Chad Janis: How I Sold Grüns to Unilever for $1.2B

0:00TBPN Host:Let's bring in Chad Janis from Grooms. Welcome to the show. What's going on? Hey guys, how we doing? How we doing? Doing great. Congratulations on the massive acquisition. We have to hit the gong for you. Unilever paid 1.2 billion. Congratulations. Big, big hit. I think we tried to make this happen last year, so great to finally have you on the show. I think everyone was appreciating how offline you've been for the last little bit. I think somebody, I saw somebody post like, the founder hasn't posted on X since like Q4 of last year. You guys were busy grinding. But yeah, I guess like the, I want to kind of dive right into, and I'm sure you've told this story before, but I think it's fun to hear it now.

0:49TBPN Host:like what drew you to this category uh in you know what was it three and a half years ago at this point you had you'd been on the board of a bunch of different uh d2c brands i would say like you started the company in like the probably the the trot like the the the very bottom of the trough in terms of like d2c sentiment like the at the time there there were not uh there were not many great exit comps to point at. A lot of the D2C darlings had been struggling. You clearly had faith in the category and managed to build to one of the biggest exits in the space in a while. So talk about the year or months leading up to starting the company and what you saw.

1:39Yeah, thanks for having me on. So I actually was trying not to start a company. When I had the idea for Grins, I was going to go get my MBA at Stanford. And I was saying, hey, I want to have a pretty normal MBA experience, hang out with friends a ton. And it was about two weeks before I went out to Stanford, I was at my dad's place. And I was drinking a Grins powder and looked up in the corner of the room. And I was just like, there's no way I'm keeping this habit past 30 days. So that was sort of the epiphany of, hey, how do I take something as robust and comprehensive and make it into a form factor, didn't think gummies at the time, make it into a form factor that could build a habit for a consumer, make it something they look forward to.

2:19They go to bed at night thinking about, excited about taking grins the next day. And so that started the journey of about a year of formulating, piloting, testing, sampling, about one fourth of my entire Stanford class, tried the early iterations of greens before we launched. And then we launched in August of 2023.

2:40TBPN Host:What other companies had you looked at in the category? I know there was, I'm going to probably blank on the name, but there was a very high profile like apple cider vinegar, Gulley. They had scaled extremely rapidly, but then not, I don't know where that business netted out, but I don't believe it was a fantastic outcome. So I felt like I kind of had this feeling at the time that maybe there was something wrong with gummies as a category. Like there was a bunch of demand, but maybe it wasn't possible to build to this level of outcome. Did you have any kind of concerns about the form factor at all, or you just had conviction because people love the product?

3:24I mean, not the form factor. The history of Gummy is actually really interesting. About 20 years ago, it didn't really exist. And I would say then Ollie came around in 2014, I believe, and made Gummy an approachable category. And then I would say we're entering what I would consider a V3 of the Gummy era, which is taking really robust blends and putting them into a form factor like Gummy. So you sort of get the best of all worlds. You get robust, comprehensive blends in a form factor that's convenient, enjoyable, consumers can look forward to it. And so I didn't necessarily tie the dots the way that you might have just there with Gulley.

4:01I think they were more focused on individual ingredients that sort of rose with trends and then came back down as they sort of trended away. We stay away from like single ingredients.

4:12TBPN Host:What would you say are the three biggest factors that contributed to your guys' what I would describe as hyper growth? I would say first is novel innovation. So each of the products you see us launching does not exist in the market. So when people say like, oh, who are you competing with? It's like, well, we're kind of creating our own new categories against large outstanding categories. I would say second is just like unrelenting urgency every day. I look back at the urgency I've had every single day over the last three and a half, four years, as well as the urgency that my team has every day.

4:55It compounds over time if you're delivering that much urgency and impact every day. The third thing that I would say is the absolute most important is the team. We've got 130 plus individuals here at this company. We have a culture of autonomy and accountability. and each individual here wakes up every day as the CEO of their domain. So when you sort of take 130 plus people who are CEOs of their function and stack that together, you end up in a, I guess, in a place that we just have ended up here in the last week.

5:24TBPN Host:Can you talk about how you thought about building the team? Like what roles you wanted to hire for and when and sort of how you stage the scale out? Yeah, the hardest part about building a company is like you as the founder have to do too much. You have to do too much to start. And so over time, you get to a place of like, okay, where does the company need me most? Like, where am I uniquely capable? So I guess like the advice, I would take that question as like a, hey, what advice would I give about building through the stages that we did? You've got to surround yourself with like the absolute best in each function.

5:58And so you sort of pick off each function slowly over time, where either you don't enjoy it and it's sort of, you know, it's pushing down on your vibes, I guess I could say. or B, alternatively, things that you think somebody could do way better than you and you need to clear that out so that you can focus on other things. And so I wouldn't say that, you know, we probably made some hires early that others wouldn't. Like we hired our chief people officer pretty early in the company. I'm trying to think of another one that we might have hired earlier than most people would have.

6:29TBPN Host:What was the motivation between the early hire on the chief people officer? I think it comes back to like, ultimately at the end of the day, like a company's success is the people, right? The culture that you have, how that facilitates frictionless growth. And so from the early days, like we've always been focused on ensuring that we get the absolute best people here in the company and then put them in an environment where they can be their full self. They can excel to the extent that they can. And I mean, we've got people at the company who probably had impacted other companies, but when they got here, it was like night and day, the impact that they were able to have.

7:03TBPN Host:You mentioned that you demoed the product with your Stanford class. What was the actual process of the very first version of the product to the scale up? Were you formulating it yourself using off the shelf products and then go to a co-packer and then in-house manufacturing? Take me on the actual product development journey. me yeah we um early days of the business pre-launch the process was calling up 20 different co-bands yeah co-manufacturing partners and telling them here's what i want to do here's what the ingredients are i'll source all of it and every single one of them except for one said i'm not going to do that like that that's going to taste disgusting that doesn't work and it got me it's never going to work yeah the one who said who said he would give it a try he was like it's so funny because because Because you say that, like, you talk about the product being innovative, but I think you guys have been so successful and probably had so many clones that my assumption has been that, like, this category always existed and you guys just came in and out executed, but actually creating the category.

8:09TBPN Host:Well, here's where it gets crazier. So we finally got the one to try and I was like, look, just produce it. We'll both sample it. We'll say if it tastes terrible or not. So we ended up by producing. It didn't taste terrible. It had some work to do. We went through multiple iterations with the Stanford classmates, 25 % of them. And then the hardest part about building this business is the little pack that we have, the daily packs. That infrastructure for taking gummies and putting it into packs did not exist prior to us. So for the first six to eight months of this business, we had 20 bodies standing around a table, manually picking up gummies and putting them in packs and taking a clamp sealer that It looks like a staple gun before we then were able to automate it.

8:53So, I mean, that that's been the hardest part about this business is getting the infrastructure to where it is today, where we can, you know, ship 10 million gummies a day and have the infrastructure for it.

9:02TBPN Host:Is that because the gummies are sticky so they don't work on normal like machinery to just fall into the pouches themselves on an automated line? Yeah, I mean, that's one of the biggest difficulties. Why it didn't exist prior. I think in the instances where it does exist would be like your General Mills, like Mott's gummies. They're like the more like flimsier type packaging. And that's all in-house. That's all in-house. Yeah. There's not really like a manufacturing supply chain that does that. Yeah. So yeah. Did you stay with a co-packer for a long time? Did you wind up dual sourcing? How did you like solve the supply chain over time?

9:39Yeah. And this has been the biggest unlock of our business over time. And frankly, the part that people are going to overlook is like having operations scale at the rate that we've been able to do it is a massive feat. We've got multiple commands, multiple co-packers, multiple nodes, 3PL, in-house facility. It's been a lot. We're finally at a place where we can actually meet the demand that's out there and keep up with it. So we're in a good operational place right now. The operations take a sleeping. Did you raise a lot of money along the way? We raised probably around$50 million over the course of the business.

10:17Some of that was secondary over the course and primary as well, obviously.

10:22TBPN Host:Yeah. You have a fantastic group of investors, by the way. Yeah. A lot of them are friends. They're great, right? Kiva, Amanda, all those people are fantastic. How did your marketing mix evolve over time? Was it relatively consistent? I mean, I'm assuming you've given quite a lot of money to meta platforms, but anything that was surprising from a user acquisition standpoint? Or was it the kind of thing where it was like, you know, 80, 90 % Google meta for the history, plus, you know, rotating in experimental budget? Yeah, I mean, meta is always going to be a beast for like every brand that's online.

11:02What I'll say, though, is it has been surprising to me when I hear others mix and that meta makes up, like you said, like 85, 90%. It's like, oh, wow, you should probably diversify that a little bit. Meta is always going to take up a massive chunk. I mean, they've built such a good platform that allows for companies to find people in market for their particular product. And so we've diversified over time. We have intent to continue diversifying, building awareness. And so it's not that we feel like we're overexposed in a channel, But we just always had the intent to create defensibility against the media mix.

11:42TBPN Host:Yeah. Scariest moment over the last three and a half years. I can tell you the exact day. Six months into the business, January 29th, I was calling my co-man. I was like, hey, we don't have, it was like two weeks of telling him, hey, I don't think we have enough inventory, right? He's like, no, no, no, we're good. We're good. We're good. January 29th, I was like, hey, we're not good, are we? And he's like, no, no, we're not good. And so we had to shut off marketing spend by 93 % overnight. And this is because you had a bunch of subscribers and you're worried about delivering on the subscriptions.

12:15TBPN Host:If you can't, you know, there's a huge amount of churn. So we've never gone out of stock for like more than a couple of days. So there's been like a couple of periods in the business where we were close. We've never gone out of stock in like a way that would hurt our consumer. But you got it exactly right. Like the golden rule at Grooms is we do not go out of stock. These people expect they take it daily. We are in stock. If that means we can't acquire customers, fine. We've got to deliver for those who are subscribers. So does that also affect the SKU mix and how careful you are about launching new SKUs?

12:48TBPN Host:Because every new SKU adds complexity to the supply chain and the inventory management. Yeah. I mean, look, like we've got a couple of, I would say we have a couple of SKUs per brand. We launch, if you ask their operations team and the actual SKU that we have, they would tell you we have hundreds of SKUs. So I'm probably downplaying the complexity. But yeah, the nice thing about this business is we have solutions that solve consumers' needs in mass. So we don't have to create 50 different products to solve niche needs that a consumer has. What's your outlook on consumer broadly? I love it. I can't imagine building in a different space.

13:32I would say consumer sentiment is rough in some ways right now. I don't think that's like a surprise. You can look, probably you've seen trends, but I would say consumer is a category. It's a beautiful thing, right? Like our team, we're leveraging AI probably in a opportunistic way, not in the existential way that a lot of tech companies are like, hey, if we don't do this right, are we existing next year? For us, it's an opportunity. and we're finding some really nice inroads there.

14:03TBPN Host:Interesting. How did you think about messaging in the early days and honing the brand messaging? Because the product delivers across a couple vectors, convenience and health benefits. Was there ever a tension between those? How did you wind up, what did you settle on for the key value prop if you could just deliver one message? I think your consumer helps you identify what resonates best. I would say though the approach of like the overarching approach of what we've done one brand that I looked up to is dr. Squatch As you know their approach, you know, it's probably the first time I was in the shower Using a soap and I was like wow, it's like really fun.

14:43This is a nice experience Uh something like actually like mark your experience there And I think we've taken some of that concept to the supplement category um where as you've sort of called out most brands are like Like we do clinical research, but we don't, it's not like the only thing we talk about, right? We do, we have like studies, we've done all this wonderful stuff, but we try not to lean too much on that because that's what the rest of the category is doing. We're kind of a lifestyle brand. And so consumers buy it, they enjoy it, they look forward to it, and it drives an impact in their life.

15:13And so I would say the overarching theme, and I think if you were to look at our ad account, if you were to look at our, like, what resonates with the consumer, it's that we're a brand that personifies our consumer and they like to associate and have the benefits from it.

15:27TBPN Host:Talk to me about the D2C to retail transition. Was that in the pitch deck at the very start? Did you know exactly how long that was going to take? Or was there a moment when you were like, okay, I'm ready. We're ready to go. Now's the time. Or did Shrey come and find you and say, it's time to go. You guys know Shrey? I know. I know Shrey. Yeah. Love it. Shrey's awesome. He's been a good buddy and helping the business since the early days. He actually went with me to pitch, I believe Walmart and Sam's Club in the summer of 2024, but we didn't have a lot of employees at the time and I was the original one pitching.

16:04Look, I just always knew this business was going to be omnichannel. I don't think there's any reason to have pride in being a solely DTC business or solely on, like there's just, there's consumers everywhere, like meet them with the solution that and at the price point that works for them um so i first had conversations about launching retail back in like january of 2024 and i'll tell you everybody was telling me hey it's kind of early like do you really want to do this and i said yes i guarantee like the selling cycles are so long here we guarantee by next year when we're finally in this retailer we're going to be really glad that we put in the time today totally um and so we you know that process took really long we launched with Sprouts in October of 2024, Target in February of 2025, and then Walmart in April of 2025, and then a bunch of other amazing retailers after that.

16:54TBPN Host:And then what were you tracking? What changed about the business, the marketing, the strategy to actually be successful in retail? The biggest thing is the rebrand we did. So the original branding, I don't know if you've seen it, It was like a dark green color. I'm glad you haven't seen it. I developed it in Canva in an afternoon. You know what's funny is it was so bad, but when we changed, the vast majority of people were like, this is a really good rebrand change. We got a few people who were like, hey, what's up with the old branding? I was like, guys, that's Canva. Nothing special there. So we redid the packaging.

17:30We made it ready for retail. You could more quickly in sort of three seconds identify what the product was. And so that's probably the biggest change we had to do to get ready for retail distribution.

17:46TBPN Host:Is product the only thing that really matters with an early stage consumer brand? It's a big, broad statement. I think it really matters for us because it sets the stage for how big any of our businesses can become. So as you know, we've got Croons, we've got Nutrips, our mushroom product, Nootropics. We've got Immune, which is an immunity product, and we've got Juiced, which is our pre-workout, pre-anything energy product. If we don't get that product right, speaking to that category right, then it caps the upside of how big that business can be. So it really matters for us. I can't speak for every business though.

18:29TBPN Host:Yeah. How, how diversified did the business become? I mean, uh, 130 employees is, uh, is a lot. I imagine that you've had success both in e-commerce and then also in retail and then also across these new product lines. But is there a power law where one product in retail is driving the vast majority of sales or is it pretty much like a sum of some of all the different parts? There's always a power loss. Yeah. Yeah. But how steep is it? Everything's growing. Everything's doing well. Like, all these products are phenomenal. People should try them. Yeah. See if they want to sleep with them. I would say that our team's, like, super ambitious.

19:07So if you asked us, we'd be like, oh, my goodness. We want these secondary products behind Groons to be much bigger than they are. Yeah. But to be clear, like, they're large businesses. Yeah. And I think any founder would love to have just one of them as their core business. And we've got a lot of really exciting innovation coming that I think will grow nicely like Greens has.

19:27TBPN Host:Yeah. When did you first meet Unilever or the folks over there? I first had a conversation with them probably in like June of last year. Yeah. That's when we started talking. But like casually, not like just getting to know them. Ultimately, for me, what really matters is the individual is somebody that I'm excited to work with, I'm excited to build with. And so I've been chatting with them for quite some time to identify whether it was a good fit for both sides. Yeah. Yeah. You also, you're like, give me another year. I'll like three, four X again. And then what do you think Unilever brings to the table to let you fulfill the vision here?

20:08They're awesome. I mean, you may be familiar with their background, but they've done this like with multiple businesses before. And frankly, it might be one of the few strategic partners that has. So you've got Nutrafol, which they just acquired probably about four years ago. And their public has stated that that business is significantly larger than when they acquired it. They acquired Liquid IV back in probably 2020. That business is massively larger. I think they just stated last year that it's around a billion of revenue. They acquired Oli back in 2019. That business is significantly bigger.

20:39So they've just done a really good job. They know what to look for. I think that's what our team's most excited for is we're getting a partner who can help us on our ambitious goals and knows the path to get there.

20:51TBPN Host:You mentioned that you're using AI opportunistically. What does that actually look like in practice? Because I can imagine that you probably have some sort of software SaaS product in many verticals. All of those companies are probably launching or adding AI features. So you can flip a switch and turn that on or you can go and build from scratch. What's working right now? One of the biggest things I'm grateful for is we have a really, really strong data and finance team. And so we have like all the data infrastructure data warehouse in a place where it's accessible through Claude to our team. So you've got the CX team, you've got the finance team, you've got the marketing team, all like immediately accessible with that information to make decisions.

21:38So I'd say that's probably the biggest unlock is everyone's in Claude. everyone is like, we all went through an effort. It's kind of a, the objective is kind of a joke, but it's basically make yourself replaceable. Like can AI replace your job? And so we're all ticking across the aspects of our roles and what we can automate through AI and finding a lot of productivity from it. But I would say the biggest takeaway there is you've got to have your data infrastructure and data warehouse in a place that it's a source of truth to every individual in the company. Yeah.

22:10TBPN Host:Uh, talk about your approach to creative. I've heard that you guys are like, uh, absolute powerhouse when it comes to just like generating high volumes of creative. And I'm curious if there's any unlocks on the AI side on that front as well. You know, we haven't really used AI for that. Um, I imagine that like we're, we're testing like a few things, but I'm sure you guys see all over X there's a million posts about people creating like the pixar animations and stuff and yeah say what you will some of it's a little testy it's kind of like hey we're we're a reputable brand like we can't be putting some things out on the internet like that and so we're pretty careful about it i would say at this point we're still like 99 plus like human generated whether it's like in a editing file or whether it's actual humans creating ugc or working with influencers who are creating content um we We haven't moved, I would say, into AI being the generator of our creative.