How Mooala Built A Multi-Million Dollar Brand By Keeping It Simple

0:10Hello, friends. I'm Ray Lateef, and you're tuned in to Taste Radio, the number one podcast for anyone building a business in food or beverage. What if the secret to winning in CPG wasn't chasing the next trend, but staying focused on simple ingredients, a clear brand promise, and flawless execution. In this episode, Jeff Richards, the founder and CEO of plant-based milk brand Muala, explains how a commitment to organic sourcing, clear positioning, and a disciplined retail strategy helped transform a scrappy startup into one of the category's fastest growing companies, even as the plant-based industry around it raced to reinvent itself.

1:00Hey folks, it's Ray with Taste Radio right now. I am honored to be sitting down with Jeff Richards, who is the founder and CEO of Muala. Jeff, it's great to see you. Ray, thanks for having me on. Thanks so much for being with us in this makeshift studio in our Austin Airbnb. We're hours away from our Taste Radio Austin meetup, and you so graciously came down from Dallas here to Austin. Do you come down? Is it a north-south thing, east-west? I don't know. It's north-south. It's a straight down I-35. It's about a three-hour trip, and today I've wound up in the lion's den here at HQ for the BevNet folks.

1:36This is BevNet HQ, the temporary HQ as it is, but I hope you like our digs. It's kind of nice over here, isn't it? I love them, and it is rare you get to be this close and personal with people in their living space. There's a daybed to my left, which is kind of crazy, but you know what? It's working. It's working. You've been in the lion's den before with us. Do you remember this? I'm going to pull this up right now. BevNet Live, summer 2017.

2:01Jeff Richards:Oh, yes. This is when you first, when we first met you. This is your appearance in the New Beverage Showdown semifinals. This was nine years ago. Oh, yeah. We got beat by Rise. Well, you know what? I wouldn't say you got beat because here you are on stage, a young Turk, as it were, and talking about Moala. I remember your presence and your composure. You were so good. So good on stage. And look at you go. That's awesome. I have the shirt. I considered wearing it to come full circle. But it's interesting what happens when you turn 40 and some things don't fit the way they used to. But I remember that was a nerve wracking day.

2:41Was it? You didn't seem nervous. Oh, man. That was unlike this discussion. That one was pretty well rehearsed. So I practiced the heck out of that one because you only had, what, like 60 seconds? So for the semifinals, we only give you two minutes. Okay. And then for the final round, we give you five. Okay. But two minutes is 120 seconds. It's not a lot of time. Yeah. Yeah. And we only give you the ability to show one slide, too. So if you have any other key details about the market or things you want to do, you can't really share them. You just gotta, you gotta wet the palette as best you can.

3:11That's right. Yeah. I remember it was so fast. I'm usually one of my flaws is that if I'm preparing for a presentation or something, I don't make copious notes. I just kind of go ad hoc, but that one, 120 seconds. I remember I wrote, I wrote down exactly what the script was because people would get dinged and that was it. You guys, it's strict. It's strict. You get gonged. I wish we dinged people. That'd be nicer. Yeah. But instead we have someone in the back smacking a big piece of steel. you were in private equity before you got into this crazy cpg business yeah yeah that's uh that's a nice transition yeah i would say private equity is generous i was on the investment banking side okay on the leverage finance side so a lot of kind of private debt for private equity buyouts and i didn't know it it wasn't this way at the time but private debt would become very sexy the moment i left like private debt is the hottest thing in the finance world right now and it's becoming less hot as there's a bubble forming.

4:07Well, plant-based milk was pretty damn hot in 2017. You were striking while the iron was hot. And Muala, I think, was differentiated in so many different ways, especially because you had a banana milk and you still have a banana milk. And I think it's one of your most iconic or most well-known SKUs, that is. It was always the big question of, okay, small brands are doing interesting, differentiated things in plant-based milk, but there's so many established players out there, so many well-financed players out there. Where did you see you could make a real impact? Where did you see that you could stand out with a brand like Moala?

4:44In the early days, separate from the founder story, you know, when I decided that almond milk was the right place to be, that decision was driven by Silk and Blue Diamond basically creating a billion-dollar category overnight by putting almond milk in the fridge and displacing soy milk sales and making plant-based milk a thing that was actually, you know, consumers can wrap their brains around almond milk. Soy milk was always a little bit of a kind of a polarizing thing, but the consumer really latched on to almond milk when they launched the category and it became this billion-dollar business.

5:17But I saw the opportunity as there's basically four quadrants in those initial days of flavor. It was sweetened, unsweetened, vanilla-flavored, or plain. and all the sales were split across those four categories and no one was really leaning into real ingredients. And by meaning nobody, I meant those two brands. And so I was like, well, you know, I was an investor, very small, meaningless investor in Deep Eddy Vodka, which was launched in Austin. And they had great success using real ingredients in their vodka. So it was sweet tea vodka with real tea and grapefruit vodka was their home run, but they used real grapefruit.

5:57I was like, well, why isn't anybody doing that with almond milk? There's a homemade element to it that you can incorporate as opposed to just being kind of an industrialized commercial product. And so that was really the idea is, can we bring the real ingredient part of this into the almond milk space? It's going to create differentiation. And the founder fallacy is if I can just get 5 % of that billion dollar market, I'll be pretty happy. So that was certainly the idea at the beginning. Banana milk, going back to banana milk, I think was the product that really set you apart in my mind. I hadn't seen anything like this.

6:33And I thought there could be a lot of interest and demand among consumers of all ages for a product like this, because it has a nutritional, or it would seem to have a nutritional benefit that other plant-based milks don't have. And this is something you were working on in your kitchen at home, I imagine. When did you feel like that was something that could be a product that would help to identify Moala as a challenger brand? Sure. Yeah. The banana milk has always been really important to us just as a differentiator. But in those early days, banana milk was a thing before oat milk was a thing.

7:09So we were making banana milk before Oatly came stateside and started ripping the world apart on the plant-based milk side. And the goal was to find for banana milk, I went through a number of different product formulations trying to figure out what the answer was, but I wanted an allergen free milk. Again, this is pre oat milk. And so it was almond allergen, soy is an allergen, dairy milk is an allergen. And I had started a while out of a lactose intolerance issue that I have. And then I realized, well, being nut free and dairy free would be a pretty great selling point for families. And so banana is what popped into my brain.

7:45And yeah, literally in my kitchen, blending bananas, is being like, how do I not make this banana water? You know, it was a challenge. But yeah, it's basically the same recipe it's been for 10 years, so. How much banana puree do you still have on your ceiling? Yeah, yeah, lots of lids off the blender when you're jamming through iterations, for sure. Hey, Mike, Cold Brew was having another moment with consumers, and High Brew is turning heads with Bold Innovation. Super exciting, Ray. There's new ready-to-drink nitro flavors like blueberry and Mexican chocolate that are hitting the shelves at Sprouts and Target later this summer.

8:20And this fall, they're dropping three regenerative organic certified multi-serves in 48 ounce bottles. Big size, bigger mission. Part of their higher standard. You can find High Brew at Sprouts, H-E-B, Wegmans, Raley's and more. High Brew's everywhere the action is. Grab yours at highbrewcoffee.com. Cold brew for those who do. I want to go back to what you talked about in terms of your ingredients and transparency and organic. I think these are all things that really do differentiate Moala from other brands on the market. The intentionality of how you communicate what you're about and the hierarchy of needs for consumers of yours.

9:01Is it as simple as this is who we are, this is what we're about and try our products? Or, you know, what helped unlock the value that Moala was offering to consumers? What really gave them confidence that this is going to be a brand for them and their families? Yeah. Yeah. CPG is a weird world and you need so many different things to go right and make sense and come together at the same time for the consumer to demand the product. And, you know, you can push the product on customers as much as you want. You can tell them about it. You can scream at them. But if they're ultimately not demanding the product, then, you know, you've got a problem.

9:36And so we've been, you know, since day one, we were really early to organic and the consumer didn't care. It was good enough to be plant-based. And everybody's like, well, this isn't just organic. The understanding in the early days of what organic was wasn't in our favor. There was confusion among consumers as to plant-based and organic being two distinct attributes. Yeah. I think the general perception was, oh, it's plant-based. That means it's already organic. It was so early that plant-based was already such an incremental improvement to people from a dairy milk that like, oh, I have to think about organic now as well.

10:11Like, So just, I think, one step too far for the consumer who was just finding plant-based milk for the first time. Like, oh, it also needs to be organic was a little bit of a just, it took education. It took time. And so only until about really three years ago, organic just wasn't a core component of the plant-based milk market. And given how early we were to the category, we were great at picking up distribution. I always say if you could put one thing on my tombstone, it would be that Jeff earned distribution he didn't deserve. And he held on to distribution he didn't deserve. And so we kind of went through a couple different phases with the brand.

10:47If you look at our initial packaging, it was a very farm fresh, flavor forward, organic forward package. And we got this great distribution, but the velocities weren't there. And so we tried a couple different pivots, one of which was taking the brand in a much more kid friendly direction and deemphasized organic. And then all of a sudden, the consumer started to care about organic. And we had a little bit of a hangover from looking a little bit more like a family-friendly kids brand to where we're like, no, we need to focus on having organic on the package. We need to communicate our flavor strategy and our ingredient strategy because that's corner DNA.

11:23We've always used awesome ingredients like bananas, honey, real vanilla beans. And that wasn't being communicated on the label. And so I think simplifying and say we're organic. This is what we use. This is where it comes from. made the consumer more willing to try it and take it off the shelf. And then it's always tasted great. And so when we were actually getting people to try the product because it looks pretty and resonates with the consumer, that has proved to be one of our most important changes is communicating that simplicity in the organic part of the brand. When you realize something is off, do you feel like you need to make that change quickly?

11:57Or do you have to be cautious and pretty thoughtful about how you're going to roll out those changes? Yeah, I would say we've embraced a strategy of incrementality. You know, Adam Batchelor, who's our president and COO, brings a little bit more of a dynamic look at things where I'm kind of like, if it's 90 % there, let's move on. I've had to develop that just as a, through the founding days. And just like at some point, you got to call things done and move on. And it's been really good to have different voices in the room to where we have focused on different from what my strategy has been historically, just making things a little bit better, always making things a little bit better, making things a little bit better.

12:35And so specifically with the label, when organic became more important, we made organic a little bit bigger. It was before the final state that we're in today. But we think it's important to make sure you're continuing to improve, even if you got a product that at one point you thought was good enough, taking another look at it and making sure you're updating and keeping things fresh and never settling is really important to us. the category has evolved in which there's a push for more simplistic packaging. The categories be full of just words, right? To my point earlier, it was this brand of almond milk.

13:08There's a lot of words to potentially communicate on the package when you're talking about plant-based milk. And we've seen it. There's a lot of complicated messaging, particularly within the plant-based milk category, which is strange because you want less. As a consumer, speaking for myself, if I see less on the front of pack, I feel like I'm getting more. in a weird way. Absolutely. Yeah. That seems to be the way of the world currently. And so you have to pick what you're going to communicate. You can communicate unsweetened, sweetened, vanilla, chocolate, almond milk, oat milk. And on top of that, is it organic?

13:42What is your brand name? How much is in a container? Or you can have a picture on there. So I think we see this when we were working on French packaging for the Canadian market. It's like, dude, this is just a paragraph on the front. So many descriptors. And so I think you just have to pick and choose like everything can't be big and it's all seems equally important to the customer. And so everything can't be big and important. But I think what is winning currently is leaning into the things that are most important to your brand and letting those lead on package because you can't say everything on the front all at once.

14:12Yeah. And I think retail buyers want to see something that is differentiated as well, whether it's a brand like Moala that has a flavor skew like banana or an almond milk that has four ingredients. And I think that probably helped unlock a lot of the distribution that you said you hadn't earned, but really you did. and gotten retail buyers excited about putting your brand on shelf. But making that jump from regional distribution to national distribution seems like a pretty straightforward process, but is anything but. How do you go about taking your brand, or how did you go about taking Moala from where we are now in the Southwest to one that could be sold anywhere in the United States?

14:59Yeah. The distribution part has been funny. So we initially made our products in Southern California in all of the distribution. So initially we got into HEB, Whole Foods, Central Market, and Costco, all that in Texas or the Southwest. And with perishable distribution and with expensive products like organic almond milk, it needs to work pretty fast and work, meaning like you need to get some momentum because it's expensive and you need to raise money. It's really hard not to raise money when you're doing a perishable product. And so after the initial phase of distribution, where we at least proved that in Texas, we were going to earn distribution, the next wave was the Northeast.

15:35And so we were shipping product from SoCal by train because it was a little bit cheaper, even though it took two weeks up to the Northeast. In refrigerated cars? Yeah, it was. And it took a long time, but you'd save, you know, a grand on or whatever on the shipment by going by rail. And so, you know, I had to learn the Northeast market pretty quick. This is how naive I was in 2016, 2017. I did not know what Wegmans was when we got in. I didn't know what it was. Wait a minute, wait a minute, wait a minute. You said when we got in, so you got into a retail chain and you didn't know what the retail chain was?

16:11Wegmans was interested in authorized banana milk. And I got emailed by Unify to get set up in Wegmans. I see. I'm sure I'd heard the name. I should know, like, that's the HEB of the Northeast. Right. It's like, you should know what Wegmans is. So we had to pretty quickly figure out a number of things, most of all the cost component of it. But once Wegmans moved, then all of a sudden the Northeast was unlocked. And then from there, it's been, you know, we're in every state except maybe North Dakota. I think getting that name brand, it really helped to get like HEB on board early. It really helped get Wegmans on board early.

16:40Man, Costco was super early. Same with Whole Foods. And so you have enough of those logos, you know, on a deck. And plant-based milk was so hot that it was never easy. But getting those early wins with the big names gave that scarcity, it girl sort of feeling when we would pitch to retailers. But even if you get into those stores, it doesn't necessarily mean you're going to sell in those stores. And especially, again, for a brand that didn't, I'm making this assumption, but probably didn't have a lot of marketing dollars, didn't have a lot of money to go spend on brokers and merchandisers to help your brand stand out on shelf.

17:16So how do you make sure that you're driving trial and awareness at a place like Wegmans, where probably at the time they had 150 stores or maybe 300 stores, something like that? Right around 100. 100 stores. Obviously, you're not traveling up there and spending two weeks at a time selling the product. So how do you get the retail buyers not just interested in selling your brand, but helping them turn while on shelf? Yeah, it's hard. So Wegmans has what's called EDLP strategy, which means everyday low price. And so they expect you to put all of your funding into providing them with the best possible everyday price.

17:51So you can't do promotions. There's no ads. At the time, there was not online advertising. So you're kind of, it is pure competition. You've got your product on shelf, and it's the price that it is. You don't get a lot of in-store trial. And so certainly social media, I mean, this is back when you could do very specific targeting, you know, with Facebook and Instagram that you can't do anymore, you know, by demographic, by age and down to putting a geofence around independent stores. So that was a lot of what we did just to get the word out there. But honestly, it was just kind of like a hope the package is pretty enough, hope people buy it.

18:26And we were lucky that it worked out in those early days. Part of just the joys of starting a brand is it's not going to work everywhere. I mean we would get discontinued out of places H-E-B wasn't aware that we were local and small and within three months on shelf We got discontinued at H-E-B talk about a gut punch when your brand is your home market year old And then we connected with the buyer and he's like I didn't realize you were he was I think he was new the desk Like I didn't realize your local news. So he put us back in It's like things like that are that are just so gut-wrenching for a brand It's tough.

18:58You can't promote the way you want to you can't market the way you want to there is certainly this element of like, man, I just hope it works on shelf. And I hope that what we executed on the packaging side is pretty enough to drive trial. And I hope the flavor is good enough that they come back and buy it. It is, it's, especially in dairy, it's hard. You don't get secondary displays. You can't go put a pallet of milk on the floor to grab people's attention. You got your slot on the shelf and, and you compete.

19:27This is why I wanted to spend so much time on your communication and marketing strategy as it relates to your label and design strategy. Because I think, and it feels like, Moala does sell itself a lot through its packaging. Pretty packaging aside, though, I think the other big part of it is what we talked about earlier in terms of ingredients and transparency and the organic factor as well. These are all things that resonate with modern consumers. Price is another part of it, though. We talked about some of the biggest brands in the industry, and they can discount on price. They can give an everyday low price that's just beating you by a number of dollars, I imagine.

20:06How do you think about pricing strategy? And how have you adjusted price to meet more consumers and to reach those households that can't necessarily afford the$8 price point that a lot of brands will start out at, especially in this space? Pricing's always been interesting. The thesis behind Muala when we started it was affordable organic, and it still is. We don't want to be at an unattainable price point for consumers. We want to drive customers that are buying non-organic almond milk or plant-based milk or whatever into organic and not have it be a leap of faith on the price side or price prohibitive.

20:42What was the initial price of Muala, say a 48 ounce bottle of your almond or banana milk? Yeah, well, when we were manufacturing in SoCal and shipping to the Northeast, it was probably$6.99. Okay. Which today sounds right. I mean, we're in 2017 but back in 2017 that was crazy yeah that's true it was pretty crazy high and so yeah adjusted for inflation that would probably be like a ten dollar you know price point or something today meanwhile back then pre-covid you're talking a half gallon of silk or blue diamond you know had a two dollar it was two dollars and something right that's just wild right but the super premium brands that were in the space were 7.99 you know and so though it's expensive the pitch to retailers would be we're more affordable and the organic will help convert consumers that are buying this less expensive product into this upsell and you know that's kind of been part of the pitch for a better part of 10 years when you walk into that room and start talking to a retail buyer does the analytical matter more than the potential of what you can do if you're pulling from data research market research firms does that make a bigger impact in the retail buyer's eyes, then the potential for this to bring incremental value to their stores.

21:58Yeah. It depended on how good the data was. Well, I mean, did they scrutinize the data? Did they scrutinize where it's sourced from? Yeah. I would say meetings are interesting in that you can make data look good. You know, you guys are right in the heat of this with brands pitching for stories or whatever, but you can make data look good if you spend enough time cutting it the way you want to. right and so you know nine out of ten meetings a buyer has the brand they're talking to is doing amazing in the brand's eyes and wants to talk about all the positive things so for us it was always about and continues to be about pitching the potential but also especially now while it has quietly become no matter how you look at it past four weeks 12 24 52 weeks the number one growing velocity brand by a very large margin in plant-based milk.

22:48And so that's a different story than when you have zero distribution in the Southeast and you're talking about bringing incrementality and they don't care how you're doing in, in SoCal or in Texas. It's like, well, what about my market? And so no, I'm not telling you anything you don't know, but like, if you've got good numbers, you show the good numbers. That's just the easiest way to, to go with it. And if you don't, then you lean more into what, you know, the hopes and dreams could be and avoid the numbers. I think it's also about how you interpret the data. You mentioned, okay, yeah, this is doing killer business in SoCal, but what does that mean for Miami?

23:23Yeah, right. I mean, how does how do the two relate? The way we innovated early on is much different than the way we innovate today. You know, we launched a keto milk item in 2020 in the boredom of COVID when you and a million other brands. Yeah, yeah, yeah. If you're talking about degrees of innovation, and keto milk is out there. That's like for a brand that had organic almond milk and organic banana milk, it was a trend play and keto milk died. I should say keto died like the month we launched keto milk. It was just the worst time ever. But a well-documented situation in the industry is what's next, what do you have next that's coming?

24:00What's gonna shock us? What's gonna awe us? And you guys make a living on that, right? And so there was that pressure, but the pressure was to be like really, what is the next out there thing? It was like, oh, it was almond milk. Then it was oat milk. Oat milk is the next thing. And then it was like, what's coming next? And the answer is nothing's really come next, right? You've had other things kind of swell and fall. You've had almonds swell and fall. You've had soy and coconut. But what we've seen is like that kind of appetite for tremendous change type innovation within plant-based milk is no longer there on the retail side.

24:35You know, you asked about how we got distribution so early. if you had something that had the word milk after it and it was different it was getting a shot in stores you know for probably the better part of six or seven years it just that was the way it was the more different weird it was the more excited people were to put it in and the reality is with banana milk being an exception the weird stuff doesn't work i mean and i go back to soy milk as the example soy milk has always struggled because it has a name problem it has a you know there's a negative connotation with soy, but it's the same situation with, I'm not going to call it any other basis specifically, but like grass milk, that's neat, but does that sound good?