714 Heather Terry: Founder & CEO of GoodSAM Foods

0:00I am unwilling to give up, but I will start over from scratch as many times as it takes

0:07Kara Goldin:to get where I want to be. You just want to make sure you will get knocked down, but just make sure you don't get knocked out. So your only choice should be, go focus on what you can control. Hi everyone and welcome to the Kara Goldin show. Join me each week for inspiring conversations with some of the world's greatest leaders. We'll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can't wait to get started. Let's go. Hi, everyone, and welcome back to The Kara Golden Show. Today, we're diving into mission-driven entrepreneurship, my favorite topic, including raising capital without compromise and what it really takes to build a regenerative food system that works.

0:59Kara Goldin:And I'm thrilled to be joined by Heather Terry, who's a serial entrepreneur, serial founder, and the CEO of an incredible, incredible product and company called Good Sam Foods, which is a farmer-first snack brand doing things very differently. So Heather is a serial founder, as I mentioned, who's experienced the highs and the lows of hard lessons that come with taking the wrong money in certain points. Also, just being able to see lots of challenges that maybe she didn't even know that she was going to run into and creating a product before. That's what I love about serial entrepreneurs. And after learning firsthand how things can really go up and then go down, she's now scaling Good Sam with an uncompromising commitment to sustainability, community, and transparent supply chain.

1:58Kara Goldin:So like I said, Good Sam Foods is just absolutely incredible. They just fairly recently closed a series A that I'll let her talk about, but I'm really, really excited to have her here to talk about her company, her product, and what she's doing today. So Heather, welcome to the show. So excited to have you here. Thank you for having me. I'm such a big fan of yours. So this is such an honor to be sitting here with you. Seriously. Thank you for having me. You're so, so sweet. So, okay. So let's talk about Good Sam and what exactly is Good Sam Foods? Good Sam works solely in regeneratively farm systems directly with farmers in eight different countries in chocolate, coffee, nuts, and fruit.

2:46And what's really different about us is that we build relationships on the ground. We provide technical support, different types of resources. But in addition to that, we are using the systems of regeneration. So a lot of our products grow together in those countries. Right. So whereas most businesses will go and just take one thing from farmers, which really forces a monocrop or a monoculture, we come and say, oh, you've got chocolate and coffee growing together. We'll take both. Right. So we try to take all the viable cash crop off of these farms, associations and cooperatives. that we can. And what that really creates, Cara, is economic viability.

3:24In some places, even the United States, you know, our farmers in the U.S. still have really quite serious economic challenges. So the food system is very disconnected. And what Good Sam is here to do is to prove that it can work for every stakeholder from the farmer who plants the seed all the way through the eater who picks up a package of our product on the other end. So we're really trying to merge together those connective points, which we've really lost, especially in the U.S. food system.

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5:31Kara Goldin:How did you come up with this idea? Yeah, so I was a serial entrepreneur. I had a chocolate business that I ended up selling in 2015. And I was consulting for a lot of different businesses. And I always wanted to do something more in the field. We had traveled in my first company, but we had brokers and a lot of middlemen, which we don't have a good sample. We stripped our entire system of that. So of the pockets of farmers and the brand, right, in order to get an equitable product on shelf to the consumer don't exist in our system. So I had been working for a long time, like pretty much in like what we would consider an extractive model in natural consumer goods, right?

6:17VCs kind of came in in 2010. They were funding a lot of companies, but expecting these massive exits in three to five years. It was not sustainable. It's an extremely extractive way of running a business. It's sort of profit and top line at all costs. And I was in that system for a long time. And I had been on the ground with some of the farmers, but it just like, I couldn't get past a firewall, right? It was like, and I was, I was one of the only women traveling in the field. It was like, you kind of couldn't get past a certain point. And in 2019, I was at a consultancy in New York City working and I'd been helping brands, you know, kind of put together their financials for capital raising, get focused, get a good channel strategy.

6:58I'd been in the business for a long time at that point, almost a decade. And just trying to do my part to help companies do it better without stepping on the landmines. And a project came across my desk that had direct access to farmers in Colombia. I had never thought to work in Colombia. There's a lot of stigma around Columbia. And I somehow got convinced by my former business partner, who's since left the business, to go down there. And I brought one of the members of the team at Thrive Market. We ended up understanding that we had this regenerative system and we had direct access and there was a real opportunity.

7:40It was timely. It was of the moment. We had an opportunity and we thought, if we could do this, no brokers, no middlemen, working directly with a farmer, prioritizing regeneration, trying to figure out, like, could we take more than one thing and really start to drive that economic viability and create a flywheel on the ground? Could we then create a consumer product that could come to the market, obviously, always a little bit higher than like a private label commodity, but essentially start to really change the game for the brand and the farming community simultaneously, as well as giving the consumer a better than good product, right?

8:21And that was what we set out to do. And it started to work. And so we decided we go further and further and further. And what was really great is that Thrive Market came in really early and they were really wonderful in helping drive what products and categories that we came into. And that was really how we got put on the map. That was how Good Sam came to be. And I resisted coming into the CEO seat for a while because, of course, I knew that world quite well. And I resisted it for a long time. But ultimately, I realized that if I was going to continue to do this work in my life, that this was the path that I wanted to take.

9:02This was the mark that I wanted to leave on the industry. Or, Kara, I was going to fail spectacularly. Like it was going to be one way or another, but if I was going to do it again, then do it big and do it in a way where we can drive systems change. Otherwise, why do it? Did you have a relationship with Thrive Market before? I did. Yeah. So I had a relationship with them and, you know, not a really deep one, but when we brought it to the table and we put together the materials and we got some guidance from some of the folks over there, we just realized we had a really big opportunity and that, you know, could we grow a brand in that capacity?

9:42And it was, you know, we started the company in 2020. The idea sort of came onto my desk in 2019. I was traveling the majority of 2020 during the pandemic to build the supply network, as we call it. We work in, like I said, eight different countries. And so building that network out was a lot of work, a lot of COVID tests and a lot of special visas to get into countries and places. But I think we realized that we had an opportunity in 2020 to drive a lot of volume through the system at a time when we couldn't access brick and mortar retail. I couldn't walk into Whole Foods and get a placement in 2020.

10:17So it was kind of like very synchronistic that it all came together with Thrive and they sort of became the main driver of our business. It was how we started and we wouldn't be here without them. So we're very grateful to everything that Thrive has done for us, for sure.

10:34Kara Goldin:I read that you said if you've never been on a farm, you shouldn't be in the food business. Can you unpack that a little bit? I know. I'm so controversial, but it's true. I think that if you don't understand the realities on the ground, it's like trying to build a computer program and not understanding code, right? Like you'd never ask somebody to build you an app or build a computer program or a website for you that doesn't know code. You'd never do that. It was just like this person doesn't have the skillset. So for me, it always, it always struck me, you know, and in my first company, Nipmore, I did travel, you know, not at the length that I do now, but it also, those moments in the early days of my career really scrambled me because I was like, something's wrong.

11:17Like I I could intuitively feel that something was wrong, but I felt deeply powerless in terms of how to actually deal with the system. So it took a number of years for me to figure out, like, OK, if I if I get out there once we landed on the ground, it could say, I'll tell you a funny story. So if you go and read our 2024 impact report, you'll you'll read the story in more depth of of the first time that I got on the ground in Columbia, which was pretty intense. You know, I had been working prior in my career with brokers. And so you show up in a country, they take you to the nicest places, they introduce you to the farmers that are the happiest.

11:54And it's all a lot of smoke and mirrors. And you can kind of feel it. You know that something's like not totally right. And sometimes farmers would pull me aside and they would say things to me like, hey, like what you see is not exactly what's going on. That was a deep impression on me early in my career. When I went to Colombia for the first time, we were working in a region called Tolima. And we had to fly from Bogota in a propeller plane to the heart of the forest, the jungle, onto a military airstrip. And when we landed, and mind you, I have Thrive Market with me. I've got my original co-founder with me.

12:33I've got a group from Colombia that was helping, all these people. We get in this propeller plane and we hit the runway. We get out. There are dogs. There are machine guns. There is military and I am being searched. Our bags are being searched. Everything's being searched on the ground. That region that we were originally operating in was where the original FARC was operating. And so there was a lot of complication in that place. And that was the first moment for me where I was like, wow, Dorothy, you're not in Kansas anymore. Like this is the real thing that you knew was there all of this time, but that you couldn't see, right?

13:16And so that moment was really developmental for me in that I started to understand that I didn't have all the answers. I started to understand that the food system was a lot more complex than it's even painted to founders, right? Because a founder who's just buying from a broker through middlemen is being fed a story to make them feel good and to put the right thing on their package. And that had been me for years, but also intuitively knowing that there was a lot more to it, that there were a lot more complications. There's poverty. We work in Ghana. There's mass poverty. It is some of the most heart-wrenching, heartbreaking stories and people that you will see on the planet.

13:58You know, all of these places have stories and they're in this deep developmental work that we turn a blind eye to and then we, you know, complain about the cost of like a pineapple because we don't understand it. We don't understand that a pineapple only grows two pineapples in its lifetime. It takes 18 months to get those two pineapples out. And then we complain when a pineapple is$6, right? But we don't understand that there's a guy who's tending that pineapple for almost two years to get it to you. And then you think of that$6 and then you think, wow, that pineapple should be a lot more than$6.

14:36Because we've been intentionally taken away from the root of food in the system that we exist in today, which is the grocery store model.

14:49Kara Goldin:Yeah, no, definitely. And also no child labor and things like that, that we don't really want to think about. Yeah. If people knew, if people really sat with a child labor piece, they'd never buy a mainstream brand of chocolate ever again, because that's all that it is in the United States, because we don't hold that standard like Europe does. Remember, every system is complicated. Think about how complex for any of you your job is, your home is, raising your kids is, whatever it is, right? People are complicated. So we turn a blind eye to the food system. But when we actually open it a little bit, we understand that it is also extremely complex.

15:27Kara Goldin:Yeah, definitely. So from the time that you thought this idea up to actually getting your first product, how long did that take? So we started the process in January. So I guess it was like November of 2019. And then we were in the field in January, February, and then after then it was pandemic. So it was November of 2020 that the first product came out. So about a year, about a year from like the inception of the company to the first product being launched. So you, and then COVID hit, right? And so. Oh, it was during COVID. So we were 2019, COVID hit. We were still driving to a launch point in the middle of the pandemic and launched it in the pandemic in November of 2020.

16:14It's crazy.

16:16Kara Goldin:Yeah. So, so wild. So you recently, I mentioned this in the intro, but you recently closed a Series A. Congratulations. So you chose Latin American investors. Talk to me about that decision process. Obviously, you're sourcing from there, so it totally makes sense. But I think a lot of people, maybe they don't know that these investors are out there outside of the U.S., especially if they're a U.S. company. But how did you how did this all come about? It's really interesting. So we were going the traditional VCPE route. It was miserable. It was just horrible. You know, 2020 2022 was a tough year for capital raising, if we all remember.

17:03And so there were a lot of like locked wallets and bank accounts and all of it. You know, I think a lot of the VCPE world, you know, I think that was like kind of the first, like a big first, a big fumble for them. They didn't, they, they had sort of overvalued companies prior to 2022. They were dealing with a lot of dumpster fires, trying to preserve their portfolios. So it was really hard for a new company to come onto the scene and raise money. In addition to that, when we were out there talking to them, you know, they thought I was crazy. There were like four categories. Are you out of your mind?

17:35You'll never make it. It's too expensive. It's too this. It's too that. It's all the old stuff, right? Like I think what's so interesting about consumer goods, even in the natural products world is that like, there's an old guard that just believes that because they did it this way, it must be done that way. Right. And so there's been very little innovation in how we raise money and how we collaborate around the world on food systems. But there's a whole other group of people who are thinking about these food systems on a broader global scale. Regardless of what's happening in a place like the United States and the populist policies that we have here now, we're a global community.

18:13You will be hard pressed to touch anything in your home right now that doesn't have a foreign component to it, right? Like it's just the cat's out of the bag, toothpaste is out of the tube. Like I hate to destroy anybody's like pipe dream, but like we're not going, there's no way to go back, right? Like there's just, there's no capability. It'll take decades to really create that environment. So I was a little bit at a dead end. And I also didn't like, I had some term sheets, bad term sheets. The minute you get a bad term sheet, that's like not, I always say to my employees, I'm like, what is in the best interest of the company?

18:46Not what's in the best interest of Heather, not what's in the best interest of one investor. What is in the best interest of the company? If we're all here for the company, what gets this business to the next point? And so when reading those term sheets, it didn't get us to the next point. It was a takeover strategy, right? Like, oh, hey, they need money and nobody else will give it to them. So we'll give them this term sheet that's really crappy. Luckily, I've been in that scenario, right? I've taken bad money in the past. I've had bad partners. I've had bad actors. I've had people do all kinds of crazy things in my career.

19:19And I just said, no, I just said, no, I would rather fail and close the doors of this business than take the wrong money after everything that we've built and stand for. So I was at that inflection point. And then I went to a conference called SOCAP. And SOCAP is an investor conference with investors from all over the world and very impact focused, mission and impact focused. I had no idea what I was getting myself into. I was on a panel. I was there to meet people and to see what would happen. But I did not know a soul, Kara, in this environment, right? Like I come from natural CPG, like it's a VCP strategy.

19:58I know all the guys, I know all the players, right? Like, you know, that whole, that whole thing. And I walked in there like deer in headlights and I got in an elevator with an American who spoke perfect Spanish, a guy named Greg Krupa, who literally changed the complete trajectory of how we were going to raise capital moving forward. He introduced me to everybody he knew. He seemed to know everybody. He's a guy from Chicago. I'm from Chicago. We bonded over that. He started introducing me to everybody. We exchanged phone numbers. And then three months later, he called me and said, hey, I'm winding down my NGO in Ecuador.

20:36I think I can help you raise this money. I really believe that I'm the guy who can help you do it. I think I have the network. I think I can help you. Let me come work for good, Sam, and let me help you raise this money. It was Greg who opened up those doors. He got me in every room with every major impact investor that he could find, get a connection to. And wow, what a different world, Kara. What a different world. These are people who are looking for seven to 10-year exits. And they're not looking for necessarily acquisition. They're looking for just, oh, hey, we're going to sell to somebody who has deeper pockets, who can fund the business further, who can, you know, grow with you guys.

21:17They're deeply connected to the work on the ground. They are extraordinarily pragmatic, very numbers focused, but also extremely pragmatic, right? Like the world of being in impact was just so, I felt like I was in Alice in Wonderland. I was like, I'm in a different place. Like this is not, this is not what I'm used to, right? This is very different. And I also think because of the nature of the work and the respect that those investors have for the work on the ground, because they really do understand, right, that when you're on the ground, you view the world through a lens that others cannot, right?

22:00Again, you can see the complexity. So it's you, I don't care, you probably know this because you raised money when you're in, But like you walk into the room with those VCs and they make you feel about that big. They make you feel like you don't know what you're doing. They know what they're doing. They're going to be here to tell you what to do. And instead, what I was met with was everybody saying, no, you're you are I'm looking at you. I'm here to be a part of this. I'm here to buy into your vision. I'm here to support what work we're trying to do to change something. That was a very different world.

22:33And it's very funny because, you know, a lot of my CPG friends from years and years have now come to me and be like, can I raise impact money? I'm like, well, what do you do? You know, some of them don't have it. And because they've seen what's happened at Good Sam and they've seen that support and how we've been able to navigate it. And it's just like it's so unfortunate to see that disparity. Right. And understand that there are still so many who are stuck in this system. That's just really extractive and hierarchical and not not fun for founders. not the reason they ever started a business, right?

23:06And so I think I'm deeply grateful for that having happened because we just wouldn't be sitting here. I would have closed. I would have just said, no, I'm not going to do this. But I'm in awe every day of our investors because they hold my feet to the fire, but they are their true team players.

23:28Kara Goldin:I love that. So how many SKUs did you actually launch with? So we launched primarily, gosh, I have to remember how we did this. It was chocolate first. It was followed by a handful of nuts after that. And then we moved into coffee. And so chocolate, I think we did four chocolate bars, four chocolate bars. When we started, we did macadamia nuts first to see if we had something in that market. and yeah so it must have been seven to ten skews originally that we came out with and then we just kept adding on from their database right what does the market want what commodities are selling what are people really looking for where are the complaints can we do it better can we um you know get people to buy something that is a higher quality with better ethics uh that they can talk about when they you know sprinkle it on their yogurt or put it on a circuitry board.

24:23Kara Goldin:I love it. So when you think about figuring out if a SKU is working, I mean, this is always a question that I get from especially new founders. How do you determine that something is just not working and we should move on? Because sometimes it's the audience that you're actually selling to. Maybe you're in a retailer that is just not giving you the shelf space or doesn't really have those consumers coming in, or maybe you really haven't been able to have the right creative or you haven't figured out the algorithm online or the relationship with Amazon or whatever it is. But how do you know that this is a product, a SKU that you should shelve, cancel, continue to grow?