got to try our products before they launched in market. So we soft launched our protein brownies last May and they fell in love with the product. They said that it was exactly what they were looking for in their category. They appreciated the innovation because they're first in market to be a protein brownie that's gluten-free, plant-based, no added sugar, shelf stable. And that's kind of where it started. And with the innovation, they quickly jumped in and offered us a rotation in all 82 locations in the Southeast. When you say they were looking for this type of brand in their category, what category were they talking about?

29:54Yeah. So this is the protein snacks, protein bar category, and that encompasses your more wholesome snacks, like your breakfast bars, and then also protein bars, which is one of the fastest moving categories in Costco. If you go to a Costco, you notice that protein bar section is right by the register and that's by design because consumers are buying protein snacks, protein bars are stocking up in bulk. And that's a fast moving category that they really like to invest in. And that's where they invited us to be a part of. I'm guessing it wasn't as simple as, hey, here's a free ticket to get into Costco.

30:29You still needed to win them over. What were the key points in that meeting that convinced them that you could be a brand that could not only sit on their shelves, but thrive at Costco? Great question. First and foremost, we had already done two Costco rotations with another product line, and we did a roadshow prior to that. So it wasn't like zero to 100. We went with Costco. They saw us perform really well as a supplier with another product line. And they saw us really prove ourselves with a roadshow, which I highly recommend for any brand. It's kind of like a farmer's market meets a Expo West in terms of your sampling and selling for weeks on end to really prove yourself to Costco before you get invited to sell your products in rotation.

31:12So basically, I'm sorry to interrupt, but just to clarify that the roadshow is you going to different Costco stores in a particular region and sampling your product day after day for a certain amount of time. Yeah, it feels like a traveling circus, honestly. And it's very exhausting, long hours, but the data and the validation and the proof point that you can get is so valuable. And it's usually how Costco likes to test an emerging brand before bringing them in. So we had already done that with another product line, our dessert, Kashi Butters. And so our Costco buyers already knew who we were.

31:46We already were an approved Costco vendor. And so that made the conversation much easier in terms of this is our second product line. We're coming back with even more innovation to Costco. So that's the first piece of advice is do a roadshow if you get the opportunity. And also, if you haven't been able to do that opportunity, show them other compelling data. So we had retail distribution with our other product line. We had a very strong Amazon presence. And even though this particular protein bounty line was new, the momentum around it of us already having pre-orders was compelling to them. And so whatever traction you can show your Costco buyer is super important to show that what they're betting on will materialize into success for everyone.

32:28Second piece of advice I have is once you get that meeting with your Costco buyers, do your research. So Nikki, my co-founder and I, we actually flew to the region that we would potentially be launching in. And we took photos of all the products in our set. We looked at every single price point, pack size. We brought up measuring tapes and we measured everything. And so we were super, super prepared and well-researched of what are we entering into? Who are competitors? What are they priced at? And we developed this very comprehensive deck for our buyers saying, hey, here's where we land on price.

33:02Here's where we land on offer. And really just showing them our knowledge of the entire set. So we really were able to make that compelling argument of why we belonged there and what we would bring to the table. And I think they were very impressed by that when they saw photos of their set and us plugging ourselves in and how we story told around that. And yeah, just showing that you're putting in the research and time to develop a value proposition that no other brand can provide. So I'd recommend those two things is show your traction in other locations and then do your research of the set that you want to enter and why you're best equipped and what value you can provide that retail buyer.

33:40I would think that some founders might be a little gun shy going back to Costco because you were already in there once and it sounds like it didn't work out as well as the protein brownies are working out right now. Did you feel any hesitation? Was there something that you had to refine when it came to your pitch? No. So the first rotations were actually very successful. It's just the protein brownies just ended up picking up more traction. We just decided to double down on that. So the success in that other product line was just so compelling that Costco knew we're not just a one hit wonder and that we can continue bringing innovation to them.

34:13And so the thing with Costco that's really exciting is they want to be in that forefront of innovation. They're looking for premium products, better free products, products that can satisfy that treasure hunt that they like to provide their members. And so they're always looking for products that are unique and differentiated and can provide value to their members. It's great to get into Costco. You're in 82 stores. That's fantastic. I think that's always the first step. Probably the easiest step in hindsight, right? The harder part is making sure that the product is moving. How are you supporting the brand at store level?

34:51And how are the brownies, why are the brownies resonating with the customers there? Yeah. So a couple things. One, we personally went on site to visit as many locations as we could. We flew across the country. We're based in LA and our products are being launched in Florida, Georgia, the Carolinas. So that's a long trip to make, which a lot of people would probably call us crazy for doing that. But we knew inherently that being on site in the field, meeting the managers at Costco, meeting the members, helping sample and demo the products would be instrumental to our success because it allowed us to storytell, to understand questions, pain points, understand, you know, what is optimal merchandising.

35:32merchandising and just seeing our product there allowed us to sell better and then train and equip brand ambassadors and the demo staff to sell better. So that boots on the ground approach is so integral and core to our DNA and how we activate a region. And it's also a great content opportunity. You go to our social media and, you know, it's by design. We like to show the behind the scenes because in this day and age, people buy from people and the storytelling and the highs and lows of launching in a massive retailer like Costco is actually really interesting for people to see because it's so unique and different.

36:08And so we definitely leaned into that. And we showed the crazy parts of, you know, when a demo no showed on us, and then we jumped in with our hairnets and demoed ourselves. And kind of these behind the scenes snippets really allowed people to kind of feel this endearment to the brand. And that was a really fun way to bring people along the ride. So we activate both in person and online. And obviously, of course, Costco is the demo capital. It's very, very heavy in demos. And so sampling is such a huge thing for us to support that. And then lastly, packaging. When you think about Costco, it's just, it's so big, right?

36:47And I'm not sugarcoating that. So you have to put in so much time into the engineering of your not only your cell unit, but also the tray it goes into and then the palette. And we've spent hours and hours visualizing, planning, designing, how does our product look? And one key thing I want to call out is that we design our packaging to capture someone's attention in 0.5 seconds. And we do that by showing a protein brownie front and center so that people can visually see what the product is. And we lead with protein brownie at the top. We put our logo on the bottom by design because we know consumers care more about what they're buying versus the name of our brand.

37:30They'll find that out later. They'll remember it later. And so that reverse engineering of our packaging of putting a very delicious looking brownie and telling consumers what is it really have to stand out on the massive shelves and also contribute to our success. Yeah, I love the front a pack. And I'm glad you brought that up because the brownie itself, it looks moist. It looks fudgy. It looks delicious first and foremost. And yes, if you're looking for a functional benefit, more protein out of your sweets and snacks, this definitely seems like it fits the bill. The pack size, you're in 12 packs at Costco, if I'm not mistaken.

38:05People aren't necessarily going to see the inside or the wrapped brownies themselves. Who did you go to? How did you get good advice about what a larger pack size should look like? Yeah. So this was a team effort between our packaging designers and really bringing our vision to life, advisors and investors who already have their products and Costco operators that really ingrained in us that think big, think much bigger than you normally would. Take your product into a Costco shelf, set it on the shelves, take steps back, walk even further back and see, okay, can I notice my product? And that those kind of small details is how we thought about it.

38:44And so it was a lot of engineering and design and kind of just also paying attention to the competitive set, right? We went and walked the aisles multiple times, took photos, went back and did a debrief. We're like, this is what we like. This is what we don't like. This is what we notice and pops in our set. And then when you're looking at your competitive set, notice the colors, right? If you see a lot of blacks and whites and blues, maybe hit it and go towards a lighter tan with a pop of pink. And so we were very intentional of trying to own our own color too, so that when we were on the shelves with our competitors, we really popped.

39:18You know, when I first met you guys, you and Nikki, Alave was a very different kind of brand in terms of what it sold and what it looked like. But I think throughout it all, your original vision and mission has remained the same. How do you stay true to those values of the original concept and what you wanted to provide to consumers that wasn't currently out on the market. How do you stay true to that when it comes to innovation, messaging, promotion, and making sure that what you're doing, again, is very much the plan from the outset? Great question. From day one, a lobby was built on the belief that you shouldn't have to compromise between health and satisfying your cravings.

40:07And for us as consumers, we created this brand to really help solve not only our pain points, but the pain points of many others. And while we've evolved with different product lines, the mission has always been the same, which is to bring integrity back into the packaged food system from a sweet snack, protein snack perspective, as we felt abandoned as consumers. and really noticed that there was a white space in creating a product that didn't use sugar alcohols, that didn't have gluten or dairy or artificial ingredients that would ultimately make us feel sick. And so that ingredient transparency, that integrity, that fight for not only having particular ingredients, but also not having particular ingredients has always remained the same.

40:56And we have never wavered from that. We have, if anything, just evolved to the consumer to the growing market demands. And I think that's actually our superpower as a brand is that we're not afraid to take a step back, release our ego, and really listen to feedback from our consumers, from our community, from advisors, and deliver a product that consumers are looking for, that they're wanting and are solving problems for them. And I love our story because for anyone who feels defeated or that it's this uphill battle to expand their brand and to really quote, make it, it isn't overnight. And it's okay to take a step back, evaluate, pivot, make a change.

41:39Your first draft might not always be your end product. And that's okay. I think there should be more permission, especially in entrepreneurship to make mistakes and to adapt and evolve. And that's very much our story, right? We didn't get it right the first time. We also launched during a global pandemic. So there are other factors outside of our control, but I think that resiliency and that openness and that adaptability is really a core, you know, facet of our brand. And it allows us to be vulnerable and share, hey, we might not get it right the first time, but, you know, our heart is in the right place to deliver product that really helps people.

42:20And I think that integrity really shines through. Again, quite a bit of evolution since the outset, from packaging to color scheme to products. What would you say is the biggest or most important lesson that you've learned over time? So many lessons. In terms of packaging, keeping it simple was a key lesson for us. So often we want it, especially as operators and founders, we want to word vomit every single great benefit. Did you say word vomit? I don't know if I've heard that term yet. Yeah, you just want to kind of just like literally word vomit everything like a paragraph of like, here's why you should buy this.

42:57This is so great. But here's the thing, consumers, just people in general can at most retain one to two, maybe three things at a given time. And so allowing us to just keep things simple and strip away anything that was just extra allowed us to focus on, okay, what are the key things consumers want when they're making a purchasing decision, when they're looking for a product? And so bringing in that focus and that simplicity was key in delivering in the front of the pack, protein count, sugar count, you know, vegan, gluten-free, key attributes that consumers look for, product front and center.

43:34What am I buying? What is the product, right? So keeping things simple was a key lesson for us. And then on the back, if they want to look more, we have a little blurb about our story. That's been key. second lesson is bringing the vibrance and color that is so key in packaged foods because in our beginning stages of a lobby we had this like black aesthetic we were trying to be sleek and modern and that just wasn't us because you meet Nikki and I and we're very vibrant we are part-time fitness instructors we personally ourselves are very colorful people and there was a mismatch between us as the brand evangelists and the founders and the packaging and I think making sure that there's this very clear connection between, you know, the messaging, the product and the packaging is so clear.

44:21And it took us a while to get there. And, you know, that has been key for us to really let our personality shine and let our products' personality shine as well in tandem. The last time we spoke for the podcast, you and Nikki talked about a package revamp. This is in 2023 that was executed in two weeks and cost about$200. Yeah. And I encourage folks to go back and listen to that episode. But in hindsight, do you think that was something that was in the long-term helpful for the brand? Or was it just another learning lesson for you on the way to where you are right now in terms of your package design?

45:03That was necessary at that time. So just for context, we did a massive quick sprint rebrand for a couple hundred bucks. We crowdsourced it online. And at that time, we had no resources. And we also didn't have as many insights going into our product, our positioning, our consumer demographic. I think the key thing that really moved the needle for us to have so much confidence to invest in a design agency to revamp all of our packaging and truly, truly revamp our entire brand identity was when we did our Costco Roadshow. and we were sampling Ray to like 70 ,000 consumers across four weekends, chatting with so many customers and sharing our product, sharing our mission, sharing our story.

45:46And the feedback that we were getting helped us inform, okay, we need to lean more into this. This is a commonly asked question. This is something that we need to make sure we prioritize in our packaging. Let's change this flavor name. And so all the data points that we would get, we would then download into a Google doc and notate it and go back and forth And while that information was fresh, we were keeping in mind in the back of our brains, hey, we need to do a brand refresh. Let's get all this data now so that when we take it to a brand agency, we know with clear conviction what we want, what we don't want, and that vision to then translate into packaging.

46:21And so if a brand can do anything of that sort, whether it's a farmer's market or just polling their friends or allowing themselves to really gather a lot of feedback before going to a brain agency, I highly recommend that because usually designers have their own idea of what they think you should do. And I think a brand owner should be backed with so much data and consumer insight so that they can inform that and collaboratively work with a designer so that it's creating something that truly hits the mark. And I think it's also a couple years of experience that we just needed to get being in the market, noticing other products, noticing what worked for us, what didn't work for us.

46:58And so it's just kind of this timeline of nothing happens overnight. And it's just this amalgamation of data and inputs that you eventually get to create the end result. And it seems like in the end, hiring a design agency, even though it can be pricey, was the right thing to do. Absolutely. And they allowed us to really drive the key things that we wanted to bring forward, but they also pushed us a little bit too. So if you recall, our previous logo had ELAVI all caps and we were very glued to that and stuck with that. And they pushed us to explore capital E lowercase. And these are like so small and nuanced, I realized just to talk about, but they really helped push us to expand beyond what was in front of us, bringing colors and archetypes and icons that we never even pursued or thought about.

47:50And so design agency, the right one, can be great to expand what you're considering and expose you to new concepts and ideas that could be even better for your brand. Yeah, and I think they did a really good job in making the package, the protein brownie package, feel a bit gender neutral. It skews feminine a little bit, but I think your previous packaging skewed feminine in a much more significant way. and clearly that brownie on the front, you know, there's a lot of protein this or protein that. I think a few years ago, protein donuts were the big thing. And at the end of the day, you know, sometimes the packaging just didn't look great.

48:31You just didn't want to get into it. And then certainly when you did get into the packaging, there were some that were, I'll just say better than others. What you sell looks great, tastes great. And I'm glad you got here because it's not easy. And I'm sure every entrepreneur who's listening right now has had that feeling I can't do this anymore. You know what? It's not working. I've given it all I've got. I got to stop. And you and Nikki have had that moment. What kept you going though? I like to joke around that we're like the cockroach that just doesn't die. Oh, geez. Okay. Well, I say that in joke because yeah, this is really hard and this is not for everyone and you have to sacrifice a lot.

49:11And I think a lot of people look at entrepreneurs or think about entrepreneurship as this very glamorized romantic thing and it's really not it's a lot of hours a lot of working for very little pay you're barely paying yourself to extend your cash flow and runway and it feels like this constant grind and so what gets you motivated to do this over and over again what gets you out of bed what allows you to sleep at night and for us it's the mission it's our community it's you know every day we're getting consumers reaching out saying i enjoy food again i can't eat anything else, but you know, this allows me to satisfy my cravings.

49:48I struggle so much with XYZ or I'm struggling to get my kids to eat, or my mom is diabetic and I'm trying to get her to eat more protein and cut sugar. And this product is helping them do that. And it's these messages that keep us fired up and keep us going is that we're, we're truly changing lives and we're truly helping people. And I don't think any consumer product good founder would be doing this unless they truly felt mission driven to create better products. And that's so cool to create an idea, to start with an idea and then create a product. It's unlike anything you can never experience.

50:23It's definitely the most challenging, difficult time of my life in terms of doing everything at this pace, at this speed and scale, but it's also the most rewarding and fulfilling. And that's what I have to continue reminding myself is, Hey, I chose to do this. I remember We're dreaming about this moment five years ago, 10 years ago. And there's this quote that I love is, remember when you wanted what you have now. And that quote, for anybody, it's such a great perspective shift of this is really hard. You're in the grind. But hey, you wanted this five years ago. And this is something that you've been working for.

50:58And so just kind of having these systems and frameworks and support system in place to remind yourself that this is the path you chose, that this is, you know, very challenging and difficult, but you can do this. And if you brought it this far, then clearly you're well equipped to keep going. And I would recommend every founder to have their key non-negotiables in terms of really managing their mental health, whether it's movement, working out, you know, taking time to spend with their friends and family to get perspective, journaling, therapy, whatever it is, because entrepreneurship can chew up and spit you out.

51:38And I think anybody who chooses this has to be a little bit crazy, honestly. But at the same time, it's such a beautiful journey to not only build and create, but also as a human to watch yourself evolve as you shift and your your company and your baby ships, so do you. And that's such a cool thing to experience. Yeah. Throughout your explanation of how you keep going, I was thinking of a couple of recent episodes of Taste Radio, including one that featured the co-founder of RxBar. And Jared Smith is an investor in Alavi. He's one of the co-founders as well. But I'm talking about Peter Rahal. And when I sat down with Peter, I asked him about happiness.

52:23And I said, at the end of the day, you want to be happy as an entrepreneur, right? He goes, well, no, happiness is irrelevant. You should expect pain and challenge anytime that you're starting a business because that's what it is. But on the other hand, I was thinking of a quote from an episode I did with Gail Becker, who's the founder of Kali Power. And Gail said, and this is along the lines of what you were talking about, when I see how we've changed people's lives and made dinner easier and bring people joy, that's what has to satiate founders. If that's not why you did it, then stay the hell out because it will never be satisfying enough.

53:02And I think that's the key to keep going is you really have to believe in what you're doing and really believe it's actually changing lives. And again, I know, cause we've talked about this, you had that evening, maybe it was more than one evening where you're, you're sat down and we're like, we just stopped doing this and do something else. But what motivates you throughout all that change, throughout all those heartaches is that you're actually seeing it, your products benefit the lives of others. Yeah. And look, let's go through the alternate. This is an exercise I've done in therapy and with other mindset coaches.

53:35Let's go through the alternate. Let's say we stop everything right now. We stop doing this. What would you do? And I asked myself that question. I'm like, I would still do this because I love growth. I'm a naturally curious person. I think as humans, we are designed to build and create. That's how we evolved. And that is really the way I kind of shift myself back into it of, you know, if this was to all go away tomorrow, I would actually miss it. I would miss building the journey, the kind of growth that happens. And I kind of liken this to just given my fitness instructor background to going to the gym.

54:11It's uncomfortable. at first. And you might not want to go at first, but once you're there, once you kind of see the growth that happens over time, the evolution, it's so rewarding. And you keep wanting to come back because you read the benefits. And I just reframe everything as this is growth. This is all part of our growth journey as humans, as entrepreneurs, as leaders. And no matter what, we're all going through our own experience. Everything is going to be hard. And at the end of the day, I'd rather build for my own dream than for someone else's. So that's what keeps me going. And of course, it's so fun and exciting when you hit these milestones.

54:47But during the tough times, you really have to do a lot of personal mental work to build yourself back up. And I think that is what everyone should be practicing is how do you bounce back from the hard moments. And with each step that you take, kind of like a video game, you get better and better and you progress to the next level and you come out of it as a stronger, more resilient person. Outstanding. Michelle, I'm so glad that we had this opportunity to sit down. It's amazing because I met you and Nikki, I think it was about four or five years ago when you just got started. And to see where you've come, you know, to go through all the challenges that Alavia has gone through.

55:27And it's not necessarily like something where, you know, this is a brand that has had the rockiest of roads, but it is a brand where it took work, it took time. And to get where you are right now and to see what you're doing in Costco is amazing. So congratulations to you and Nikki. Thank you so much for taking the time and talking to us about your journey and what's worked, what hasn't, and offering some really great advice, I think, to founders about not only how to get into Costco, but how to think about your evolution while staying true to your vision and also the personal growth and the personal work that you need to do as an entrepreneur to get to where you are today.

56:07So really appreciate everything. Thank you so much for having me. 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. Our 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 Podcast 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 on behalf of the entire taste radio team thank you for listening and we'll talk to you next time