Hey, folks, it's Ray with Taste Radio. Right now I'm honored to be sitting down with Gardar Stefansson, who is the founder and CEO of Good Good. Gardar, it's great to see you. It's good to be here, Ray, and thank you for pronouncing my name so well. You got it. I appreciate you complimenting my pronunciation.
I don't know if it's the correct pronunciation as it was intended to be because you are from Iceland, and the American version of your name sounds a little different. What is the correct way to pronounce your name if you were in Iceland? Yeah, the correct way is Gardar Stefansson. Okay. But I think your pronunciation was the best one I've heard for a really long time praise to you.
Thank you very much. I'm really excited to speak with you because I think Good Good is a brand that, as I mentioned to you, seems to be in the right place at the right time for the US consumer, and you've been in business for 10 years. The brand launched in 2016 in Iceland and has gradually made its way to the United States.
Just for context, tell us a bit about the origins of Good Good, why you got into this business. I've been a food entrepreneur my entire professional life, so immediately after I graduated university I started a business that I've exited, like, all in CBD. Basically, when we started, my two fellow co-founders had this idea of a sweetener, like creating stevia drops, and that basically is our humble beginnings.
We had a really small production plant that we acquired making stevia drops. And that was in 2016, and we had high hopes because stevia was just allowed as an ingredient in Europe. If you're not familiar with stevia, it's the natural sweetener that has zero calories and it's from the stevia plant from South America.
And we were like, "Okay, this is a game changer. You have a sweetener that is low glycemic, doesn't raise your blood sugar level, and 100% natural." The idea was just to produce and, conquer Europe. That was our whole idea. That didn't go as planned. We produced too much, and we were not able to sell it, so we had to do something.
So we had a huge inventory problem because we had too much stock we couldn't sell, and of course a big financial problem because all of our cash was bound in that stock that we needed to sell. Then I got this idea about creating a jam because every fall I go to the mountains, I pick blueberries in Iceland, and I make jam.
And I was just so appalled every time how much sugar went into a one jar of jam. It's about 60% of the jar is sugar. And that is the case for most spreads and jams out there still today. And we wanted to use sweetener, so that is how we got into what we do today, which is no added sugar spreads.
We used our sweeteners, and we created the first prototype in my kitchen. It smelled great but tasted like, I don't know, the most horrible taste on the planet. And then, we did it again and again, and at one of the trials we had the recipe that we are serving today in about 10,000 stores in the US and 30 countries worldwide.
So that's just a quick snapshot on who we are and where we come from. Where'd the name Good Good come from? I wish I had an epiphany and I was on a mountain hill somewhere, crossing the glacier in Iceland. But it was our ad agency in Iceland that came up with the name. And I think it's pretty good, even though it's quite generalized, because basically what it means is that we're a brand that is both good for you and tastes good.
So it's just a simple meaning. It says what it is. We were lucky enough, being the first in the spread and basically in the CPG world, to have that name, so we registered it, then trademarked it. And yeah, that's how we started. You described it as pretty good. I might describe it as pretty Good Good.
That's my dad joke of the day. Yeah. I hope you like it. This is not a fake laughter, by the way. It was a chuckle. It was, it was- yeah. Which is okay. As long as I didn't get a snort. A snort means it's not that funny. A chuckle's good. A chuckle's good. Yeah. So on the logo of every jar of Good Good, you see the brand name front and center, but right above the brand name is the term no added sugar, which is music to the ears of so many consumers.
When did you start to realize that there would be this shift of consumers who were revolting against sugar and looking at sugar as one of the ingredients that they would have to avoid, or at least reduce the consumption of to lead a more healthy life? We recognized that opportunity immediately when it started, and that's why we wanted to create the stevia.
As soon as people started to figure out that diet is huge part of how you live your life and how, if you need any medical help or anything, you can control a lot of it by just focusing on what you eat. And somehow sugar, like in the past, was not a relevant topic. It was always something about fats, in your food or any other ingredients.
But in the rise of the maybe the 2000s, it started really to hit off, so people started to figure out, okay, this product here, the main ingredient is sugar, that's not good for me if I eat too much of it. And with the rise of diabetes, people are much more aware. I think there are very few families out there that don't have anyone close to them that is not with, either diabetes type 2 or pre-diabetes.
As a society, it's just a huge problem for us how much sugar we consume. From the get-go, we knew that was a opportunity and a need, and that's why we have that as our priority message on the brand. It's the first thing that we want the customer to know because we are truly no added sugar. When your retail strategy incorporates so many different channels, how do you source data?
How do you make decisions about merchandising, pricing, communication in-store when you have so many different retailers and they are trying to talk to consumers or customers in each different one? Because, yes, Whole Foods shoppers sometimes shop at Walmart, and you might have an Erewhon shopper who, if they visit Florida, they'll be in Publix, but it's not necessarily every shopper visits every retail store that you're in.
So how do you navigate the breadth of your retail strategy when you are playing in so many different spaces? Yeah, and that's a amazing question. And one thing that America has, it has a big advantage compared to Europe is data. The accessibility to data here is just amazing. It has a price ticket to it, but-- a price tag, but it's like it is something that is not widely available in Europe. It's like you have really limited chances of knowing your customer in Europe. You have to do a lot of marketing research and in-field work. But here you can buy syndicated data that helps you make the right decision, see how things move on stock.
That in line with just going to the store and taking photographs and gathering information on where you're placed is a key thing. And I just want to utilize for all new CBD brand, if you get on the shelf with a retailer, that spot is your most important real estate to get your message across. You need to stand out, and I think most CBD brand know that, that packaging design is key.
That being said, a lot of things have changed in the past four years. So we utilize, of course, merchandising in-store programs that are offered by the stores, like the chains. At the same time, you just have to partake in the promotional windows. You have to promote at least 12 to 20 weeks a year with some good deals just to get those spikes and new customers that only wanna buy things on promotions, then hope and pray that they will buy you again, which is happening in our case, just gonna say that.
Which is a different model in Europe. Europe is just fixed price, basically, and you're in the same price almost every year, like all the year. It's really few promotional windows there. At the same token is what has changed today is you got everything on your phone now, so a lot of people are purchasing via the app, and suddenly there are much more programs to partake if you wanna do that through the retail chains.
So there are multiple ways to go about, and the key is just to choose and pick the ones that give you highest return on investment. We have done millions of mistakes. We also been lucky, and we also been strategic and made the right decision sometimes. It's super hard to navigate, but you know if you have a good product and your repeated purchases and the data is looking good, then you know that you're doing something right.
And one thing we know, because we are doing Costco roadshows, we're sampling, we are selling on Amazon where people buy it for double the price as they buy it in ACB or Whole Foods or whatnot, is that we know the product tastes good. We know that the customer is not gonna be disappointed with it. We know that we're selling good stuff, and I think that's the key, is that as soon as we have the customer that tries it, we bet that he's gonna buy it again.
So there are multiple ways. Also, social media, it's an old and new story. Super important to build the brand. What I do sometimes is I run a full marathon in a strawberry jar suit for brand awareness and and other stuff. But it's like there are multiple ways of trying to get people's attention, and that's the name of the game.
It's about being out there and do whatever it takes to get people to try it, and it's a never-ending story and can never quit It can be really expensive to decide whether to accept a retailer's offer to be in their stores, whether it's 100 stores, 1,000 stores, or more. You have things like slotting fees.
You have, as you mentioned, promotions that you have to abide by or promotional windows that you have to abide by. Has there been an instance where you said yes to a retailer and it was the wrong decision? You alluded to a number of mistakes, and I assume there are some that happened with retail as well.
Yeah, absolutely. We had one of the biggest retailer in the US ask us to expand our products from 300 stores to 3,000, and it was great, but at the same time, the brand was not mature enough to get that really great distribution because no one had heard about us, and we hadn't figured out and set the right priority messaging on the labels.
The word of mouth was not there to support the brand and the social media and all that stuff. So yes, we have done that. We've done promotional mistakes, going too heavy into promotional stuff. That cost us a lot because we go to most stores, we go to a distributor and a retailer, and they all take their cut down the line, so it's like it's killing the margins.
So it's about finding the rhythm. But I have not met any founder or an operator that has done this correctly in the beginning. It's just a learning curve that every brand has to go through to figure out exactly how they can navigate and what's the right temperature and sets for their promotions and stuff.
The key thing with everything is margins, and that's something that you need to think of every day, every second, to maintain certain margin that fits your category, fits your velocities, fits your sales and where you are in the business. And super important to think about that in the beginning because as soon as you start to sell, then it's really hard to raise the prices.
You have a little bit of window, but retailers don't like it at all. That's something you need to think about immediately in the beginning and have healthy margins that support promotion, support marketing, and support building the brand awareness. Maintaining great margins can be even harder when you have more competition coming to the market.
If you're a unique brand, if you're a one-of-a-kind brand, you might be able to name your own price and maintain the margins that you see as necessary to succeeding. But there are more no sugar products coming to market. There always have been, but there are more coming to market, whether they're coming from entrepreneurs or from legacy brands and corporate brands out there.
So you might be getting squeezed on both ends and have to stand your ground as much as possible. So do you feel like the competitive Set. Do you feel like the competition that you're seeing come to market, which again is happening seemingly every week, is making it a little bit more difficult for you to maintain your margins?
Or on the other hand, could it be something where, as they say in our industry, a rising tide lifts all boats, and that you're all educating the consumer and you're able to maintain a price point that's in line with your ingredients and their expectations for a product like yours? Yeah, that's a great question.
I think it just depends on which category you're in. This is a really valid question for beverages and bars. I think they are under more price pressure than spreads. We are still under price pressure, but it's a little bit of wider range, to be honest. For example, you can buy a peanut butter for a dollar, and then you can buy it for $15, and it's just who are your customers, and are they willing to pay that price? I think that's the bigger question. We're growing really fast, and we're seeing our velocities increase every four weeks, because that's when we get the SPINS data we get. So we're doing something right, and we are not the cheapest, we're not the most expensive either.
It's just a fine balance. I don't have the right answer for that. But if you have a product and you can charge a premium price for it, and the customer will buy it and continue to buy it, then you're doing something right And that's why I am a big proponent of if you're a new founder in the CPG space, try it online because you have to charge premium there anyway because the cost of fulfilling a heavy item are so insane that if it works for you there and you have repeated purchases and you're growing your email list and you're doing well on Amazon and collecting reviews, then you have a proof of concept that this might work because you're already collecting premium price online.
CPG is super hard. We're bean counters. Every cent matters. All of us are, like, calculating the promotional spend and the deductions. It's a really hard environment to navigate, and that's why maintaining the margins and making the product work with the margins you need is a key aspect for us, and that needs to be thought of in the very beginning before you launch anything.
If you have a premium product and you cannot collect the premium price, maybe you don't have a premium product. Or at least, then you don't have the market for it, at least. Just for context, what's your everyday price in retail? 'Cause online, I'm on your website right now, and your strawberry jam, as you pointed out, is gonna be a higher price, or at least I think the expectation is that it's gonna be a higher price in retail.
On your website it's $12.99. In retail it's...? So in conventional, like the big mass, it's $5.99, and in the natural retail it's about $6.99 to $7.99, on the, a strawberry jam, for example. The chalk spread is a little bit more expensive, and then the peanut butter is the same price, basically, as the chalk spread.
So it's about $6.99 to $8.99. So that's the range. I think everything that's somewhere below $10 is a good way for a spread to be priced at. Yeah, I think it's fair. I was ready to pay $12.99 for the strawberry jam 'cause I'm looking at it and you can actually see the ingredients in the jar, and it actually looks like real strawberry jam versus something that's an over-processed mess, which frankly, when it comes to spreads, that can be exactly what it is.
Plus, as you point out, the no added sugar screams at you. It's one gram of total sugar per serving, five calories per serving, 88% fewer calories than other strawberry jams out there. So- If you're a health-conscious consumer and you see Good Good for the first time, it might be something where that price point of $12.99 isn't necessarily something that you would balk at given the nutritional profile.
And I also think it gives that customer permission to, and interest in, your other products, which are aligned with your jams. You started out in jams, right? Yeah, we started as a sweetener brand, but jam was the first product when we didn't materialize the sales with the stevia drops. But yeah, jams are the first product.
Then we went... The choc spread and the peanut butters are the newest addition. It makes sense, right? If you're gonna sell jams, you might as well sell a cocoa spread or a hazelnut spread, and also peanut butter as well. But the timing of those launches and making sure that the products deliver on the taste and value as much as or more than your jams is really important.
How much time do you spend on new product development, and how do you determine timing when you are introducing it to the market? That's a great question. For example, the jams, we have developed about 20 flavors, but the name of the game is that the Pareto principles still apply, the 20/80% rule.
With all the jams sold basically in America, 40 to 50% are strawberry jam. You have to be aware that when you're developing a flavor, is there a market for it? And it needs to taste good. It took us three, four months to do the original recipe right and balance the sweeteners, balance the fruits.
We have a natural preservative called rowan berry extract, and to use that in line with, to make everything taste good and safe for consumption and all that stuff. So it took us about three to six months. But as soon as we have the functional formula, then it takes us a bit shorter time to bring a product to the market.
So we are, for example, doing a spicy jam, and then we just shuffle the fruits we're gonna use, so the berries and the chilies. And, we have the functional formula, we know how it works, we know how to react, so it takes us about maybe three months to do that. When we pivot into a new category like peanut butter, that took us a year.
We had to select the right peanuts that are low in natural sugars. We use fibers with the peanuts, so we use prebiotic fibers and, we had to pick the right one, that it balances right, but it also needs to be the right fiber that is suited for production, so it works with that. But I would say three to six months when we have figured out the functional formula, but we spend a lot of time on it.
Is it easier to get buy-in from retail buyers when you already have a product like your jams on the market and in their stores, or is the new product evaluated in a completely separate way? That's a amazing question, Ray. It depends on the buyer, honestly. But it also depends on how are you performing in the store.
If your sales are not there, then they're not gonna take another item in. That being said, it depends on if the buyer is ready for innovation. And you have those "Hey, this is something new. I wanna attract new buyers," and you show the data that hey, you... We attract buyers that actually spend more per visit than other brands and, you bring that to the table.
But some buyers are also just wanna have the traditional set there, what they have had there for 50 years, and do really little changes in that regard. So it's a basically, like a profile on the buyers. You know who they are and also the store. What experience do you want when your customers come through the door?
How do you wanna curate the set? And it depends on this retailer and depends on the buyer. And we have had great success with buyers that pick an innovation with us and put it on the shelf, and we have the data. And also we try everything online, so we know basically that we love it ourselves, but that's not enough guarantee.
These are good prices. Here are the price you get. It helps when you have social proofing, when you have a track record, proof of concept online yes, people actually bought that at the double the price that you're gonna sell it at your store, and they're raving about it. I think it's hard to get new innovation when you have low sales and you're, like, just getting started.
Then you're just lucky to get a couple of SKUs in. At the same token, when you have established yourself, you need to constantly prove that you can bring sales and customers in line at the par level as the brand they're either replacing you with because they have limited shelf space, or on par with the legacy brands that have 100 years ahead of you.
Retailers are changing fast. Just look at Walmart. It's not the same store as it was 10 years ago. They're really going after natural brands And that in their step. That wasn't the case, the key here is retailers and are adapting because the consumer, and we know this, the consumer wants something different.
They want to eat something healthier, different, and, that's why I think you're seeing a big shift with the traditional brands, legacy brands, and which direction we're going, which I think is a great thing. We need to eat healthier as consumers, so that's my two cents with a long answer.
It was a great answer, and I think no matter whether you're in Walmart or Whole Foods or Publix or Kroger, the retail buyer wants to see your product move, and that is the name of the game. Because if your product isn't moving, they're gonna take it off their shelves pretty quickly with another brand whose products will sell more.
And retailers wanna know that you are going to support the brand with marketing, with pricing initiatives, et cetera. What's been the most effective form of marketing? You talked about social. I'm on your Instagram page right now, where you've got 66,000 plus followers, and your content looks great. Has social been the most cost-effective way of getting the word out there, or is there another form of marketing that's been really effective for you?
It's the hardest thing to measure. Even brands that have 1,000 likes on their posts, it doesn't necessarily mean that they're selling a lot. The best effective way, in my opinion, that has proven based on velocity numbers is the labels, the packaging. That's the key thing you need to figure out immediately.
We did not figure it out immediately, by the way. Then the brand awareness. It's a holistic approach. It's so many small things you need to do at the right time, and all at the same time. I used to live in Iceland, of course. I just moved to Austin. As you can hear from my Texan accent, I have been living here one and a half year, and Texas is the state we're selling the most and growing the fastest, and I have the highest household pen.
So I am really focused on building up our presence here and participating in events. One other thing is trials. You need to get people to try the product. So demoing, going to events, making that happen, because that's golden. When people have tried a product, they're more likely to buy it So we've been doing that a lot for the past year.
And we sponsored the Austin Marathon, for example. We were like, a jelly brand sponsoring a marathon sounds so weird, but it worked really well, and 20,000 people got a jar with them. And I, of course, ran a full marathon in a strawberry jar suit to promote it as well. Packaging, labels, the right message, make sure your product tastes good and you get repeated purchases.
That's a non-negotiable, in my opinion. And then the third thing is trials. How can you get people to try the product any way you can? And Costco roadshows, for example, are amazing way to get things going, both trials and sales. I think we've come full circle, Gardar. Thank you so much. This has been a fantastic conversation.
I really appreciate the time. I think Good Good is a tremendous brand and doing some amazing things for the industry and for consumers who wanna live and eat healthier, which clearly is a lot of people. And so I think there's a real great future for the brand. So once again, really appreciate the time, and thanks so much for joining us on Taste Radio.
Likewise, Ray. Thank you so much.
