'Everybody kind of laughed at us': HexClad CEO Daniel Winer on being an early DTC cookware company -- and catching the eye of Gordon Ramsay

0:03Hello, everyone, and welcome to the Modern Retail Podcast.

0:30I believe means that it is stainless steel, nonstick, and maybe some cast iron thrown in there too. If anyone listens to this show, they know that I love talking with people in the cookware space. It's something that's near and dear to my heart. I own a lot of cookware. But I also just love talking about being a relatively new company, getting traction. I'm pretty sure one of Hexclad's first retail partnerships was Costco, and I'd love to talk about how that all happened. And then obviously there's the celebrity part of it, which we'll get all into. But Danny, how are you doing? Thanks for joining me.

0:56It's a pleasure to be here, Cal. Thank you so much for having me. Absolutely. So first, let's start with who you are. HexCloud, correct me if I'm wrong, but the company launched in 2016, but first went to market 2017. Is that right? We did officially sell our first pan in November of 16. I kind of have that email the way people used to pin up the$1 bill in their store. So yes, but essentially, we started getting traction in the second half of 17. What were you doing before you got into cookware? And how did that idea spark? So before we started Hexclad, I actually worked for another cookware company.

1:35After I got tired of I was trying to be in the entertainment business, you know, be the writer, producer, actor, director, slash, slash, slash. You know, and we got a bit disenchanted with the whole thing. I stumbled into working for a cookware company. You know, I loved food. I loved cooking. I'm a good home cook, but I'm not a chef. So I didn't really have an interest in working in a restaurant per se. And this was a way to kind of have my toe in it, but not, say, have to work 14 hours a day in a hot kitchen. So I worked for this other cookware company. My co-founder, Cole McRae, was my top salesman.

2:17I'd worked my way up. I was the VP of sales and marketing for the company. And essentially, around 2010, I really saw that our business model was a bit flawed. And I went to the owner of the company and I had my laptop up and I had Facebook on. And I just pointed at this and I go, this is where we need to be. We need to build a community. And he did this hand in my face like that. And he said, trust me, kid, this Facebook thing, it's never going to last. that's a memory that'll stick with you it it is and i walked out of his office that day and i said to myself i gotta start my own company and so essentially cole and i used to go to the gym every night and uh we would just start talking and i didn't know i was going to start a business with him it just kind of uh materialized out of gym sessions that we talked about this and um and really we didn't we were kind of burnt out on the cookware we really wanted we loved products that had a story and we were both very into juicing at the time so by the time we got around to doing this was around 2013 and we started going to asia to trade shows and we wanted to we wanted to bring a cold press juicer to the market like a home juicer and sometimes i would take off on a Friday afternoon, fly to Hong Kong, get there Saturday afternoon, walk a trade show all day Sunday, and then be on the 6 a.m.

3:51flight out of Hong Kong Monday morning, and then be back at my desk at like 1130 a.m. So nobody knew that we were trying to do this. And essentially, we did find a great juicer. We brought the juicer to market. And that was in 14. And we had a nice juicer business in 15. And part of 16. And essentially, we went out of business overnight. It's like my biggest failure, because I never expected that every bodega in New York would have a juice bar in it now and creation and press juicery and all these companies, you just couldn't compete against them. So it was quite a humbling experience to be like, wow, I built this company and I was in business on Tuesday.

4:38And on Wednesday morning, we were out of business with the juicer. So luckily, we'd always had the idea of having multiple products. And before that had happened, I had actually met the guy who invented how to laser etch the hexagons. So it was rather serendipitous. When you decided to pivot from juice to cookware, did you know what the competitive advantage would be? Or how were you able to be like, this is going to be what will work for the next product for the next company? Yeah, that's a really good question. You know, luckily, having my years of experience in the space, one thing was I knew what consumer sentiment was in the space.

5:21You know, people wanted durability is probably the main thing people want, right? They want value for money. So they want something that's going to last, which they love the ease of nonstick. They like the way it cleans up. But what they hate is the fact that most nonsticks last somewhere from one to three years. That they hate. I knew that they hated when their pans get all burnt and ugly on the bottom because oil drips down the pan. Or as it splatters, they move the pan from the hot burner to the cold burner, but oil splattered on there. Now it's cooking to the bottom of the pan, and they don't know why their pan is so ugly on the outside.

5:57So these were in my mind. And when I met this guy who invented this, I'm like, I had an aha moment. I'm like, this is a better mousetrap. And actually, when I met him, he was making Korean barbecue plates, Korean inventor, that he was just beginning to experiment with frying pans at that point. What did you say to him? Was he completely like, okay, use my technology, we can work on this? How did that all come about? You know, it's funny because I was in Guangzhou, China at the time. And this was like, when I found it, the juicer was beginning to decline already. So Cole and I were being very careful with our money.

6:40And so I went alone. We didn't even both go. We couldn't really afford for both of us to go to Asia. So I'm walking around by myself. And I had a meeting with, I don't even remember who and what it was about. But I went to go to this meeting. And I walked up to the gate or the door of this convention hall. And there's 20 Chinese soldiers standing there. And I'm like, they won't let me through. And they go, yes, Xi Jinping is here to cut. Oh, my God. He's going to cut like the opening ribbon for the Canton Fair. So I get diverted into this basement. And if you've been to any of these trade shows, they will sell every inch of real estate that they can.

7:21So I'm in a basement, essentially, in our booth setup. And this is like one of those moments where you go, thank God I wasn't on my phone or texting or just not paying. Or I wasn't looking right. I was looking left. And I saw this, what at first I thought was maybe a griddle or something with these hexagons on it. And it turned out it was Korean barbecue plate. I stopped. And you know, in Asia, I'm expecting that this is a knockoff of a knockoff of a knockoff. and I started a conversation and they're like no this is we invented this and I'm saying to myself oh sure you did that's what I hear all the time you invented it and then they pull out a book with about 13 or 14 patents global patents on this I'm like wow I'm like oh maybe I did find the person and and then I found out they were there because they were trying to keep an eye on people stealing their technology.

8:15So they had to be there to kind of walk the show. So they had to be a participant. And I started talking to them about making pans for the Western market so that were designed slightly differently. And they're like, we would love that. And we just hit it off immediately because to be perfectly honest, we were broke at the time. We had a failing juicer business at that point. And they had to have faith in me that as we had a couple of conversations that I could deliver what I promised them if they gave us the rights to North America. And that was in the spring of 15. And then I spent all of the rest of 15 and till I'd say late summer of 16, redesigning the pans with them, you know, weight, different weights, different thicknesses, different handles, putting the design on the outside of the pan.

9:05I, you know, that was kind of my idea. Um, and then we came up with what we felt was like a home run product, you know, now we just had to deal with the fact that we couldn't get any funding. Yeah. So, yeah. So that was my other question. Was this, how did you fund this? Was it just scrapping up, you know, scraping up what you could or it, you know, with this type of business, you need, uh, you know, not a small amount of capital in order to get it off the ground. Right. Uh, yes. And so essentially what we did was during that period, I went out and tried to raise money. And I heard a couple of things.

9:39I heard one, you want to go in the cookware space. You're crazy. It's too competitive. You'll never get shelf space. And I go, aha, I don't want shelf space because we're going to be the first direct to consumer cookware brand. And I got laughed out of offices for that. They're like, you don't buy cookware that way. What you do is you go to Bed Bath & Beyond, you go to Williams-Sonoma, and you go, you peel the pan, you pretend you're flipping omelets in the store. And that's the way people buy frying pan. So essentially, everybody kind of laughed at us. So what we did was we looked at each other and like, are we committed?

10:22And we emptied our retirements. We maxed out credit cards. We were applying for more credit cards, paying one with the other one. And we completely bootstrapped it. And it was just the two of us and one assistant for the longest time. Wow. And so did you, because correct me if I'm wrong, I was doing a bunch of research. It seems like, I think it was 2016 when you got Costco. Is that correct? No, it was actually 17. And that was, so what was unique about it, I had done business with Costco before in the past. And essentially, we had this product. And based on my relationship with Costco, in the spring of 17, they gave me a courtesy meeting.

11:06And again, one of these moments, when things just fall into place, I'd read an article. And I don't know if it was Forbes or which business publication, but I read an article that said Costco worried that the average member is 55 years old and that they're not appealing to a younger crowd. And as we've been playing around over 16, trying to introduce our product, raise money, whenever we met with, say, a younger techie type of individual, they loved the look of the pan. And they loved that there was some technology behind it. It wasn't just a 100-year-old cast iron skillet. So we were getting a lot of buzz with more Gen Z and millennials than baby boomers, so to speak.

11:59So when I went into the meeting, I took a flyer and I'm like, look, we're not grandma's cookware. We're Gen Z's cookware. We're the millennials cookware. And I saw the buyer's eyes light up a little bit because she was like, you guys are nobody. Why would I give you space in our store? but Costco also does this great thing where they let you put on demonstrations in the store so that's part of their DNA you know not only do you go get a sample of cheese newer products they let you put on what they call a roadshow and we were like we need our story told and we can do it two ways we can either tell it in person like that or we're going to tell it through social medium.

12:42That's it. So at the end of that meeting, she went, let me see if I can get this through. And I sent her a bunch of product and they tested it. And that took a long, long period from an April meeting. We sold our first pan in Costco in November 3rd of 17. And I remember the day because it's the day my life began to change. When you go into sale in that kind of place, that will definitely change the velocity of things. You said how the initial thesis was that it would be direct to consumer. Yes. In that first year when you were only online, how did you go about building that? And in the end, did you know that sometime soon you would need a retail partner to really get things going?

13:25Or walk me through that entire strategy. So the idea was always to be a D2C brand, but we were very open to having one strategic retail partnership. And in the back of our mind, because we had done business with Costco, we, Costco is a unique animal. I mean, because it should be uncool to shop there, but it's, but it's not in, you know, I live in LA and, you know, you'll pull into the Costco and you'll park next to a Rolls Royce. And that guy who was driving the Rolls Royce, seen his wife eating that$1.50 hot dog, you know, and they got that$6 rotisserie chicken in their bag. And there's just, but they can also buy a$500 bottle of wine there.

14:11So it's just this very unique thing. So we kind of felt like that with the storytelling aspect of the roadshow would be a good retail partnership. But we knew that our products would just languish on a shelf somewhere if people didn't understand what they were. So then during 17, we had very limited budget. We started buying ads on Facebook. And this was new. You only just started to be able to monetize Facebook in that way. And we didn't know what would resonate with people. So there was a lot of failure because there wasn't a playbook at the time for us to follow. So we kind of had to create it through a lot of trial and a lot of error until we started really hitting.

15:00And it took until about early 18 till we started really doing any significant online sales. We'll be right back after this message from our sponsor. Please stay with us. I would say that now people know you because, you know, they know you because of the products. But I also think you have a lot of buzzier partnerships. Was that initially, like in 2018, were you thinking about partnerships like that? Or how did that all come to be? So another really good question. We were definitely planning to try to build relationships with some influencers in the space. As you know, in 17, I mean, even the term influencer was somewhat new just like six years ago, as far as this is actually a career.

15:46So we thought about that. We also knew we were always from the get-go getting very, very positive feedback from professional chefs because they loved that they could get a sear. They loved that, though we're not a pure nonstick, like if you put an egg white in there with no butter, it's going to stick to the steel part. However, if you use a little bit of butter, you're fine. So they were kind of getting the best of both worlds. And it was a product that their line chefs weren't destroying within a couple of months. So when we were getting that positive buzz, we did try to partner up with local chefs in LA or food influencers and get them our products.

16:33So that definitely was part of our strategy. You can dream or hope, but I think realistically, we weren't thinking we were going to be partnering with some of the greatest chefs in the world. That was kind of a pipe dream. Got it. Well, it ended up happening. Yeah, I realize I didn't say at the beginning, but correct me if I'm wrong. So Gordon Ramsay has been a longtime partner of you, but he's now a co-owner. Is that correct? He is. And he has been for a while. It was one of those, again, very strange things that, you know, I'll remember the day I remember where I was driving when the guy who was handling our social media called me and said, by the way, do you know Gordon Ramsey's following us on Instagram?

17:13And I'm like, no, I did not know that. He's like, should I reach out? I'm like, yeah, I think you should. And he reached out and whoever does Gordon's social at the time was like, oh yeah, Gordon has one of your pans and he really likes it. Someone gave him one. And we said, can we send you some more? They said, yes. And by the way, does Gordon have a cookware deal? I don't know. I don't think so. And a few days later, I was on the phone with Gordon's business manager. And it just felt right from that first phone call. So I wanted to ask, because you mentioned how you're working with local chefs in LA.

17:52One of the big questions that I've always asked different cookware companies is the positioning for cookware, a lot of people think is the same. but positioning is different. There are some that their idea is that it's as good as professional grade and professional chefs use it in their home. Others are, this is so easy. Even if, you know, anyone anywhere can use this, it's just like a, you know, a big thing. And you're kind of, I don't know if I want to say in the middle, but like you have professionals using it, but you're targeting the home cook, someone who might not necessarily be a chef.

18:21As you figured out who your partners were, how did you coalesce on the exact messaging of what exactly the product would be. Does that make sense? It does. So we probably are the only, but we were definitely the first pan that called itself a hybrid pan. And this to me was like, what's our secret sauce? You know, sometimes they say jack of trade, master of none, or jack of all trades. We actually are the jack of all trades, but we are the master of most as well. Because, you know, very often you were sacrificing something. So for nonstick, you sacrificed durability and you sacrificed really a great sear.

19:04If you use stainless steel, you got a great sear and it was very durable, you sacrificed easy cleanup. What we loved was that we had this incredible tool that would do both things really, really well. But the key was this, was durability. That was it. Because one thing Cole and I were always very clear on is we wanted to start lifelong relationships with our customers. We were not here for cash grab. If that was the case, we would have tried to exit as soon as this was valuable. That's not it. We don't talk about exiting. It's not in our DNA. I want to be like Sony, like Sony in the 1980s where people just went in and bought Sony.

19:53You research. I want people to go, we need a cutting board. Just get hex clad. They make great products and they stand behind them. We need utensils. Just get hex clad. That's who we are. And I wouldn't have brought a product in that didn't have the technology and the construction that would not allow it to go on a lifelong journey with you. So that's kind of what our message was. I kind of laugh at some cookware out there that is out there just for aesthetics. Their only selling point is it's pretty or that's not us. I think our pans are sexy, but guess what? You're going to have them 20 years also.

20:37So that's the bonus. Yeah, that kind of leads to my next question. And I have an idea who you might be alluding to. I feel like you were before a couple of years before there was the whole boom of DTC cookware brands. And they all had a very specific target demographic and they all had a similar messaging. When that started happening, did you change things or say, we're going after someone different? Or how did you fit into that overall kind of boom and, to be honest, kind of a bust recently of a lot of these brands? A few things. Being the first one doing it, maybe we had a little advantage because, listen, some people know us a bit more.

21:19What the great thing was, I always feel like we almost had a cheat code because we had the best product in this space. and this is nothing against the quality of these products that our competitors have. And we had a totally unique technology and that did differentiate us. There are many brands right there that are kind of cookie cutter, like whether and nothing against them. You know, I don't know what their overall strategy would be. I would guess a lot of them were hoping to enjoy some success and to exit. And whatever that exit looked like, well, that's for them to decide. But since our goal was always to be a legacy brand, we approach things differently.

22:07So very quickly, I knew who we were. And I knew we were badass cookware. And that's what I said in 2016 and 17 as I was meeting with people. I'm like, we're badass cookware. And they're like, well, what does that mean? I go, it means that we go against the norms. uh you know we have a bit of like fuck you about us and um and and and the cool thing is you can be an eight-year-old girl making the grilled cheese and you're a little badass or you could be a grandma you know who you know cooks for a family and you're a badass and that's kind of who who we were and that's kind of why perfect like who's bigger badass than gordon ramsay you know So, and that kind of thing.

22:50And we always kind of stuck to that. Like, we're badass and we're trying to reinvent the cookware space. And doing that, I think, separated us a little bit where some people might mix up our competitors that anybody who goes for, say, a color scheme for their cookware, maybe that's the differentiator. Sadly, anybody can paint a pan a certain color. So, you know, now how do you differentiate yourself in the marketplace that, you know, that was for other companies to figure out. And I think that's why there was a bit of a correction in the space, because let's face it. Most companies got a huge pandemic bump.

23:35We did, too. Knock on wood, though, we're up 108 percent year over year over last year. And we were over 100 percent the year before that. As fast as we can make the cookware, we're selling it. And so our companies become more and more valuable, which is, you know, I feel so lucky and I'm so grateful to the universe for it. But like, I like that we've connected and resonate with the consumer. Absolutely. So, yeah, correct me if I'm wrong, but I was reading you're projected to do 350 million this year. Is that right? Yeah, I think I think we'll probably break that a little bit. That's awesome. Would you say that the Ramsey partnership is what sort of accelerated or changed the rate of which you were able to go towards the strategy of being a legacy company?

24:19And, you know, we're getting close out of time, but I want to get into like this year. So like go into like what have the what has the big sort of push over the last few years? But has it just been continuing with the products, product expansion? Like walk me through how any of that has changed. Okay. Well, a lot in there. I know. I'm sorry. I just threw in like 20 questions. That's all right, because it's great and it's exciting for me to talk about it. So, how do we grow? How do we take over the world, so to speak? We have expanded our product skews and we keep with the same philosophy, which is it will be of the highest quality.

25:01Whenever possible, it will be completely innovative. it. If we can't innovate something to make a better mousetrap, like for example, our knives, our knives are just great Japanese Damascus steel knives. We couldn't change the knife. So what we did was they look great. They're of the highest quality, but like something with our peppermint. Like I do most of the product design still. So I just tinker and I'm like, I buy every peppermint and I'm like, I want a better peppermint. I hate these. So I spent two years doing it. And what we finally thought of was we went to a coffee grinder manufacturer and we're like, did you ever make a pepper mill?

25:37He's like, no. Okay. Well, peppercorns aren't as hard as coffee beans. Let's start working there. And we kind of reverse engineered through that. So we try to do some stuff like that. That has led to our growth, our strategic partnerships. Gordon is like throwing gasoline on a fire. And because he's so involved, I mean, like he incorporates us and everything. I mean, I just flew home from Vegas with him on Sunday and he's just the whole flight. He's like, you know, I mean, he busts my balls a lot. He's like, you know, I mean, it's, you know, I mean, that's his entire persona. It really is. And it's like, I mean, we filmed our first YouTube thing with series with them and we had 2000 people watching it and he gave out my personal email and the thing to everybody.

26:22And he's like, so sorry. I know he's like telling everybody to email me and i'm like stop stop fucking with me gordon um but he's like he wants to be part of the strategy he wants to help design the product he's like very into all the aspects it's not just like a paid partnership like i talk to him regularly and we spend time regularly and we strategize regularly and he uses our products in his restaurants and his chefs love them whether it's his three Michelin star or his pizza place, they'll use our products. So that's all helped accelerate our growth. And then also we have in the last 14 to 16 months expanded globally.

27:05So we do sell in the UK and we're doing quite well there. We're really gaining traction in the EU. We launched in September in Australia. And shockingly, we were almost ready like three months in to hit our goals for all of year one. Oh, wow. And we launched Monday in Japan. So for next year, we'll continue our global expansion, which I think will help cement us as the most exciting cookware company globally. That's exciting. This is a two-pronged question, but when you do these international expansions, how important is retail to them? And also, how important is retail in the US? So I believe you're in Costco.

27:50Are you in Target and on Amazon? Are those your three? No, we are on Amazon. We're not on Target. Sorry about that. No, that's all right. We're on no shelves. Costco is our only retail play. And it's a great partnership. they're they're they're great and we do an incredible business there and internationally though we are 100 d2c which is challenging because not everyone shops online the way americans do so in some ways we're having to be patient with certain markets and we are open to following our u.s model and having one strategic retail partnership in some of these areas but like for example, with Australia, where I thought we might need to do that, essentially, as fast as it's getting offloaded into Australia, we're selling it.

28:44So we may not need to go down that road. Got it. Got it. We're over time, but I've been loving this conversation. But let's talk, you mentioned a bunch of things that you're thinking about it, some of its product expansion, a lot of it is international, what, like, what are your main goals for the year to come? And also, do you have a set like, percentage for what you want the international business to be in terms of the revenue? So I'll start there and work backwards. So in a perfect world, we would love to get to the point that maybe in one to two years that international would be between 25 % and 30 % of our overall business.