Spend Less, Move Slower. Why Burlap & Barrel's Blueprint Works.

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0:39Hello, friends. I'm Ray Latif, and you're tuned in to Taste Radio, the leading podcast for entrepreneurs, makers, and innovators in the food and beverage industry. Burlap and barrel didn't chase scale, and that's why it's winning. In this episode, Ori Zohar, co-founder and co-CEO of the Single Origin Spice brand, And explains how resisting the urge to go mass, staying profitable, and focusing on quality and relationships helps build a durable CPG brand.

1:18Hey folks, it's Ray with Taste Radio. Right now, I'm supremely honored to be sitting down with Ori Zohar, who is the co-founder and co-CEO of Burlap & Barrel. Really glad to be here. Thanks, Ray. Yeah, we're here at the Winter Fancy Fair, the inaugural Winter Fancy Fair. We used to be called the Winter Fancy Food Show. Yes. A little different. It doesn't feel different, though. It still feels really lively and fun and exciting. There's lots of people exhibiting. There's lots of people eating. We also moved from Las Vegas to San Diego, which personally I think is an upgrade. I don't want to offend any Vegas people, but it's really lovely here.

1:51The sun is shining. Yes. It's amazing. Yes. I mean, it's actually kind of hard to be inside the convention center right now because it's so gorgeous outside. That's right. I asked if you came in from New York, but you're based in L.A. I'm based in LA. Yeah. Burlap and Barrel, we're a remote company. We're about 25 people. Ethan, my co-founder and co-CEO and business partner is out in New York and Queens and Jackson Heights, incredible food neighborhood. And I, a year and a half ago, married a lady from LA. And so we got married in the Brooklyn courthouse and then we made our way over to Los Angeles.

2:20So now we are officially bi-coastal. Nice. Jackson Heights. I've never actually been to Jackson Heights, but I've heard so many great things about the food scene out there. A lot of South Asian restaurants yeah yeah and also just like a plus for diversity i think it's one of the most densely populated like as many languages and cultures and everything so whatever you have in your mind you can find that kind of food and there's amazing tibetan food you'll get momos to no end there's basically any culture that you're thinking of you'll find delicious inexpensive versions of that food and so it's just i'm very happy whenever i go out to stay with ethan and visit there that we just i just know that we're going to eat really well good barbershops too from what I hear.

2:55I haven't gotten my haircut there. I haven't had the pleasure yet, but maybe that's the next thing on my list. Well, the haircuts, they massage your head and they do a really cool thing. I guess I've been missing out on this part of Jackson Heights. I saw, I don't know, you know, sometimes when you're up late watching YouTube and you see like, I got my haircut at a South Asian barber in Jackson Heights. You're absolutely right. That's something that I need to check off the list. I'm sold. There you go. So Burlap and Barrel is a brand that I have seen in a lot of different places. And every time I come across your products, the first thing that comes to mind is quality.

3:28Quality or specialty, but I think quality more than anything else. It just feels like a brand that is so specific in what they're trying to deliver to consumers. From your sourcing, to how you present yourself on shelf, to how you communicate with people. Everything feels really intentional. But let's back up for a second, because I don't know if you thought you were going to be a spice purveyor when you were 10 years old and, you know, thinking about what you're going to do with your life. How did you get into this business? Yeah, thank you for so much. And quality is exactly what we're going for.

4:03And I'd love to, we'll talk more about why we got there and how we got there and all that stuff. Ethan and I have been friends for a very long time. I moved to New York straight out of college. Ethan was there living in a small apartment in Chinatown over a tofu factory. He was cooking incredible meals. And I was like, I don't know who this guy is, but I need to have a seat at the table whenever he's cooking. He was also working in restaurants. I started hanging out at those restaurants too. And we became really good friends over kind of many, many shared meals and many late nights. We ended up starting, Ethan was working as a pastry chef at one of the restaurants, was making lots of ice cream every single day, different flavors for the menu.

4:37He said, I want to start an ice cream business. And everyone said, talk to Ori. He's our business friend. So I graduated from University of Maryland. I got a business degree as an undergrad. I was working in advertising at these, like I'd never been in a building that was open 24 hours a day and like had 50 floors and all that stuff. But so Ethan and I started talking and in the summer of 2010, we started an ice cream cart called Gorilla Ice Cream, G-U-E, like Gorilla Consurgent. We were idealistic young guys straight out of college and we started making flavors inspired by political movements and revolutions from all around the world.

5:06And we got both our ice cream cart and donated every penny that we had from the business back to the street vending project, which was a street vendor advocacy group in New York. Oftentimes street vendors don't have the like legal knowledge or how to deal with all the American policy and requirements. Anyway, the street vendors, they were that advocacy group for them. So over the summer 2010, we started this ice cream cart. We pushed around the streets of New York. We set up at the Hester Street Fair. We set up at the South Street Seaport. We made a lot of ice cream flavors every single week. And we ended up donating around 5 ,000 bucks to the street vending project.

5:38And it was our first kind of time working together, kind of combining Ethan's culinary skills with my business skills and seeing how that all worked together. In New York, a city that has ice cream on every single corner of the city, we were working on telling a story that connected with people about where these flavors came from, why we combined them together, and doing something that was interesting and unique and different. Fast forward to the end of that summer. And what year was this? This was in the summer of 2010. Okay. So Ethan, at the end of that summer had gotten into a master's degree in international development moved to london and from there he moved to afghanistan and we'll bring him back into the story in a couple in a couple years um i went to the dentist and the dentist was like oh my god what have you done i had four cavities oh that'll happen when you sell ice cream business man but then i went and i was like all right i'm ready to do a kind of proper startup quote unquote you can't hope we can hear the air quotes here and i went and started a venture-backed fintech company in san francisco i met some entrepreneurs that had started a business in switzerland they ended up giving us our initial funding to start this like easier, friendlier, more transparent mortgage brokerage in the US, which is where we started.

6:39Nobody knows what APR is. Nobody knows what points are. We were trying to create a kind of borrower friendly version of that. We spent four years, we raised$32 million. We spent more than$32 million. We were in this like grow fast at all costs model where we just had investors coming in and throwing money. We had a series C that fell apart. The investors were waiting, trying to push us into bankruptcy. It was this really crazy Silicon Valley, like roller coaster ride. And by the end of it, we ended up selling it for 10 % of what we had raised to some of our investors. And so I went on this crazy thing, learning what to do, but mostly, honestly, what not to do.

7:13And that was right when Ethan, who had spent those same kind of four years in that time, he'd been working in Afghanistan, building schools and working over infrastructure projects. He'd worked in Jordan at Doctors Without Borders, but he kind of came out of this nonprofit world with two things. One was this wild cumin that grew in Northern Afghanistan that his chef buddies were like, oh my God, this is the best version of this cumin. Can we buy this? And number two, a kind of frustration with the nonprofit world saying, hey, I want to make real change, but we were writing grants. We just weren't moving at the right pace and the right way.

7:42We weren't really building the business in the way that he had imagined. And then he came out to San Francisco where I was living at the time. And I had been very disillusioned with the VC world of going through this, like grow fast at all costs and just go, go, go and throw money at it and all that. And that didn't feel like the right way to support our constituents or our customers. It didn't feel like the right way to build a long-term healthy business. And so that's right when we had kind of come back together and he said, I think I have our next business. And he then spent the next year or so visiting farmers to start saying, we knew we couldn't just build a business around cumin.

8:13And so he ended up meeting a vertically integrated cardamom farmer in Guatemala. He ended up meeting an organic spice cooperative in Zanzibar, both farmers that we still work with today. and then he came back to San Francisco and we sat at this restaurant before service at NOPA, a great restaurant in San Francisco. And I just watched the chefs fall out of their chairs, you know, trying these spices. And we had this kind of like epiphany that I think Ethan was very well aware of at the time, but at least for me, it came into focus for the first time that chefs who had access to, they knew their cattle ranchers, they knew their produce farmers, they knew their cheesemongers, they knew their grain farmers, but spices was a total like black box of where it came from and what it was.

8:49And so that's what really set us in motion to build the single origin spice company, which was really applying a lot of this direct trade single origin values to the world of spices in this kind of comprehensive way for the first time. You know, entrepreneurs often see opportunities faster and more clearly than most folks. The question I always ask founders is, how did you decide that you're going to invest behind that idea? It's one thing to have an idea. It's another thing to say, well, I'm going to invest my time, my money, my blood, sweat, and tears into doing something like this. What really drove you?

9:30So I think everyone thinks that like entrepreneurship is a combination of either a mad scientist or lightning striking with like innovation, light bulb over the head. Ethan, to his credit, comes from a family of entrepreneurs. I've also done this entrepreneur thing for decades and it's actually been a really good muscle to exercise because you start learning what we saw with Barrel Off and Barrel that I had never seen at any other company that I worked at was a pull. We saw this product market fit. We saw chefs saying, I want to buy this cumin. What else do you have for me? And so as Ethan in the first year started traveling around, visiting farmers, sleeping at the farm, bringing back stuff in his suitcase and duffel bags, we were just selling it faster than we could bring it in.

10:08And so we had this really early kind of indication. We were of testing it little bits at a time so ethan started traveling we both started putting little bits of money in and what ended up happening is because we were bootstrapped we didn't have big vc money we ended up just saying how can we keep testing the like hypothesis that home cooks and really but starting with chefs were ready for this new thing and so what motivated us was we did see this new model we did see this thing where we could kind of it was like a win-win where farmers would get paid more we would then cut out all these intermediaries that normally mark up prices but don't often add value or often quality goes down as they mix and mix and mix.

10:44And so we just started testing it. And what we saw is the chefs were like, yep, what else you got? Every time we'd bring in a new spice. And that kept giving us the courage and the kind of conviction that not only were there incredible spices that weren't making their way into the U.S., but also on the other side of it, that there were customers. And that's where chefs were the first ones that would buy something out of a unmarked, you know, brown paper bag, but that they were like, oh my God, yes, what else can we do? So we saw there was opportunity and we said, let's keep opening this store and see how far it can go.

11:12Proof of concept is really important. Getting that validation from chefs, very important to say, okay, we're on the right track. When did you feel like you had a business, like an actual business? Was it in the first six months? Was it two years in? When did you feel like, okay, well, this thing has legs, but in a way that is more than we can just sell this into restaurants. We can create a consumer brand. So in the first year, Ethan was our R &D guy. He was setting up all the infrastructure for the business. At some point in his apartment in Jackson Heights, he had about a thousand kilos, over 2000 pounds of spices in his home.

11:45I would fly back from San Francisco and then I'd come home and I would have to wash every single thing in my luggage. Like it was just, he was running a spice company, a little bit of a gray area out of his living room. It probably smelled amazing in there, but yes, you probably could not walk home and not smell like cumin, cardamom, aniseed, all those kinds of things. Like a spice bazaar. And so for the first year, it really felt very touch and go, very fragile. And by default, all companies early on are very fragile. And I think the goal of entrepreneurs is to make your company less fragile.

12:14Anti-fragility is like, how do we take away risks and help it? So in the first year, it was all out of his apartment. He was going door to door, selling to chefs all around. But what we started doing is we started building a website and people started buying and started moving. And there were these two moments. One, we got a tiny, like two sentence write up in the New York Times, basically saying, Burlap and Barrel is a company that exists. And then all of a sudden, we just saw a slew of customers coming in. It was really influential. But for the first time, you start out and you're selling to friends and family who are kind of doing you a favor, buying from you.

12:45But for the first time, we started building past that. And we started having strangers buying our spices. And literally, Ethan was stamping the spices and writing by hand and all that stuff. So it felt really legitimizing that we had customers not only coming, but coming back and telling their friends and referring to it. And then we closed out our first year. and I started looking at the financials and this sounds way more complicated than it was, but in our first year of existence, we sold$100 ,000 worth of spices. And I was like, oh my God, this is a real business. Like this isn't just like a, so that was really strongly legitimizing.

13:16And we knew that we saw both restaurants and chefs were coming to us and recommending us. That started legitimizing us to home cooks because we could go and say, look at all these chefs that you trust and love. They're buying our spices. What about you, home cook? Like Nike works with athletes or whatever it is. but that was really strongly legitimizing. And so at the end of that first year, we had a really sweet, short, but effective write-up in the New York Times. And we also just saw that we brought in real revenue. Like this wasn't an idea. The rubber was hitting the road and people were buying and coming back and buying more.

13:44And so that convinced me beyond anything that we had a lot more runway. We could really expand this business. Did you have a contact at the Times? Did someone help you get that write-up? Yeah. So Ethan was kind of going around and nobody does PR like founders. I think oftentimes there's subject matter expert founders that are just like, I just want to tinker in the lab, like don't talk to me. But founders are the best salespeople. And what he very cleverly did was we set up Google alerts for all the writers that anybody writing. We knew that Florence Fabricant was a rockstar writer. And so he just reached out through everybody that we knew and got to know other food writers and other journalists at the New York Times.

14:19And so we networked our way over to her. And then she kind of, to her credit, has done such a good job finding new companies and young companies and giving them the stage. And so it really was with some grit. It was really not by shooting press releases off into the ether. It wasn't by hiring some fancy blue chip expensive PR firm, which I know so many early stage companies do. It was around really like pounding the pavement, setting up Google alerts, reaching out to those writers, following them on Instagram, sending them messages, like all that stuff. And so it was really around that. And then just taking the time and not treating them like in a transactional way, but really showing them that we're spice experts.

14:57We'd love to talk to you about it. We'd love for you to take a look at our business and what we do. And just by creating this kind of human relationship, it ended up really paying off really nicely over the life of the company. I'm really glad I asked that question because I think some people might just say, oh, well, yeah, this food writer for the New York Times, you know, fell over in the street and saw this jar of burlap and barrel, which clearly did not happen. You guys had to make that happen. Yeah. $100 ,000 is not a lot of money to start, But it is, again, a proof of concept. It's a starting point for sure.

15:26But then where do you go from there? Well, just in general, like starting a company is a privilege, like the ability to forego. Like in the first year, like I think Ethan and I were in some form of like unemployment. I was doing a little consulting on the side, all that stuff. But we were also about a decade into our careers. And so we had saved up a little bit of money. So we were able to keep turning out our pockets. We went without salaries for the first two years. You didn't quit your day. You did quit your day jobs. In the first year, it was Ethan doing this full time. and I was consulting and doing this and just helping where I could.

15:52But it's been a tough journey because I think in the first few years, like I think this is what a lot of entrepreneurs struggle with is like, let's say you want to build a company. Let's say you want to pay yourself$70 ,000 a year. There were two of us. For us to pay that, the business had to pay$80 ,000,$85 ,000 a year. So how much revenue do we need to do to have 85 times two, you know, 170K left over after we do? So it's like, you're like, oh my god i need to sell half a million dollars worth of spices best case scenario to even be able to afford a salary for myself and even then wouldn't we be better off spending 185k back in the business or you know whatever it is and so that's where i think a lot of people underestimate and we were lucky that we had nathan's wife like i had some savings like all that we just were kind of scraping by in the first few years it's such a good point but one i think a lot of founders don't realize which is you have to generate revenue and a lot of revenue a lot of revenue.

16:47And I think a lot of people, maybe, you know, we're at fault, the media in writing about how many companies raised money and like, look at this, this company raised$3 million or this company got$500 ,000 in sea capital or whatever. But you know, the best way to raise money is to sell product, right? Totally, totally. And you need to do it for a while. There's no golden bullet. What we also learned is that everything we did, like made the business like 5 % better. And we're like, if we can do 20 of these, then our business will double. And if we can do that again, But the lack of investor money, the lack of like real finances made us also be a lot more clever and forced us to think about profitability.

17:21So instead of hiring an exporting agency, we realized that it was cheaper for us to fly out to the farmers. We had two 50 pound check bag allowance. That's really my first sourcing trip with Ethan was we went to Zanzibar. And I was like, oh, amazing. Ethan wants me to come to Zanzibar, like all this and that. I'm the business side. Ethan's the kind of product and all that. And he just wanted extra luggage allowance. So we filled two suitcases full of cinnamon and black peppercorns and nutmeg and cloves. And that's how we brought it back. But we just realized that the plane ticket meant that we got to spend time with the farmers in person because farmers have been burned by foreigners coming in, promising them the moon and the stars and then disappearing.

17:57So we got to go there, spend time with the farmers. And then we got to bring the product back that we would sell and then would offset the cost of that trip and give us enough money to do the next round. And so in the first few years, it was really a lot of suitcase importing, as we affectionately called it. But also we just try to be really attentive to our audience and to be like, what do you want, dear chef? And home cooks, who are you? And we found out that our best customers were women in their 50s and 60s that lived outside of major cities. And because they were cooking three square meals a day, they were eating really well, they knew how to cook, they've traveled, and they didn't have local specialty stores nearby.

18:30And so they were ready to come in. We couldn't have started this business selling the grocery. We could only start this business selling via e-commerce through our website because we didn't have the money yet to brokers and distributors and all that craziness. We started as an e-commerce business, but that kind of, those restraints forced us into creative solutions and forced us to become this like healthy, profitable business. I'm assuming you weren't doing Facebook ads and Google ads and things like that. I think my understanding of the business and my exposure to the business was primarily through magazines like Food & Wine, all those food magazines out there.

19:05Again, developing a relationships with those writers and making them aware not only of what you're doing, but the story behind your business is really important. You're selling the story as much as yours, the spices. How did you engender a good relation or how did you engender good relationships with those writers, those bloggers, those people who were so influential in getting the word out? We keyed into something that was really important early on, which was that writers and also chefs at great Michelin starred restaurants had no idea where spices come from. And so these are curious people that want to learn, that want to be educated.

19:39And so we didn't come in here kicking down the door saying, here's our press release. Do you want to write about us? We said, did you know that cinnamon is tree bark? And most of the people were like, no. I didn't know that. We're like, how do peppercorns grow? And everyone was like, no, no idea. And it's the fruit of a climbing vine. They grow in bunches like grapes. And so what we really got to do is we got to put our foot in the door through this kind of like educational approach. and these people drank it up, both journalists, both chefs, both writers, everybody all along. And ultimately our home cooks too, baby peppercorn vines are incredibly cute.

20:09And cinnamon, like nobody understands why cinnamon sticks are tiny. And it's because it's from younger bark and it's from branches. And we bring in cinnamon sticks that look 10 times bigger. If you come down to our booth at the show, I'll show you. But the main point is that people didn't have a lot of awareness into like where this comes from. So we came in as educators. We came in to open people's worlds about this world of spices that you have on your dining table that you have like so often so many of these blends that you cook with steak seasoning especially now with the tariffs where we saw that turns out black pepper doesn't grow in america turns out cinnamon doesn't grow in america turns out vanilla and saffron and all these other things oftentimes your dinner plate reflects a global ecosystem that is specialized and worked really really hard to get all these ingredients over to have your dinner and so you can shake this jar of spices and this steak seasoning or this you you know, cinnamon sugar, whatever you're using.

20:57It's been a global adventure to get to your plate. What we were doing is unmasking that and bringing people a little closer to that. And people's curiosity just took them from there because we know so much about the rest of our kitchen, about our pantry. We go to the farmer's markets. We know all these other things, but spices were this total black box. And by being able to like show people what was going into it, all of a sudden we saw people's eyes light up and their curiosity. And then we ended up benefiting as being the purveyors of that. So if you learned from us, how Vietnamese cinnamon is really special.

21:27And it turns out most Vietnamese cinnamon comes from Northern Vietnam, which is a Chinese variety, not the true Vietnamese variety. We then became your trusted guides through this world of spices that is so full of deception and so full of misdirects and all of that as it has been since the beginning of the spice world. And so we got to play this role of a guide and people came along with us for that. And that ended up being a really powerful tool to get into people's kitchens. Trust, very, very important. And let's circle back to quality because you can be educators and say, hey, this is where this comes from.

21:56Isn't the story really amazing? But at the end of the day, the quality is about the spice. It's about the dish you're making. And if you have two dishes and you're using burlap and barrel spices for one and one for another, you want to taste that difference. So when you talk about quality, what do you mean exactly? How do you differentiate between what you sell and what, say, another specialty spice company might be selling? So there's broadly two problems in the spice world. One is farmers that are incentivized to cut corners and just like reduce cost, reduce cost because of all their partners and the buyers are like, I need this cheaper and cheaper and cheaper this year.

22:30So it creates this incorrect incentive for farmers to be able to like cut costs wherever they can. The second problem is changing hands. So spices on average change hands 10 to 15 times. They're treated like commodities. So if the market is low, my incentive is to keep spices in my warehouse, you know. Can I pause there for a second? Spices are commodities though, aren't they? Spices are agricultural products, right? Like if the more we think about spices, is the way we think about produce and their nuts and bark and seed and fruit and leaves. The more we think about them as agricultural products where freshness matters, the better the quality will be.