#241 - Breaking Into Misfits Market: What the Buying Team Actually Wants

24:43Our customer has evolved to understand quality and value doesn't always need to be mass scale. And therefore this ends work very closely with you to understand how that fits into our own economics, where we can place you. And we're very tight on what those slots mean for the customer so that we have a wide variety of ranges of price points and availability and accessibility to that, which means if you're a product that is very high end, we still want to talk to you. If you're a product that is entry level, but has great quality and a great story, we also want to talk to you. And if you're someone who's changing your packaging and you're looking to get rid of it, we want to talk to you as well.

25:19And that's where the guinea pig retailers comes in is because we can trial in many different ways and give you that exposure. Okay, great. And tactical question, but you mentioned MOQs before for things like opportunity and LTOs. Does it start at a couple pallets, but it could go up to a truck or something like that? What are the typical volumes you've done with brands historically? It'll be item specific. Again, that's where we have products that come in in the cases, half pallets, layers, especially if it's something that we're trialing and testing it out because we also want our customer to expect the get it before gone mentality that you may get something, you may see it and maybe here today, not tomorrow.

26:00And then other instances where we're working with you, where there's a high level of efficiency, we'll maximize the trucks and making sure that we're getting the best rates for our customers. So again, it's the beauty of working with a retailer like us is that we are hyper flexible. And because we're an e-commerce model, we have the ability of turning ourselves off before we get to a point where there's a negative customer experience of adding in the box. So if we start to get low, it becomes unavailable for purchase. So the customer that picks it gets it and they don't necessarily see all the sellouts and then we'll just order up more on the next wave.

26:33Okay, got it. So next question, Jesse, if a brand is lucky enough to get to work with you on the replenishment side, hopefully trying to get on that permanent misfits market placement, we love it. What do they need to do to actually prove that out? What are you looking for from that brand when they're trialing with you? Is it what kind of velocity do You want to see what kind of support can they do? Give us all the good stuff. I think you can kind of, well, we have to see everything in a timeline, right? Like 12 weeks of selling, you should have a good idea of like if there is traction and momentum.

27:07And within that 12 weeks, we can obviously look at comp items to see if it's performing within the commodity up to par. And as far as like what stands out to me, I want clarity and differentiation. like give me one sentence, tell me what it is. Why is it special? Who is this for? Know who you're targeting. And then does it fit with our customer values? Of course, that's like number one. So has to taste good, thoughtful ingredients, unique story that's exciting and ultimately helping build a better food system. So we like to test and learn really quick. So pricing and landed margins, Obviously, like that is important to match our financial goals internally.

27:50But yeah, I think understanding that there's a level of maturity across those areas and then the backbone being like the operations. Are you ready to rock and roll? And if not, be transparent because that's like number one for partnerships with me. Like you were speaking of unit economics. Like I want to know, tell me and we will figure out what's good for me, what's good for you and what's good for the customer as far as pricing. So I just did a roundabout. That's good. That's helpful. So let me ask you another tactical question, but it's an important one. What is in and what is out in terms of like certifications that you really want to see or you don't care about?

28:31Kinds of packaging? Like, yeah, we don't, like maybe don't have a jumbo size or like we don't do glass or we can't do frozen. It has to be shelf stable. Yeah, some stuff like that, that like, yeah, it's good for brands to know before they apply if they wouldn't even qualify based off some of those things. We do have sourcing standards, so we can follow up with a link on that. It's on our website. But obviously, that is number one. Sustainable packaging, that is nice to have. As far as certifications go, we don't have strict requirements on that angle. But I'd say gold star if you're Upcycled certified, putting a plug in.

29:10I know you guys do like Upcycle. I remember one year at Expo, you did an upcycled competition to see who could come up with the coolest upcycled idea, concept. And that, I think, was very cool and ahead of the curve also, since we're just seeing so many cool upcycled stuff really start to pop now. One thing just to add on there, just to say, or do you say, we now do all modalities. So we are ambient. We also do all chilled and fresh. And we just launched Frozen. So we are Frozen within Chicago as well as our BWI market as well. So we are a full-end grocery store online for our customers so they can get their full shop.

29:47There isn't any limitations we have. We also launch personal care as well as household vitamins and supplements, pets. So we cover not just grocery, but all even the adjacency categories as well. That is awesome. Also, shout out Maryland because I'm from Maryland and there's not a lot in this CPG world that really comes from Maryland. So love that. Also, how does that work with the shipping, by the way? If I'm a consumer and there's dry stuff coming and there's frozen stuff coming, how do you actually handle all of that? What's the consumer experience of it? Is it different boxes? Is it dry ice within the pack or those like, you know, refrigerated packs that come in?

30:22Yeah. So I just got my box literally like an hour ago. So I just unpacked it. So our dry and our chilled will be in the same box, but they're separated out by we actually have the ability to be able to return the boxes back. So we keep that sustainability element. We keep the ambient to the side stays out there. So they say dry and all of our chilled goes in with ice packs in a sealed pack that helps to keep it all cold and chilled for the items that are going to get in there. Frozen, new innovations for us of launching that. That comes in a separate box with dry ice. Heavy insulation for the customers.

30:53This way, the customer is able to get their frozen separated, their chilled, their dry all together, and they'll all be able to separate it. Our operations team has done an amazing job of being able to curate those pieces together so that your chilled is always cold, your dry is always dry, and your frozen stays frozen. That is amazing. Do you guys have any other very cool initiatives like that coming up? Like, where is this? It just seems like all of these cool features and capabilities you guys are adding on. It's going in such an exciting direction. Anything else on the horizon or in five years where do you really feel like this is going to get to?

31:27Ah, that's a good question. I think from like the horizon perspective, at some point, it's going to be just continuously growing the assortment. So when I first came into here, we were even more curated. I think, Jesse, we were about like 400-ish items at the latter part of 2023, early 2024. And then we scaled up into the 1 ,100 SKUs. Right now, our frozen assortment is between 135 and 150 SKUs with room to be able to add more onto that as well. So part of this is as we're building it out, is we want that curation. But we know that there's going to continue to be that meaningful growth into the assortment that allows us to be able to add more items, be able to hit some of those pockets and staples that we have with our customers, where maybe they're not as much of a velocity, but they're a reputational piece.

32:15So we have to carry them, but we want to make sure that we're able to move and be efficient in the other items. So that, to me, is the further evolution of what we get to is we get to continue to expand and add more items and hit more of those niche pockets. That's so exciting. And a lot of brands just started typing in the chat very excitedly also. Like, what about this? What about this? I love to hear that. Let's touch on some things that we did the past year that like in plus we launched our program that gives subscribers deeper discounts for value. And then we have a lot of stuff in the works with our own brand odds and ends.

32:50So as you talk five years down the road, like impact is number one, we want to save more food. So what a great way to do that to lean into private label. We all know like the industry that's growing so, so quickly. So we're going to lean into that from a mission quality value perspective. And then we are on the cusp of launching Snap, which expands access. Accessibility is huge to us. That's awesome. That's so exciting. I wonder if you have an example of a brand that you've onboarded recently that you feel like was just such a good fit for your shoppers and for your platform. Maybe you could highlight what that brand is or what it was about them that you felt like was just such a hit for you or made it such an obvious yes.

33:31Oh boy. I know. Just to put you right on the spot. I have a trick that I use when I am asking a question that you have no idea that I was going to ask is I just talk for a while like I'm doing now. I'll ask the question right up at the front and then I just wander around. I go in a big circle just talking about who knows what and then I come back and usually by the time I'm done asking the question I've given everyone enough time to remember what their favorite new brand is. So Jessie I feel like you just got there. Yeah, yeah, I did. I did. So June pistachios, I'm going to shout them out. The fattest pistachios you've ever had.

34:07It's a joy to crack open these pistachios. And just the taste is so forward and quality. And they came in to the partnership really eager to invest, like really eager to understand what sort of success we've seen in other areas that we could like lift and apply to their launch. strategy with us. It has been a huge success. So from that launch, as an example, we can really tap into and copy a lot of that success for other spires. Well, that looks good. I was looking at a June salt and pepper pistachios they have. Bill Pickles, number one. I was going to say, Jesse, the pickles are my favorite. That looks amazing.

34:48I got to try those. Okay, Emma, what about you? Do you have one locked and loaded? I know. It's like choosing a favorite child. You know, it's very hard, but I think their beverage is a category that there's so much innovation. There's so much room for play and trial and just being able to like adjust an everyday habit into being more functional is something I'm really honing in on. Functionality in beverages at a total has exploded. We recently launched in January at least like eight new beverages that have all done really well, but like Laurel's A2 Ready to Drink Lattes. I want to give them a shout out because that's a product, you know, that's existed in the market as a ready to drink just canned iced coffee.

35:35But they put an innovative spin on it by offering it with A2 milk, which is better for people that are lactose intolerant. And it tastes delicious. Like the matcha chai and coffee concentrate is like true matcha chai, really strong and delicious. The packaging is great. And just overall is like a very aligned value and brand wise as a partner. Another shout out because I'm drinking it right now. All phenoms, Jesse and I are addicted to this product. So delicious. It hits all the points of Lion's Mane, L-theanine, green tea. So it's more of like a stable caffeine intake. But yeah, overall, I saw in the comments, someone asked if we are willing to play into categories that essentially don't exist yet.

36:24And that is definitely something we're looking for. Someone else I saw in the chat that I met recently at Fancy Fair. It's a sparkling bone broth, which I will share. I know he's in here. I was a bit hesitant to try because like that is a very strange concept, but it's delicious. It's something that I could see becoming a part of like my everyday routine that you would never think that it would be a product to exist. So we love to jump on that. That's part of Jesse's new role as being our lead of innovation is really capturing these trends, these new to market brands that are really like breaking barriers within categories and creating new categories that don't exist yet.

37:06So that's something we get super excited about and it's always on our radar. Okay, someone said that the name of that one is Morrow. Yes, that is correct. That sounds cool. I have got to try that. That's new to me. And I see a lot of stuff. And that's a brand new concept. That's cool. Steve, what about you? Is there one that you want to call out as a recent success? Something that you're obsessed with? What's in that box that you just ordered? You want to show it to us? I should have done that. I should have kept it going. Honestly, I have a ton. I have to go to my sister's birthday afterwards.

37:33So I ordered a ton of things for charcuterie. Getting in today. So shout out to John. like the curation of new deli meats and the Ali stuff that we have coming in into our produce team for the vegetables, especially the prepared ones, because I don't have a lot of time to chop up the product. And then odds and ends, our products in here have a lot of our dips and cheeses that are going to go into there. I think in general, from a brand perspective, and one thing that I I've called out with a lot, which goes into the highly curation pieces, we are finding that brands that maybe don't do as well at other retailers or hidden just soar in here.

38:06And the one that I I always use as minor figures as the example of they're a product that is above and beyond, you know, our best product in that category. And it is one that hides in a lot of the natural channel and the retailers. But even here, when we stacked it up against the big players, it blows them out of the water. And when you asked me what's in my box, I had three of those in my box. Yeah. Why do you think they over index so much with you? Not as much competition on the shelf. It's because it's easier to find. And you think about it, like we were going through like the numbers of like with us, there's a one in 1100 chance of your product being found.

38:38If you're at a super Walmart, there's one in 100 ,000 chance of your product being found. When you get it down into smaller categories in the way the curation comes in, you're only competing maybe against once or two, but you're on a level playing field. You're not competing against facings. And I came from a traditional background. I evolved into startups and e-commerce before coming here. But here you're on a level playing field. you're stacked one up against each other it's easier to find your story gets out there a lot better and how you work with everything and how you work through telling your stories and the cms it allows us to be able to elevate it and i say this coming off of our q2 go to market meeting where we literally are just shouting the names of all of the brands that are coming in and the stories and we get marketing hyped we get site merchandising hype and you'll see as you go through our website we're featuring all of these little bulletins and stories and telling people about it.

39:29But then we get you out in emails and blasts and all of these, which really allows you to be able to succeed. And that's why when we talk about what works and what doesn't work, there are things that may not have worked in the market or aren't supported by data that just blow us out of the water here. And I think about one of the big stories for us was like Mezcla. Mezcla came in here. We built a really good relationship with them. And they've been a really good mainstay for us of growing and trust and exploration that has allowed us to be able to take a brand that didn't have a lot of notoriety, but was amazing, great quality, and have them be a really big cornerstone.

40:05And that's what we're always looking for. That's where our evolution came is. We're looking for those brands to really be able to explode on our site, and then they get to become the mainstays, and then we build our assortments around them. That's very beautiful. I love to hear that. And before we go to let some brands quick pitch, I would like to ask, is there anything you guys are looking for right now, though? Anything where you're like, actually you know what hole we have that i've identified there's some white space or just something you need a lot more of because the products are really hitting in that category any needs if you got a problem you know we'll solve it right now on them because there are probably some brands out here in the audience that have it but anything you want to call out emma i do i have a selective ass which i don't know if it would be relative for this group but running the dairy category my goal is to have a more regional strategy so having more focused cheeses that are coming on the East Coast from Vermont and the Midwest, making sure we have the best Wisconsin cheese possible.

41:03Fresh milk as well. We recently launched in BWI. So that's a space we've never been able to play into before because of shelf lives, just overall, like very small windows that we're able to offer a product, but it's a big gap in our assortment. So looking for more dairy expansion that is truly like as close to the farmers as possible. We want to highlight those stories, elevate brands that are hitting the organic standards and just upholding the high values that are hard to hold in the dairy category. So that's my special request. Cheese, yogurt, milk. You can send those requests my way. All right, get ready.

41:44They're coming. clear your inbox on LinkedIn because it's about to get blown up. Jessie, what you got? Oh my goodness. Obviously I'm looking over like what's innovative in every category within groceries. So like my eyes are wide open all the time. When we see innovation, it's such a big buzzword. Like what does it mean? Do you introduce a new flavor or cuisine that really expands a category. Do you solve a real customer problem than what is already out there, like a sea of average and then sustainability led, like upcycled, rescued inputs, like that's something that will always stay like near and dear to our hearts.

42:25So, and it has to taste good. I think I've said that like four times now, but really, really looking for a lot, like as we get into charcuterie season, hosting and picnics, like anything that fuels that what I like to call lazy gourmet, you know, lazy, like special elevated convenience kind of. So really hopping on that. But so that didn't really answer a category specific, but overarching. I like it. And it helped everyone get to know you better, which is a good thing when they come to pitch you. They'll know what you're into. Steve, you want to add anything on to the wish list? This is, I would say, the biggest request that comes to us from marketing every single day is the compelling stories, the reason, the why.

43:08If you're coming in here, we love talking about brands. And it's been the most impressive thing for me coming into this team as I've been exposed to so many unique small brands that I didn't hear of or I didn't try. And what we're trying to do is really push them this year as much as we can. So when you're coming in, we're looking for the stories, the whys behind it, what gets you compelling, because it's not just the CMs that are here that are doing this. But I will say we have a very passionate booty team all around us between growth and marketing and support. And I saw some questions on like what we do to support the small brands that are coming here.

43:42We'll tell your story. But to tell your story, we need to know your story. And we will do that and we'll be your biggest advocates in here and then also making sure that your story gets out there. Beautiful. All right. I'm bringing in some people to pitch. Let's hear your 15 to 20 second pitch. And we're going to rapid fire try to go through a bunch of people. So we've got Dave up. All right. Hit us with your pitch. I don't have a product with me right now because it's in the other room. But this is our Brooklyn Sesame Bar that loves your gut with 19 grams of fiber and 12 grams of protein. That's 15 seconds.

44:14I'm being really mindful of your time. Nailed it. All right. Thank you. And extra points for ending on time. All right. Hi, I'm Radima. I'm the founder of Veggie Vice. We're freeze-dried veggie chips. So literally just zucchini and salt and broccoli, sour cream, and onion that you can crunch on. On the go, we're super viral on TikTok and would love to chat more. All right. I like the ASMR component as well. Dave, you're up. Hi, guys. Hey, I'm Dave. I'm one of the co-founders of Newt. So I have autoimmune disease. I had to give up peanut butter. My girlfriend's Chinese. Love the black sesame dessert, but just wasn't healthy.

44:50So together we made a macadamia nut butter with black sesame and we also have matcha. So just try to make a functional food. Interesting. Love it. You guys are so prompt. Really appreciated. All right. Who is up next? We've got Tony. Come on down. Hey, how you doing? My name's Tony. My product is avocado mayo made from actual avocados, not avocado oil because it's made from avocados. It is 75 % less fat and calories than any oil-based mayo. And I'd love to talk to you more about my getting my product in. Thank you. All right. Nice job. It's going great, guys. Our startup CPG brands are just well-trained.

45:26Shabani, you're up. Hi, I'm Shabani. I'm the founder of Little Gourmets. We offer fresh, veggie-rich, globally-inspired baby food. And we're based on the research that shows the high correlation between our early foods and future eating habits. So trying to improve the food for our kids. I like that topic because I ate trash when I was a kid and I still love trash. And I see some people I'm very close with with their kids and they're just letting them eat trash also. I'm like, don't let that what happened to me happen to them maybe. Give them some better stuff. All right. Keeping it rolling. All right.

45:58Jenya. Hi, here are you. I'm Jenya. I'm the founder of Crepes. We have sweet and savory crepes. They come fully cooked, frozen. All you do, just warm them up, open microwave, real ingredients, no artificial cause and flavors. And we have amazing flavors. Apple, spinach, mushroom. and I think it's 15 seconds. Thank you so much. I love it. I would crush those after a night out on the town. I'd come home and just nuke that whole thing and just destroy it. All right, Mike, you're up. Hi, everyone. I'm Mike. I'm the founder of Pezzy Pets and we work with fishermen and hunters from around the world to turn invasive species into pet treats for dogs and cats.

46:36That'll show them for being so invasive. I like it. All right. Thanks, Mike. Okay. And next we have got Allison. Hi, everyone. We are Say So. This is Lazy Gourmet for cocktails and mocktails. Our brand new format is stick packs. Literally, all you do is pour and stir for a low sugar cocktail or mocktail made with real ingredients. We're sustainable because we're dehydrated. We really believe the future is not going to be shipping water or glass. And these would ship perfectly in your boxes. All right. And she did just say so. I love it. I was telling you guys how good the audio is on this platform.

47:13Like you can just hear the grains in the say-so just like trickling down. It's so good. All right. Come on down. What you got? Hi, my name is Edlin, founder of Reclamation Foods. We make an award-winning Korean-style bone broth. We're upcycling bones from processors that would otherwise go to waste. We actually have two. We have an opportunity buy, but also replenishment possibly. We've got beef, pork, and then we have old packaging that we kind of are getting rid of. That's the opportunity buy. We're also releasing a chicken flavor. and it actually jiggles in the fridge because of all the collagen content, but it is shelf stable.

47:45All right. Good job. I saw some eyes go wide on that one. I feel like you said some of the magic words like upcycled. Okay. We're going to do a couple more here and then we'll have to wrap. So I've got Andy now. Yep. Cool. How are you doing? I'm the sales director for MyForce Foods. We specialize in harvesting whole mushroom mycelium to make a plant-based breakfast meat. The bacon is the best-selling thing in the natural channel across the whole country. It's really taken off. It's really clean, fried ingredients, and we do all the farming ourselves in upstate New York in vertical farming system.

48:12So it's very sustainable, great use of acreage up there too. And we also do a my pulled pork, which is brand new. I don't know if you can see that a little bit. Yeah, got it. Upside down. Yes, there we go. That's our brand new item. All right. Nice job. Okay, Gina, you're up. Hi, I'm Gina, the founder of Pantry Gems. Oh, we're going to talk. I'm really excited. So I'm doing single tablespoons of tomato paste because I cook a lot and I'm sick of wasting tomato paste. Usually use one or two your tablespoons and then you're like, what do I do with the rest of the can? So I came up with a solution that's never been done before.

48:44All right. Nice job. You got it before you even pitched. Okay. Okay. You're up. Hi guys. How are you? My name is Amanda. We do the first and only dessert butter. It's the first spoonable snackable dessert in a jar, but we also just launched them in squeeze touches. So all of our flavors come available for lunch boxes and anything that you need when you're on the go and gluten-free dairy-free, no refined sugar, no seed oil, So all good for you. And it tastes fantastic. It does taste fantastic. I just had it recently. It's so good. That is true. Okay, here we go. By the way, it works out pretty well.

49:15You'd think just calling so many random people up from an audience. We don't even know who they are. You'd get some odd ones. But I don't know. People are always doing such a good job. I'm going to do the last one here. We've got Janice coming up. And I'm so sorry for everybody that we missed. But there were so many people who wanted to jump up to talk to this awesome team. Hi, I'm Janice. I'm the founder of Hawk Roll Sauce. We're bridging two high-velocity categories. chili crisp and hot sauce. We're trying to drive chili oil out of being an occasion use category and really make it more approachable and just more fun for all consumers.

49:45We're also bringing in unique formats really with the first squeezable chili oil. We also have a really unique flavor catalog with a habanero for chili oil as well. And we're really just a better for you made for everyone condiment. Nice job. Only hits here. Everything was a hit. I love it. So coming back to the Misfits team. Anything, any commentary on the overall pitches you saw? They were great overall. Anything that, you know, stood out to you that you want to comment on? Fantastic pitches. Hopefully we get a list. I tried writing everything down as quickly as possible on this one. Honestly, the one that stood out for me is the broccoli crunch, the sour cream and onion.

50:21Very curious on that one. I have a little girl who loves everything salty snacks and I'd love to give her broccoli instead of a cheese puff. So very excited to see that one. All right. Pantry Gems hits on every customer value proposition that we have. Eglin, I'm going to reach out on the bone broth because you did use every single buzzword in my net. Yeah. Nice. Cool. Emma, anything you want to add? I mean, no, I just, I loved everything. Not a ton that was touching my categories, which makes it a little bit easier. But as a consumer, I would love to try everything. Just want to say thank you to everyone.

50:54That was so interesting. I wish we could do that all the time. It would make our lives a lot easier sourcing wise, but excited to have a lot of great follow ups and discuss those products with the rest of our team. And we should do it all the time. So reminder to everyone, you can get in touch with the team. It's procurement at misfitsmarket.com and mention the webinar. Mention you heard about them here or if you're listening on the podcast, mention that. And I bet that they will give you extra special love when you do that. So I want to thank especially the Misfits team for joining us today. This has been really a treat.

51:27and if somebody gets in with them because of this, let us know. We'll celebrate with you. It'll be great. All right. Thank you, everybody. Bye. Well, my friends, we've now arrived together at the end of another episode of the Startup CPG podcast, the top globally ranked podcast in CPG. As you may know, we're not just a podcast. We're a community of brands and experts, and you should join. You can sign up at startupcpg.com. You'll then get an invite to our online Slack community. You're going to hear about amazing events near you, all of our special opportunities to get you in front of buyers, investors, brands, and more.

52:02It's a free community. So what are you waiting for? I will see you there or on our next episode. Bye-bye.

52:25I'll see you next time.