R&D RADIO: Building a Reliable Formula Brand with Casey Bauer, COO, Bobbie

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1:16There's obviously a big feeling of responsibility when you're one of only four and knowing that you're manufacturing something that's sole source. And so basically, it's the only form of nutrition. And this is something when I was at Cape Farms, we did the same thing. So the level of importance of food safety and quality and everything that goes into our process is just that much more critical. And it makes sure that we don't skip any steps. We don't take shortcuts. We test religiously on our product because it's just so critical when it's the only form of nutrition that babies get that we put a lot of effort into everything that we do being one of those four manufacturers.

1:58Hey, everybody, welcome back to the Startup CPG podcast. Today, we have a very special R &D radio episode for you. I'm chatting with Casey Bauer, COO of Bobby, a leading infant formula brand in the United States. We're diving into what test-obsessed means in formula manufacturing, the Bobby promise that protects subscriber inventory during recalls and shortages, why bringing manufacturing in-house changed everything for the brand, and why food safety is the one place you never want to cut corners. As a mom myself, safety and transparency was something I was looking for when I was making a formula purchase while I was pregnant.

2:35It was a just-in-case item in case I was not able to breastfeed. As I learned more about Bobby, it was a no-brainer decision for me as a mom. If you're a brand, hopefully you'll be walking away from this episode with some notes you can take back to your team and put that same sentiment of trust and transparency into your products and make your brand a no-brainer for consumers everywhere. I am so glad that I had that can of Bobby on hand because my daughter decided one day, you know what? I don't want to be breastfed anymore. And who was there for me? Bobby was. As always, enjoy.

3:10Hey, everybody. Welcome back to the Startup CPG podcast. This is Caitlin, and today I'm here with Casey Bauer, COO of Bobby. Casey, welcome to the show. Thanks so much, Caitlin. I'm excited to be here. It's really great to have you here. We decided to have you on the show because as many people may or may not know, there has been botulism outbreaks linked to baby formula. And Bobby is the only formula brand language that I speak as a former Bobby mom and a current Bobby lover. So I figured let's call somebody from Bobby onto the show and let's talk about food safety and operations and let's just hear it from the pros.

3:49So before we get into anything further, can you just tell us very simply what Bobby is? Yeah, so Bobby is a leading infant formula brand and we're, I think, the fourth largest in the United States right now. We have domestic manufacturing and have been growing quite a bit, but excited to be here and excited to talk a little bit more to your viewers. I'm very excited to have you here. I'm excited to dive into all things Bobby with you. Can we hear a little bit more about your background? Yeah, my background. So I've been at Bobby for almost 11 months. That's gone by very, very quickly, as you might imagine.

4:22As the COO at Bobby, I oversee quality regulatory supply chain. And prior to this, I was the chief operations officer at a company called Kate Farms, which is a leading medical nutrition company. So that's a little bit about me. Further back, I've done a lot of other food and wellness stuff. I worked in the operations group at PharmaVite, which is Nature Made Vitamins, as well as Nutribolt, which is a leading sports nutrition company. I would say, too, for me as a mom, hearing that as part of your background makes me feel this other level of comfort when it comes to choosing a formula brand. I already have a formula-fed baby.

4:59She was breastfed for seven months. And one day she decided, I don't want this anymore. And luckily, I had a can of Bobby at the ready as backup for her. And I think that I was very comfortable in making this decision because of everything that Bobby does as a company and puts forth in their marketing and they really stand behind everything that they say. And hearing more from you about your background and what you've done in the past and now that you're here with Bobby, it makes me feel even more comfortable having made that decision for my daughter. So I'm really curious. No pressure, of course.

5:36You, as Bobby, are one of four formula manufacturers in the United States. What kind of pressure does that feel like for you as a company? because I feel pressure for you as a mom and we feel pressure to make those decisions for our babies to choose the right formula brand for our babies. So tell me what it's like being just one of four manufacturers in the United States. Yeah, it's a great question. There's obviously a big feeling of responsibility when you're one of only four and knowing that you're manufacturing something that's sole source. And so basically it's the only form of nutrition.

6:14And this is something when I was at Cape Farms, we did the same thing. So the level of importance of food safety and quality and everything that goes into our process is just that much more critical. And it makes sure that we don't skip any steps. We don't take shortcuts. We test religiously on our product because it's just so critical when it's only form of nutrition that babies get, that we put a lot of effort into everything that we do being one of those four manufacturers. And I've heard Bobby tossing around this phrase of being test obsessed. Can you tell us what that looks like? What is being test obsessed in a formula company look like?

6:53Absolutely. So for us, it all starts with the process. So the process has to be great. We need to be just maniacal about making sure that we follow the process, put all of the preventative measures in. But that is never 100%. We spend a lot of time also looking at what can we do from a testing perspective? How can we ensure that our 2000 plus safety checks and quality checks are there to validate that everything that we're doing through that process ensures that we say is in the can is in the can, the things and the contaminants that we don't want in the can aren't in the can. And the thing that I'm a big believer in is we do it at multiple places throughout the process.

7:31With Bobby, we manufacture under one roof in our facility in Heath, Ohio, but we test raw materials. We test our bulk powder. So basically, as we make the powder, we go for a period of testing and then we test it again on the finished can. That redundancy is something that, to me, helps me sleep better at night, making sure that especially as it comes to those contaminants and things like food safety and pathogens, that we can rest a little easier knowing that we've done what we can to ensure that when it gets into your baby's mouth, we've done everything we can to prevent any food safety risk.

8:04Can you share a little bit about what that's looked like implementing these testing processes and how you've decided, OK, we have this testing that we started with and now we're going to add additional testing in? Where do you find is the right time, that sweet spot to start adding in more testing for your facilities and for your products? I love that question. It's an evolutionary thing. So just like anything else, technology or iPhone getting better, testing technology gets better, too. And so we're constantly reviewing what we call our test methods to make sure that a lot of those improvements get baked into our testing and so that we can always give the most assurance to our customers.

8:45One of the ones that we're really excited about, we recently partnered with IEH Laboratories, who was the first one to develop a method for testing for C-Bot spores and a lot of powdered milk products, which we use as an input into our products. And so we've rolled that into our testing protocol as well. We're constantly improving things like our detection limits. So as we look at things, for example, like some of the contaminants with heavy metals, methods get better and better. And so those detection limits get lower. And so we're constantly looking for ways to try and improve. How can we leverage that?

9:20How can we give more assurance to our consumers? So that's something that we constantly do and we pride ourselves on. And you mentioned this already, but you are manufacturing everything in-house. You're not outsourcing to a co-man, which from my understanding, you were in the past, correct? So let me give some validation. We actually still do both. So we manufacture in-house. Our facility in Heath, Ohio, we've increased our year-over-year throughput has increased by almost 300%. We've almost over doubled, I think, at this point, the workforce year-over-year. But we're still not enough to meet the demands of everything.

9:56We still partner with a contract manufacturer. So that quality piece goes a step further. It means that we need to go to our partner's facility, but we used to rely solely on the contract manufacturers. Now that's not the case. Now we have a lot of the manufacturing in-house. And that's also helps, to be frank, get us more educated on the process and smarter on things that we need to look for. And we always try to take that back to our contract manufacturers through our partnership with them to make sure that they implement those improvements as well. That is really good insight. And I feel like that's a really good perspective for other brands to hear, too, that being able to see everything that's happening behind the scenes, but in your own facility and being able to then lay the groundwork and the foundation for your co-man is really impressive.

10:42And I think it adds this other layer of transparency, not only for your team, but for your co-man as well, because now you can say, OK, you do hold the keys in a sense, but this is how we want to see it done. I think that's really cool. Thank you for that. Yeah, we're excited about that. And those partnerships are crucial. We want to make sure that we share that. To be honest, it's not even just about our co-mans. It's about the industry in general. We want to be stewards of the industry. So as we find new innovative ways, things that we believe can improve food safety, we try to share them when we can.

11:15So hopefully it helps improve the industry, too. We want every consumer out there, every mom or dad out there that's feeding their baby's formula to feel confident about what they're putting in their baby's body, even if it's not a Bobby product, to be frank. We really want to be stewards of the industry in that way. I think that's so respectable. And I've always come back to this term when I think of Bobby and Bobby's practices as being the gold standard, quite frankly, in the industry because of the transparency. That's not just amongst your team, but it's also something that you're sharing with your customers, too, and in your marketing.

11:51And I think it's really something that brands can look to and take notes for their own brands. And I am really curious, too, because you mentioned the dialing up or down on the levels for contaminants. Because you are working with a co-man and because you do have your own facility, is that something that you are able to call the shots for or is that up to your testing facilities? How does that work? Yeah, so that's something that we own as a brand. So when we go through and establish a product, we build out what we call finished good product specifications. So it basically is everything that has to do with that product, what goes into it, what tests should be run, what test methods should be used to validate the outputs of those acceptable ranges.

12:34That's all defined by our team. And as I mentioned, this is something we're constantly reviewing. We're trying to be on the cutting edge. So we partner closely with these laboratories. And so if they come back to me and say, hey, Casey, great news. I just got a new test method where we can take the detection limit from five parts per billion of something down to two parts per billion. Awesome. Let's go ahead. Let's roll that in. And if it's at a contract manufacturer, we'll partner with the contract manufacturer to update those finished good product specifications and hold ourselves now to that tighter limit that that's really important to us.

13:06Got it. And what do you feel like radical transparency looks like when it comes to testing and sharing with your customers? Yeah, good question. And in fact, it's something that we've recently taken to heart. So we've added our transparency tracker. So any consumer can go online, they can enter their lot number, and they can actually look at the testing that was done on their lot of products. Specifically, they don't need to just trust, hey, it's on the shelf here at Target. I think it's OK. They can go actually do that validation. And we're constantly pushing ourselves to add to that transparency.

13:38So as we do that, we're trying to build confidence in our consumers and trust that we're going to continue to try to push the envelope there where we can and give that transparency and that peace of mind back to consumers. As a dad, I know that that's really important to me. And so we're trying to give that to all of our consumers. And you just mentioned Target as a retailer. I have to know because I know that you are a subscription-based brand and you're also available in retail stores now. So when something like a recall comes up, how do you manage that relationship with your retailers when obviously a recall is going to put more pressure on brands who are still manufacturing and putting product out on shelves?

14:21I would think that you're prioritizing the relationship with subscribers, but how do you manage that relationship with retailers when that extra pressure is put on the brand to increase production and provide more in both places on the retail channel and D2C? Yeah, very good question. So we always partner very closely with the retailers, especially when we see something like a recall in industry. That's a big deal. And it puts a lot of pressure on them. They're one of the key ways that consumers go and get infant formula. And as we saw in 2022, with what happens with Abbott's that can wreak havoc.

14:54And so we're in close, constant contact with them. We've shared details about our operations with the retailers. We also try to preserve a healthy amount of inventory and that inventory policy protects against some of these things. Now, you never know. You never know the level of spikes. So it may not be perfect, but it definitely gives us a little bit of cushion. On the D to C side, we actually have ever promised. And this is one of the things that actually brought me to Bobby because I was so impressed with it. In 2022, when the formula shortage happened, I had a lot of friends who are affected.

15:25But I heard about the Bobby promise. And sure enough, every single time that a subscriber goes online and subscribes to Bobby, that immediately ties back into our inventory policies. And we ensure that that inventory is protected for that consumer through their baby's whole journey. And that just gives a peace of mind, especially seeing what's going on to any parent that wants to make sure, hey, yeah, this is something I'm concerned about. I want to make sure I've got formula for my baby. We've got a way to give them that Bobby promise that, we got you. We got your inventory covered. If you subscribe to us, we subscribe to you.

15:59You know, it's 2022 that the Bobby promise also came across my radar. I wasn't even pregnant yet, and I frankly probably was not even thinking about getting pregnant at the time. But I was just so impressed and blown away by that. If you subscribe to us, we subscribe to you. And I think it made so much sense from an inventory planning standpoint that even brands so large scale as Bobby, brands that are new and emerging can also learn from that too, because you are able to plan better if you're having people subscribe to you, because you can know essentially what you're able to produce and what you're likely not going to produce.

16:39And hopefully you can plan so that you have everybody taking care of yourselves and your customers altogether. I remember that being something that really stood out to me. I had friends who were looking for formula on the shelves. They couldn't find formulas for their babies. They were breastfeeding or not breastfeeding. And I remember going into stores not knowing what I was looking for. I just knew that I was looking for formula. So when it came time to making that decision for myself on who I was going to go with, if it came down to bottle feeding, I knew it was going to be Bobby because of that promise.

17:14So it's cool to hear your perspective, not only from taking care of the subscribers, but also hearing the perspective when it comes to working with your retail partners too. So thanks for that insight. Love that. Yeah, like I said, that was near and dear to my heart as well. From inventory planning, it definitely helps. But to me, it also showcases the values at Bobby, right? It's so easy. Imagine during that formula shortage, Imagine how many new customers Bobby could have tried to just go grab really quickly, as opposed to take the inventory that they had built up and say, no, no, no, we're going to protect the consumers that we have today as partners.

17:49It's a very different mindset, but it just shows you the mission that Laura built and one of the key ways that we're trying to deliver against it. So, yeah, for me, I was just so blown away by that. That was one of the biggest draws when I got the opportunity to join Bobby. What do you think all food and beverage brands can learn from these recalls when it comes to food safety, inventory? There are so many different things that we could touch on, but what comes to mind for you first for what other food and beverage brands can learn from this? Yeah, so I can't speak for all the other brands out there, but I can tell you my takeaway.

18:23And my takeaway is you never get to that place of being 100 % safe. You can minimize risk. That risk is always there and you need to be just maniacally focused on it. I remember when our first baby, my oldest son's named Tanner, and you get all the baby proofing stuff for your house, right? When we had our second kid, Chase, I remember going around and you have a different view almost because you've now had a baby. You've seen it fall. You've seen it do all the things. And you're like, oh, my gosh, like, no, he's going to pull on that and that thing's going to fall. And now I need to change this.

18:57And it's kind of how it works with food safety, too. You see recalls. You're like, oh, my gosh, well, what could happen? And you walk through and there's the level of the regulations and you make sure that you're compliant with the regulations. But you're constantly going through and saying, what else? What else can I do? How else can this go wrong every time you walk through your facility to try to keep upping the bar and keep lowering that risk? But you just never quite get it to zero. But you have to be very focused and minimize those risks as much as possible. I think that's a really good perspective yet again.

19:29Oh, thank you. No surprise there. Is there anything from your years prior to working at Bobby that your experience, you felt like, okay, this was something that happened or this was something that I learned and now I'm going to take it through my years at Bobby and see what I can do to apply it? Anything that pops out in your mind that you feel like you want to share? in my prior life with Kate Farms, again, being that sole source nutrition in there, it was medical nutrition. So it was older than one, but still a large percentage. What we dealt with was the pediatric population. So the younger kids that had significant illness.

20:06And it's just this increased focus on quality and food safety when you're dealing with that type of population of who's consuming your product. You know, my times at Nutribolts and you're dealing with healthy adults and things like that. It's one thing. But when you take it down into sick kids or infants, the bar just keeps raising. And so it's one of the things I've enjoyed about this role is it really gives you more and more permission to focus on the quality and food safety aspect of the job. So that's been something I keep taking away and keep trying to build on. And it's something that I try to make sure my team holds near and dear to their heart as well.

20:43and a reminder of who we're servicing. We're servicing an infant that doesn't have a fully developed microbiome, doesn't have a fully developed immune system, doesn't have the things that you and I have now later in life. And so we need to be that much more cautious in everything that we do. It is interesting because like you're talking about the pediatric population and infants, these products are not nice to have. They're necessities for many families. So I can only imagine that the amount of pressure that's being put on your brand, that's being put on Bobby, that's putting on customers as well.

21:19So to be able to walk through everything that you've done with food safety and being able to ensure as much as you possibly can, we all know that safety is a spectrum. Being able to ensure the safety that you've put in place is, I think, really admirable. Oh, thank you. We take it very, very seriously. And it's something that down from Laura and myself down to every associate on the floor, it is the number one job is to ensure that we deliver a safe, effective product to every parent out there. And can you touch on why American made versus domestic manufacturing matters for a brand like Bobby?

21:57Yeah, for me, it's really critical. Every time that you get closer to the facility and I get a chance to actually go walk the floor, see the product, touch the product, hold it, it helps ensure that I'm one step closer from a food safety perspective to everything that's happening. And so for me, that's absolutely critical to have our supply chain and our manufacturing as close to us as we possibly can. And look, for some of our materials and some of the ingredients out there, that's not possible. They don't exist within the U.S. But we try to take that into account as much as we possibly can just to protect that supply chain and ensure it's covered from a supply assurance standpoint.

22:37And again, from a food safety standpoint, we're as close as we possibly can be to it. Can you share a little bit about what it looks like to lock in a supply chain partner and maybe some instances of scenarios where you thought, OK, this is a red flag. You don't have to tell me what they were, but this is a red flag. This is how we're going to move forward and look for the next supply chain partner. Yeah. And of course, you always look for those red flags and those issues before you start doing anything with that partner. Right. So we have really robust supplier qualification programs. So every time that we go through and find a new partner that we think we could be a good partner for us and really help support the Bobby supply chain, we do on-site audits and visits.

23:19We have kind of detailed questionnaires. We try to understand their testing policies and everything that they do to ensure that they are going to set up food safety in the same way that we do. And then we do it like it's not, okay, one and done, checkbox, we're done. It really is an ongoing thing. We're constantly going out. We're visiting them. We're partners. We make sure that we stay up on all the documentation requirements, like everything that's needed to give us the confidence that this is, in fact, a high quality supplier. Those are things that we always follow up and make sure are consistently done.

23:53Amazing. Any pieces of advice that you want to give to any new and emerging brands who are looking to get into CPG or currently manufacturing their own products, given all of your experience? No, other than to say always prioritize food safety and quality. That's the table stakes, right? Like that you have to absolutely have that. You can always look at how can I become more profitable? How can I move faster? How can I scale? How can I get into this retailer? But the one thing that can cause it all a fall apart is food safety or quality issues. So that's be my one recommendation. That's the one place you don't cut corners.