607: How I Built a $120M/Year Cookie Business From My Appartment | Loren Castle

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0:39Just head to omnisend.com forward slash founder without the E to get started. All right, now let's jump back into the show. Welcome back to the founder podcast. What if being diagnosed with cancer at 22 became the catalyst for building$120 million a year food brand that's now in over 5 ,000 supermarkets nationwide. Well, today's guest is Lauren Castle, founder of Sweet Lauren's. And after surviving cancer just three months out of college, Lauren channeled her passion for clean eating into creating what she calls the best cookies in the world. Starting with only$25 ,000 in savings, demoing cookies from a rolling suitcase on the New York subway, and landing Whole Foods before she even had proper packaging.

1:22In this conversation you're going to discover how to start impossibly small and use customer feedback to find true product market fit before scaling and why going all in on allergen-free ingredients became their competitive moat and superpower and the power of weekly mentorship sessions with advisors outside your industry and how they help Lauren stay focused through the chaos of building a CPT brand. hear the stories learn the proven methods and accelerate your growth and future through entrepreneurship welcome to the founder podcast with nathan chan so you were diagnosed with hodgkin's lymphoma at 22 which led you to drastically change your diet And I want to know, like, how did this intense personal health challenge become the core of driving the purpose for Sweet Lawrence?

2:22So I don't think I ever thought of myself as a founder or entrepreneur. I mean, I was 22 years old when I got sick. So I didn't even have really corporate experience. You know, I just graduated college. Three months after graduating college is when I got diagnosed. And thankfully, I was cured after a year. But it really changed my life. I realized health is everything. And just feeling good is everything. And so while I was going through treatment, I couldn't have taken on a full-time job. So I just decided, what can I do with my time that lights me up? that something that I'm passionate about, something that gives me hope for the future, something that just like I'm genuinely intrigued about.

3:13And nutrition and like cooking just was so obvious to me. It was like you eat at least three times a day. Like you are what you eat. I directly saw a correlation between the types of food I ate and like how much energy I had. And, you know, during treatment, like all I cared about was getting through it, like getting through it, surviving and thriving on the other side. So food became just so important to me. And it's not something my doctor talked about. So it's something that I really felt like I had to kind of learn myself. And so I started to take cooking classes, studying nutrition and learning things that are obvious today.

3:54But this was like over 15 years ago when just natural foods wasn't talked about the way it is now. And so obviously I cut out anything artificial, corn syrup, hydrogenated oils, bleached flowers. Like I just was trying to eat as whole real food as possible. But I love good tasting food and delicious food. So I definitely wanted to make sure I was eating delicious at the same time. and I have a huge sweet tooth and I love baked goods and I love how happy people get around fresh baked goods. And I love, you know, a warm chocolate chip cookie is probably the most comforting food on the planet. And I just couldn't eat what most bakeries were selling anymore.

4:37It just really gave me that sugar high sugar crash. And I don't know. So I wasn't, it didn't feel like food to me. And so I started to make my own recipes out of that personal need. It was not a business idea yet. It was more, I'm starving for delicious, warm chocolate chip cookies and my favorite baked goods, but I want to eat things that are made of good, less processed ingredients. I can't find it. I guess I have to make it myself. And so after a ton of tweaking recipes, I finally started making cookies that I thought were the best cookies in the world. And friends started to love it and family started to love it.

5:15And like, Like that's when I just, that was my aha moment of like, everyone is looking for a healthier way to satisfy their sweet tooth as long as taste is there. Like I really think I could turn this into a brand. And so what happened next? Like I want to hear the whole food story and how you got your start, but you know, many people have a product idea, but you didn't go out and, you know, assess market demand. You didn't go out and, you know, look at what the competitors are doing. You just started with your own pain point. You came up with this idea. What's really impressive is you've bootstrapped this business nine figures a year in annual revenue, like super impressive growth as well.

5:59But you didn't walk and aim to kind of build this massive business and look at the demand, look at the product or the category, anything. You just kind of fell into it, right? And even just like talk me through like how how you commercialize this yeah really the beginning days were such gut and intuition led um I definitely had no access to data I had no idea how big the market was it was just really looking at human behavior and really just being like bare bones what are people getting excited about what are retailers getting excited about what makes sense for like today's shopper. And so, you know, I was making all these cookie recipes and I won a couple baking contests and those gave me the confidence to start Sweet Lauren's.

6:49But I still didn't know what starting Sweet Lauren's meant. If it was a packaged product, if it was CPG, what type of product would it be? You know, a baking mix, shelf-stable packaged cookies, cookie dough, So or is it going to be like a bakery? And so I took a business writing workshop course so that I could really sit down and like understand the numbers behind it. Like what would it cost to open up a bakery? And wow, rent every month would cost a lot. That's a lot of pressure, you know, to hit those numbers every month. And then also like if you go into a bakery, you have to have an incredible assortment of products.

7:28And like I just was so in love with cookie dough and I was so in love with the way people responded to cookie dough. Like I would make these fresh cookies and people would say, can I just buy the cookie dough from you? Like, I want to make these later for my family. Like I want to eat this warm and fresh before I go to bed. Like, and I'd be like, yeah, sure. I'll like give you a tub of cookie dough. And I just started, you know, that's what got people excited. They love the convenience of having something already made, you know, and they could put it on a baking tray and 10 minutes have a warm cookie and this incredible experience at home.

7:59So again, I, it's not like, it was really intuition and it was really looking at like, why do I want to start my own business? Like to me, if I was going to start my own business versus going to get a job for someone else, it had to be for something that was worth the hard work. Like I knew it wasn't going to be easy. I didn't know it would be this hard, but like, and take this long, you know, to get here. But like, I wanted freedom. I wanted to create a business that I felt like I was living my dream, my passion, and it gave me freedom and it gave me a way to connect with millions of people. So actually like a CPG product really worked for the things that got me excited versus like opening up a bakery where I probably would have to be in that store every day, you know, from morning till close.

8:43So I went to whole, I got a meeting with Whole Foods through this business writing class. This guy in my class worked in Whole Foods in the overnight shift, restocking the shelf because he wanted to open up his own business. So he was taking this course for that reason. You know, and I asked him one day, like, what does it take to get into Whole Foods? And he called me the next day and was like, you know, you've been meeting on Wednesday with like the head buyer of the Columbus Circle Whole Foods in New York City. And I just I was so pissed off because I was like, I'm this looks so unprofessional.

9:14Like my website said coming soon. I literally didn't have a product yet. You know, I had recipes and that was kind of it. But I took the meeting. I wrote down a one pager about like what types of ingredients we used at Sweet Lauren's, all the different types of products we could create depending on what Whole Foods wanted. And really just went into this meeting kind of asking questions like where are you excited about in the supermarket? Like what product would you want to buy? Like what moves fast? Like what? And so we walked all around the store and like it was really interesting. It's like baking mixes don't move that fast.

9:49You know, shelf stable cookies, you know, are snackable. But like, are you ever going to say this was the best thing I ever ate in the world? Like probably not. And he really was like, no one's built the next brand name and natural cookie dough. And it just really clicked for me. Like I was like, it's so true. Like there is no cool brand that was really out there yet that like I was excited to buy that I I thought the taste was superior, that I love the ingredients. And so he did a tasting and called me the next day and was like, how soon could we get this? And that was my first customer. So I found a factory and it took seven months to figure out how to package the product, scale the recipe, design packaging, but got into Whole Foods and that's really what started the business.

10:34Yeah, crazy. So first thing that comes to my mind, and I'm sure people listening, watching to this is how much it cost to bring that piece of the puzzle to life. So I started as small as possible. So, you know, there's probably like somewhere around 500 Whole Foods around the country today, but I got into one store. Like, you know, I just got into one store at a time at the beginning. So I found a factory in upstate New York. I was living in New York City at the time. I had to take a three-hour bus ride to this factory. This factory had never even made cookie dough. So I had to like learn with them how to scale a batch from my little kitchen, you know, to like a hundred pounds.

11:19And I just tried to make as small batches as possible so that I wasn't having hundreds of thousands of dollars in inventory, you know? And so, and I got into one Whole Foods and I demoed in that Whole Foods every week to make sure that it was selling. And so I got movement going there. Then I got into two other Whole Foods locally, made sure there was movement there and just really kept the business really quite small for about one to two years until I really tweaked packaging and flavors and just really found product market fit. Yeah. Okay. So there's a lot to unpack here. And if it's okay, I'd like to delve a little deeper on the factory piece, even just like the small runs.

12:02What did it cost? How did you work out packaging? How did you work out even the nitty gritty around the food being safe and like all of the, you know, legalities of making sure the business is protected? Like how did you work all of that out? Honestly, just Googling and jumping in. I had my savings. I spent about$25 ,000 that year in just all of those things. I hired the most affordable designer. And by the way, our first packaging was terrible. Like when I look back, it was you could tell it was so cheaply done. Like it was in the cheapest kind of tubs I could find. It was, you know, a friend designed the sticker packaging.

12:48It was all done by hand. These were very small runs. So I didn't have a ton of like outgoing fees. I tried to really keep it as small as possible. and, you know, so that I could build the confidence that, like, I could scale this and risk, you know, higher levels of inventory. And I definitely needed to tweak the product. You know, again, I was obsessed with the customer. Like, the second I got into Whole Foods, I was like, this isn't about me anymore. Like, I can make my own favorite recipes and flavors in my kitchen every day. This is about understanding, like, America and whoever my customer is, like, what she or he wants, what their kids want, and how to like really listen and make them something that changes their life and makes their life better.

13:35And, you know, then they're gonna love the product, then they won't balk at the price point, then they're gonna see, you know, that the product adds value to their life. And so I think like, that's where the demoing came in. I didn't hire someone to do that. I did that myself. I took a rolly suitcase on the subway from uptown to midtown with a toaster oven in the suitcase and cookie dough so that I could bake off fresh cookies in the aisle and like really see honest feedback, you know, and people are honest in New York, very honest, you know, they don't hold back. And I heard a lot of feedback about you should really have your packaging be portion controllable.

14:18You should have these kind of flavors. You should have, you know, your font size increased on the package. I mean, all these opportunities for improvement. And I also heard a lot of positive things like, like, this is such a smart idea. Why has no one ever done this? Of course, I want to buy a cleaner version of cookie dough that's out there, you know, than the processed stuff. And how'd you make it taste so good? And things like that, that like, after you started hearing that hundreds of times, it really, you know, I really felt in tune with the consumer and it really helped me lead the future of it with that really strong gut feeling of like, I know what the customer wants.

14:56I've talked to hundreds, thousands of people at this point. And it really made me feel kind of like an expert in kind of like the natural baking world. So you would have had thousands of conversations like demoing the product what was the biggest misconception that you had oh we still we still deal with this today is that when you say oh i have a better for you cookie dough or i have a cookie dough that uses like simple clean ingredients or i have a cookie dough that's dairy free and gluten free people are like oh like i'm sure it's going to be good tasting. Like always to get people to try the product is like the hardest thing.

15:36Cause once they try it, they're like, this is delicious. You'd never know it's gluten-free vegan or better ingredients. So I think like we're, we've always battled that misconception that like better for you can't taste better. Yes. Okay. So what's really interesting to me is you found a market, it, you're growing the business, and then somewhere along the way, you made an aggressive change. And I want you to talk about that change because this part really resonates with me because I have a lot of food allergies. I've had food allergies my whole life. Like when I had food allergies, oh, dairy, egg, sesame, peanut, coconut, all nuts, kiwi fruit and so these allergies have not gone away and when I was younger it was very difficult to to work out what to eat navigate and my mom you know was so scared and she tried so many alternative therapies and all these different things and back because back then like allergies wasn't so much a thing now it's everywhere right but I like you know what 38 years ago it wasn't really a thing.

16:52So, you know, for you, you made an aggressive change to speak to this market, serve this market. So tell me what happened because I find this part of the story very interesting because it was very courageous what you did. So tell us, can you share that part? Yeah, no, I appreciate that. So I, the first recipes for Sweet Lauren's weren't allergen free per se. They were dairy-free. Their recipe was always dairy-free. It was always whole grain. It was always non-GMO, but it wasn't free of the top allergens. No one was even talking about the top allergens kind of when I launched Sweet Lauren's 10 years ago.

17:33So I totally understand what you're saying. But I got Sweet Lauren's cookie dough into all public supermarkets and then all Kroger supermarkets in the first year of really like launching national. And that was a really big deal because those retailers don't normally launch kind of smaller, better for you brands. And, and, you know, it, we, it, when it turned Sweet Lawrence from like a small Northeast tiny company to like a national multimillion dollar business, because I was in all of a sudden overnight over 5 ,000 supermarkets of the busiest, you know, top supermarkets in the country. And what it did was made Sweet Lawrence available in almost every state.

18:19So now instead of just like leaning on the East Coast, I was reaching kind of every type of American. And I started to get inbound messages like you've never seen. The amount of emails and personal and to the business messages I would get on social media where people were saying like, I am obsessed with this concept. Cookie dough is my favorite thing, but I don't feel good after I eat the conventional product out there. Your cookie dough never hurts my stomach. It feels so good. But my husband is gluten-free. My kid has a nut allergy. My sister can't eat dairy. Can you please create some other products so that there's something for them because it's so stressful trying to feed them?

19:02And so I didn't get one or two of these emails. I'm talking, I would get these kind of messages every day for months. And again, listening to that intuition, I didn't have access to data. I just was like, I'm trying to make the baking industry better. There's clearly another need here for people with food allergies. And no one else is going to listen to them. Like the big guys are not going to go down this route. So like even if it's small compared to like our normal cookie dough, you know, if it's incremental and it's really meaningful and changes the lives of these people, it feels like something we should do.

19:38So I worked on my recipe to make it free of like the top allergens. I took out any soy that was in the chocolate. There was no dairy. I took out the gluten. No nuts. No egg. No coconut. No, you know, just made no sesame, made it free of the top allergens. Basically for me. Exactly. I made it for you without even meeting you yet. And I was like, like, let's just like, this is an unmet need. We can solve it. Why wouldn't we do it? And so I found a factory that was allergen free because that's the other hard part is like finding a factory that can even do this because they're so strict about what they bring in.

20:18And, you know, just launched Chocolate Chunk, one skew. And Publix and Kroger took chocolate chunk. We called it gluten-free, but it was free of the top allergens. And it sat right next to our original cookie dough. And you can't ignore data. Within six months, it was our number one SKU. And so I started to get a ton more messages from our customer base that's always been just so vocal. And they were like, I have to say, like, I tried the gluten-free thinking it was going to be terrible because I got it for my husband. But I love it. Like, I love it even more than the original. Like, you can't even tell the difference.

21:00Like, I'm not buying two different products. Like, I just want to buy one thing for my family. It makes life easier. I want to know that, like, this thing is safe for my friends, going to my kids' school, you know, any neighbors, family members that have allergies. So the big aha was like sitting right there when we finally like really saw the numbers. Like you couldn't ignore that. And the refrigerated dough space, which is where Sweet Lawrence cookie dough, you know, is where the cookie dough section is in a supermarket, is small. It's not like it's aisles and aisles long. There's a condensed space, meaning, and we're not a DTC brand, really.

21:36I mean, you can buy our product DTC, but we're our real businesses is in supermarkets. And so because it's refrigerated, because it's perishable. So, you know, I really had to be smart about whatever SKUs we were going to put on there. I knew we didn't have room for like 20 cookie dough SKUs. So every SKU I put on there had to really work. And so and I also just saw that like it, you know, what seemed niche about like being allergen free actually became like our superpower because it was so incremental to the category. You know, we weren't taking market share from the big guys. We were half our customers.

22:13Fifty percent of our customers had never shopped the cookie dough category before. They were just walking right by it. But now all of a sudden they were like, wait a minute. There's finally like a clean version, better for you version, allergen free version. like I can get behind Sweet Lauren's. And so that became kind of our, like really what we were known for is like bringing a new modern, better for you, clean ingredient, allergen-free customer to this category that otherwise never even knew it existed. Yeah. So this is a really, really interesting part of your story because what did it cost and what did it take to pivot?

22:51because like that that like you're already a multi-million dollar brand and you've totally kind of reimagined who you guys are did you like how how long did it take to phase out to go all in on this niche and market like were you scared was did you still like even the data was there like talk me through that yeah it it definitely was scary but thankfully the data made so much sense that um you know you couldn't like you couldn't argue against it I think there was a couple things that um that that I knew were the way forward so one you know when I launched the allergen free we wrote gluten free really big on the package and I think you know we wanted that for the gluten-free people to find us.

23:43But the second they found us, like we were like, wait a minute, if we're only launching allergen-free and discontinuing like the original line, like we got to make sure that we don't alienate people that aren't gluten-free, people that don't have food allergies, people that in your family don't have food allergies, but they want to eat the same thing as you. So packaging design became of the utmost importance. Like what do we look like on shelves so that we look just like a damn good, delicious, modern cookie, fun, vibrant, pops off shelf. And by the way, our call outs are there, but they're much smaller on the package.

24:23So that if you're looking for dairy free or non-GMO or gluten free or nut free, you will find them, but we're not screaming them because that's not our reason for being that like, you know, I think I just evolved the brand. It never changed why I created the company. Like it was always to have a delicious cookie experience, delicious fresh baked goods, using simple ingredients that you could trust. And then now we were allergen free. It was just like an additional like, you know, cherry on top. And now you can feel safe if you were looking for any one of these things. Yeah, that makes sense. Also, like it really became our superpower because I think I realized also how hard it is competing in this industry.

25:07Like the food space, the CPG space is so competitive and you're up against multi-billion dollar businesses that have been around for decades. And I think my original product was like, it was definitely not the same as what's on the shelf, but maybe it was only like this much better, you know, like a little bit better. going, you know, completely allergen free on top. It's like I could charge the price point it deserved for the more expensive ingredients. I had a healthy margin. And all of a sudden I really built a moat around us that was so different and so difficult to, to like break into. Um, and just very, very differentiated in the market versus trying to be like just a little bit better than something that was on the shelf.

25:53Yeah, that makes sense. And one thing that I just, I think people would love to know is what advice would you give on the packaging? Because what you were saying before about the allergy piece, you didn't need to shout it out. That makes sense to me because somebody with allergies, I would always check what the ingredients are anyways, right? So you didn't need to kind of, you could actually create something that looks cool, stands out, And it's all about attracting people on the shelf, not attracting just that person with allergies. So that's really smart. But what advice would you give around packaging?

26:30What are the unlocks there? How do you create great packaging to get shelf space? Yeah, I'm obsessed with packaging. I think it's so fun. And I love how it combines psychology and business and art all together. But I think you have to really look at where you're sold. Where are you sitting next to? What products are you seeing next to on the shelf? I think it's also slightly different than a D2C brand that's maybe just living, you know, on its own website or Amazon. But like in the supermarket, you know, you're in a section. You pretty much know who you might be next to. And so it really helps you think about what colors do I want to use?

27:09What size package do I want to have? Like, how do I want to stand out on shelf? And then, of course, there's limitations in terms of like what works for your factory and the machinery. but you know once we figured out well we really want place and bake packaging like we want packaging where when you open it there's 12 like circular portions of cookie dough in there so that when you open that package if you just wanted to make two cookies tonight you could do that Nathan you know and you could leave the rest in your fridge and eat the rest tomorrow or you could make all 12 if you're having like you know friends over dinner party so I think we really looked at making sure the packaging was really smart and it was super convenient for today's consumer that has no time and really portion controllable so that it's easy to not have 12 cookies lying around all the time.

28:00And if you want to just make a couple for yourself, you can. So people loved that. And then we really looked at our competition and we're like, okay, we obviously don't want to use those colors. We want to use like, you know, like we want to figure out what the brand's personality is, which is really kind of my personality, which is just kind of like, I want to be a bright light. I want to like make the world happier, joyful, better, more modernized. Kind of, so we've used like a hot magenta pink. That's kind of like a power pink, not like a soft pink. Like it's kind of like a fun, powerful pink that guys like, that girls like, that we've just gotten a good response to we use a lot of white in the background because we wanted to symbolize like clean, clean ingredients, simple ingredients.