Ops Spotlight: Todd Hoffman, COO at Brightland

19:39How does it relate to the overall grand plan of really getting these products out there and making the consumer sort of like the number one part of the journey? If it doesn't sort of meet those criteria, it might be a great idea, but it's not necessarily a great idea for our business.

19:53Hannah Dittman:Yeah, that's a great, you've got to be able to be willing to look at everything, but then only pursue the things that really are going to make the big difference. And I think that's kind of the balance that and discipline that leadership has to instill to make sure that you stay focused, but keep it new and interesting at the same time. When someone's going out to manufacture something for the first time, or when you guys are thinking about your supply chain, how are you choosing manufacturing partners or maybe how have you in the past, you know, what are your top criteria and what has or would make you switch from one manufacturer to another?

20:27Well, what would make me switch from one to another is not meeting my expectations. You know, I look at our business today, am I making, am I creating a formula? Where I closed, we were blending and actually had a formula. Or am I bottling? Or am I cooking something? And so I always want to know with my co-man or my manufacturing facility or whatever it might be, those critical supply chain partners, what are they really good at? What is their key thing? Is it the inbound and buying of ingredients? Is it the way they do the formulations? I really want to understand what their key core competency is and does that match with what I need?

21:04If it doesn't match exactly with what I need, they're not in my right place. And so that's number one. Number two, what is their focus, right? Are they focused on the big guys and I'm just a small cog? Are they focused on smaller companies that they want to help grow and sort of invest in? And so we've been really lucky. okay, we have found some great commands and supply partners who believe in the vision of what we're trying to do and they want to work with us. And so I think we are pretty demanding. We want perfection. We want someone to get our product and have the absolute best experience.

21:37What do I mean by that? Our glass bottles are a lot of times for gifts. So if you're going to give someone a gift, that bottle better look perfect. The product inside better tastes phenomenal. And if you're an at-home cook and you're going to try and cook something and use our product and you have a bad experience because of a leaky bottle or a top didn't get on properly or you know whatever it might be it all comes down to where in the supply chain did a breakdown and I have to make sure that my customers have the absolute best experience and so when I'm looking at my co-mans for example I want to know that they're going to wake up and think about me even though I'm probably their smallest customer.

22:13So how do I get the most love out of my partners where I'm probably their smallest part of their business?

22:19Hannah Dittman:Yeah, I feel like having partners that really believe in the potential of your brand and want to scale it with you just makes such a big difference than just being another number or another volume addition that they can squeeze in, especially if you have perfectionist standards. I've had people tell me before, I'm such a perfectionist. I'm like, great, awesome. That means I'm being a lot more rigorous than whoever else you're working with. Yeah. Our partners always say to me, you know, Matt Chloe's even here, they couldn't believe how often me as a CFO or CEO or COO were coming out to watch a production run.

22:52The number of times I stood on the line and actually packed things out, we're going to be going this year as a team to our facility and we're going to sit on the line this year and do some of the pack outs. We want them to know that we're invested in the business. We are not just a bunch of people sitting at computers and spreadsheets. We live and breathe this. And so we want to be part of the team. So I also fundamentally believe we need to understand their problems. If it's just, here's my problem, go solve it versus collaborative. Like I need to understand what your problem is. One of the examples that I never, you know, back when I first started was there was a real challenge in the way that we were bringing in materials.

23:26And I didn't quite understand it until I went out there and realized that their receiving doc and their delivery doc were on the opposite sides of the building. And it wasn't until I saw it and understood their problem where I could then come in and troubleshoot because I was part of the problem. And so if I understand their problems, I can visualize their problems. I can see their problems. I can be part of their problems and they can also be part of my problems. So if I explain to them what's going on, either a truck delivery issue or, Hey, here's what's happening on my farm. And this is why I had my oil can't get there tomorrow.

23:55If they understand that, and I understand it, you have a much more collaborative approach to solving the problems because it's truly done as a partner versus I need you to produce, produce tomorrow. I have UNFI orders coming in. I have to deliver it. Do they care about the UNFI order or do they care about getting their machines back up and running? And so if I'm part of their problem and I'm part of their solution and they truly believe I feel for them, which we do, then we can have a collaborative approach to it.

24:20Hannah Dittman:Yeah, I feel like that's a great piece of advice and wisdom. But just in general, too, I think approaching external partners the same way that you would approach internal employees, I think is lost on a lot of people sometimes, but they're just as much as part of your business as anyone else. Maybe they don't have as full access to your information, but they're critical and they're important and you all want to be on the same team in the same dream. Well, I totally agree. I mean, come the holidays, they're part of a family, right? And we want to make sure that they feel that same way. We share with them stories of like what our customers are saying because they're part of that journey.

24:56And it's really important. I mean, I remember Chloe's, I remember one of our co-mans called me up one day and he said, you know, everyone just calls me to beat me up and yell at me and tell me all the things I'm doing wrong. He said, you call me and just want to talk. You don't have an ask. You just want to talk and see what's up. And he's like, I so much appreciate. I'm very busy, but I really actually appreciate. I look forward to your calls. And I ultimately know at the end of the day, if I need something, I can call him as a friend. He understands it's a business, but it can also call him as a friend.

25:22Hannah Dittman:And that just makes your job so much more rewarding too because lord knows in everything goes wrong in operations there will always be a headache there will always be a fire a 9-1-1 something you keeping up at night and having those foundational relationships being really strong so when things do come up or when you do need the favor or when something got lost on your side and you actually you know you need them to go above and beyond to help you make it right or whatever it's so much easier when you already have a great rapport with someone than when it's a tense or a kind of non-existent relationship.

25:54And now you're trying to like make the most happen. Yeah. Any good co-man will go above and beyond, right? And supply partner will go above and beyond. And so I don't think, I have fundamental belief that even if you're just a true working relationship, a good supply partner will always go above and beyond. But it's what you said. It's that extra, extra, extra. It's that last little bit. It's our 3PL this year who we've got a great relationship with. The day before our shipping cutoff, we missed some orders and they went above and beyond. They were getting stuff out. But even after that, they still missed some orders.

26:28And what they did was they took, they literally got product in their car, drove it to the FedEx facility and drop it off to make sure even more. And they were so proud. They called us up. They're like, you never guess what we were able to do. We were able to get a few more orders out. Here's what we did. And they're excited about it. We're excited about it. It really matters. It really, really matters.

26:47Hannah Dittman:Yeah, that's such a sweet, great example. Pivoting back to questions a little bit, what's a realistic product development timeline as people are planning to work with their commands or thinking through things before they go crazy beating someone up? How should operators plan their launch calendars? And of course that differs by what you're making and your category and all of that, but some general guidance. I think bring your team into the fold. It's very easy to forget to bring everyone in the fold from a product, co-manufacturing, packaging. I'm a fun and a believer of bringing all supply partners into the fold very early on.

27:20So who drives product? Is it sales? Is it marketing? Is it product? We have a product team. And who really drives what's that newness in the development of a product? It can come from anywhere. I don't really think we have a secret sauce, right? It's product development sort of comes naturally in the evolution of a business. It might come from a sales meeting. It might come from standing in a grocery store and being inspired by something. But when we do kick a product, a project off for that, it's how do you get everyone on that same boat really quickly? Again, from the supply partners all the way down to your distribution team and your internal team.

27:58We look at it because we are on your channel. Where is it going to go first? And how are we going to talk to our consumers? Is this meant for what's the purpose of it? What's the job to be done for that product? and depending on the job you've done for that product, how are we going to get it to that consumer the most effective way for the consumer? So is it a gift? Is it a consumption product like our grocery products? And depending on what that is, how do we work back to figure out, okay, if it's internal for a direct-to-consumer, I can miss deadlines, it's okay. I can't change when the holidays are, so Q4 is around the corner.

28:30I can't move when that shipping cutoff deadline is. But I can sort of move things around. My launch date might be Monday. It might be Tuesday if my website's not quite ready. In grocery, it doesn't work that way. If I miss the reset date, I'm writing a check and I'll probably never get back in that grocery store for quite a long time. And so it really depends on where the products are going and what the purpose is and then who I need to bring into the fold. And I also think product development is all about what goes wrong. A lot goes wrong. It might not work on the production line. It might not work in the, when you go pack it out for the first time in your master case.

29:04And so as challenges sort of erupt along the way and break along the way, making sure all of our partners are aware, hey, this is new. Here are the challenges that we're facing. How do we all work together? Again, it goes back to my great supply partner relationships. If my co-man's really into it with me and sees the vision of what this is going to do, they're going to work with me. They're going to understand and say, okay, we're going to pause the line. Let's figure this out together.

29:27Hannah Dittman:Yeah, it's so scary. I think it's a great opportunity getting into retail, but so scary that you no longer have the full chessboard all yourself to move around as you see fit. You've got to start playing a real game against real factors. You know, if you were my advisor, my mentor, and I came to you and said, hey, I want to launch a product. How long do you think I should give myself? It's going to be, you know, from scratch, brand new. What kind of timing advice would you tell me? Do you want to get a product where you can show proof of concept? I think there's a big difference between proof of concept to I'm ready to sell into the world.

30:00Proof of concept, I fundamentally I believe needs to be quick, real quick. When you have an idea, get it out there quickly, get it to your advisors, get it to your friends, show that it has true value. You can spend a lot of time developing a product. I finally believe to really get it right, it's going to take six months to a year from when you ideate that to when you can really get something proverbially on a shelf or on DTC. You know, just think of everything from photography and creating the content and seeding your influencers, getting it ready for a proper launch just takes time, even when the product is ready.

30:34And so our cooking wells have been ready for a bit of time, but we had to wait until the time was right. When were the Whole Foods reviews? We wanted that to be our first retail presence. And so we had to wait to when those reviews were. And so it sort of backtracks to that. So I think getting proof of concept, can I make this? Will it work? And can I have the partners? That should be done quickly. Because if you can't figure that out, you might be able to sell it in somewhere, but then what?

30:59Hannah Dittman:Yeah, great advice. I feel like that's kind of like the R &D phase, proof of concept phase is like a whole chapter and then fine-tuning, getting it to fit the spec, the product development. That's a whole nother chapter. And then getting it to market, selling it and all the battles that you're fighting after the fact, that's a whole nother thing too. Constantly evolving. I was surprised when I first got into the food world and consumer world that there are, you know, not that I was surprised that they're experts, but there are these so many experts that know how to take that aren't idea creators, but they're executors, right?

31:32They can see your vision and they can really help you bring it to life. I'm not a vision person. I'm a bring it to life person. Ash, for example, is a vision person. She sees it. And so we make a great team when it comes to that. There's a lot of yin and yang when it comes to how her and I operate and how we bring people in our team on the journey be it like the high level i have this idea i have this vision i have this dream how do we make this a reality and we really play together well with that because that's not my specialty my specialty is not i have this great idea of this great crazy product i wish i did but i don't and that's what makes i think going back to like earlier questions about like building team what creates a good team is when it comes to ash and myself and our relationship it is that yin and yang it's what do we do differently and how does that sort of come together.

32:16And so if you have an idea, don't try and perfect it. Try and get it to a place where you can at least show someone, here's my idea, because other people, and don't be afraid to bring other people into the fold. Other people can really help do it quicker, faster, and more effective, especially when it comes to scaling. Yeah.

32:32Hannah Dittman:I feel like if one person has all the skills that we need, they're not human. They're AI. They're a robot. Yeah. Kind of pivoting to like scaling and strategy, you know, if you've built a product, you've kind of gone through, you feel confident, you know, you're going to iterate it, but you feel really good about the product you made. Is supply chain optimization a one and done thing or kind of like a main focus at the beginning? Or is it a forever pain point? What's your approach to scaling cleanly? And how do you know when you need to make a change? Are you like, for instance, are you constantly renegotiating pricing?

33:06Hannah Dittman:Or do you wait for a fundamental change in the business and then kind of think about, okay, maybe we should optimize something in our supply chain. I think it's really important to strike when the iron's hot. What do I mean by that? If I'm going constantly to my partners asking for price, asking for price, asking for price, it's death by a thousand cuts. So I am not a firm believer in that. I am a firm believer in make a product and work with a partner who can scale with you and grow with you. And over time, share with them your margin profile, share with them what you're trying to do, explain how you're going to grow with them.

33:39If they understand your math, I know I understand sharing the math can sometimes be really scary. I'm not saying that we always share the full level of the math with our partners, but if they can understand the concept of what we're trying to do and where we're trying to go, I think it provides insights to our partners of how best they can work with us. So no, I don't think going all the time to ask for concessions constantly is the right approach in big moments. But I also don't think it's in those big moments that you can always just go and ask for price. So we got Whole Foods. That's a huge win.

34:07I'm not going back to my partners being like, we got Whole Foods, lower my price. It's we got Whole Foods. I have an infrastructure set up where I can actually scale this and make it profitably because of the vision that we bought into a long time ago. And they knew that that was a goal we had in the future. And so we were set up for that success, right? They're investing in us. And so just because I got there doesn't mean they should be penalized. And so we're now thinking, you know, future forward, at what point, how do price increases? How do price changes? How do scalability changes affect that?

34:38If we're making numbers, a thousand bottles a year, and now I'm making a million bottles a year, my co-packer might not be the right co-packer anymore. That's a huge scaling difference. So I might not grow you. And so to be open and honest, because I don't want to become your biggest customer and then walk away the next day and leave you in the alert shell. It's a lot of the Costco model. They don't want you to live and die by them saying yes, them saying no. And we have to have the same approach with our partners. We can't grow, grow, grow, and then be like, sorry, you're not the right people for us anymore.

35:07It is a bi-directional relationship. Our success is their success. Their success is our success. And we have to both be very cognizant and clear with each other about where we can go and what we're trying to do with it. In terms of scalability and when we try and put things in place at the right time, I think for our business today, we sort of said this before, are we an adolescent, a mid-teen? I don't know what we are. And so I really believe that there There are times and places where we need to put in certain infrastructure where we can get the job done and other places that we need to just remain scrappy, where a Google Doc is just fine.

35:42An Excel spreadsheet is just fine. And that holds true for very large businesses. We were part of the Trebani Food Incubator when I was at Chloe's years ago. And I remember Hamdi talking about this and talking about scale and when do you scale? And I remember him saying that even when they were a very large company, they still were on QuickBooks. single user login on QuickBooks. And it wasn't until they got into much later in their game that they went over to a big ERP. And he said it was the best decision they made because they didn't overinvest because they weren't sure what they were yet. And we're in the same place.

36:15Hannah Dittman:Yeah, no, a thousand percent. When I worked in PE, I mean, and you're talking like later stage investments at that point, easily a hundred million in revenue or more. Most of those companies were on QuickBooks or didn't even have a CFO. I was band-aid solution for a lot of things, or, you know, we were the ones implementing an ERP with them. And that was part of what the capital was for, is for really professionalizing big scale operational things, cleaning up some of the things that could have been optimized without having to cut costs or do this other stuff, because you feel like you can, you know, start putting some backbone into the business in a way that just requires a little upfront capital.

36:48But yeah,

36:49Hannah Dittman:I think it's another question I had, you know, when do you think about that? When is it time to scale to a 3PL, lease a warehouse, implement an ERP. In startup land, everything lives in the gray area between need to have and nice to have. So how do you know when is now becoming a need? I think from a 3PL, it's a little bit easier to see that, right? I've expanded out of my kitchen. My wife is going to kill me if I ship one more package out of our house mentality to I want to provide the best possible experience, right? So for example, we scale up tremendously during the holidays. I have to have a 3PL who can handle a huge uptick in holiday business.

37:27And I don't think Ash, when she started this, ever thought that she was going to be handling out of her home in Southern California. It had to be something that could scale. And so as a holiday centric business, a 3PL was sort of the only option that we had. And that was decided upon well before I was here. I wish I could say I was smart enough to think about that when she thought about it. But today, as I think about it and we look and say, okay, now we're getting into retail and that's a very different supply chain and 3PL model than direct to consumer. How does my 3PL fit in that? And I look at it and say, I have a great relationship by 3PL.

38:01How can I work with them so that they want to grow into becoming the best 3PL for me? And is that too big of a lift? I think working with our current 3PL to optimize my needs for supply chain purposes for grocery, I can work with them. I can get them to the place I need them to be. If you're a primarily a grocery 3PL and I'm now going to launch my D2C business, I think it's a harder lift. There's a lot more integrations when it comes to D2C to try and figure out how am I going to do UPS packaging and rate cards and Shopify integrations. I think it's a little more complex. And so we're lucky we're on the other side going from D to C into grocery.

38:41And so from the 3PL side, I look at it that way. From the ERP side of things, it's almost the opposite. And this probably frustrates some people on my team, but I am a pump the brakes person when it comes to an ERP. What are we trying to solve for? Again, going back to what's our North Star, what are we trying to solve for? We're trying to solve for that customer experience. And so right now is the most critical thing to know the fifth decimal on my cost of goods as it moves through my supply chain and know that from an inventory perspective, I'm losing 0.1 pennies every day? Or is it more important that I can invest that into product and into my branding and into my marketing, into my deliver the message to the consumer and give them the best experience they can?

39:22Can we get close enough? I've talked to enough companies where they'll show me their numbers and their main products lose money just off the bat. You don't need ERP for that. I'm using a spreadsheet to say, hey, your cost of goods are upside down here. Go invest in product before you invest in systems.

39:38Hannah Dittman:Yeah, that's great advice. I feel like, you know, if it's breaking, if you're outgrowing it, or if it's very much not the core problem that you're trying to solve and you only have so much bandwidth, then focus on the top of the totem pole first. I think that's pretty much in line with just common sense and great advice. Kind of going off of that, you know, when you're setting up operations and you're moving quick and you're trying to make things happen, things can get crazy real quick. You can blow up your supply chain. You can set it up wrong. You can have the wrong people doing the wrong things.

40:09Hannah Dittman:You can do a lot of messy things. So how do you balance scrappy execution with long-term infrastructure? What's your framework for prioritizing speed versus sustainability? And how are you kind of constantly walking that tight line? I think it really goes back to the team I have in place. We have entrepreneurs that work here, right? So people who are amazing, I'll do it. I'll figure it out. There's sort of like no problem too hard for us to solve. I think as you're growing, as you're scaling, there is a true balance between being scrappy and thinking long-term. For example, right now we are putting into place a lot of processes and flows that are going to make our lives just a lot easier.

40:47It's going to help us make decisions faster. So what are you trying to accomplish? I look at our business and say, I want to be able to make the best decisions I can, the fastest I can. How do you do that? I believe data. Data help provide you good information. So I think this is a great product. Okay, well, versus the other one, one has a 60 margin, one has a 40 margin. Will this one sell X percent more to recover that? Why do you think that? Is it just a belief or can you support it with some numbers? And so we can create some infrastructure that can provide us better processes, better flows, better able to make decisions, I'm a big supporter of that.

41:23If it things like we're going to implement a million dollar ERP system, that's going to make my life a little bit easier. We need all the need to report to our board. But if I'm in the growing scrappy part of my business, I need to be able to do the things that are going to help me grow the company in an effective way. And when you're small and young, you got to figure out where to allocate those dollars fast and effectively. Like every dollar has to provide me like$10 back.

41:46Hannah Dittman:Super helpful and definitely something to re-anchor on as you get so distracted with all these other things that go on. Kind of thinking about your own career, you know, what's a small ops decision that ended up having a huge impact for you? Were there any lessons learned from something that seemed minor at the time but changed everything that maybe other operators could learn from? I think in a small growing business, nothing is small. No problem is small. Every problem feels massive. My labels didn't show up. I can't produce. That's a huge problem, even though it's something as small as a label.

42:23And so I think one of the things is like an operator look back is how do you roll with the punches? You are going to get whacked over and over again every single day. There is a proverbial fire to put out every single day and to remind yourselves two things. Number one, why am I doing this? What's the purpose? What is the customer getting out of it and how is it going to improve the customer's life and number two whatever problem i had today it's probably gonna be worse tomorrow or different tomorrow and so figure out the best approach solve it quickly solve it effectively get the right people involved so i think having the right people around me and knowing when to hire the right people it's a huge thing so i don't want to say it's a small thing but i think having the right people knowing when to hire them is probably the most critical part of scaling a business.

43:09You cannot do it all by yourself. It's just not possible. And to think you can. So understanding where you're not good and what you need to support you. I think in our business, what I love is specifically with our founder, Ash, and with people who work with me directly, there's no issue to say no to someone. There's no issue to say, no, I understand this really well. Let me explain to you why. and it's not invented here mentality. It's like, okay, let me learn from you. And so having that open mind to learn about some other people, a lot of founders, a lot of CEOs, they have all the answers and you're just sort of there to work for them.

43:43So as long as you have an open mind and you can creatively think through solutions, these problems aren't that hard. Everyone's sort of had them. Every business has the same problems. It's just in a different way. And I think in the last year, we've all seen some problems, especially on a supply chain basis and operator basis. What I thought was really cool is how a lot of these smaller brands all banded together to help work together to solve something and really provide a network of support. And I think that was not just a small, it was a big thing that people did and banded together to help with.

44:12Hannah Dittman:Yeah, harrowing times on the off side the last few years. Yeah. What are some of the biggest problems you've solved in your career? Are there any recurring pain points or watchouts that happen from company to company in operations that others can learn from? like if there's kind of like the playbook of, oh yeah, you're definitely going to have to battle this or that? I think some inventory and knowing when to produce, right? So I'm going to go produce a million bottles and now you have, you've sold 10 and what am I going to do with these other 999 ,990 bottles? Or I produced a million and I have demand for 10 million.

44:50In ops and planning, especially as a young business, it's almost impossible to get that right. And so I think That's really the hardest part, right, is the visibility between sales and how quickly I can pivot my supply chain, right? How quickly can I produce? How quickly can I get it back on shelf? So if I'm a DTC business, by the time I get it to when I get it back on shelf is tomorrow. From a grocery perspective, if I'm out of stock at my distributor, it could be weeks because of when their pickup schedules are or when they're going to put it back on shelf or when it delivers to Whole Foods.

45:22So the visibility across the supply chain and not just the supply chain, but the sales channel too, right? So having that visibility of what things are working, when things aren't working and to pivot into them. I think the most common pain point in ops is like, I don't have resources. I need more resources. Ops is all resource constraints. If I had more people, I could throw it at it. We're lucky here. We've got people who just are finding ways to figure things out, create systems. And it's amazing some of the tools that have been created internally. It blows my mind, some of the tools that people are creating here to create that visibility.

45:57And it's visibility that we need at the most basic level, but also at the most senior level to try and make decisions for what we're going to do a year from now.

46:05Hannah Dittman:Yeah, the problem of forecasting accurately and making sure your sell and sell through matches up, all the finance related aspects of inventory management are definitely huge pain points. What about kind of on the early stage production side? Have you ever been able to figure out, I think, another common pain point on what you're talking about on quantities and inventory is the forever challenge of, I only need to start with 500 or 1 ,000 and they're making me do 10 ,000. What do I do about that? How would you kind of bridge that gap or how have you battled that kind of stuff in your career? It goes back to finding that right co-packer, finding that right partner.

46:41You know, we've gotten creative. I remember early early on when we were we're running chloe's and talking to our co-man and they said it cost me more money to turn my machine on than I'm going to make doing what you're asking to do I can't make it work and I say great how much does it cost to turn your machine on because I don't need 10 ,000 but I can help write a check for this how do I amortize that over the cost of the next two production runs can you lean into me on the next one again if I know your problems my co-man had to report to a much bigger corporate entity and he was bored about p &l management great can i make a deposit for a future production run because that'll help that's solving your problem but i also knew it takes three hours for the machine to turn on and for this to happen and for the product it won't work if i don't do this oh i understand that and so understanding again understanding their problems understanding what makes them tick understanding what makes them be really good at their job.

47:35If you're really good at making and bottling olive oil, and I tell you, you have to change what you're doing, you might not be really good at doing it anymore. And you're going to give me a subpar product. I need to understand what you're really good at and what demands you're telling it. Or is it just pure profit? Are you just doing it for pure profit? If you're doing it for pure profit, I might not ever get around that. I might have to find a different co-packer.

47:55Hannah Dittman:Great example. And I think some awesome food for thought. I love empowering operators and founders to feel capable of controlling their own destiny. I think you're at the whim. You feel at the whim or powerless so often. You know, providers want money from you. Everyone's trying to sell you things. Retailers are saying, you know, rejection investors. You know, you're just commands everyone. You're needing something from everyone and you constantly feel like the one doing all the asking. But the mindset shift of being on a team with all these people and trying to make it work, I think it is so helpful.

48:25Hannah Dittman:If operators got together and wrote like the tales of operations and the crazy stuff that they did to make things work. It would be the most awesome read. I have a little book that I jod down on my own of like crazy situations where I've had to do things like that. Didn't have it on my bucket list or my bingo card for the day is very, very long. I know we're coming up on time really quick. So I just want to hop into our last couple of things if that's all right with you. So as you know, at Startup CPG, we have the largest Slack community in the industry with over 25 ,000 members. I'd love to pull a question directly from our channel and have you answer it as a case study for any founder with a similar question.

49:02Hannah Dittman:Here's a recent question that popped up. I just received a draft for a contract from a co-man I've been talking to. This is my first time working with one ever. What should I make sure is covered in the co-packing contract and what should I look out for? A lot. I have a belief that contracts are meant to be written in a way that you figure out how you argue and then you throw it away. You agree of how we're going to fight a fight. And then you shake hands, you put in a filing door and you never look at it again, but you need to lay out how you fight the fight and agree upon from upfront with the partner that you're talking about of, Hey, we're only doing this because if it goes bad, if things go well, I promise you, we're not going to look at our contract.

49:43If things go bad, we're going to put on the, Hey, you said you were going to do this. And so during the contract phase, there's a real, I think there's a real balance of making sure that you're working with the partner and understand what the rationale, what are you trying to accomplish here? I think some of those watch outs though are volume commitments. Like how do you think about that? Like what you said a minute ago, I only want 500. I need to do 5 million. But also what am I committing to long-term? Am I committing to a one-year volume commitment? Am I committing to X number of cases over six months?

50:14How do I, from the brand side, how do I stretch that out as long as possible? They're going to want to contract that as long as possible. I think a big one especially in food is waste how are we calculating waste who's in charge of waste that can become a real big problem if you don't talk about that in advance like hey what should the waste be because when you get a waste report of 10 and you've bought all the ingredients and you write a bitch and you say hey that cost me a hundred thousand dollars in waste and they say well that's how waste works and you haven't talked about that in advance it can get very expensive very quickly.

50:48I think from a recipe perspective, making sure crystal clear about the formula, who owns it, making sure there's safeguards in place that they can't take your formula. I always want a general idea of who else they might be working with to understand, is there a risk? There's always risk. You're entrusting someone else with your product and your formula, but how much do I trust you? And I think you can get a lot of that out of the negotiation. You can really determine who a person is and how they'll work with you when you're negotiating these hard parts of a contract. And so I use the hard parts of those negotiations to understand what it's probably gonna be like to work with them because it's not always gonna be easy.

51:22It's gonna get contentious. And so this is your first foray into that when they're still in the courting phase.

51:27Hannah Dittman:Great answers. And definitely I'm like, my mind is go thinking of all the times that I'm like, yeah, the waste one, especially if you're making a different format of product or something like that can be a big one. Because I think it's also important is how do price increases work? Because I think when you're in the negotiating phase, you're dating. And so a co-man might really want to get you in and they're going to give you a good price to get you in. I think everyone knows how hard it is to change co-mans and the pain and suffering that you go through and a lot of expenses you go through. And so how do you get clear and share with your co-man what your growth plans are?

52:00And if you hit your growth plans, how that will look from a cost increase perspective over time. And so we try and get really clear cost increase provisions put in contracts because you don't want them to say it's$10 per case. And then next year when you grow 50%, like, oh, it's$40 now and you're stuck.

52:19Hannah Dittman:Yeah, especially back in COVID when all the raw mats were fluctuating so much. I mean, the price of things like glycerin was spiking so much. One day a quote from me went 4X overnight and I had to wait for the future. I was like watching the futures like constantly like, when is this going down to blaze my BO? So yeah, things can get crazy. It's real. And I think COVID was the beginnings of the craziness of capacity constraints and labor constraints. And where do I fit in in your schedule and how does that work? And so contracts I've seen have gotten much more formulaic when it comes to that to sort of account for, I don't want to say pandemics, but real big issues.

52:57And where do I fit in? I always think it's really important. Does the co-man have their own branded product? because if they do, you're fighting against their line time for their own branded products too.

53:08Hannah Dittman:Yeah, great point. We all need Girl Scout and Boy Scout. Like I made it through COVID operations badges. Before we wrap up, I want to take a second to make sure our audience can have an actionable next step to apply all this amazing knowledge to. For founders that may want to get in touch with you or continue to learn from you, where can they find you, follow along on your journey or your company's journey or what's the best way for them to get in contact? And then for operators, that might be interested in a role working directly with Brightland, what advice do you have for them? So the best way to get me is email.

53:39And LinkedIn is sort of where we share. I share most of what's going on in my world. So my LinkedIn is probably the best place to see what's going on from our business perspective, email. But Shana, if you want to share that, if you'll be sharing that out.

53:52Hannah Dittman:If you're comfortable sharing, yeah, by all means. Yeah, it's todd at brightland.co, not com.co. So it's Todd at Brightland with two D's, T-O-D-D at brightland.co. And I always love connecting with people. I always love hearing stories. I really believe that we can all work together. I have a mentality of rising tide. So the more we all work together, the higher the tide rises and it's better for everyone. And so I have a fundamental belief in that. And so, yeah, reach out. I always try and reach back out and email back. And I might be the one reaching out to you one day asking for advice as well.

54:23So, you know, in terms of working at Brightland, I think it's an amazing place to work. It's not just a place to work. I think we're really trying to transform how people are either give gifts, receive gifts, spend time in their kitchen, spend time in their home and how to make some fuel in their home and have this beautiful white bottle on their countertop, but then also cook this amazing meal for their friends or their family or for whatever it might be. So it's great when we get to be part of that. And so we remember that. We always talk about that internally of what we're trying to do and why we're doing it.

54:53And you see it the most, obviously, during the holidays when the orders come in and all the really amazing notes that we see and the letters we get back of these amazing gift notes that we see come across our desks. And yeah, we're growing. So keep an eye out because we're growing and we've brought on some amazing people in the last year and we're going to continue to do so.

55:11Hannah Dittman:Awesome. Well, thank you so much, Todd. It was such a pleasure to have you today. Thank you. It was nice to see everyone. Nice to talk to you.

55:19Hannah Dittman:Thanks so much for tuning in, everyone. If you liked this episode, show us some love with a five-star review at ratethispodcast.com slash startupcpg. I'm Hannah Dittman, podcast host and correspondent here at Startup CPG. I hope you'll join me again as we dig into more juicy topics like ops, finance, and all the real talk founders actually need. Come say hi on LinkedIn or ping me on Slack. I'm always eager to hear your questions or brainstorm future episode ideas. If you're a potential sponsor and want to get in on the fun and appear on the podcast, shoot us an email at partnerships at startupcpg.com.

55:50Hannah Dittman:And last but not least, if you haven't already, don't miss out on our free Slack community for emerging brands and CPG lovers alike. Join us at startupcpg.com. We'd love to have you. See you next time.