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From Farmers Market to National Retail: 30 Years of Growth for Left Coast Naturals · Selling on Giants: The eCommerce Marketplace Podcast

• 0:15
  SPEAKER_01: Welcome back to Selling on Giants.
• 0:17
  SPEAKER_01: Today's conversation is with someone who has been building in retail long before most brands ever thought about going omnichannel.
• 0:26
  SPEAKER_01: Ian Walker is the president and co-founder of Hippie Snacks and Left Coast Naturals, a business that started at a farmer's market nearly 30 years ago and has grown into a manufacturer, brand builder, and distributor supporting over 40 brands.
• 0:44
  SPEAKER_01: This is a different type of retail conversation.
• 0:47
  SPEAKER_01: We get into what it actually takes to build a brand that lasts on shelves, how to think about pricing and margins the right way, and why most brands underestimate the cost and timeline to make retail work.
• 1:01
  SPEAKER_01: If you're a digital brand thinking about retail or you're already in it and you're trying to figure out how to scale, this one is worth paying attention to.
• 1:10
  SPEAKER_01: Let's dive in.
• 1:17
  SPEAKER_01: First question uh for those who may not know hippie snacks or less left coast naturals, can you give a quick overview of the business and what you've built so far?
• 1:26
  SPEAKER_00: Sure.
• 1:26
  SPEAKER_00: Yeah, so I started this business uh almost 30 years ago, coming up pretty soon, actually May 1996.
• 1:33
  SPEAKER_00: So one more month, we'll be 30 years old.
• 1:36
  SPEAKER_00: Um and we started as a manufacturer uh selling at Granville Island Market and then eventually started selling to stores.
• 1:43
  SPEAKER_00: We got into distribution.
• 1:46
  SPEAKER_00: Um, so if you fast forward to today, we are really two businesses in one.
• 1:50
  SPEAKER_00: We are a manufacturer of two brands.
• 1:52
  SPEAKER_00: We have a brand called Hippie Snacks, which is a better-for-you snack brand.
• 1:57
  SPEAKER_00: So we make crackers and out of things like avocado and cauliflower and regenerative oats.
• 2:04
  SPEAKER_00: And then we have another brand called Left Coast Organics, which is a repack seed and nut and trail mix type brand that you'll see sold in the bulk departments in Canada.
• 2:14
  SPEAKER_00: So hippie snacks is sold around North America.
• 2:16
  SPEAKER_00: Um, Left Coast Organics is sold in in Canada, and then we are also a distributor.
• 2:22
  SPEAKER_00: So we distribute our products, but we also distribute about 40 other brands and organic bulk.
• 2:29
  SPEAKER_00: So we supply most of the major retailers with all their you know, seeds and nuts that are organic that you buy out of like a bulk bin.
• 2:36
  SPEAKER_00: So yeah, so we kind of operate those two businesses in parallel.
• 2:39
  SPEAKER_00: We have a our main operation is in Burnaby.
• 2:42
  SPEAKER_00: Uh we're in about 50,000 square feet, and then we have a uh warehouse in Toronto as well.
• 2:48
  SPEAKER_00: Sorry.
• 2:49
  SPEAKER_01: Oh, oh yeah, so you mentioned on our initial call that you you started off when it was just farmers market.
• 2:56
  SPEAKER_01: So, like, how did what made you choose uh natural food uh as kind of your your niche as you were, you know, from farmers market to major distributor and brand?
• 3:06
  SPEAKER_00: Yeah, it's it's um, I mean, I started this out of university.
• 3:09
  SPEAKER_00: I was 24.
• 3:11
  SPEAKER_00: Uh, I was, you know, definitely very idealistic.
• 3:14
  SPEAKER_00: Um, but I I had worked um for a long time I used to go to canoe trip camps and then I worked as a canoe trip guide.
• 3:21
  SPEAKER_00: So I kind of came into this with a huge appreciation of the outdoors.
• 3:25
  SPEAKER_00: I would have I call myself an environmentalist at the time.
• 3:29
  SPEAKER_00: And uh the person that I started the business with, Jason, um, he was an Olympic athlete who competed in 1988 Seoul Olympics as a vegan, so which was pretty rare in those days.
• 3:42
  SPEAKER_00: Um it's a bit more common now, but um so he came at it from kind of a health perspective.
• 3:47
  SPEAKER_00: I came at it from an environmental perspective.
• 3:49
  SPEAKER_00: We knew that we wanted to do a business that meant something and that was purpose-driven and did better for the world.
• 3:57
  SPEAKER_00: And so we kind of came into that with that, you know, hopeful mindset, if you will.
• 4:01
  SPEAKER_00: Um, so as we were developing products, we kept that in mind.
• 4:04
  SPEAKER_00: Like we started with nut butters, and eventually we tried to create a product that had no nuts in it.
• 4:11
  SPEAKER_00: So we were roasting soybeans to make like what's called a soy nut and then grinding that to make a spread.
• 4:17
  SPEAKER_00: The spread wasn't very good, but we liked snacking on them, and that's actually the product that took off.
• 4:22
  SPEAKER_00: And the reason I say that is because soybeans are fairly affordable, and you can buy organic soybeans for fairly affordable.
• 4:28
  SPEAKER_00: So we were doing uh organic right out of the early days, and in those days there was no standards, right?
• 4:34
  SPEAKER_00: So we were actually using the California organic standard.
• 4:37
  SPEAKER_00: There was no US standard, there was no Canadian standard.
• 4:39
  SPEAKER_00: We had to find a person to inspect us and certify us, and so we're early days, we were kind of the weirdos, that's for sure.
• 4:49
  SPEAKER_01: That's crazy.
• 4:50
  SPEAKER_01: Well, the weirdos usually have the impact.
• 4:52
  SPEAKER_01: I like to say, like, nerds rule the world, so we don't give enough credit to weirdos, that's for sure.
• 4:57
  SPEAKER_01: Um you mentioned so like when you started, there was no 1996.
• 5:01
  SPEAKER_01: Like uh, I don't even think you could pay for things over the internet in '96.
• 5:06
  SPEAKER_01: Um, so so you like your initial getting into retail, I guess, was a lot different.
• 5:11
  SPEAKER_00: Can you tell me how it how it used to be and then kind of what it looks like today in terms of uh the retail I mean it's to some degree, you know, we we started off selling at Granville Island, so it's like selling at a farmer's market.
• 5:25
  SPEAKER_00: You're selling direct to consumers.
• 5:27
  SPEAKER_00: The beauty of something like that is that I can talk to the consumers.
• 5:30
  SPEAKER_00: I'm at a table selling my product, telling the story.
• 5:34
  SPEAKER_00: Um, as opposed to digital, you're selling direct and you tell your story through other ways, you know, either through digital advertising or your website or or whatnot.
• 5:45
  SPEAKER_00: We were people to people talking.
• 5:47
  SPEAKER_00: Uh it was great because I was able to get feedback uh really well on how do we improve the product, what do people like about it, all that kind of stuff.
• 5:54
  SPEAKER_00: I think you get a bit of that with digital as well now.
• 5:57
  SPEAKER_00: Um so it was just sort of um, but there was no online at that time.
• 6:02
  SPEAKER_00: Meanwhile, we had some stores that would actually come to the market and say, hey, I'd like to sell this product.
• 6:06
  SPEAKER_00: So that's sort of where we started.
• 6:08
  SPEAKER_00: And but you learn very quickly as you start selling the stores.
• 6:12
  SPEAKER_00: And I think the the learning curve is the same now as it was then.
• 6:16
  SPEAKER_00: Um, around as you enter those stores, it is a different uh medium in a couple ways.
• 6:24
  SPEAKER_00: Um, number one is on price, right?
• 6:27
  SPEAKER_00: So you're used to selling retail price to a consumer.
• 6:30
  SPEAKER_00: Well, as you're doing that, you know, you have the cost of the materials and the labor and the packaging, right, to make the product.
• 6:38
  SPEAKER_00: But the thing that a lot of people don't figure out is that so you actually have to work that retail price point backwards and say, okay, well, the retailer, you know, you were making all that yourself when you're selling at a market.
• 6:50
  SPEAKER_00: But a retailer is making 40% margin.
• 6:53
  SPEAKER_00: So if they if they buy it, if they sell it for a dollar, they're buying it for 60 cents.
• 6:59
  SPEAKER_00: Then quite often retailers don't want to buy directly from the manufacturer, they want to buy through a distributor.
• 7:04
  SPEAKER_00: So you've got to fit in a distributor margin who's making 25 to 30 points.
• 7:10
  SPEAKER_00: So they're gonna buy it for 75 cents and then sell it for a dollar.
• 7:15
  SPEAKER_00: Then once again, the manufacturer who makes it, you, has to make margin to sell to the distributor.
• 7:22
  SPEAKER_00: So you have these three layers of margins, which not everyone builds into their head when they do retail at uh either on digital or at markets when they sell, they don't put all those proper margins in.
• 7:36
  SPEAKER_00: Plus, when you start, you know, you're paying retail price for ingredients, and then you buy it from distributors, and then you buy it from the actual suppliers.
• 7:46
  SPEAKER_00: You're inefficient on equipment, so your labor charges are super high.
• 7:50
  SPEAKER_00: Um, understanding what your costs are and how that translates into being able to have margin available for you as a manufacturer, for the distributor, and for the retailer is really important.
• 8:04
  SPEAKER_00: On top of that, just because you put product on a shelf doesn't mean it's gonna sell.
• 8:09
  SPEAKER_00: It's kind of like being in Amazon, right?
• 8:11
  SPEAKER_00: Even though that's digital, just being in Amazon doesn't mean you're gonna draw sales.
• 8:15
  SPEAKER_00: You've got to draw eyeballs to that.
• 8:17
  SPEAKER_00: So either that's digital advertising.
• 8:19
  SPEAKER_00: Likewise, at the retail store, you gotta go on deal and have a shelf tag, you've got to pay for some ads to from to push the retailer to do a display of your product.
• 8:30
  SPEAKER_00: Because if you think about walking around a store, it's a lot of products you see, right?
• 8:34
  SPEAKER_00: Thousands and thousands and thousands.
• 8:37
  SPEAKER_00: Yeah.
• 8:37
  SPEAKER_00: Right.
• 8:37
  SPEAKER_00: So you have to stand out somehow, and you've got to do that either through promoting and getting a tag or getting a display and getting attention because it's easy to get lost in the mix.
• 8:48
  SPEAKER_00: And I think people don't always build into, once again, into their margin, the fact that they're gonna have to do discounts, the fact that they're gonna have to pay for ads uh and co-ops at big retailers.
• 9:01
  SPEAKER_00: They also want a listing fee, they want some free fills of product.
• 9:05
  SPEAKER_00: It's expensive.
• 9:06
  SPEAKER_00: Um the other thing is that you know, uh, you know, people get excited because they're in a really big chain, but sometimes a big chain means big stores, which means more items, which means it's easier for you to get lost in the mix.
• 9:20
  SPEAKER_00: So, you know, your expectations, if you sell in like a, I don't know, Whole Foods where you're getting a lot of eyeballs in a real relatively small store, you can't take those same numbers and extrapolate that.
• 9:33
  SPEAKER_00: Oh, if I sell, you know, a case a week, that if I get into a thousand loblaws, I'll sell a case a week in each of those, it doesn't always work out that way because it's a bigger store, it's not always the same customer base.
• 9:45
  SPEAKER_00: You know, so understanding what those what your expectation for those stores is and how you can stand out, it's really important.
• 9:55
  SPEAKER_00: That's interesting.
• 9:56
  SPEAKER_00: There's a financial and there's the marketing piece uh that come with it, as well as the expectations.
• 10:02
  SPEAKER_00: And the other thing that people do is that they try to sell everywhere right away, as opposed to selling to the core stores where you can build a success story.
• 10:11
  SPEAKER_00: And you know, because you can blow your brains out trying to get a listing fee at Loblaws, but if you're not selling well at, I don't know, choices or whole foods.
• 10:20
  SPEAKER_00: I can't remember if you're in are you in Vancouver or are you in Toronto?
• 10:23
  SPEAKER_01: Uh I'm actually in North Carolina.
• 10:25
  SPEAKER_00: Well, you're in North Carolina.
• 10:26
  SPEAKER_00: Okay, so let's think of who's in um who's in North Carolina?
• 10:30
  SPEAKER_00: Is it fresh market that's in that area there?
• 10:32
  SPEAKER_01: Yeah, we get we have fresh market, Wegmans is big, and of course whole foods too.
• 10:36
  SPEAKER_00: Exactly.
• 10:37
  SPEAKER_00: So, but if you're not selling well at fresh market, you're not gonna do really well at Piggly Wiggly.
• 10:43
  SPEAKER_00: Right?
• 10:44
  SPEAKER_00: So you've gotta have your, you've gotta make sure that you've got your product dialed in before you go and blow your brains out spending a ton of money.
• 10:52
  SPEAKER_01: That's interesting.
• 10:53
  SPEAKER_01: So, what I'm hearing too, it's like uh so I have two questions.
• 10:56
  SPEAKER_01: First, if I'm a digital brand, you mentioned core stores.
• 10:59
  SPEAKER_01: So core stores are like where my ideal customers are more likely.
• 11:04
  SPEAKER_01: In your case, the natural foods, so like Whole Foods would make sense.
• 11:07
  SPEAKER_01: And I guess for those listening who may not understand, how do you how do you know who your core store is?
• 11:15
  SPEAKER_00: Uh I mean, if I'm gonna really dumb this down and oversimplify it, I mean, uh part of it's gonna depend on your price point, part of it's gonna depend on your brand image.
• 11:26
  SPEAKER_00: So are you a more higher-end product or are you a more sort of uh cheaper, approachable, familiar product?
• 11:33
  SPEAKER_00: Um, most of the people that you'd be talking with would probably be more on the higher-end specialty type product.
• 11:40
  SPEAKER_00: So right away, you're you're you're losing some of the more discount retailers that may not have the uh reasonable uh you know pay scale to be able to afford that or that are excited about that.
• 11:57
  SPEAKER_00: You know, you also want to find people that are values aligned.
• 12:00
  SPEAKER_00: So generally at a say a fresh market, you're gonna find more people that will be aligned with around sustainability and natural and and clean label ingredients.
• 12:11
  SPEAKER_00: So generally, I would find most of the people that you'd probably be talking to about this would be that same kind of niche.
• 12:18
  SPEAKER_00: Everyone's kind of it's we all kind of laugh.
• 12:20
  SPEAKER_00: We're all trying to go for that 35-year-old uh woman that goes to yoga and you know, like it's all the same consumer that everyone everyone segments, but they're all really going for the same consumer.
• 12:31
  SPEAKER_01: So makes sense.
• 12:32
  SPEAKER_01: Uh also the buying power women between the ages of 35 and 55 is a real thing.
• 12:37
  SPEAKER_01: Um another point on that.
• 12:39
  SPEAKER_01: So you mentioned like um when you first start, there's lots of inefficiencies in your process.
• 12:45
  SPEAKER_01: So to your point, you're getting from a distributor, you're not getting from the manufacturer, uh, and you're learning too.
• 12:50
  SPEAKER_01: So like you're just making mistakes.
• 12:53
  SPEAKER_01: For Brendan, just getting into retail, if I break even on all my expenses, is that kind of a win?
• 12:59
  SPEAKER_01: Or are you do you have like a specific profit margin?
• 13:03
  SPEAKER_01: And maybe it's different for everybody.
• 13:05
  SPEAKER_01: I really don't know.
• 13:06
  SPEAKER_01: How do you how do you factor in like advertising to your point, marketing, the fees?
• 13:11
  SPEAKER_01: Like, should I just be like, if I can get in and cover all my costs, it's a win?
• 13:15
  SPEAKER_01: Or are you like, we need to at least make 5% or whatever that number is?
• 13:19
  SPEAKER_00: Well, it is, I mean, um, we got to make sure we're talking apples to apples here.
• 13:25
  SPEAKER_00: Generally, for the first couple of years, it's hard to make money as a business on the whole.
• 13:30
  SPEAKER_00: So you just don't have the volume to be paying yourself, paying your staff.
• 13:34
  SPEAKER_00: Like it is, there is a threshold you have, you know, you gotta be in the high hundreds, getting to the million mark before you can really start paying people properly.
• 13:42
  SPEAKER_00: But you as you get there, um I think the the general rule of thumb is think about gross margin at the starting.
• 13:52
  SPEAKER_00: So you gotta make uh worst case 40% margin, not markup.
• 13:58
  SPEAKER_00: So that means you cost 50 cents and you sell it for a dollar.
• 14:02
  SPEAKER_00: Markup would be it costs a dollar and you sell it for a dollar 40.
• 14:07
  SPEAKER_00: But that's not actually 40% margin, that's actually less than that if you do the backwards math.
• 14:12
  SPEAKER_00: So margin is top down, markup is bottom up.
• 14:15
  SPEAKER_00: So everyone talks margin.
• 14:17
  SPEAKER_00: So you need 40% margin, at least.
• 14:20
  SPEAKER_00: Generally, 50 would be much better because at 40 you're barely gonna make it.
• 14:25
  SPEAKER_00: So shoot for 50% margin for some other categories.
• 14:29
  SPEAKER_00: Like I'm talking food.
• 14:30
  SPEAKER_00: So for other categories that may be higher.
• 14:32
  SPEAKER_00: So have it generally you're looking at 60, uh, health and beauty um side of things.
• 14:38
  SPEAKER_00: So you need a good margin, first of all.
• 14:41
  SPEAKER_00: And as far as budgeting goes, you got to put at least 10 or 15% into spending at store.
• 14:47
  SPEAKER_00: Oh, that's just gonna be a real, you know, that's a very loose rule of thumb.
• 14:52
  SPEAKER_00: Um, but that's gonna be your advertising as well as your discounts.
• 14:56
  SPEAKER_00: So um, you know, you're gonna be on four times a year at 15% off.
• 15:02
  SPEAKER_00: And sometimes you've got to top that up to 25% off for certain deals.
• 15:07
  SPEAKER_00: Uh, you got to pay for some ads, you know, that stuff adds up to about 15.
• 15:12
  SPEAKER_01: Does the uh retailer do the ads and you're paying them?
• 15:15
  SPEAKER_01: Are you paying like an agency or are you doing a paying retailer?
• 15:19
  SPEAKER_00: Yeah, and it'll sometimes it'll go through the brokerage or through the distributor, but it's you paying for it and it's the retailer spending it.
• 15:26
  SPEAKER_00: Got it.
• 15:27
  SPEAKER_00: Okay.
• 15:27
  SPEAKER_00: Um, so yeah, I think uh that's something to think about.
• 15:31
  SPEAKER_00: Um, you know, I think you're probably not, I mean, realistically, you're not gonna make profit in retail till year three, probably.
• 15:39
  SPEAKER_00: Uh so you've got to have that's the other thing is you've got to do some math on okay, what's the bleed rate gonna be so that I can get to there?
• 15:46
  SPEAKER_00: And I've got to have some some some scale.
• 15:49
  SPEAKER_01: Now when you get into sorry, no, I was gonna say when you get into because that's interesting.
• 15:55
  SPEAKER_01: So you're you're eating it the first two to three years.
• 15:58
  SPEAKER_01: So therefore, you're offsetting the cost of being in retail by being extra profitable on your D2C website, for example, or Amazon or wherever else you might be distributing online, and that's kind of the the crab walk.
• 16:11
  SPEAKER_00: Well, hope hopefully, or you're just raising money as a lot of people end up doing because you're bleeding, right?
• 16:17
  SPEAKER_00: Uh it's uh it is uh I'm not trying to scare people away.
• 16:22
  SPEAKER_00: I'm just saying it is can be it can be expensive to be into it.
• 16:25
  SPEAKER_00: The beauty is once you're in there, it is a fairly consistent turn.
• 16:30
  SPEAKER_00: Uh as long as you have a product that turns at store and it's not going to be delisted.
• 16:35
  SPEAKER_00: You know, you you can build upon building, you know, you don't have to keep uh whereas D to C, maybe there's, you know, A, they change the algorithms, B, there's some other hotter product, it's all of a sudden getting all the attention.
• 16:47
  SPEAKER_00: Like I think it's a little bit more like fly and die.
• 16:50
  SPEAKER_00: This is a little more consistent.
• 16:52
  SPEAKER_00: Okay.
• 16:54
  SPEAKER_00: Um, so you get that steadiness and you get that uh that volume.
• 16:58
  SPEAKER_00: But yeah, there is a lot of this omni-channel discussion right now where people are, you know, uh doing both sides of it.
• 17:05
  SPEAKER_00: Um and it's a matter of it is difficult though, because if you spend heavy on digital, then you don't have the money to spend on uh on retail.
• 17:13
  SPEAKER_00: And if you spend on retail, then you don't have the money to spend on digital.
• 17:16
  SPEAKER_00: So it is a challenge.
• 17:18
  SPEAKER_00: Um, you see a lot of people that will build digital big enough so that it's profitable and then that can subsidize.
• 17:24
  SPEAKER_00: Part of the reason why we do so, one of the things I didn't say is that we like we manufacture ourselves, we have our own plant.
• 17:31
  SPEAKER_00: So we subsidize our brand in two ways.
• 17:35
  SPEAKER_00: One is through private label.
• 17:38
  SPEAKER_00: So we do private label for large retailers in the US.
• 17:42
  SPEAKER_00: And then number two is uh the distribution.
• 17:44
  SPEAKER_00: So the distribution is a profitable piece of the business that helps to fund the brand.
• 17:50
  SPEAKER_00: So we've happened to follow that model.
• 17:52
  SPEAKER_00: I'm not saying I recommend that model because it makes your life very it's a lot of businesses at once, it's quite difficult.
• 17:57
  SPEAKER_00: But it's the way I've done it.
• 17:58
  SPEAKER_00: Like I I'm the only owner, I have no uh investors who've been able to cash flow build this business.
• 18:04
  SPEAKER_00: So we are kind of a rarity, but um didn't mean that it made it.
• 18:09
  SPEAKER_00: I'm not saying that's the exact way you should do it, but it it it's one of the ways.
• 18:14
  SPEAKER_01: Did that happen overnight, Ian?
• 18:15
  SPEAKER_01: Or like you 30 years, I mean, you've been in business for quite some time.
• 18:20
  SPEAKER_01: It must have been an evolution, right?
• 18:23
  SPEAKER_00: Yeah, we I mean the private label fate came fairly quickly.
• 18:27
  SPEAKER_00: That was kind of what turned us from unprofitable to profitable.
• 18:30
  SPEAKER_00: That was in about year three.
• 18:32
  SPEAKER_00: We got a contract with a large US retailer.
• 18:35
  SPEAKER_00: Um, they're kind of sensitive, so I don't say names.
• 18:38
  SPEAKER_00: But um that helped lift us, you know, that that I think we're doing maybe year two, I think we did 300,000, and then we did 100,000 first year, year two, 300, and then that put us up to like 800,000.
• 18:49
  SPEAKER_00: I think that was like a half million bucks.
• 18:51
  SPEAKER_00: And that kind of helped us to start to become profitable.
• 18:55
  SPEAKER_00: But then we realized that a ton of our like a really ridiculously high percentage of our sales was to that one customer, which is not a scary, that's not a really that's a scary proposition.
• 19:06
  SPEAKER_00: So we I got like I like to think of myself as measurably paranoid.
• 19:11
  SPEAKER_00: I'm always trying to make sure that I have like a bulletproof business.
• 19:15
  SPEAKER_00: So that is when we started to get into distribution because I saw that as another, we A, we saw that there was maybe a market for a small distributor.
• 19:26
  SPEAKER_00: You know, there's lots of UNFIs in the world, but those are huge, and there's market for a smaller distributor that focuses.
• 19:33
  SPEAKER_00: So, and we wanted to be proud of how our product was distributed in our own backyard.
• 19:38
  SPEAKER_00: So we started doing that as a bit of a so as that, as private label, because private label kind of you have a life cycle, it kind of goes up but down, as that declined, the distribution stepped in to help subsidize.
• 19:52
  SPEAKER_00: So uh, and then that kind of, I mean, distribution usually is pretty steady, but the private label's gone up and down depending on the products we have.
• 19:59
  SPEAKER_00: Um so I think it's good to think about um if it's gonna be, if it's gonna take a while to be profitable, how are you supporting yourself in the meantime?
• 20:08
  SPEAKER_00: Is it fundraising?
• 20:10
  SPEAKER_00: Is it a profitable other side of the business?
• 20:13
  SPEAKER_00: Um, because you got to be patient with it.
• 20:15
  SPEAKER_00: It doesn't happen always overnight.
• 20:18
  SPEAKER_01: Sounds like it sounds like risky too.
• 20:19
  SPEAKER_01: If you have all your capital and resources tied up and now you're kind of all in to your point, it sounds like it's really hard to be able to do both.
• 20:28
  SPEAKER_01: So you gotta kind of pick a lane and and stick with it.
• 20:32
  SPEAKER_01: Is that a an accurate assessment based on this conversation?
• 20:36
  SPEAKER_00: Yeah, and I think the other thing is learning, right?
• 20:39
  SPEAKER_00: Like, um, so just to go back in time, like I think probably our year three or so, we started selling into the States with uh with our first brand, and we did everything wrong.
• 20:49
  SPEAKER_00: Like we we sold to anybody that wanted product, we we followed guidelines and promoted the hell out of it.
• 20:58
  SPEAKER_00: And uh we kind of blew our brains out, but we were we were all over the country and we didn't build like a center of gravity in any one location.
• 21:07
  SPEAKER_00: And just to explain this, because most retailers want to buy through a distributor, so you're usually using Unify or Kahi to sell to a natural food retailer, but each of those companies have DCs or warehouses spread out throughout the country.
• 21:23
  SPEAKER_00: So you'll get like, and you they don't turn them all on, you turn them on one region at a time.
• 21:28
  SPEAKER_00: But when you when you get a retailer that wants to carry it in that region, that turns on the DC.
• 21:34
  SPEAKER_00: Problem is that maybe that retailer, like a good uh example is Sprouts.
• 21:38
  SPEAKER_00: It's all over the country, right?
• 21:39
  SPEAKER_00: But they have only a few stores in the southeast.
• 21:42
  SPEAKER_00: So they pull out of this Georgia warehouse, but there's only three stores.
• 21:46
  SPEAKER_00: Well, for me to ship from Vancouver, BC to Georgia a bunch of product, I've got to ship a couple pallets worth of product.
• 21:54
  SPEAKER_00: But three stores are not gonna go through pallets worth of product.
• 21:58
  SPEAKER_00: So I've got to get other listings there.
• 22:00
  SPEAKER_00: Or else the warehouse in Georgia wants to order like 20 cases, but I can't affordably send them 20 cases.
• 22:08
  SPEAKER_00: So my point being that you gotta be kind of intentional about it.
• 22:12
  SPEAKER_00: So we actually left the US and it didn't go back until about five years ago, where we had a product that was kicking ass in the Canadian market.
• 22:20
  SPEAKER_00: We had we did it with we started in regions.
• 22:23
  SPEAKER_00: So we started in California and Pacific Northwest and built out all of the chain in that area so that we were sending five uh five skids at a time or a truckload at a time so that it then could be profitable.
• 22:36
  SPEAKER_00: Because you know, you make assumptions in your margins, but usually you're assuming, okay, well, this is five five pallet minimum to get to get it so that it's 200 bucks a pallet in trucking cost to get there.
• 22:48
  SPEAKER_00: But if they only order one pallet, well, that's out the window.
• 22:52
  SPEAKER_00: Yeah so there's these funny little extra things that you don't think about.
• 22:56
  SPEAKER_00: And um so anyway, maybe I'm getting a bit too detailed there, but I think it's something to consider that you focus in regions so that you can make that region profitable.
• 23:08
  SPEAKER_00: And you can have a nice story, right?
• 23:10
  SPEAKER_00: If you sell really well, then you can go to spins and get the data for that region and show that you're kicking butt in that region.
• 23:16
  SPEAKER_00: You know, you won't show up on the national data because it's only one region, but in that one region, you can show, hey, we're the top selling, we're only in one region, and in that region, we're the top selling alternative snack or we're the top selling uh protein pasta or whatever your category is.
• 23:32
  SPEAKER_01: That's pretty amazing.
• 23:33
  SPEAKER_01: And of course, the data, the the deep the devils in the details, right?
• 23:37
  SPEAKER_01: As they say.
• 23:38
  SPEAKER_01: Um, Ian, this was super informative.
• 23:40
  SPEAKER_01: I mean, I learned so much.
• 23:42
  SPEAKER_01: I've been digital only, so like hearing this, I'm like, man, there is so much that goes into retail.
• 23:47
  SPEAKER_01: I guess you take for granted as you walk through the supermarket how like the journey the product took from manufacturing to to shelves the tables, which is crazy.
• 23:57
  SPEAKER_01: Just to kind of wrap this up, do you have any last piece of advice for some of our digital brands that are are just getting into this and anything you want to leave us with?
• 24:06
  SPEAKER_00: I mean, I think um just always be curious.
• 24:11
  SPEAKER_00: Like I've been 30 years at this, and I'll see somebody doing something great, and I want to pick their brain.
• 24:16
  SPEAKER_00: Like, as soon as you start thinking that you got everything figured out, you're in trouble in probably any industry, but definitely in our industry.
• 24:23
  SPEAKER_00: So, you know, if you want to like always reach out to people that you admire or that you think is doing really well and pick their brain.
• 24:31
  SPEAKER_00: Like people are super friendly, especially in the food industry.
• 24:34
  SPEAKER_00: Like, I the number of times I've reached out to people and I'm like, oh my god, I can't believe you're talking to me.
• 24:40
  SPEAKER_00: And and um, but they're glad to because we all want to help each other, and I'm the same now.
• 24:45
  SPEAKER_00: Like I I talk, spend lots of time talking to people because I'm just cheering for everyone, and um, so it's very supportive that way.
• 24:53
  SPEAKER_00: So I say leverage that so you can learn um and don't ever think that you don't have anything more to figure out because that's when you get in trouble.
• 25:01
  SPEAKER_01: Well, Ian, you're so generous.
• 25:03
  SPEAKER_01: Uh, we met at the show, and I'm so grateful that you came on to educate our audience and me selfishly.
• 25:08
  SPEAKER_01: I learned a lot.
• 25:09
  SPEAKER_01: So, Ian, thank you for watching.
• 25:12
  SPEAKER_00: Uh uh startup, you know, beginning brands, because I think the more they can learn, the better.
• 25:17
  SPEAKER_00: So thank you for doing what you do.
• 25:19
  SPEAKER_01: That was Ian Walker.
• 25:21
  SPEAKER_01: A few things that stand out from our conversation.
• 25:24
  SPEAKER_01: Retail is a long game, it takes time, clap capital, and a clear understanding of what margins before you even step on a shelf.
• 25:32
  SPEAKER_01: And trying to be everywhere too early is one of the fastest ways to stall out.
• 25:37
  SPEAKER_01: The brands that win are intentional.
• 25:39
  SPEAKER_01: They build traction in the right stores, in the right regions, and they and they use that leverage to expand.
• 25:46
  SPEAKER_01: If you take one thing from this, is that retail is not a land grab, it's a sequencing game.
• 25:52
  SPEAKER_01: If you enjoyed this episode, make sure to like, follow, and subscribe wherever you're tuning in.
• 25:57
  SPEAKER_01: And as always, I'm Mr.
• 25:59
  SPEAKER_01: Will.
• 25:59
  SPEAKER_01: This is Selling On Giants.
• 26:01
  SPEAKER_01: Catch you next time.