#251 - Scaling the Brand: Ops, Systems, and Simplicity with Mezcla and Doss

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1:18when your business grows it's going to get more complex inevitably it's like a network of nodes and you add more warehouses or more EDI partners like Costco, Target, whatever, more formulations and like this stuff just explodes in complexity. To some degree can't avoid, you can design around a little bit. But the enormous trick is I think exactly what Yoga just said is like, how do you make sure that your systems, but also like the process, the people, the way you do stuff means that you can keep it as simple as possible. Like how do you follow up a bunch of that complexity in a way that a human can just apply a bunch of great judgment on it?

1:51and like judgment and tastes in a really repeatable way. It's not about adding a bunch of complexity for the sake of it. Like there's no glory in that suffering whatsoever. I think that's what a lot of brands really suffer with is it gets really complicated. And then a bunch of people sort of have the feeling that that's like the hallmark of success. The hallmark of success is how well do you manage that? How fast can you keep growing essentially by empowering your people? Hello, friends. Welcome to another Startup CPG podcast. I am super pumped about today's episode because we are going to follow along the journey of one of the breakout brands from the startup CPG community.

2:25It's Mezcla, those incredible plant-based protein bars that you've seen in stores everywhere. They have been a total rocket ship over the last few years. And I think they're one of the best examples out there of how to grow fast while maintaining a super lean rock star team. Today on the podcast, you're going to hear all about how they did it. And a huge thank you to our sponsor for today's episode, DOS. It's an ERP platform working with high-growth CPG brands, and they're helping the Mezcla team to scale their simple and effective operating model. If you want to chat with them, you can visit DOS.com.

2:57That's D-O-S-S dot com. All right, here we go.

3:06All right, welcome everyone to the podcast. I'm so excited that today we have Yoga from Mezcla on to tell the story of the rise of Mezcla. It's a brand that I knew about in the early days. And then before I knew it, I just started seeing them everywhere, which for me is especially amazing because I feel like the category that they're in is just one of the most competitive ones out there and so hard to stand out. But they've done it. We also have here today Sebastian from the DOS team. What we're going to talk about a lot today is when you scale the way that they have, what starts breaking from an ops perspective?

3:41And I think this is going to be really cool for all the brands out there to hear who are wondering, what should I be planning for if I hit that kind of curve? So, okay, Yoga, I'm going to start with you. Do you mind first just giving us the intro into yourself and Mezcla? Sure thing. Yep. Well, nice to meet you, Daniel. Thanks for having me on. Good to see you again, Sebastian. I'm Yoga. I serve as our president and chief operating officer at Mezcla. We're a consumer brand that plays right now in the protein bar space with our trademark puff crispy bars. think a crispy treat meets a protein bar with some level of function.

4:14What we're trying to deliver on is just an eating experience where people want to eat protein bars, a category that generally people have eaten on autopilot before. We've been scaling about 2 to 3x annually for the last several years. And in March, just about a month ago, we closed in our Series B, primed to invest more capital into specific levers to continue that pace of growth moving forward. Okay, and let me just ask you right off the bat, How did you guys do it? What is it about your brand that caught on so well? I mean, I think, okay, we've seen some people do well in the bar space who I think are like repeat founders, have hundreds of millions of dollars to throw it at some crazy tech or whatever.

4:54But I think yours is a story of a good product, authentic brand that just executed well and kind of just grew consistently. Like, what was the secret to all of that? Yeah, I would say the two primary drivers, there's many, of course. but I'd say the two primary drivers is number one, a product that delivers on an eating experience. In my view, that's just better than most other in the category. There are some emerging players now that are trying to introduce crunch, not just as an aspect, but as a feature of the bar. I think we were probably one of the first to really make that, like I would say centerpiece for what the value prop was of eating a Mazco bar.

5:31And I'd say the second thing is probably just the execution of our team. We have a very lean team who's been able to scale with us pretty rapidly, and Sebastian knows one of them pretty well. Justin, who I would argue is probably the most important person on Mezcla's team, is an operations manager and ensures that product gets to our warehouses from our co-manufacturer and then gets out to all of our customers. Okay. And I know we're talking about ops today, so I really am happy that you gave those answers. But one thing I didn't hear you mention is just the branding, which, you know, if I'm thinking about, okay, you're going into a really competitive category where so many entrants in there, how are you going to stand out for me?

6:10Actually, branding would come first. Can you tell me a little bit about, like, maybe describe your branding for somebody who hasn't yet seen a mezclab bar? And what does it try to do? And how does that resonate with consumers? Yeah, I mean, it's funny. We're actually launching another brand refresh right now, Dan. So you'll see those rolling out on shelves over the coming month to two months, maybe a little bit longer depending on the retailer. As I'm sure you're aware, sometimes it can take longer for product to flow through the shelf. But I'm happy to walk you through the brand kind of history too on some of those, like the primary ones.

6:39We started out like most other startup brands do, leaning very heavily into specialty and natural retail. And what really sells there, candidly, is a story and is a product because customers there are more willing to try new things. There's propensity to trial that is higher in the premium, natural, and specialty retail channels. What's funny is like, as you walk through the bar category and you look at the block, right? It's pretty intimidating when you walk in there and you see a hundred different options. What's rare is an option that's willing to stand behind what their product actually looks and tastes like without using pure play flavor cues.

7:17So if you look at our boxes and our packaging, you'll see a Mezco bar actually featured on that front of pack in a way that doesn't really exist for many of the other brands. And I think, Dan, what that means is people know what they're buying. A bar that looks like a rice kripsy treat meets protein bar. It's got 11 grams of protein in there. It's pretty light, airy, crispy, only 170 calories. And people are just willing to try it. And what's been really exciting for us is that we're investing a lot into trial. But once people try our product, our retention is actually best in the class. So we're able to keep customers after they try our product because they know that it delivers on taste and texture in a way that most of the other bars that they're eating on autopilot generally provide.

8:02That's pretty interesting to hear. I was thinking about if you look at a power bar, like if you open that wrapper up and look at it and someone's like, what do you think that is? What's in it? Like, I don't know. It's like a shiny, gooey blob of a product. Like what's in there? I don't know. But if I look at your product, I can immediately call out a few of the things that I'm eating. so that makes sense and why you would actually want to show that front of pack 100 i mean the way we think about it is this right like i still eat other bars i would say primarily now simply because i can't even eat my own bars i eat so many of them on a day-to-day basis i would say a healthy mix of market research in there too i'll be the first to tell you this is a massive category there's a place for everyone to play at the end of the day what mescola was found on is actually what we're trying to stick true to today, which is a bar made by foodies for foodies.

8:54Yeah, that makes sense. And the category itself is so big. You can look at the set. It's huge because it's something that people really integrate into their lives, right? I always see at the gym, people pack in a protein bar for after their workout. Like my sisters always have protein bars around as well for them and their kids just kind of on the go, probably feels like a healthier snack than a bag of chips or something like that. So that makes a lot of sense. The retention thing is so interesting. Do you feel like when you're actually converting customers then off that trial that they're becoming daily users right away or just putting you in the mix of bars that they typically go to?

9:33Like how loyal are people in this category in general, not just to your product? Yeah, it's fascinating. What we have found is I've done quite a few customer interviews, just getting on the phone, literally talking to people and trying to unearth more about trends of how, where, when, why people even eat bars. The most interesting thing to me is different eating occasions. So I'm not trying to compete for the person who's trying to bulk up after deadlifting 350 pounds in the gym. Mescala is probably not the bar for you right after for your recovery. But Mescala is a great bar when it's like three o 'clock or four o 'clock, you're feeling a little bit of a dip after your lunch, you want a healthy snack that is light and airy, it's not going to weigh you down.

10:12Like that's where we play in, right? Or after Pilates, you want a little bit of a snack. You don't want to weigh yourself down. That's where Mexico can play in. So I think what we've really been able to crack is this texture piece. And now we're trying to build more of a community and a brand around it so that we can keep people coming back to not just the product, but to the broader brand portfolio. That's very beautiful. Okay. I have two quick questions and then I want to pull in Sebastian as well. So the first one, I live right near Citarella and I see you guys have a huge presence at Citarella.

10:43Like when you were talking earlier about your strategy initially of penetrating specialty, those kind of places, like, do you feel like you were able to have a better shot at carving out a big set in places like that and start building out awareness? Is that kind of like what you're talking about for your initial strategy? Yeah, I would say that's how we wanted to gain the toe hold, right? And to begin to grow the brand, prove out product market fit. We were initially in the Citerellas, the Kings, Balducci's, Whole Foods, Sprouts, and those are still enormous pieces of our business today. Though we have started to scale more into mass and conventional, which is where we see a really significant opportunity to gain greater household penetration in the United States.

11:21For us, I think some of the biggest launches that we had last year were Target and Publix in Q4, which have been going very well for us, continuing to gain additional distribution, both in store count and in SKUs within both of those retailers, as well as in Safeway at Albertsons, where we've continued to additionally tack on incremental regions or divisions, as they call them, and more SKUs within those divisions. I think the coolest story for us that really shows how we try and pretty much land and expand within retailers is Whole Foods. Back in 2022, we landed with three SKUs in three regions of Whole Foods, quickly expanded to four SKUs, five regions, and now we have about 11 or 12 SKUs across every single Whole Foods in the country.

12:06Well, good for you guys. That's so good to hear. That's amazing. And yeah, that is like where the true test comes is if you can actually perform once you get that real Whole Foods opportunity. And then if your brand also then can make the transition and perform in places like Publix. So good for you guys. That's so great. Isn't there a great story as well, Yoga, up where Whole Foods came inbound to you guys from what I remember. It's a funny story, actually. So Whole Foods was originally outbound, did not go anywhere. And then we were in, I don't know how well you guys know Texas, but we were in Juiceland, which is like, has this cult-like following in Austin for smoothies and juices.

12:44We were one of the very, very few bars. Actually, we may be the only bar, but we're one of very few at the very most bars that are available there. And the Whole Foods buyer saw us there and then reached back out to us. And that's how we initially got into Whole Foods, which is pretty crazy. A little FOMO. I like it. You just surround them with the product and they're like, oh, geez, I guess it's getting everywhere now. I can't be so late to the party here. Okay. And then, so, oh, trial, you mentioned. How are you driving that trial? You mentioned you're investing a lot into having people try it and then you can have good retention once they do.

13:12What are your real powerhouse tactics for that? Yeah, I would say I think about that. So 70 % of my business for context is retail and then 30 % is digital, 25 % of that Amazon 5 % DEC. The way I'm building this brand, we're building Mezcla is such that people are primarily buying our bars in store because that's where we're primarily distributed at this point. But we have a very strong growth channel that we're continuing to invest more into, as well as more conventional opportunities on the retail side. So think shopper marketing. When we're at Target, for example, are we putting more money into Roundel so there's more digital brand awareness about us?

13:49It's popping to the top when people are shopping at Target.com, all the way through to Instacart when people are scrolling through. And we've now launched in a couple of regions in Costco, in the Southeast, Northeast, and the business centers. Well, we want to make sure that people have that opportunity and that option to buy Mezcla. So investing in both inorganic, right, like paid online within those retail channels and retail media, as well as a lot of trying to build that organic buzz and push some social to retail action for us as well. Okay, cool. And so you guys are a rocket ship right now.

14:20Yeah, you're obviously crushing online and in all of the retail. So when it comes to the op side of the business, like I always love talking about the marketing and demos and shop marketing and all of that. But you guys are growing so fast. This is a big business to support. Any brand out there knows because even at the early stages, they're sweating individual ingredient orders arriving in time and just have like an individual PO getting a couple days late somewhere. But you guys are cranking now. the pistons are firing. So can you just tell me a little bit about like, what is changing now for you at this stage as you're really maturing as a company and having just really consistent processes, all that kind of stuff from an office perspective?

15:02Yeah. And it's a great question. I think you basically started to answer it yourself there at the end end, right? Which is as we've scaled, we tried to do the things initially that didn't scale. And now we're building the systems and processes so that we can maintain very high ODIFs on time in full rates when it comes to our distributors and make sure that we have like basically the right amount of product at the right place in at the right time and ship such that it is fresh product as well. And so all of those are slight optimization equations. And they're all, I think, decision points for a brand on what they want to focus their time on.

15:37Right. So there's some brands out there that want to have complete control over every aspect of their supply chain and they're ordering ingredients for their product, I think that that can take a very significant time commitment, for example, out of your supply chain side of the house. And so instead, what we've done is we've tried to push on the co-man side, right, starting from an end-to-end process like my product, we are on fully turnkey basis where I just pay one finished amount per bar once it rolls off the line and actually leaves their facility. But I have full visibility and transparency into the component costs.

16:11The way I think about it is this, right? I don't need to be negotiating and buying pistachios every single time I'm placing a purchase order, but can I structure contracts with key suppliers and key ingredients that are very central to my product's texture and overall flavor profile? So for me, my Puff Crispy Bar, I think my pea crisps, think my chocolate, right? These are things that I want to have a direct relationship with. I've set up the contract with those and I let my co-man pull from them. I already know the pricing. I know what the product quality is. I know all of that, but I don't have to deal with actually placing the POs, receiving it, maintaining the storage and the warehousing and the handling.

16:48To me, the way I think about things is Mescla is a consumer brand. We are not very vertically integrated. We don't own our own manufacturing capabilities. So I want to have as much visibility as I can, but I don't want to be the one who's actually holding pen or the needle on actually making my product, if that makes sense. That's interesting. I didn't understand that about turnkey. When I hear that word, I'm like, oh, they just do everything. So you're not even the one sourcing the ingredients, which honestly makes me nervous. I'm just like, well, what? But is it good? Is it going to be late?

17:14Like what's happening? But it sounds like you actually are involved in setting up a contract, but then they're just really placing the orders and they have a consistent price from them. Like you said, right, as you scale, different business processes will emerge. In the earlier innings, we had semblance and understanding of like who these suppliers were and what the specific specs on them were. as we've grown, we've built like an internal tasting council, for example, that we call the Crunch Council. And that helps us inform the product development lifecycle. And we're actually hiring a head of R &D right now too, right?

17:45To help oversee this Crunch Council, help oversee product development. I had a lot of other names. Will they be called Captain Crunch? Captain Crunch. I mean, I had some other names that are perhaps not as peachy that we had as potential names for it. But I think the Crunch Council has been pretty awesome to run it. We and we had like an augural crunch council meeting where we all take it pretty seriously we're all sitting down we have someone like unsheathe the bar chop it up into specific pieces we're all taking a bite we're like swishing it around in our mouths like wine figuring out like oh how's the crunch factor on this or like how long is this taste in my mouth what does the aftertaste like is the crisp ending pretty quickly like things like that we did not do earlier on we would take a bite be like oh this is good this is not good and now we're trying to structure around it.

18:32And so in the beginning, did I know who my chocolate supplier was? For my first few runs, actually, I don't think I did. I did learn who it was after that. Because chocolate is so central, it's the bottom coating of my bar. I have a custom spec on that chocolate that I pull from. And because my pea crisps are so central to the crunch of my bar, I have a custom spec and a custom crisp that I've built in conjunction with both my co-manufacturer, so what will run best on their line, as well as the pea crisp manufacturer that will run best on their line and what makes the best possible product, right?

19:01So I'm trying to control as much as I can the product quality, which in my view, when you're talking about food, anything you make is only as good as the ingredients you're making it with. It's going to be hard for me to stop thinking about the Crunch Council. If you guys end up hiring somebody named Mark, maybe it could be called Marky Mark and the Crunchy Bunch. I like that. Thank you. Just throwing that out there. Okay, Sebastian, let me come over to you now. So Sebastian, I know this is like music to your ears to be hearing all of this talk about ops and the focus. And I love this story that yoga is telling us because it seems to me like a brand that has really focused on what they do best and simplifying their business.

19:41So focusing on their brand and the crunch and delivering the promise to consumers while really simplifying their operations and just trying to really make things be very consistent, executable, scalable, all of that stuff. Is that what you see from the best of the brands that you guys work with and also please hit us with the overall intro who is sebastian who is dos yeah sure i'm samasti and i lead everything business development and marketing at dos at dos we're building an operations cloud which is essentially a next-gen erp for fast-growing businesses like mezcla where we bring together the best of ai and sort of super flexible systems that adjust to every other business process that you're running i think in terms of seeing i think you put this really well yoga, right?

20:25As a brand that you create a promise to your customer, whatever that is, you're kind of a challenger brand coming up initially, you find a unique angle. And that has to be something that your customers love and rave about and enjoy. It gets really hard to take that from the first couple of repetitions where you're benignical about the details of discovering it to extending that experience across anyone who buys a bar online in Target, discovers it somewhere in a shop and part of that is trying to take the madness and the magic of early days and putting it into a method where you can kind of do it over and over again and that is incredibly hard it's hard because you got to find great people it's hard because you have to figure out new partners that you work with because suddenly you get a crunch counts now that you have to figure out what specific crunch a mesquivar is but it's also hard because you go from one kind of source of truth that you might get your hands around really easily and typically that source of truth has a name and as a person to suddenly like replicating that across a ton of different order systems right because you're selling on Shopify on Amazon you're selling in Target you're selling wholesale and so you've kind of gone from like creating the magic and getting that great experience going the first time around to then trying to replicate that magic and just keep your head screwed on as there's someone there to monitor is like a bunch of Excel sheets and copying data between them and so that's typically what we see we see that there's an amazing love for the product and a really passionate team and this like very urgent need to try and make sure that that can scale.

21:52It scales with a system that adjusts to the magic formula you found for your business. And typically the answer is adjust your formula to this old system that we've built. And I think any good operator refuses to do that because they have crafted with love and passion and precision, the thing that works for them. So that's typically what we see. And the great thing about that is we get to work with phenomenal operators who've built things with real love and passion and try to helped them grow up if there even is a system to love at that point you know that's i mean i hope they're at least that far right i mean i'm sure you're dealing with plenty of brands who end up realizing they need to get dos into their systems and you're like what are you using now like what i know you guys have a system it's typically a name the answer's typically a person

22:39that's a tough situation to be in especially if that person ever takes vacation okay so yoga in In the early days, what wasn't working from an ops perspective? Because it sounds like now you guys are on a pretty good path. I mean, we'll talk more about how you guys use DOS in a bit also. But what are the kind of things that you feel like you did in the early days where you really learned a lot of lessons about that? Like, OK, we did it because it grew that way and because we had to and don't fix something until it's really broken. But what are some of the things that you did that just really weren't scaling?

23:09It's a great question. I hesitate to say anything was really broken, to be perfectly honest with you, Daniel, on the operations side. I think there's just growing pains as you begin to expand and you do more of the same thing. You're like, this is like just taking up a lot of my time. Less of a scaling issue is just like, I don't think I should really spend as much time as I am doing this, right? And the number one thing that like DOS loves to talk about from ESCLA, for example, is our sample orders, which was just an unbelievably manual process that we had a member of our team just like basically spending like near five to 10 hours a week on and that was just not something that needed five to 10 hours a week sounds like a lot it also doesn't sound like a lot until you realize like that's basically one full working day that's dedicated a week to just putting in sample orders when that's not a central piece of why this brand exists or why operations exists right so i think that's like a very prime example, as well as what I gained a little bit of hesitancy was, I think we were pretty organized.

24:05Our graduation schema was we moved from Google Sheets. To be perfectly honest with you, it kind of worked. It has everything that you need. People will sit out there and bash things. Like honestly, I think Google Sheets did a pretty fine job for us. We graduated from Google Sheets to Airtable, which is in my view, like a fancier table to DOS today, which is upgraded table is how I like to think about it with more bells and whistles attached to it. And each step of that way to, in my view, is the progression towards a system of record. And to me, like, that's the most important thing is, yes, you can have a Google sheet.

24:39Yes, you can have an Airtable. Yes, you can have a DOS. At the end of the day, what I think you get as you start to graduate towards these slightly more sophisticated systems of record is something that's of little bit reliable. It's trustworthy. There's no questions about like breaks in a process because it's much more automated, as well as in my view, right? Like when you're talking about food, there's really serious traceability concerns that come into play. And knock on wood, we have had a pretty good track record on that today. And we run drills on that usually about like once every about six months with the quality advisor.