[00:00:10] Ray Latif: Hello, and thanks for tuning into the number one podcast for the food and beverage industry, Taste Radio. I'm Ray Latif, and you're listening to episode 170, which features an interview with Stew Leonard Jr., the president and CEO of Stew Leonard's, a beloved chain of specialty grocery stores known for its experiential approach to shopping and commitment to customer service. Tune in on Friday, July 12th for episode 42 of our Taste Radio Insider Podcast, when we're joined by Rick Field, the founder and CEO of pioneering pickle brand Rick's Picks. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues, and of course we'd love it if you could review us on the Apple Podcasts app or your listening platform of choice. It's embarrassing, but I'll admit it, I've never been inside of a Stew Leonard's grocery store. It's strange on a number of levels. One, Stew Leonard's, which has time and again been named one of America's best grocery chains, is a must-visit for someone working in the food and beverage industry. Two, I live a relatively short drive from a Stew Leonard store. And three, I knew I'd be interviewing the company's president and CEO, Stew Leonard Jr., for this episode. Although I hadn't experienced a Stew Leonard's in person, I felt comfortable with my research on the company and felt prepared for my interview. Yet, as Stu noted in our conversation, research can only take you so far. At the helm of the chain for nearly 30 years, he indicated that the secret to the company's success, in the form of a half billion dollars in annual sales, is its emphasis on meeting and engaging with its customers in the aisles of its stores. Stu spoke at length about the company's focus on customer interaction and what it has and continues to teach Stew Leonard about delivering a unique and high-quality experience. He also discussed the evolution of the chain's food offerings and how it selects brands for its stores, how the company attempts to stay current with food trends, his perspective on leadership, and how Stew Leonard is planning for the future. Hey folks, it's Ray with Taste Radio. I'm at the 2019 Summer Fancy Food Show, and sitting with me right now is Stew Leonard Jr., the CEO of Stew Leonard's. Stu, thanks so much for being with me. Yeah, I'm happy to be here. Fantastic. How long have you been coming to the show?
[00:02:20] Rick Field: Gosh, years and years. You know, I've been in the business now 50 years. 50 years? Yeah. You look great. Just starting out as a kid, you know, when my dad opened up the original dairy store. So I pretty much my whole life just worked in, you know, the retail floor. Wow.
[00:02:36] Ray Latif: You and I both have been coming here since I was a kid, too, actually. You've been what? I've been coming here since I was a kid, too, actually. Down at the Fancy Food Show? Yeah. Yeah.
[00:02:43] Rick Field: I don't even know how long it started ago.
[00:02:44] Ray Latif: Do you know? Oh, that's actually a really good question. You know, I talked to the president of the Special Evaluation Association, Phil Krafarakis. I hope I'm pronouncing his name correctly. Sounds Greek. Is he Greek? I believe he is Greek, yes. And I think he mentioned it was about 40 years ago that the show started.
[00:03:01] Rick Field: Well, you know what's nice about this show, since Stew Leonard's is sort of based in the New York metro area, a lot of our people can come to this. So I think of all the shows we go to every year, and we love to go to shows, we sort of look at it, we're item hunting for our customers. That's what we're doing. And so the nice thing about this show is it's very easy for people just to come to it. So we might have... 30 people from Stew Leonard's. Wow. That come down and walk the floors at the show. Buyers, all buyers or? No, no, they're not so much buyers, just some managers too. Wow. And they come down and look. You know what's really neat about a show like this is that you get to see the displays. They always make their products look fantastic. And you look and say, boy, I wonder if I could do that in the store. Their lighting is always spectacular. all their awards are listed. The signage is, you know, they're always telling you this is an award-winning cheese, an award-winning chocolate or whatever.
[00:04:00] Ray Latif: Well, that's good advice to listen to entrepreneurs out there who don't have necessarily a nice-looking booth. You know, it's like you got to make your booth look really nice because the retailers might merchandise your products similar to what they saw at these shows.
[00:04:12] Rick Field: Well, I think from the entrepreneurs, we just started this thing called Stew'Stew Tank out in our East Meadow, Long Island store. Stu'Stew Tank, like Shark Tank. Yeah, like Shark Tank. And what the idea of it was, we brought our suppliers into demo in the store. And what we found, customers were thrilled with all these demos going on. We had 20 different demos going on around this. It was like a Food Show in the store. So we said, let's try something. Let's advertise for new entrepreneurial companies that would like to launch their product at Stew Leonard's. We'll give you a shot during the month, and you come in and demo it. And we're going to pick the best ones, and then we're going to put them in all six stores. In our seventh store, we're opening a new one in Paramus this fall. We'll put it in there too. So somebody who has a new product is just able to bring it into Stew Leonard's and if it sells well, and if the customers love it, we'll roll it out for them. It could be just be like a home run for their company.
[00:05:16] Ray Latif: I can imagine. And for context, you mentioned you have six stores and a seventh on the way. relatively small retail chain, but a very well-known and well-respected retail chain. A number of different publications have called Stew Leonard's the best grocery store in America. Tell us why the brand and the company is so special, why it's so revered.
[00:05:36] Rick Field: Well, I think what's interesting is that we started as a dairy, okay? I mean, really small. My father delivered milk, so this is really Now you're a half billion dollar company. Yeah, it's grown up a little bit after that. But the whole thing I always think about is you want it fresh. And that's one thing my grandfather with the dairy, he'd go get the milk fresh in the morning, bring it in and bottle it and sell it to our customers. And milk is so perishable. So we sort of grew up in this fresh food environment. And what we've done is just expanded into bakery, fish, meat, produce, prepared meals, which are really popular today. So we're able to take that fresh concept and really spread it around the store. And the difference between Stew Leonard's and most stores is that the middle of the store, where you go into a normal traditional supermarket and they have all those packaged products, we don't hardly have any of them. So a normal supermarket might have 50,000 items in there and we'll only have 2,500. Wow. Yeah. And you only started out with about eight items, right? That's right. Wow. Eggs, ice cream, bread, you know, just a basic dairy items.
[00:06:49] Ray Latif: That's amazing. And so, you know, when you're considering adding new products at this point, Do they all have to be perishable, or do you still have, do you have any dry items on the show?
[00:06:58] Rick Field: No, they don't have to be perishable. We're just looking for, you know, it's sort of like the 80-20 rule. You know, 80% of your sales come from 20% of your products. It's Pareto principle is what they say, and it's amazing how true that is. And what happens is a lot of times we don't focus on those top 20% that we have. So when we come to a show like this, or when we're looking for new items, What we're looking for is something we feel we could put in that will be one of those hot new items. We just tried this year, cauliflower is really hot right now. Everybody, cauliflower, cauliflower, right? Everything. Well, they came out with the cauliflower pizza crust. And we put some marinara sauce and some of our fresh mozzarella on that, put that out in the store. And I want to tell you, It has just taken off to become one of our best selling pizzas. This has surpassed pepperoni and cheese.
[00:07:54] Ray Latif: Just traditional pepperoni and cheese pizza.
[00:07:56] Rick Field: Yeah. People are loving this cauliflower.
[00:07:59] Ray Latif: I can imagine. I mean, it's certainly one of the hottest ingredients right now is cauliflower flour. Yeah. And, you know, in your store, your customer base, I'm sure, is getting just as educated and just as interested and better for you. Right. Ingredients, better for you, items. But talk to me a little bit about, you know, the average Dooliners customer.
[00:08:19] Rick Field: Well, you know, just back to your point that you just mentioned there, you know, sometimes when you're bringing new items in, sometimes if you're too early, it's the same as being wrong. So like today, we're seeing a lot of vegan, you see a lot of gluten-free, you see a lot of plant-based products. You're seeing a lot of trends that are emerging in the food business. Like Martha Stewart, I was talking to her the other day. She was just at the Aspen Food and Wine Festival. And I said, well, what was cool out there? What did you notice? What trends were going on? She said, well, meatless products. You know, when you start seeing little trends like that. You're talking about plant-based foods. Plant-based. Yeah. And the tendency to get away from meat. Right. You know, we got an eggplant meatball in the store right now. An eggplant meatball? Eggplant meatball. We just, that's part of the Stew Tank.
[00:09:11] Stew Leonard: Okay.
[00:09:12] Rick Field: It's one of the new companies that came in and it's like rocking it. The new entrepreneur that just started this even came in and asked us what kind of package they should put it in. Do I need a UPC code on it or not? So we helped them sort of even design their package a little bit. But the main thing is when customers put it in their mouth, That's the key. I always say to everybody, you know, we sell a lot of food at Stew Leonard's, but it comes down to what does everybody say after they eat it? In terms of taste? Yeah, do they go, yum, was that good? Right. And if they don't say that,
[00:09:47] Ray Latif: You're just average. For that average customer that comes into the store, I mean, are they relatively affluent? Is it just sort of from every walk of life? You know, who is who are the folks that shop at your stores?
[00:09:58] Rick Field: Well, we're not an upscale, expensive store. You know, we're we pretty much want to hit the mainstream. But we do sell a higher quality than the normal competitors, we feel. We get the bigger size melons. We do a lot with fresh fish rather than frozen fish. The first thing we look for is to find a great product, and not worry about price, not worry about anything at that point. Just let's make something great. And then after that, let's figure out how to work the price out. Sometimes you get to a where it's just too expensive. You're using a chocolate that's maybe too expensive or a cheese maybe in there that's too expensive. You might have to make some adjustments to it to try to get the price down so you can sell thousands of them. and make a lot of people happy. And that's what we're trying to do at Stew's all the time. You know, we're working on a queso sauce right now, trying to find the best queso sauce. We got a new executive chef in, and he's been trying all these queso sauces. And I said, well, first of all, there's somebody out there that has a knockout, lights out queso sauce. It might be some little mom and pop Mexican restaurant, maybe in the New York area. You might read one of these magazines, Best Of, you know, and they might have best Mexican queso. Go find that queso sauce. As we find when we're looking for new items, find a line of people waiting to get in somewhere to buy a product. You see that, what's the bakery, always has a line down in New York City. What is it? Dominique Ansel. Dominique Ansel? Well, that's where we got the cronut. Okay, there were lines of people around the block for that. But what's the bakery around the corner? Magnolia bake, okay cupcakes. He's got a line there. Yeah, so find a line You know somebody's got a you know a meatball shop say that down in Brooklyn and everything. You know there's lines. Yeah find a line, go buy the product, and then we bring it back to what we call Stew Leonard's R&D department. And you know what R&D stands for at Stew Leonard's? Well? Retrieve and duplicate. Okay. That's what we do. Okay? Maybe we're not smart enough to come up with that amazing, you know, item, but we'll find something everybody's waiting in line for, bring that back, and let's try to recreate it at Stew Leonard's.
[00:12:32] Ray Latif: You mentioned something earlier about wanting to make your customers happy and certainly providing them with a high quality. item like a Cronut at an affordable price?
[00:12:42] Rick Field: Well, I don't know if I'd go high quality. Okay. It's a fried donut, a fried croissant.
[00:12:49] Ray Latif: We'll call it a relatively high quality product at an affordable price point. And, you know, keeping the customer happy seems to be the cornerstone of what you do. There's a stone in the front of your stores. Rule one. Two rules, right? Rule one, the customer is always right. Rule two, if the customer is ever wrong, we read rule one. Why have you taken that approach?
[00:13:13] Rick Field: Well, I think the customer service philosophy at the store just started with, we never started with customers like customers. They weren't consumers. They weren't like some abstract thing. They were friends and neighbors and people that we grew up with in town. So we were just trying to please our friends really. We look at the customers and we try to get all our team members at Stu's. to look at the customers more like a friend. You know, you don't want to just treat them as a transaction. And a lot of times what we don't do is look at the long-term value of a customer. And we figure maybe a customer may spend $5,000 to $10,000 a year at Stew Leonard's. You know, if you add that up over 5 or 10 years, like you're going to invest in a piece of equipment, that's $50,000, $100,000 right there. So we look at the customer coming in that, you know, let's really try to make them happy. And the main thing at the store that we want to do is get them to come back. We make tons of mistakes at Stew Leonard's. I mean, I don't know of any retailer out there that isn't going to have, at some point, some moldy blueberries with mildew on them, right? Because it's just the nice soft fruit like that. I mean, it just happens. And you can't control. We're buying. you know, farm products like that. So we don't do everything right. So we just try to make that customer happy when they walk out the door. And I think anybody that has a business today, that's the message you want to send to all your people. And every time one of our people gets up to speak at Stew Leonard's, a manager, an executive, they got to put a customer service story in there. about something that happened to them in the store, that they did something nice for a customer. To keep perpetuating that, you know, all the time, it's two letters.
[00:15:12] Ray Latif: We'll be right back after a quick word from our sponsor.
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[00:15:31] Ray Latif: So the measure of your employee success is how well they treat their customers?
[00:15:35] Rick Field: Well, that's one of them, obviously. You know, I mean, we have an acronym at Stew Leonard's, which we call S-T-E-W for Stu, right? Now, the S is satisfy the customer. That's really important for everybody. The T is a teamwork because you can't have a happy customer unless you have happy people working there. They just don't go the same. You can't treat your people wrong and then have them treat the customer right. Can't do that. So we want to measure really our morale at Stew Leonard's and how engaged we can make our team members and how much they enjoy their job. That's why for 10 years we were one of Fortune Magazine's top 100 companies to work for. And we want to create a culture and environment where people can come in, get promoted from within, be treated right. And it's not easy. We're seven days a week, from 7 in the morning to 11 at night. This isn't like Happy Friday or something. We're done for the weekend. That's when our business just starts. So we have to manage schedules. We have to manage people. We want to make people happy. So that's the T. Then the E is the excellence. where what we're trying to do is improve quality all the time. It's like back with the Japanese when they started the whole quality process. That swept through America. Today you have all different kinds, the 5S and all these other things. But the basic concept is really try to improve processes and quality all the time. And we just want to keep trying to make stews better. all the time and we expect our people, if they see something they don't like, change it. We have a sign in produce, if you wouldn't take it home for your mother, don't put it out for the customer. I like that a lot. Yeah, that's a really good way of putting it. And so we'll let them make that call. And then the W at the end of it is the wow. We want to wow that customer. So when they walk out of the store, they're sort of tingling a little bit, you know? And they're sort of walking out and going, you know, that was a lot of fun. I ate a lot of stuff when I went through. I saw all these costume characters walking around. I saw these animatronics going on. The person was really nice to me behind the fish counter. Gave my daughter a little, at the deli, gave them a little piece of bologna, you know, that they could taste it, whatever. just that when they walk out of there, they're happy.
[00:17:58] Ray Latif: Yeah, let's talk a little bit about the wow, because Stew Leonard's is known for creating an experience for retail shopping. You're not just going there to buy some grapes. You're going there to buy some grapes and enjoy yourself in so many ways. How did you come about that idea? How did you come about the idea of making Stew Leonard's not just a place to shop, but a place to go?
[00:18:18] Rick Field: I don't know if you can really say it's a formula or anything. I think it's more of an attitude. And it's almost like if you have people over to your house for dinner, you can either just say, we're going to stick normal food out. You know, we'll do some chicken and, you know, pizza or whatever like that. Or you can say, Hey, I want to bring it up a notch. You know, I got some cool wines, you know, that maybe these people may like, or you just feel you want your guests after they leave your house to go, wow, that was a really nice dinner that Ray, prepared for us that night. And so we feel the same way when customers walk out of our stores, we want them to feel like they walked out and just had a really nice experience there. And I know the internet, everybody's saying they're shopping, shopping, shopping over the internet, and I do it too. I mean, it's definitely sucking some of the retail sales out of the marketplace, but After people are all done sitting on the computer doing the internet, they want to go someplace and have fun. So we want to try to create that experience at Stew Leonard's, whether it's cutting a big chunk of cheese out in the aisle. Like right now, all this beautiful fruits coming in and the brick level, which is a sweetness of a lot of the fruits that we're getting, is probably at its highest right now as we're coming into the summer. The watermelon, oh my gosh, like eating candy. The pineapples are like, you know, everything just so good, you know. And so to get that out and be doing what we call in the store a show and sell where you as you're cutting watermelon, you're doing it in front of the customer. They see it's fresh and they just go, give me some of that. Do you want to bring that home? So trying to get like a little show around every corner within the store, try to get some excitement going and your people can do a lot of it. I mean, look at the Pikes Market out in Seattle. You know where they Throw the fish all around. I mean, they create an experience. I've never heard anybody say anything about the price there. They're all talking about the experience at the market. Yeah. That's our challenge today. It's all retailers. Every retailer listening to your podcast today is challenged with how do I create my retail store into an experience?
[00:20:43] Ray Latif: And the layout of your store plays a role into that too. It's almost like you're directing your shoppers around the store as opposed to them just figuring out what aisle to go into. You're pointing them in a certain direction. We have one aisle.
[00:20:55] Rick Field: You have one aisle.
[00:20:57] Ray Latif: One aisle. Well, sort of.
[00:20:59] Rick Field: There's one aisle. You go in, you go out. That's it. Don't go backwards. You're going to get run over.
[00:21:05] Ray Latif: You have one of the highest sales per square foot in the grocery industry.
[00:21:12] Rick Field: I was talking to Walt Salmon, who is a great friend. He's retired. He was the head retail professor up at Cornell. Yep. And they do an amazing retail program. But I went up to see him one time and was on a panel there. And he told an interesting story. He said he was with the CEO of one of the major chains, regional chains. And he went in and he was walking down one of the aisles. They had 44 different kinds of mustards. And he said, why do you have so many mustards? Oh, well, people love all these different types of mustards, you know, and we have every kind from all over. And then he was into, I think Lidl or Aldi, one of those stores. And he went over and looked at their mustard display and they had two of them. They had a brown, you know, and a yellow. And that was it. And he said, why do you have, he said, those are the top two sellers right there. So I asked our managers at the store, how many mustard should we have? And what you want to do is there's almost like a curve here where you can maximize your sales. Now, I would say my father would probably go with the yellow and the brown. That's how he built the business, okay? Well, today, now all of a sudden, you got an organic one. Hmm, should you put organic in? Now, all of a sudden, you have a local one. Okay, Hebrew Nationals, really big around New York. Do you carry Great Poupon? Do you have French's? Of course, you have to have it. So you want to bring maybe an organic, and you want to bring a local. into, then you start getting into, I mean, probably here at the show, you'll see the 44, maybe 100 of them. And so you have to really decide, is one with sriracha in it really going to sell or not? Honey mustard, is that going to sell? I believe it's to learn right now about six mustards and we're going to hold and we feel that will maximize sales.
[00:23:09] Ray Latif: So it's really just the best of the best varieties is really what you're trying to carry or at least the, the most shopped of the top six varieties of a mustard or any other particular category.
[00:23:20] Rick Field: Top ten. Our managers at the store, we're talking top ten. What are the top ten sellers? I go around the show here, the fancy Food Show, and the first thing I do to everybody, what's your top-selling cheese? We saw a chocolate guy. What's your top-selling chocolate? We just saw Ronnie and his wife, they started Rayo's, you know, marinara sauce. And he has a chip over there right now. He's got like five flavors. What's the best seller? Well, it's your traditional chip. We're not going to put all five flavors of chips in. We'll probably just put one, maybe one and maybe two.
[00:23:57] Ray Latif: How do you test out new brands, new products? Because, I mean, you mentioned Stew'Stew Tank. Let's say, you know, it was a hit for a week or so, and then all of a sudden you find out people don't really like that product. I mean, what's that testing period like for a new product or brand?
[00:24:09] Rick Field: Yeah, that's a good question. You know, some of it can be seasonal, too. You're just, it's a summer item or a holiday item, and it just doesn't sell the rest of the year. We're constantly testing that, but one of the things I say to our managers is, if you want to get in the Baseball Hall of Fame, all you need is three hits out of ten. Okay? So you're striking out seven times. And that's what we do at the store. We're going to try a lot of stuff, put it in. The time you give it varies sometimes, because sometimes you put it in, Maybe the company didn't demo it enough, so you want to give it a little extra chance if you come in and demo it a lot more. You might also find out that it might not be the right season. You know, the packaging might be different. They're going to redo the pack. There's a lot of things, but usually I'd say we could tell after a month.
[00:24:59] Ray Latif: Yeah. Earlier, you mentioned meatless products, plant-based foods. When you come to a show like this, a lot of people, you know, want to hear about the trends. What's trending in food? What's trending with specialty food? You know, how do you evaluate trends? How do you think about what's hot on the market and how it can be imparted into your selection?
[00:25:20] Rick Field: Yeah, you're trying to have your nose to the ground, sort of like a hound dog in a way, you know? And it's not just food, but it's fashion. Say, you know, I know people in the fashion business, and I'm not a big fashion guy, okay? But, you know, people that are really into it are so observant of what people are wearing. You know, they're going to different trendy spots, you know, trendy restaurants, just to see what the younger people are wearing today, what's sort of hot right now. We have to have our sort of nose to the ground for food all the time and saying, what are people eating? Now, it's interesting, you know, they say in wine business, people, they talk dry, but drink sweet. So, oh yeah, I like these dry white wines. Well, Ones with a little more residual sugar sell better. So, a lot of times when I go to somebody's house, I sneak in the kitchen and look in the refrigerator, okay? Because I don't care, sitting at the dinner table. It's part of your job. You got to figure out what people got in their cabinets. It says a lot about what people are really eating. Not what they're preparing for dinner, but what they're really eating. And it's interesting sometimes if you start seeing more organic in the refrigerator, you start seeing people eating maybe less carbs, you know, and you see that there's a lot more, look at In-N-Out burger, they have that burger on the lettuce, right? Right. With no carbs. So you start seeing trends like that happening and you just try to introduce products in the store that might feed into that trend a little bit. Yeah. And then you just sit there and wait and see what happens.
[00:27:06] Ray Latif: Test and learn is what we call it.
[00:27:08] Rick Field: You really have to. It's a big experiment as a store. And I feel our customers love it when they get to see all these new items come in, too.
[00:27:15] Ray Latif: Yeah.
[00:27:16] Rick Field: It's sort of fun. Like, wow, I never saw that. You know, that's pretty cool. And, you know, it creates what you said before about the experience. You know, new items really build on the experience, too.
[00:27:28] Ray Latif: Yeah. We'll be back in a flash after a quick word from our sponsor.
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[00:27:54] Ray Latif: Aside from going to people's refrigerators, one of the things you do is get into the aisles of your stores and talk to customers. What do you learn from them when you are talking to them in store?
[00:28:06] Rick Field: Well, you know what? First of all, I think every business that you're in starts with a passion. Okay, so this shouldn't be something you have to tell people to do, get in this, on the store floor. You either like to be on the store floor or you don't. You're talking about your employees. Well, I'm talking about every great retailer I've ever met. Sam Walton, good example. You know, we spent a day with him one time, just touring a few of his, Sam's Club and one of the Walmarts. And I want to tell you, he had fun going in the store. He enjoyed it. Did people know who he was? Yeah, because he got on the microphone and said, hi, I'm Sam Walton. That's one way to get people to know who you are. But, you know, he was, you know, really great. You look at even the Marriott's with the hotel business and hospitality. I was down at the CIA award dinner that they had for Culinary Institute of America and all the chefs that got up there. They're not faking it. I mean, they don't go into the kitchen just because they have to go in. They like to be in the kitchen. Right. Probably some of their biggest problem is, is they don't get out of the kitchen enough and work on some of the systems, you know, that they need within the company. I think being on the store floor is critical to the success of a company. And if people start trying to manage from an office, I think the company is going to run into problems. And you can learn a tremendous amount just by talking to those customers. A good example is Millennials. My wife and I have four daughters, okay? And they're all quote unquote Millennials. Sometimes we're sitting there in a meeting and everybody say, those Millennials, those Millennials. I said, hey, wait a minute. Do you mean our kids? You know, is that who we're talking about?
[00:29:54] Ray Latif: You've been doing this for a long time. You've been CEO since 1990? Yeah. Yeah. Do you have to be a good salesman to be a good leader in the retail business?
[00:30:03] Rick Field: Well, I think, you know what I find is, I think a good leader has to be a merchant of hope. That's the first time I've ever heard that, but I like it. You know, there's a lot of obstacles in your way all day for all of us in our lives. My wife and I and our families faced plenty of, you know, obstacles and downturns in our past. You know, we're going to be on CBS tomorrow morning talking about water safety, because my wife and I had a little son that drowned 30 years ago. So we've done tremendous work helping, you know, probably there's over 100,000 lessons we've given away now. Even at the show today, we gave one of the people, my wife gave them a book. They had a little one-year-old. So we've written some books and so forth. But I think a good CEO has to be optimistic, has to be a merchant of hope, like I said, has to be compassionate toward the people. Of course, you have a business and numbers you got to meet, but I think there's also you know, compassion. I was talking to my nephew yesterday, actually, and he works for a consulting firm in Boston. And he just found out his mom, which is my sister, just got cancer. And he went in and told his boss that at his consulting firm. They're right in the middle of a big project. And he said, you know what? I want you right now to go home, OK? Spend time with your mother. I don't want you to call in at all unless you want to talk to me. You don't have to call for updates or anything else like that. And he said, when you feel ready, come back to work. And you know what he said to me? He said, I'll do anything for that guy now. He said, that's just what I needed. Now, to me, tremendous leader. Yeah, it was busy. Yeah, it was a consulting firm. Yeah, they had a big project. But he showed some compassion toward the people that worked for him. And that's what I think businesses should do. I think that's what leaders should do. I think that's what builds a culture within a company. You know, you have to model it. You can't just write it in a handbook. You got to actually do it.
[00:32:21] Ray Latif: Yeah. You've talked about your family a number of times in our conversation and Zooliners is a family owned company. Do you intend to keep it that way? I mean, is it, is it critical for the next generation of leaders to be from your family?
[00:32:32] Rick Field: Well, you know, look, things are changing all the time. So obviously we'd like it to be a family business and continue on forever. That's really what the goal is. But, you know, younger people come into the company and have different views. We have millennials, you know. Hey, they may do, what's a coin now? Crypto, what's it? Cryptocurrency? Yeah, they may be doing it on cryptocurrency.
[00:33:02] Ray Latif: No more cash transactions on crypto?
[00:33:05] Rick Field: I mean, I don't know what is going on, but I think what the key is, is you hopefully try to mentor and build a good next, successors. Do any of your daughters work for the company at this point? I have our oldest daughter works on the wine side. Okay. She does the marketing for wine and she worked for Gallo and spent time out in California. She was dusting off bottles at like 4.30 in the morning at supermarkets and she's definitely you know sommelier and knows the wine business and she's with us and then I have a niece and a nephew also in the business. So there's three out of 13 of the next generation that are at Stuart Leonard's now. That's great.
[00:33:48] Ray Latif: And I have to think that, you know, sometimes when a family is running a company and has been for some time, there's a certain way of doing things. There's an expectation that the way you run a business is modeled after your personality. Is it hard to do that? I mean, is it hard to run a business, quote unquote, your way?
[00:34:07] Rick Field: Well, you know what I think is that sometimes your way is not the right way. You know, so it's a blend. Stew Leonard's isn't running the same way my father ran it. We've changed and adapted and You have to know just how much to change, so you don't want to do a 180 and totally flip everything over on its side, because there is a lot of good ideas from previous generations that you want to keep intact.
[00:34:36] Ray Latif: What's one thing that your dad instilled in the company that's still here and will always be part of the company?
[00:34:42] Rick Field: I think one thing is he's really big on being on the floor and talking to customers. It's so easy, look, as all of us start, I mean, just take people, look, I'm looking around this room right now, everybody's on their cell phone. It's easy to get distracted with all the technology because you want to get on your computer screen or your, you know, but... boy, get out in the store and walk around. And one of the things I gotta be careful of is I don't get all these little techie people coming into the store, right? With all this great algorithms and all that type of stuff that they can throw at you. Because it's about that customer out there that's filling that shopping cart up. And so I think my father has always really been super big on being on the floor and being with the customers. And that's something I got to make sure we never lose that. Yeah. That's a critical thing.
[00:35:38] Ray Latif: Well, it seems to be a philosophy that's worked. I mean, the company started with one store. Now you're on your seventh and still growing. And it's amazing to see it all unfold. And I'm excited to see the future of the company. I'm excited to see how Studeleiners continues to grow in the meantime.
[00:35:55] Rick Field: So am I. I'm waiting to see.
[00:36:00] Ray Latif: Well, perhaps we'll do this again in another five years or so. Ray, it was a pleasure being with you. It was absolutely a pleasure talking to you, Stu. Thank you so much for being with us.
[00:36:08] Rick Field: Now, how do we know if people listen to this or not? That's what I want to know. Okay, we talked all about customers and everybody out there listening now. How do you get feedback on this?
[00:36:16] Ray Latif: Well, how about this? How do people get in touch with you? For entrepreneurs who want to get into Stew Leonard's, how do they get in touch with you?
[00:36:23] Rick Field: Our big thing is this Facebook and stuff. Do they hashtag Stew Leonard's? You know what would be cool? I got a Twitter. The younger people now come in and tell me I got to tweet more. And hey, PR people are always saying tweet more, right? So I got a little Twitter account. I only got like 150 people, I think, or 200 or something following me at this time. But I may even get a picture of you and I now and put it out on Twitter.
[00:36:48] Ray Latif: Hey, we should definitely do that. Yeah. But no, I mean, what's the process like of getting, of an entrepreneur saying, hey, I think my product could fit really well into Stew Leonard's. That's, I mean, again, given that a lot of entrepreneurs listen to our podcast, you know, how do they get in touch with you?
[00:37:00] Rick Field: Well, listen, I think right now, if you go onto our website, StuLeonardsWithAnS.com, and you can see a entry right there for the Stu'Stew Tank. Yeah. You could go in and fill that application out. Okay. And our buyers are looking at that.
[00:37:15] Ray Latif: How often do you do the Stu'Stew Tank?
[00:37:17] Rick Field: This was our first round we just did. We just tried it. It was a new idea. We figured, let's give it a shot because, you know, it's Shark Tank. And I know Barbara Kerkorn, you know, so she's great on that thing. But when they're all done, they don't have a platform to sell it. So they're investing in the product, but they don't saying, I have stores you can sell it in. The cool thing about Stu'Stew Tank is if your product makes it at the store during that one month trial, you then automatically have a platform in six coming up on seven stores. So I think we're a little better than Shark Tank actually.
[00:37:56] Ray Latif: There are definitely differences, and I'm sure there's definitely benefits that are not available on the ABC show.
[00:38:01] Rick Field: You know, the whole Stew Tank thing, it's I know it sounds like a little, you know, trade off from Shark Tank, but you know, the cool thing about Stew Tank is that when I grew up, I used to clean out the milk tanks. you know, at the store. And that was my first job. So as we were talking about doing this whole thing, what ideas could, so, you know, my first, like, real business I had was cleaning milk tanks out. You know, so we let's do Stu'Stew Tank and of course, you know, with Shark Tank, so.
[00:38:29] Ray Latif: I gotta ask, and I know we're, you have a limited amount of time, but I gotta ask, Having cleaned out the milk tanks, were you ever like, hey, you know what? I don't want to do this.
[00:38:38] Rick Field: I don't want to work here.
[00:38:39] Ray Latif: This is just not a job for me. Did you ever think about doing anything else?
[00:38:42] Rick Field: Oh, yeah. Well, you know, I left. I actually was going to go work for another company at one time because I was like, I don't want anything to do with this family business. Not another retailer. No, no it wasn't. Okay. You know what, my grandfather immigrated from Germany, so he wanted me to get an accounting degree. So I got an accounting degree, and I was gonna go work for PricewaterhouseCoopers actually, right after- I can't see you at PwC. You're right. Would have been a mistake. They don't even let me do the accounting now at the store. I'd stay down the hall, you know. Accounting, you're like, man, I wasted a lot of money doing this. So, but anyway, you know, there were times when everybody gets frustrated in their job, I think, and I think that's just normal. And you just have to take a breath. and keep things in perspective. You know, a lot of times the business you're in is a really good one. There's no easy businesses out there. I've never found one. There's no, like, sometimes people make it sound like they're just like... An overnight success. Yeah. And especially some of these IPOs that come out, like this Beyond Burger that just came out. You know, people, oh, wow, look at that. I started a meatless burger and look at this. It's got a billion dollar market cap or something. You know, there's very, very, very, very tiny little few of those things out there. But mainly, most businesses are a lot of work. You know, there's a lot of obstacles and problems that come up every day. And you just have to sit there and say, you know, I enjoy what I'm doing. I'd like to be in this field. And maybe you got to trim things up that you might be doing some things that are frustrating. And you have to figure out how to, How to, uh... Manage your frustrations. Manage your frustration. But overall, you should love what you're doing. You know, get in there and keep your chin up and keep going every day.
[00:40:33] Ray Latif: That's great advice, Stu. And once again, I thank you so much for sitting down with me today. Tweet me. Tweet me. And then a couple weeks from now, I'll let you know how many people listen to it.
[00:40:42] Rick Field: We'll take a picture right now.
[00:40:43] Ray Latif: There you go. OK. And I'm going to put it on Twitter right now. As we're recording.
[00:40:47] Rick Field: I love it.
[00:40:47] Ray Latif: It's OK. We're going to do this right now.
[00:40:50] Rick Field: We're doing it actually right literally now. Okay, we're taking a picture. Stu, thank you so much again.
[00:40:57] Ray Latif: Appreciate it.
[00:40:57] Rick Field: Thank you, everybody. Thanks for listening today.
[00:41:03] Ray Latif: That brings us to the end of episode 170. Thank you for listening and thanks for our guest, Stew Leonard. You can catch both Taste Radio and Taste Radio Insider on Taste Radio, iTunes, Stitcher, Google Play, SoundCloud, and Spotify. As always, for questions, comments, ideas for future podcasts, please send us an email to ask at Taste Radio. On behalf of the entire Taste Radio team, thanks for listening, and we'll talk to you next time.
[00:41:39] Stew Leonard: Hello, I am Melissa Traverse here for the Taste Radio podcast, talking about some of the biggest tension points that CPG brands and founders face when they're scaling a brand, and those are financial accounting and inventory management. I am joined by Matt Lynn, inventory accounting guru from Belay Solutions, and he is going to shed some light on all of this that is going to help everybody out quite a bit. Matt, thank you so much for joining us today.
[00:42:09] Summer Fancy: Thank you for having us, Melissa. It's great to be out here at Expo West and it's great to sit down and be able to chat this because it's kind of a passion project of ours, working mainly with CPG brands and hoping to help them scale.
[00:42:21] Stew Leonard: It's been such a pleasure chatting with you and the team and learning all about what you do over there at Belay Solutions. Can you tell us a little bit about yourself and what your role is and the kinds of solutions that Belay gives to CPG brands and founders?
[00:42:37] Summer Fancy: Yeah, absolutely. My role with Belay, I'm actually our inventory accounting manager. I run our inventory department, so we work with CPG brands, taking them from spreadsheets, putting them on inventory management systems, and really helping connect their tech stack between their sales online marketplaces to that inventory management system, even down to their financial systems like QuickBooks. Belay overall is kind of an outsourced accounting firm. And with that, we're helping teams. We have different levels with bookkeeping, controller level work, even high level into CFO type items. So we really help those brands in any way that they need financially. And then I just have a subset of a department where we're really just laser focused on inventory.
[00:43:19] Stew Leonard: It's certainly a complex topic and there are plenty of places to go wrong. Let's start by going right and start super simple. Can you tell us what some of the biggest red flags are that would help a founder understand or, you know, the person running a brand understand that it really is time to get some help with some of these areas?
[00:43:40] Summer Fancy: WKYT. They have a lot of transactions that don't get coded or they just put them into placeholders to just get rid of it so it's not an eyesore. They'll notice they have revenue but no cash or they notice that they have a good amount of cash but their blind spot is really seeing the vendor invoices that are sitting there just needing to be paid and so they just lack that clarity that's going to really be around the corner.
[00:44:17] Stew Leonard: You know, you were talking about one of the red flags that comes up that I think makes so much sense. When somebody asks you what your numbers are and you can't come up with the right number, that's a big problem because that's something that you really should be able to share with decision makers who, you know, you're ideally looking to do business with. What should you be able to call up at a moment's notice?
[00:44:42] Summer Fancy: really at any time, you should be able to know an accurate margin. It's amazing how many founders we end up talking to that they can tell you their revenue numbers, they can tell you their selling price, and then the minute you start talking about cost or their cost of goods sold, they just get a deer in headlights look. So really it's very hard to tell, am I even making money? Or if you don't know your entire landed cost. Maybe you know what the freight cost is, the duties separately, but you're not really getting that as part of your unit cost. So it's really hard to tell. Am I even making money or am I losing money from the very beginning?
[00:45:15] Stew Leonard: And do you recommend that founders are able to call up a margin by channel?
[00:45:19] Summer Fancy: Absolutely. And depending on the number of products and channels, you kind of want to know what are your best sellers, which ones are making the most and which ones maybe you're not making as much. But especially if you're branching out and you're doing D to C with B to B, absolutely want to know that.
[00:45:36] Stew Leonard: Gotcha. You mentioned that when things feel really chaotic, that's probably a red flag. I would say that it probably almost always feels chaotic if you're running a CVG brand. And I know this may be hard to quantify, but is there a revenue number? Is there a number of doors number that would help a brand understand whether or not it makes sense to bring on a partner like Belait? Understanding that so many brands are bootstrapped or they might be tight for cash. What is that friction point?
[00:46:06] Summer Fancy: a little bit different for everybody depending on where you're at in your process and sometimes just your level of understanding of financial aspects. You know, when you're first starting and you really cash conscious and don't want to spend that much money, you may keep it on yourself. But as you're growing, as you're getting to those six-figure revenue numbers, and especially as you're approaching seven, you want to make sure you've got good financials. Because as you scale to that point, most likely you're going to be looking to raise capital. And investors, the first thing they're going to look at is your books. And are they clean? And do they show a clear picture of your business?
[00:46:39] Stew Leonard: You know, another area that folks might look to to organize some of the chaos are their systems. So many folks stick with Excel spreadsheets for a good amount of time. How do you know that you need to outsource some of your accounting to an organization like Belay Solutions versus maybe signing on to a Synth7 or a NetSuite or something like that?
[00:47:02] Summer Fancy: Well, that's actually something we really help with. When it comes to that cost question, that's something that trips people up. And sometimes if you just have a turnkey business, you buy and sell a finished good, you can maintain with spreadsheets. And we've had clients with million dollar revenue that can do that. But we see so many brands nowadays are using contract manufacturers. and they're just sourcing certain parts of their product. So when you start talking cost, they have no idea exactly what their unit cost is. So that's where we come in and we kind of understand, we'll speak with the customers and the clients and get their needs. And then if we think they're ready for a system, then we'll help put them on that system so they can get some of that clarity. And it's not something we force on anybody. There are plenty of times where founders come to us and we'll tell them bluntly, you're not ready for it right now, but we'll let you know when we think you are.
[00:47:48] Stew Leonard: That sounds like excellent advice. What should a founder or somebody running a brand look for in an outsourced accounting partner? Are there certain checklist items that they should make sure that their partner be able to execute or be able to help them understand?
[00:48:05] Summer Fancy: Absolutely. I think one of the keys, there's, there's a lot of outsourced accounting firms out there. Some focus on service-based SaaS companies, but if you're a CPG founder, you really want to make sure that your accounting firm has CPG experience. I would ask them, you know, what kind of brands have they worked with and even beyond that industry specific, because there's so many subsets of CPG. And that's something that I think is great about what we do with Belay is that we kind of run the gamut. It's kind of like the insurance commercial. We know a thing or two because we've seen a thing or two across a broad spectrum.
[00:48:35] Stew Leonard: Probably getting references is always helpful, right? Absolutely. All right. So this all sounds great. I think we have a really good understanding of would it make sense to hire an outsourced partner? You know, what some of the things you should be looking for are. What does offloading this kind of work mean for the brand? What can this do for lightening the load of a founder or lightening the load of a brand operator? Like, how does that help them in their everyday business?
[00:49:04] Summer Fancy: It just tries to really help quiet the chaos. So what we're looking to do is just take some of the weight off that founder's shoulder, let them focus on building the brand, building the business, getting that exposure. If you don't have sales, you really don't have anything. So we want them to be able to focus on that while we take care of your back end office work. And we can just present that to you on a monthly basis, you can help make decisions, you can take that to investors. And really, you can just focus on growing your business.
[00:49:29] Stew Leonard: I feel like I felt founders and the folks who are running brands collectively sigh. A breath of relief just hearing that. How can people learn more about Belay Solutions?
[00:49:40] Summer Fancy: So people can text TASTE to 55123 for their free inventory guide to get started.
[00:49:46] Stew Leonard: Matt Lin, Inventory Accounting Guru at Belay Solutions. Thank you so much for joining me here at Expo West. It's been such a pleasure to chat with you and learn about what you all do over there to help founders and brands with their financial accounting and inventory management. For everybody else out there, thank you for listening to the Taste Radio podcast. I am Melissa Traverse and we'll see you next time.
