Ep 616: How Neuro Built a Nine-Figure Smart Gum Brand Before Expanding to Retail.

0:00There's no one building a true energy brand like we are. You've got to get out of the aisle in that launch moment. There's no substitute for getting out of the aisle and getting onto an end cap. As you're growing, you don't want to operate two separate companies. You don't want to operate, oh, here's my e-com company and here's my retail. The magic is how does it all come together? We're spending a lot of time understanding how all the channels work together. which is the key and TikTok plays a major role in that. How many sort of affiliates or influencers are you working with on TikTok right now?

0:36I mean, it's tens of thousands. That halo that shows up in other channels was fantastic and really got a lot of consumers finding pathways to purchase.

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2:01Visit triplewhale.com, that's T-R-I-P-L-E-W-H-A-L-E dot com to learn more. Hello and welcome to the D2C podcast. Today I am here with Brian Evangelista. Most gum brands fight for checkout space, but Neuro built a nine-figure business online first and then made retail figure out where to put them later. Brian Evangelista is the Chief Commercial Officer at Nuro, the smart gum and mints brand that exploded through TikTok, Amazon Creator Marketing, and D2C before making a massive push into Walmart, Costco, and national retail. Welcome to the D2C Podcast, Brian. How are you doing? Great. Thanks for having me, Eric.

2:37This is exciting. For those who haven't tried Nuro yet, what's the simplest way you can explain the product? Oh man, Nuro is the smartest gum and mints in the world. It's natural caffeine, L-theanine, a nice, easy balance. You can find us, as Eric mentioned, we're exploding everywhere, very accessible. We're moving into Walmart, CVS, Costco, but long-time digitally native brand. Most brands compete inside an existing category or existing behavior. You guys are kind of creating a new category, new behavior. Was that the thinking right from the beginning? Yeah. I mean, really from our founder's story with Kent and Ryan over a decade ago, They were looking at sugary energy drinks and ways that they could find a more balanced energy in a more convenient way and just didn't exist.

3:28Most of the gum out there is just regular old dumb gum. Dumb gum. Yeah, you're going to have energy drinks and coffee, but you've got to be in the right time and place to have those. And depending on what you're looking for, there was nothing there. So creating a category was the only move for those guys. When you went to market with it originally, before you kind of exploded there, was there an education piece necessary or were you kind of piggybacking on the success of other smart products or even just the idea that you can take supplements to get smarter? Yeah, I mean, it's what you peg against.

4:01Frame of reference is everything, right? So you could say, well, you remember smart TVs and smart cars and this is smart gum. You still see deer in headlights. What does that mean, right? So having an energy and focus gum and energy and focus mints, you know, just telling people that that format can fit in your pocket. You can have a balanced experience and get that energy boost whenever you need it. It just takes a lot of education. Certainly you can't just, you know, see it and people, you know, people take a minute. Like if it doesn't exist, you know, what am I pegging again? So neuro started over 10 years ago, like I mentioned.

4:38And, you know, it's been a bit of a journey. but now, I mean, this is a product that fits in a lot of consumers' everyday life and really makes a difference. So we're very proud of it, but it has been a journey, created a category, something. Well, talk to me about it then. Talk to me because you guys started D2C, right? Yeah. Yeah. We started D2C. How soon did you know you had a real hit on your hands here? Was it early on that the ads were just working and you're like, okay, we've got this? Yeah. So I think back in the day there, so I've known Kent and Ryan for a while, but I wasn't there in the early years.

5:14And you get some momentum. Everyone you give it to is like, this is incredible once they get it. So how do you tell people about it? How do you explain it in the simplest way possible? But I do think that Neuro, some of the secrets is just cultural relevancy and connection, delivering efficacy against a true consumer need, and then just like a natural curiosity and hustle to unlock channels as those opportunities come about. But I think when you look at the story arc of Neuro, that 2020 Shark Tank episode was kind of the catalyst in that cultural relevancy and people giving Neuro a minute to understand it.

5:54That just was that first catalyst to really take off. And then was meta the early fuel for the fire? Yeah, using D2C and Amazon, optimizing, using some early tools and platforms, certainly in the meta space, but really it was TikTok shop that those early days of Neuro was ranked as the number one brand in health and wellness for a while, outperforming competitors, attracting new households, and really using the platform when it was a bit more of the wild west. and how do you get all the creators and you build that. And that halo that shows up in other channels was fantastic and really got a lot of consumers understanding what Neuro was and finding pathways to purchase.

6:42Love to hear good TikTok success stories. Was this TikTok shop or was this before TikTok shop? This is selling on TikTok shop. So getting the creators motivated to sell and Neuro has a pretty large contingent of creators that are built over the years that love Neuro and are great partners. So that's all on TikTok. But that obviously has changed a lot over the years or in the recent year. What's something that worked a year ago or two years ago on TikTok that doesn't anymore? Yeah, I think the introduction, some of the algorithm changes and the introduction of kind of pay to play last summer really changed the game where virality was something that you could work through.

7:27and do with a bunch of creators. But now the paid media aspect in GMV Max just kind of changes the game. So, and it changes the game for the creators and how they use that platform. And we're always adjusting. You know, I wouldn't say it's steady state by any stretch of imagination right now. So how many sort of affiliates or influencers are you working with on TikTok right now? I mean, it's tens of thousands, you know, that are in our network that we're working with. And, you know, it's a heavy lift, but it's part of the secret sauce. And then what's the formula for what works? Obviously, I think having a product that's what I've heard on TikTok shop is having it that lower ticket product.

8:08But, you know, just like you're in the checkout aisle of a grocery store, it's easier to make that discretionary purchase right then if you get excited about it. What's the playbook that's kind of worked really well with influencers across TikTok? Yeah, we have a sizable team that's doing the training and aligning incentives just to make that, you make it a motivating pitch and the right product to get out there and get some momentum. And it's really, you know, can those creators on TikTok shop, you know, can they make money off the product and what matters most to them? And they can love the product, but TikTok's really interesting like that.

8:45So you have to align the incentives and align the messaging and quite honestly have some momentum behind it to make it interesting for them. So they're part of something, not just pushing. So that takes a lot of work and a lot of vision and a lot of hustle. And then so with these influencers, do you have a sort of a graduating scale of pay-to-play versus rev share? versus, give me a bit of a paint, paint a picture of what that looks like of how you incentivize and align incentives there. Yeah, I mean, it's changed over time. You know, right now, if you look at historically how you'd partner with creators and now the pay-to-play aspect is you have to be spending into paid media to get more views.

9:28And, you know, creators want to understand that. They also want to understand kind of the longevity, the arc, the news that you're bringing towards things because they're looking at it. They may be passionate and love the brand, but they align themselves with brands that they can make the most money with. And that is basically how that works. So it's become more complicated on the platform. So you have to understand what you're doing as a brand and have that growth agenda, but also what their incentives are. If you were to have to launch Neuro from zero today, what would be your steps to kind of start building out this TikTok approach to start with?

10:05Yeah. So I'm not the TikTok expert on our team or broader team. So first I would pull together people that knew exactly what was happening on the platform now. Because if you look back, there's been a lot of recent changes. And then what are you really building? How are you building the incentives? How are you building the right messaging, the hooks and getting that momentum? And then do you have, how much do you actually have to spend in paid media versus incentivizing creators and like kind of build that out? But really, if you have a unique, a great product, and quite honestly, if you have the room and you don't have the channel conflicts to run discounting, because that's an interesting aspect of TikTok.

10:53If you spend enough time on there, it sounds like everyone's going out of business, you know, and how the discounts align. And so you also don't want to erode your brand. So these are all things that are recent, you know, mix it like pieces of this mix. So I think that's really the key is to make sure that you understand exactly how to leverage the platform right now. But you need to have that right product in the positioning and the right messaging and prove that you can build that momentum for creators to engage. Are most of the creators creating ads that are specific to NeuroGum or Neuro products in that they're making the video about Neuro?

11:31Or is Neuro more like a presence in their regular ad, in their regular content in a way where it's like, oh, I'll take my NeuroGum and I'll talk about what I'm going to talk about and they sound smarter or something like that? Or is it, I love this NeuroGum, is it specific to the product always? Yeah, I mean, in the world, yeah. So we do like the training, the shared learning. It's specific to Neuro, but it doesn't mean that people aren't just incorporating it in, but like really, you know, people are selling against it. So they're highlighting it in specific ways. there's a lot of creative freedom with the creators, which is very different than how you might look at TikTok versus TikTok shop, right?

12:13Or influencers in general, where they're incorporating it and scripting it in certain ways. So you're building the angles and you're building those messages, but there's a very different mix of creators, especially when you work at that scale. You're not managing every message out there, but really you're setting up the creators with the right tools to sell the product and talk about the product in the right way and the news and the momentum and the spend behind it. So it's a bit different that way. What would you say about the kind of scale and growth you've been able to achieve on TikTok? The scale and growth has been phenomenal, but really we continue to grow on all channels.

12:56But there was a moment in time where you could unlock TikTok and just with your curiosity and hustle, right? And how the platform in working with the creators, it was evolving. So there's that moment in time where you can really hit that. And Neuro hit that perfectly with a product that people really needed to know about. And the magic was, man, where do you get this? I didn't know it existed. And you had that many people talking about a product that fits in that many people's lives. Right. And it's efficacious and it's interesting. It goes in your pocket, high shareability. And I think shareability of the product is another huge key here.

13:36And, you know, hitting that timing right. And like I said, as things change on TikTok, we continue to grow on the platform. but being able to work with the creators and balance out across channels was a little bit of the magic. Now looking at you, cause we'll get into retail, but on the digital side of things, is TikTok still, is, is it the lion's share of where your growth or scale is coming from at this point? Or is it evened out to be with Google and Meta? Yeah. I mean, we're, we're still great partners with TikTok and using TikTok and investing heavily. It's just a matter of That's not where we're seeing the greatest growth.

14:15It's still great for trial and messaging and growing to a certain extent. But in our channel diversification, TikTok still has a really nice halo effect. So you're seeing your growth on other channels from TikTok. So they're doing everything they can to keep the money on the platform. But it's still, TikTok in general is very powerful and has a really strong halo. So there's nothing that's going to be able to outpace Neuro's retail growth at this time. But it's an all-ships-rise situation. So Ecom continues to be very strong for the brand with a lot of momentum. But we're spending a lot of time understanding how all the channels work together, which is the key.

15:00And TikTok plays a major role in that. And it must have a halo effect for the retail buyers, right? Like that's one part of it that I think maybe people underestimate is all those retail buyers are on social media. And so reaching those people. So I assume when you went, when you decided to crack retail, which is you think about it like I've never bought a stick of gum on the Internet. I've only ever bought it at checkout, at a corner store kind of thing where I think to buy it. So the fact that you guys were able to scale as big as you were sort of probably breaking people's habits a little bit of actually buying gum online.

15:35because, wow, this is novel, this is new, I got to buy that. But it must have just made the retail launch pretty inevitable. How did it feel when you brought the product to retail? Were they already super hyped about it, basically? Yeah. I mean, it's a great point. Building that kind of digital foundation and that there's a lot of pent-up demand in retail, the buyers know it, right? Because we got enough momentum digitally that the conversations with buyers were pretty direct, right? It's like how many people out there in the world will buy$25 plus a gum that they haven't tried yet? You have to have a friend or an advocate, some pretty strong word of mouth, which Neuro has, right?

16:16But there's still a lot of people that are like, man, I'd love to try Neuro for three to four bucks. Well, we're going to make that happen, right? And that's where the retailers come in and they completely get that. And we're building a category, we're nearly 100 % incremental to what the retailers are doing right now. And we can, quite honestly, we can make promises that other brands can't, right? So when we launch into Walmart and we say, you know, here's the, in day one, here's the millions upon millions of views that were in Walmart, we, Neuro can make that type of thing happen. So we're getting a lot of discussion and like findability and how do you create a category?

16:57And we can answer that question, right? We can use that, that groundswell and digitally and start bringing that into physical spaces. So it's not like we're putting, building a category completely on a retailer and our best retail partners, they're not putting it completely on us. We're going in and saying, Hey, we got to create something new and that's going to take, you know, some different movement and physical space and how we partner and work together. But it's worth it if those dollars are incremental, right? It's not, you're not stealing share and we can prove that, you know, who are we stealing share from, right?

17:29We're actually building, you know, all those coffee drinkers, energy drink users. They love Neuro, right? Like they're chewing Neuro in between their drinks, right? So that incrementality story is really key. And that's why retail is, it's time for Neuro to really start growing in that channel. How have you approached it? Because I've heard different approaches of people kind of going, picking a retailer, going as deep as they can with that retailer, maybe before they evolve into other spaces. And I know that if you go wide and spread yourself very thin, that can be a recipe for disaster as well, because you're not going to...

18:04So how have you guys actually approached retail scale? It's really about that partnership. So if we're working... So one, there's a lot of retailers out there that have big investments in retail media, right? So it makes sense to go with retailers first that have a strong digital foundation so that your toolkits can work together. And you speak the same language, you get a good understanding of that. So when you look at the Walmarts of the world, it makes sense for us to partner together and we can share learning there when you look at um you know every channel whether it's c-store it's a mass it's grocery it's drug it's club there's always retailers that kind of uh come to the top rise to the top of like their digital investments and you know what kind of partnership they're willing to give those make the best partners uh we actually can say how many digital and physical touch points can we get with a shopper during the first three months of a launch and how can we do that together?

19:07And that's what makes it right. If you go too broad, you're absolutely right. If you go too broad or you work with retailers that will put you on shelf or put you in the wrong place or not help you celebrate that launch, it's probably not going to go well and it's probably not going to help your data story as you're looking to expand in the future. Retail is probably more of a pay-to-play option than people think about. And you mentioned Walmart. How important has it been running digital ads on those marketplace platforms? It's still early days for us. Walmart's an exciting one because we just launched there more recently.

19:40But I think it's important to run a full, comprehensive launch strategy. How are we getting different Dutch points? Like who's shopping on Walmart.com? Who's shopping in aisle? Who's shopping Checklane? We actually have several beta programs running with newer partners and people are creating stuff right now to solve these omni-channel problems. And because of where we're coming from, we have the tried and true. We have all these different pieces. We're running ads on every digital platform you can. And we're sticking with the winners because we know how to run those types of playbooks. And I think that's the exciting part is we're going to do some things in these launches.

20:27But we're communicating to the retailers every step of the way so they know what we're doing and it makes sense to them. And we know what they're doing and it makes sense to us. And that's kind of the key. Are there any investments you've made in retail that have had an outsized impact, whether it's an end cap or ads or anything? Is there any part of the playbook that has provided you with surprising results? Yeah, you got to get out of the aisle in that launch moment. There's no substitute for getting out of the aisle and getting onto an end cap and every shopper's walking by it and giving you that moment, giving you that glance.

21:06When you're in aisle, especially if you're creating a category, you have to get that trial and you have to have like people go in to retailers constantly and say, where's that energy gum in the blue pack? Some recall, right? Where they're like, where's Neuro? We heard you have Neuro. But that energy gum in the blue pack has to scream off shelf on an end cap. If it's in an aisle, you just get lower foot traffic. There's just no way to combat that. So a lot of the partners that we're working with, we're also launching at Checklane, we're launching where gum would be, and then we're also launching where supplements and energy would be.

21:43So really that kind of like two-headed approach is part of the magic. You mentioned in our pre-interview that retail completely shapes the P &L of the business. Can you expand on that a little bit? What does that mean? Oh, yeah. So when you change your channel, diversification is going to change the shape of your P &L, right? If we sold something on D2C, people pay you before you even ship it out, right? In retail, you're building product, you're shipping that out, you have different payment terms, you trade dynamics, you have every, it's just really the shape of the P &L completely changes. And because you're paying in trade and slotting and all these metrics between gross to net, your product margins change, your logistics change.

22:31So you have to be ready to make these investments. And Eric, to your point is when you go into retail, picking the right partners, you have to believe in those investments. We're going to launch with the right partners and get the right top and bottom line outcomes that we're fueling our business and we're not digging some sort of crazy hole here. So it's tough because you also, as you're growing, you don't want to operate two separate companies. You don't want to operate, oh, here's my e-com company and here's my retail company. The magic is how does it all come together? That's every investment, that's building the team, that's building every strategy and how it's intertwined.

23:10What breaks first when a digitally native company becomes a retail company? Or what's been the hardest part of this evolution? First, it's time. So retail moves in its own time. And because it moves in its own time, you sell in at a different time. You wait for answers on someone else's time. You get paid on someone else's time. Everything is on someone else's time. When you're running a D2C business, you're managing Amazon, it's like so many things are on your time. That's a cultural change. I I think in that, you could see how there's strain, right? So when is that PO coming and we have to build inventory?

23:54So there's operational strain. Financially, when do we get paid for these things? What is this like? What are these deductions coming through? Why is the retail marketing? Why do we have to spend this money? When did we promise this? How does this work? It's like a whole new muscle. So that change in time, it reshapes the P &L, your operations. So then when you think about from a marketing standpoint, you have to learn new channels, new digital shelves. You have to understand how it works together. You know, most of like those retail media networks, they're not as sophisticated as what performance marketers are used to.

24:33And they're like, how come we don't have this data? When do we learn about this? How come I can't get here? Why do I have to write 800 tickets to get like, you know, my PDP is updated. And now I'm talking to someone overseas trying to figure this out. You're just moving into a completely different space. And I think the stress around time is probably the best way to put it. The things you control and the new muscles and the patience and the teamwork, it's all because you're on someone else's time. Did you hire strategically in going into retail, like hiring someone who'd done this process before?

25:10Did you guys kind of figure it out as a team? Yeah, so I've spent my career in more omni-channel, so working across retail and e-commerce. So it came to the point where, all right, if we're going to push in a big way, we need to build out the right team. So we're still a very thin team, but we hired expertise, right? We hired people that have done this, people that understand storytelling, timing, understand the economics of this. and just a handful of seasoned vets that really get it and then understand there's things we're going to do and there's things we're not going to do. So that expertise is really helpful because it's that sell-in, but it's everything that comes after that, right?

25:57You can sell it in, but just managing that ongoing. In retailers, as soon as you get in, the next question they have is if you're doing well, they're like, what's next? And if you're not doing well, they're asking why. and they have just as much data as you have, if not more. So that's very different than the D2C space, right? So they know if you're doing well before you do. So you got to get used to that. It's a different game. I wanted to talk a little bit about a recent campaign, your Gum is Dumb campaign. Yeah. And your awesome slots you have there. This seems like a move up funnel, right?