708: Shorting Protein, Starbucks’s Stumbles, and WTF Is Up with All This Farmer Cosplay with Snaxshot’s Andrea Hernández

34:37Like it's so insane to me. Like, wow, like late stage capitalism bias. But I think, I think, you know, Blank, you know, Blank Street is, is kind of competing in that like Gen Alpha, uh, trendy drink, matcha, matcha space where it's like about making things look like the Erewhon smoothie. Well, exactly. It's an Erewhon is kind of leading the impetus for these larger chains. I think that they want these coveted smoothie drops moments at Starbucks. drops like the the drinks have to be aesthetic like everything like it used to be right it used to be that the the starbucks cup itself was a way of signaling but i think that obviously the that has like what is a like what do people care about when it comes to starbucks and i think that i the the refresher drinks like that's something that i see in social like that pink drink like they're really trying to figure out like what now that like these new generations i really don't care about what first we're not really drinking hot coffee anymore because you can't really signal and you can't really see like all the colors swirling but when you get like an ice drink it's like oh like this is like like prime for like tiktok clickbait or whatever so like i think that is the way that the gen alpha approaches something like a starbucks and so blank street has been able but also kind of lean into that to keep itself like being successful and competing with something like a Starbucks.

36:14But I think Starbucks is in trouble because like there's like Dutch Brothers, like there's other chains. I was gonna say dirty sodas comes right to mind because Dutch Brothers is eating Starbucks lunch in certain markets. And it's like, when will Starbucks actually have a soda fountain? Yeah, the Dutch Brothers line, like whenever I pass by it here in Austin, it's insane. like I've never like I'm just like wow like they really have come in and really been like I think like it's more of a threat I think they have to figure something out because like they'll lose in trying to I think that they were trying to like do something with the prices like they're going to lose that war because Dunkin' and McDonald's kind of beat that like beat them to that so they're going to have to figure out how to be able to remain premium but when you don't have a premium experience to offer you don't really have anything that feels premium except for like doing these gimmicky uh bear cup drops that are just like for the millennial moms out there like i think it's going to be challenging to to figure out how to keep gen alpha yeah going um as you know chains like blank street try to try to come for It's a tall task.

37:30And I imagine, you know, Starbucks has their trend forecast teams combing the planet, the cafe impulses in Seoul, in Copenhagen, in Australia. I'm sure that they've been looking at these trends and looking at what are Gen Z and millennials doing in these cafe spaces. I think about Boba as well. Like how does Starbucks and Boba? They did try to do that. They tried? But I think that that was also like it fell flat because it's not authentic. And I think that people, there was this whole controversy when that came out. And I think that people, again, you have to navigate. I think it was funny. They used to not operate in wanting to do functional stuff.

38:19And now you're seeing, at least in the UK, like three years ago, they were already doing a protein RTD. I think it was like 20 grams of protein. and they had an RTD. And I was like, curious why in the US they hadn't done that. And like this year has been like all about protein. And then 2026, they're actually going to be launching a protein RTD, a Starbucks protein RTD. So who knows what is going to be the actual thing that ends up saving Starbucks at this point? Because like they're only, I mean, they're already like cutting their growth. Like China was a big opportunity for them and that flopped.

38:59So they're going to have to literally figure out how to beat Erwan at their own game. Yeah. And just also from the tier below them, the newer local shops where people are shelling out five, six dollars for a pour over in some urban city, in urban markets. Yeah. Well, nobody, my thesis was always like nobody goes to Starbucks for the actual coffee because it tastes horrible. Always been my no. I mean, Reserve is a different situation, and I think Reserve has always did some great coffees there, the ones I've tried in New York and Chicago. But that's not the norm for the other 10 ,000 locations or whatever.

39:40Yeah. Well— Good luck to them. Good luck to them. You know, actually, it just shows that, you know, when we're kind of kidding about Brian Nicol, I mean, it's a really, really difficult job to try to, like, inspire. a change in consumer behavior around this legacy brand and show growth. I mean, obviously you're getting baseline sales. I mean, people go to Starbucks as their daily coffee routine going into their office or driving home from school or work. But just to do growth is so hard. Yeah. And like Brian Nichols, like it was a big thing because he's coming from like QSR, which is like quick service.

40:21Yeah, Chipotle. Giants like Chipotle. and he did, I think he worked in like Taco Bell as well. So he's like a veteran of this, but I do think that drinks and coffee and I think it's more about like how habits have changed around the product itself. So like, it's not like, it's not food, right? Yeah. So I think it's very different. And I guess for him, it has definitely been a challenge. And I'm very, again, like I respect, like he, Starbucks needed someone that operated in a space. I think the previous CEO came from like the CPG side. So it's going to take, I guess, some time, but I'm wondering what is going to be the major overhaul that ends up happening because you also can't like undo convenience.

41:05Like they structured this to be like the takeout, like prioritizing that. So like now you have to kind of like figure out, okay, how do you can't not do that anymore? You still have to have that, but then what else can you add on to that experience? Yeah, I mean, the answer is possibly food. I mean, that might be the answer. Like, Starbucks is a cafe and not a coffee experience. Oh, my God. Imagine Starbucks starts doing, like, breakfast slop bowls. I mean, it's definitely going to happen. But that, to your point earlier, it takes away the convenience if you have to, like, wait six minutes to get that sous vide egg cooked, you know, heated up.

41:41I know. Even, like, I've gone to try to get, like, those, like, little pastries that they have. And even just that takes so much time. I'm like, wait. This was a mistake. Yeah. I mean, it's interesting. We'll keep checking in about Starbucks because I think it's just kind of a great, great story and emerges like trends in beverage and retail and QSR.

42:10A few more questions. I asked you this last year and I want to know if you've thought maybe deeper about it. You know, Andrea, you're named the CEO of a major grocery chain. What would the first 90 days look like for you? It's funny because I actually, this year, like recently, I saw something pop up in my email where it's like a grocer actually asking like if I would take an advisor role. Really? Yeah. What would you, I mean, what did you say? I mean, I think I have to think it through because it's not like traditional. They don't have like an actual, it's like an online. Yeah, sure, sure. But yeah, it's a very interesting, and I've worked with a couple retailers this year and just observing like there's, I think that there's the traditional grocer versus like what also has become successful amongst millennials.

43:13and even Gen Z is like the dupe culture ones, which is the Costco's and the Aldi's and the Trader Joe's. So you mean the bargain private label retailers? Yes. Got it, got it. So I think there's a couple things. It depends on what. If I was a traditional grocer, or I would for sure figure out how to rework the, I mean, I can give you an example. I feel like Central Market is such a great example of doing private label really well. They have like this fishwife dupe that I'm just like, wow. They've really learned like, okay, aesthetics matter for this generation. And like that it doesn't feel, it's like a dopamine hits from like finding a good dupe and so I think I would take something out of that playbook I know Walmart's been trying to do it with that like Gen Z private label better goods that they've launched but ultimately I think like the crisis there's an existential crisis happening in big legacy brands that the grocers can kind of use to their own advantage by continuing to grow the premium side of it because that I mean people will pay for brands so like an example is Grasa right like Grasa people will pay the$17 for that Grasa olive oil and everybody thinks that it's just about the format and you see all these legacy brands literally just going and switching into a squeeze bottle but then they're not really selling as much as Grasa and And the whole idea is that Grasse is viewed as like a premium.

44:59It's like the ace of bottle of olive oil. What's struggling is brands like Kraft Heinz because they're kind of stuck in the middle. It's not like premium, but it's also like not private label. So I would definitely go to the jiggler and like plan out like, okay, so, you know, Kraft Heinz is splitting itself the same way. Kellogg's like how to like what in what ways like can we double down now and maybe like make like a Google's dupe and not necessarily a craft dupe because a lot of the private labels were just dupes of the legacy ones and so like that's why I say like central markets really smart because they've realized like oh people kind of want dupes of these like shoppy shop style brands yeah yeah they want dupes of like the probiotics sodas and yeah yeah and like Whole Foods is I mean Whole Foods just came out with their like probiotic like sodas.

46:01And I think that again, they're getting smarter at that. And then obviously like I think the importance of being able to grow your the delivery side of it. I think that obviously that's against you cannot unlearn convenience. um but i i mean i love the the innovation sets like sprouts has it's just i don't think that it's merchandise very well i would kind of take that and do it better i feel like what are in the innovation sets at sprouts i don't i don't have a surprise so sprouts has an innovation set and so like if you've ever been to a sprouts they'll have this particular area uh where they have like all these really new brands like there's a brand called casa vita that's like this bolivian like cheese like cheese puff kind of snack like palo de queijo but like crunchy cool and there in that and so like i think it's it's about seeing how you perform and that eventually if that you perform well in that innovation set that you can grow out of it into like the main grocer side i think Like to me, I would figure out a way and I don't know how this would happen because again, I think there's like a lot of insidious things that happen in grocery stores and how they're structured.

47:22But like I'd figure out a way to not give that much importance to the distribution of it. Like I don't know how this could work, but make it easier or find ways to like be able to bargain on behalf of the actual brands. I think that's something that's always disheartening for a lot of the emerging brands is how much they're like basically getting out of their own makings because they have to be discounting. Yeah, discounting and then like tied to these like massive like the Kehys or the Yunfis. And I do feel like that's like a very predatory style operation. so I mean my grocery store probably wouldn't make no money but I would try to figure out like how do you upend that dynamic because I think that that's the only way that you can actually be able to give these emerging brands a real chance and maybe I would also reduce the beverage fridges the sizes and I would triple down on Frozen.

48:35Yeah, Frozen is, I fully agree that Frozen is this massive, massive unlock for some of these like dusty chains. And like just so many people rely on Frozen and just they don't know what they don't know with the innovation coming out, especially foods of many different cultures. It's not just the hungry man dynamic. I mean, I see so many great in like the, you know, the Whole Foods to sell stores. I see great innovation with frozen, be it vegetables or sauced meats or sauced vegetables and legumes. It also, it gives people this idea of freshness, right? So I know that post-pandemic people did upgrade their freezing capacity, like the storage for freezing stuff.

49:30I live in an apartment and I'm constantly running out of my freezer space because I am that person that's switched to buying frozen vegetables because it reduces food waste, in my opinion. It really, really does. I think that's also a massive shift in perception of like, yeah, you still want to indulge in freshness, but if you're the kind of person who's not always cooking in the moment, whatever, it just helps you reduce your own food waste in a way. I think it's just easier to use and then save, etc. There's a lot of, I think that, again, behavior-wise, why frozen has and i wrote this like probably 2021 where i was like there's going to be a big boom in frozen and this is why like these are like the the changes in behavior that we have and i think those changes of behavior are what ultimately then get you see now in numbers where i think frozen is the only category that's still growing double digits in the grocery and we haven't even talked about uh frozen ice cream and ice cream uh you know ice cream um yeah not We haven't even talked about that.

50:45Yeah, and there's so many opportunities of beyond what was usually frozen, right? Like we were saying, I feel like even just this new wave of dumplings and Latin American too, like Latin American, different, I forgot the name of this company, but it's a huge, successful Brazilian company that's only in frozen and they've, I mean, I forget the name of it, but they started with like paladitas and stuff like that. So I think that, yeah, like we're seeing like this, like renaissance of like the frozen area that, like the frozen category that extends so much beyond just like what used to be just what we assume was like the TV diner, like TV dinner kind of thing.

51:32Well, now even with like Deep and Kajana, like on the South Asian side of the coin, just incredible options there, which I think is - Yeah, I mean, I'm happy for it because, but then like, it's true. Like even if you go to Trader Joe's, like there's so many, like just the frozen. I love how they have. Have you ever been like to the Trader Joe's where they have like, I mean, I guess they have them in all. It's like this frozen. It looks like it's like they don't have the big frozen ones with the door. They just have like the ones that are like, yeah, like they're just open. Yeah, the chests. Yeah, the chests.

52:06Yeah, the chests are great. But they're like an open chest. Yeah. Yeah, I love that style of, I mean, that feels like you're, you know. And it's always packed. And I'm like, wait, like there's so many people buying these like frozen meals. Oh, yeah. I mean, Trader Joe's just kills it with that stuff. Have you explored in your work dynamic pricing at the grocery store? Yeah. I mean, I saw the Instacart news. But that's always – it's now being like, oh, because they did this study on like Instacart. But dynamic – like Amazon does that all the time too. Of course they do. So to me, it's like, yeah, but that's been around.

52:43That's nothing new. What about the physical store, though? What about actually going to a store? You got the blue light special. Yeah, that. I mean, again, late-stage capitalism. I think it's really smart on a business end. But this is the thing to me. I think groceries is a very delicate space because it is something that you it's like an inherent it's mundane like and then you're thinking about like why like why are we doing this like this isn't like uh did they try to do that in restaurants with drinks like there's some bar well i've talked to i've talked to operators about that on the restaurant side which i think is is super unexplored is like the idea of dynamic uh pricing um at down times it's all based on timing where when tables are not i mean wasn't that like i guess the original happy hour was that oh it's what happy hour was always intended to be but you could do a second happy hour it's almost like a groupon model where you book through resi or or you know a reservation engine you get the 30 off groupon if it's at this like off hour um yeah but but i think i think is it walmart that physically has been exploring that um i mean i just love this idea of like honestly i love barkers i mean this is like so antiquated But what if they're just barkers in stores like selling products at these like flash discounts?

54:10I mean, how insane would that be? I think, yeah, Walmart is the one who started using the digital price tags, I think. Yeah, they have. Was it last year? Yeah, yeah. So, yeah, I think that is that. I mean, it's it's again at one point where you're gargantuan like Walch like Walmart. You have to be finding ways to extract more value from your consumer because you have shareholders to answer to. And this is, again, when I wrote about the new grocer, written like my late stage grocer essay, I wrote about the high piece grocer model and why that's really fascinating and how it's kind of disrupting the grocery, the kind of outdated grocery model in itself and how to make money.

54:52I think this is why I try to tell people like when you go to a grocery store like chain, the person in mind is not whenever all these things are the products you're bringing into or like the brands that they work with or the models of, you know, whether they have dynamic pricing or not. it all comes down to like what ultimately is going to make shareholders happy and it's not about actually meeting consumers needs so it used to be right that grocery stores you would go and kind of fulfill your list and be like okay i bought what i needed and now i just go now it's about like getting you to indulge in things that's like oh my god do you like who the hell is drinking skittles water and it's become this like like playground and it's like i don't know like not even playing it's like a casino where it's like all these little like uh like coin machines and slots like luring you in and it's like you don't you didn't really have to go drop you know 100 plus dollars on this i mean it's a treats lifestyle that we live in and we need different treats and different formats yeah yeah of course our generation has definitely changed the way that we relate to these kinds of products but again like when you're when you're seeing something like a Walmart, like you have to understand that Walmart ultimately does not do anything now with the consumer in mind.

56:16Yeah. Because whatever they do is like they have the infrastructure to just like ultimately like make it work at some point because like they have like over 4 ,000 like grocery stores. Yeah. So at that point, it's like it's not about you, the consumer. It's about what the shareholders, what will make them happy. And unfortunately, Walmart has been killing it in the grocery game. And, you know, Target's had to rehaul a lot of even I think that they're like executives and like I think the CEO swap that happened. Like it's because they haven't been able to nail the grocery aspect the way that Walmart has and the way that Amazon has.

57:00And Amazon also like tried their best to try and go compete retail wise with Walmart. but I think that they're just sticking now to like, you know, exploring with Whole Foods. And because I go to like order stuff on Whole Foods and I see how the prices of these things change. And they'll even give you like those specific days or specific times it'll be like discounted through Prime. It's smart stuff. To like incentivize. It's smart stuff. Yeah, it's super smart. And data, you got to figure like, ultimately that just, it's like data that's being informed. And I'm sorry that we're eventually going to be ruled by algorithms.

57:36So we might as well start getting used to it. It's like, well, I think we are. I mean, it makes our lives less complicated in some ways. It makes our lives more efficient. And, you know, if they can do dynamic pricing to benefit the end user, I'm all for it. I don't think that it's going to be used that way. I think it's just going to be used to extract more value. But, again, it's late-stage capitalism. Like it's, it's, there's nothing really that you can do unless you address how is it that Walmart got so big or how is it that, you know, I know, thank God the Alberson Kroger deal was, was, was not allowed.

58:17Yeah, yeah, that would have been. I was like, wow, finally, there's one win that we get. That was Biden. That wasn't Trump, right? That was last administration that blocked that one. It might have been Biden. Yeah. But at least I was like, wow, at least that there's that, you know, it's like we don't need more consolidation in this space. No, definitely not. But sadly, the Mars and the Kellogg's one did, by the way. So now Mars basically owns Kellogg's. Andrea, this has been so much fun. Am I going to see you at Expo West? Yes. All right. Maybe we'll walk the floor together. That'd be really fun.

58:49Thanks for joining This Is Taste.

58:55Hi there. It's Matt, co-host of the show. We are currently running a This Is Taste listener survey, and we'd love to hear from you. Do you have a guest request? A restaurant you wish we'd visit to talk about on three things? What about a lesser-known cookbook author who deserves a spot in our studio chair? You can let us know by clicking the link in our show notes to complete the survey. It will only take a couple minutes, I swear, and will help us continue to make the best show possible. That's the This Is Taste listener survey, link in our show notes. Today's episode is brought to you by ButcherBox.

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1:00:52Visit butcherbox.com slash taste to get this limited time offer and free shipping always. That's butcherbox.com slash taste. Don't forget to use our link so they know we sent you. Mit Mastercard Business Bonus sichern Sie sich attraktive Rabatte auf Tools und Services für Ihr Unternehmen. Alle Angebote unter mastercard.com slash business bonus. Winston Nelfieri, welcome to this day. How are you? Thank you. I'm good. Good to be here. I'm happy to have you here. I really wanted to talk to you. First off, sauce is a terrific product. You know, you make these pasta sauces that I think are really in line with the modern flavors.

1:01:38And you can push back. I call it pasta sauces. I'm sure there's much more to say. No, it's totally violent. But I wanted to have you in too because you're at a stage in your company's trajectory. that is you're not the biggest sauce, but you're not really baby startup. You know, we had Kiki from Sour Milk on recently, and, you know, their journey is much earlier. You're in the middle. So I wanted to kind of contrast those two conversations in what better way. Before we get to your company and really a lot of questions about CBG these days and like the way you're thinking about this, you know, inflation, all these crazy things, you know, the grocery stores is a complex web of topics.

1:02:19You're based in LA. Yes. You're a young man. You're maybe out of, we're maybe going to different places, but I want to know, where are you going out? Yeah. Restaurant wise, I think my favorite place is this place called Little Dom's. Yeah. It's a great Italian hole in the wall, kind of New York scene, honestly. Yeah. But my dad's very Italian, so we always try and go to most of the Italian places in LA. Yeah, yeah, a little down in school. Yeah, so. Yeah, what was food like growing up for you? Were you, were you, was the sauce on the table? It's funny because I, before I started sauce, I had never had a jarred pasta sauce in my whole life.

1:03:00My mom was a big cook growing up. So we, she was always chefing up something. She made pastas, you know, all the time, but we never had jarred sauce, which was so weird to me that I started a jarred sauce company, but you don't realize how much of America actually uses it. And I think also you can make a really good, high-quality product in a jar. Well, you know, I have a different narrative for myself. I grew up with Paul Newman's on my table. That was like the one jar that my mom or dad cooked with. 90s, it was like busy families, and it was great. But I think that we were stuck in this kind of red sauce paradigm on the shelves.

1:03:46And Saws is definitely not doing that. So tell us a little bit about the company, you know, what you stand for, what types of sauces are you selling right now? Yeah. Yeah. So I have a co-founder, Troy and I. We started the business about two years ago now. You know, our biggest thing is we would walk down an aisle of grocery, right? You walk into a Whole Foods or the infamous Erewhon in LA and everything is so bright and colorful and Elicits this emotional response to the consumer that you just want to pick it up and look at the product, right? When we were shopping for pasta sauce, we felt like that category of grocery was very archaic Tan labels New York restaurant to retail brands on shelf that When the consumer was looking to buy it was like why would I buy this marinara over that marinara?

1:04:37I think on one point it came down to price and then the other was brand loyalty, consumers' habitual routines. And for us, we felt like, why don't we bring some innovation into this set in terms of Gen Z marketing as well as branding and then product. So we really lead with bold flavors, unique flavors, but also taking flavors from cross categories. Not too foreign to pasta sauce, and not too foreign at all, I think, from an ingredient perspective. People can see summer lemon marinara, and they know that it's just lemon and marinara, right? It's something different, but not something you would typically see in the tomato sauce aisle.

1:05:20No, having citrus presented on the label is, first off, it's challenging to execute. And the reason we're talking is I like your product. Oh, thank you. People send me products all the time and mixed results. But I really like them. But then Miso. Of course. Miso enters the... And that's pretty as foreign as you can get. That's our most out-of-the-box one, I would say. So we launched... That was, I think, our fifth or sixth SKU now when we launched all of our products. And that's definitely the most foreign, I would say. What we get from a lot of buyers is naming convention is interesting. but once they try it, it's actually one of their top flavors.

1:05:58So two years in, early on, how do you work on formulation? And you're young, and you're not from the culinary background, so clearly you needed somebody to help you. Yeah, so we, it's a long story, but Troy and I really come up with the flavor profiles. In the early days, we never came up with, we never used data analytics to make our flavor choices. It was really more like, okay, hot honey is trending on pizza, like why don't we put it into a pasta sauce and jar it up, right? And then also thinking about flavor profiles, cross-category, and making sure they're not too foreign. We did have some advisors in the early days that were helping us out with connecting us with some food scientists, as so they call them, that help you really take your product and then manufacture it at scale.

1:06:48So what we were able to do is work with that food scientist, come up with the flavor profiles that we wanted to use, and then she was able to help us. Yeah, I mean, she did good job. Manufacture that product. Your food scientist is amazing. Did you go to business school? I actually studied real estate development in college. So adjacent. Total opposite of selling tomato sauce. No, totally. But I, you know, having that background in academia, I mean, you looked at case studies and like the first one that comes to mind two years ago is the Rao's story. Exactly. Like the business story. I mean, the exit that Rao's had, it like kind of shocked the world yeah the the valuation of a single pasta i mean they had multiple SKUs but a single product was remarkable yeah were you looking at that yeah for sure i think you know the rayos acquisition came after of course we started saws but um they were sold originally i think for a few hundred million back in like 2018 or 17 yeah um but yeah like Like, Rayo's, I think.

1:07:50I think more than a few hundred million. I think they sold for around like 600. Yeah, that's more than. Original time. It was like a$600 million acquisition for a pasta sauce. Which is crazy because I think during that acquisition, it was just pasta sauce. Yeah. And then after they went into, you know, frozen, bunch of different other categories of grocery. Yeah, it was pretty remarkable. But like, clearly people love sauce. Yeah, exactly. Exactly. I think that is the one that goes down in history as a great example. And I think to your point, it did help us, of course. Yeah. So let me ask you, early on when you're launching, what's the challenge for you to break through this category?

1:08:33Because to get into these stores, to get into Target, one year after founding is pretty remarkable. How were you able to do that? Yeah, I would say, you know, Troy and I still do the selling to this day. We were having the founders in on sales call. I think you just show your passion for the brand at all times. For us, getting into retail was, it was difficult, but also I think the one thing about getting into retail is not as hard as you would think, at least for us at the time. Like we were going into a category that hasn't seen much innovation in decades. When we were meeting with buyers, they were always saying like, hey, we hate reviewing in this category every single year because we see the same New York restaurant to retail or the same, we use the freshest Italian tomatoes that everyone else is using, right?

1:09:22Like I think for us is we pitch the brand as like, we're bringing incremental dollars to the set, bringing a new consumer to the set. We're not taking away dollars that, you know, another marinara on shelf might be taking from another brand. So for us, the retail thing was somewhat easy to get into retail. It's just building that community to get your product off shelf, which everyone in CPG, I think, knows that. But yeah, I mean, how many times did you say we're the graza of pasta sauces in a sales call? We try and be out there as much as we can. I think that's the best thing about the brand is that we don't really have a direct brand Bible and we can kind of do whatever we really want and be out there and outgoing.

1:10:03And I think that's a real big differentiator. I mean, I think the large retailers wanted, you know, Gen Z energy. Yeah. Because they know, obviously, there has to be innovation there. And the aisle is pretty stayed. But on the flip side, you're throwing out these flavors. And you're doing Alfredo's as well, which, you know, really mixed results historically. Yeah. I like yours. I like yours. I mean, how are you addressing the changing tastes of younger shoppers? because I think that's like your big promise with Sauce is we're really tapped into this young millennial and Gen Z shopper. Yeah. I mean, like I kind of mentioned earlier, like we look at like what we think is trending.

1:10:53Now we do use a little more data and analytics to make our flavor decisions. But for the most part, it's like, what do we see in culture? And I think that's what makes us a big differentiator in the set. And then on the Alfredo front, yeah, like that's, it's one that I probably never thought we would come out with a jarred Alfredo, but it's crazy to think that, you know, most of America does eat jarred Alfredo. Our brown butter Alfredo is one of the most popular selling products at Whole Foods in the Alfredo set, which is great. And we've been, we always are tweaking our formulas, you know, making them better, using higher quality ingredients, trying to really, you know, as much as we can help products.

1:11:36Like, I think that's, we listen to consumers' feedback on what they're seeing. I mean, salted pistachio, Alfredo. Yeah. Salted pistachio. It reads well. Yeah. You know, I just think a lot of consumers have been burned by the Alfredo in the jar. It's tough. I mean, a lot of our competitors, you know, most products like on the Alfredo set, like you're just making a plain Alfredo or you have some sort of unique flavor. But a lot of them taste very milky. I think for us is like even all of our products, like when we lean into the flavor, we're really leaning into the flavors. So where are you making it?

1:12:08Do you have co-packers around the country? Do you have a single co-packer? Yeah. So all of our red sauces are made domestically here in the U.S. And then our pestos and Alfredo business is actually made in Italy overseas. Yeah, smart. I want to know about just like the cost of goods and how that's affected your pricing model. I mean, how are you adjusting for cost of goods, which includes, you just mentioned, importing tariffs. I mean, it's real. It is real. It's definitely real. I would say we are very fortunate enough that we actually are cooked. The main majority of our business is our red sauce, which is domestic.

1:12:48and we actually use California-grown tomatoes. So very different than your typical. In our category, a lot of our competitors are using Italian tomatoes, right? The bonus for us is that we are using California-grown tomatoes, which I think is great. You know, we use the highest quality tomato, no preservative tomato that you can find out there, and one of the most expensive tomatoes that you can find domestic. So, yeah, I think that's on the Alfredo and pesto front, We do have tariffs, of course, importing our products from Italy. But I would say because it's not a majority of our business, it's not as big of a focus, I would say.

1:13:28Do you use domestic olive oil? We use foreign olive oil. Yeah, yeah, yeah. Like that, which I would expect. Yeah. But yeah, it's good that you have like the bulk of your product is domestic. So you're a little protected from that. Exactly. And we use extra virgin olive oil from overseas. I mean, it's very high quality. we don't use just basic olive oil. What is your funding picture like? I mean, did you do friends and family for the first year and then did you take money from venture or from other sources? Yeah, so we've had, I think our category is tough. It's a pay-to-play category as many are in CBG, right?

1:14:09Resource intensive, yeah. Yeah, so we did do a family and friends round very early on before Troy and I even had a product. We were kind of, you know, of course, in that early stage of building brand. And we raised about$210 ,000 family and friends and a few angels. And that took us about six or so months to like really formulate, get maybe some products, branding, like all of that stuff. And then went into a very small round, about half a million dollars. And I think at that point we went another six months. and then what it really scaled is when we went to Expo West in 2023 is when the brand was probably six or so months old we were in Expo West really you know came out with this nice booth we were kind of the hot kids on the block right like getting into retail stores on social media we were blowing up virality and all that stuff and we got approached we went into that saying hey we want to raise like a million dollars like we need a little more funding which is still a small amount of funding yes i mean you're not looking for this blockbuster round which is still it makes everything the million million dollar investment exactly so we went into that let's start raising a million dollars and then came out actually at expo west we kind of got an offer like on the floor for three and a half million dollars um and that was at the point when we had just heard that we were launching nationwide in Target as well.

1:15:41So it was like kind of one of those things where like we had to fuel growth and succeed in that retailer. So you were able to get national distribution in Target with the friends and family round? Yeah, probably. And then we've raised a very small venture round, that 500 ,000. So we had about 700, but the 200 was probably burned by the time we or 500 of course but um yeah we were we probably had that half a million when we were getting into target so you go to expo west in 23 you have this handshake deal with target for national distribution and then you're like we need to raise pretty nice little moment i mean what was the big selling point for your your venture partner uh to get that three and a half million yeah i would say like similar to the buyer story earlier like we we really pitched the brand in terms of like innovation and incremental dollars to the set.

1:16:34I think that's the biggest thing is like, there's really no innovation in our category. And that's really how we pitched it. I mean, you have to be able to bring that incremental dollar into the set and a new consumer. I love that. I think for potential founders or baby founders here, listening to the show, those are really interesting words, incremental dollars and new customers to set. So like looking at the grocery store and where are those white spaces? Exactly. Yeah. Yeah. It's cool. I mean, I have to ask about this like next couple of years for you. I mean, you're in like Whole Foods, Erewhon, Gelson's, Kroger.

1:17:14You're in 7 ,000 stores. Where does it go? Yeah. I mean, there's still a lot of meat on the bone, right? Yeah. There's 50 ,000 stores in the US or probably more. But I would say, you know, for us, it's really focusing on same store velocity. We're at that point where we just really want to focus on same store velocity. And I think that's the key to growth. There are a few stores that we're looking at for 26 that we're very excited about, but for the most part, it's not really focusing on new retailer and new door growth, more so same store. Same store and getting people to come back. What's your relation with Walmart?

1:17:50Walmart is, we have a relationship with them. It's not on our books right now, but we are definitely, you know, flirting with them. It's, I think that's one that in CBG is very risky, of course, but I also think like could be huge potential. It's, it's one that you really have to decide on if it's the right fit for your brand. Yeah. And it could be, I mean, this is a category that could use a little bit of, um, you know, seeing, um, uh, a lemon, uh, a marinara on the shelf at Walmart. Yeah. Exciting. What's your grail store? Where do you want to be? just like put it out in the world yeah uh grail store costco costco i think i mean costco from everyone in cbg of course founders know that costco is just a great retailer but i think also like growing up as a you know shopping there with my family as a kid i think just one to be like i would i would always love when my mom was like hey we're going to costco today because i would always go and just drive all the samples that they had so i think for us costco is one that we'd love to be in i mean i have a friend who calls it coscones because it's like they've got so many great italian products there yeah exactly it's and they really obviously um know how to drive sales for italian products and i think like for us too like our product in costco would just look amazing i think also offer a very different product for our category would you like the two two packs what like what would be your yeah we would do two packs um typically for our category it's two packs like dog bones that you just pick up probably a little little larger size yeah format and then yeah of course like our amazing branding on on a palette i think would just be amazing it'd be it'd be it'd be cool yeah um what about other you know other categories yeah i think I think one of the best things about the sauce naming is we don't really have that brand Bible in terms of like very restricted into other categories.

1:19:50I think for us, the real focus right now is, of course, our pasta sauce business, tomato sauce business. And we are looking into other avenues, but kind of how I mentioned, it's really working on that same store velocity, still building a lot of brand awareness, you know, being going from 10 stores, roughly less than two years. years ago to seven to eight thousand stores now is of course you have to build that brand awareness in those places that you know might not be the coastal cities like la new york chicago so let's let's dig into that um same store velocity building it yeah nebulous and i i talk to people about this a lot and i still kind of don't understand how do you being on the shelf in one of these 7 ,000 stores, how does same store velocity happen, occur?

1:20:44Yeah, I mean, it's definitely a lot of trial, right? There's a lot of things that come down to it. It's that triangle effect of marketing as well as TPRs in store, any sort of ads you can get, any sort of placement. I think the biggest thing for SAWS in our category is that we are so unique in terms of a product perspective that we look at Saws as, you know, similar to like a Salt and Straw to Baskin Robbins. Like you go to Salt and Straw, you have a very unique, you know, olive oil, vanilla ice cream. And then you go back to Baskin Robbins and have a basic vanilla ice cream. Even if you didn't like it, you're still going to love or remember that olive oil ice cream.

1:21:28So for us, you know, getting out of aisle is number one thing. Any way we can display our brand is, of course, with branding and most CBG brands, of course. But I think for us, it's really trial. Getting that product into people's hands is the number one. So how do you drive trial? Is that through just investment or you're paying for it? Yeah, I would say investment into any sort of like, you know, promos or just to get people to try your product. We do a lot of demos, you know, community events, I would say on the marketing side, as well as like anything on the social front that you can do and then add displays.

1:22:03Like it's CBG is expensive. I mean, it's a very expensive pay-to-play category. I think any category in grocery, right? Are you talking to strategics at all about investment or even the big acquisition? Yeah, not currently. It's not, really the focus is still building brand. You know, we have a lot to do on manufacturing as well as new products and distribution. And there's a lot of stuff coming. I mean, up until six months ago, we were a team of four people, which is crazy to think about. And now we have about 12 employees. Great. All based in LA? For the most part. Actually, about half of them are in New York.

1:22:42Cool. Winston, it's a fun conversation that we've just had. I'm wishing you all the best. I appreciate it.

1:22:54This is Taste is hosted and produced by Eliza Abarbanal and me, Matt Rodbar. The show is edited by lead producer Clayton Gumbert and supervised by Pat Stango, director of media production and development at Penguin Random House. Thanks to Shalia Harris and the production team at Penguin Random House. Theme music by Steve Rydell. Episode portraits by Louise Zergon Pomeroy. Logo design by Ellie Skirzat and Ian Dingham. Visit Taste Online at tastecooking.com And make sure to subscribe to our newsletter to keep updated on all cool things in the world of taste.