[00:00:10] Megan Bent: Hello and thanks for tuning into the Top Podcast for the food and beverage industry Taste Radio. I'm editor and producer Ray Latif and you're listening to episode 192, which features an interview with Elizabeth Stein, the founder and CEO of Purely Elizabeth, who reflects on key moments in the development and success of her natural food brand. Tune in on Friday, December 13 for Episode 64 of our Taste Radio Insider Podcast, when we're joined by Megan Bent, the founder and managing partner of Harbinger Ventures, an investment firm focused on scaling early stage, female led and mixed gender founded companies in the consumer space. 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. Launched in 2009, Purely Elizabeth Stein one of a handful of brands that helped redefine expectations for what nutrient-dense food could taste like. Known for infusing ingredients like quinoa, chia seeds, and hemp into granola and snack bars, the brand's focus on delivering great-tasting food has remained the same since day one. While the mission has been constant, the execution has evolved, and in the following interview, founder Elizabeth Stein shared how the company has strategized around opportunities and challenges within a rapidly growing market for natural foods. Hey folks, it's Ray with Taste Radio. I'm here at the Lowe's Santa Monica Beach Hotel at Nosh Live Winter 2019 and sitting in front of me right now is Elizabeth Stein, the founder and CEO of Purely Elizabeth.
[00:01:40] Harbinger Ventures: Thanks so much for having me on the show today.
[00:01:42] Megan Bent: Thank you so much for being here. Very exciting to talk to you. I've wanted to talk to you for some time. I was going to ask you, I already did ask about your Nosh Live experience. To show you how Purely Elizabeth Stein, tell us where you've been during this conference.
[00:01:55] Harbinger Ventures: I've been in my hotel room since eight o'clock this morning on phone calls back to back all day.
[00:02:01] Megan Bent: So you've missed everything.
[00:02:03] Harbinger Ventures: I've missed the whole thing, but it's also been raining here in LA. And so it kind of felt okay to be in the hotel room.
[00:02:09] Megan Bent: Totally. But you didn't miss this podcast, which makes me really happy. You can miss all of Nosh live, but you can't miss Taste Radio. Thank you so much.
[00:02:16] Harbinger Ventures: Thanks for having me.
[00:02:17] Megan Bent: One interesting thing that I found out only recently is that you went to Boston University. I get excited when this happens because I think we also talked about this. Not often you actually see people in our business from BU. Why did you decide to go there? Because I'm curious because I'm trying to remember why I went there and I can't think of a good reason. But why did you go there?
[00:02:37] Harbinger Ventures: It's funny. I never knew anybody who went to Boston University, but I had this idea in my head that BU was the only school I wanted to go to. And so that was first on my list. I knew I wanted to be in a city school and I went and visited it and fell in love with it.
[00:02:55] Megan Bent: City schools are important. Yeah. I mean, like, I could never imagine going to one of those places where the campus is just like in the middle of some small town or village. It's like, you can't leave. You can't go anywhere. You need to spread your wings.
[00:03:05] Harbinger Ventures: Yeah, Boston, such a beautiful city. It was a great place to go to school.
[00:03:09] Megan Bent: It is. But it's interesting. We have had entrepreneurs featured on Taste Radio who also went to BU. And I'm curious if you were thinking about entrepreneurship while you were in college or, you know, how that kind of happened, how you decided to start Purely Elizabeth.
[00:03:23] Harbinger Ventures: I think from a very young age, I had entrepreneurship in my mind. I laughed that when I was 13, I wanted to be CEO of Disney.
[00:03:36] Megan Bent: That's a huge, ambitious goal.
[00:03:40] Harbinger Ventures: It was.
[00:03:41] Megan Bent: CEO of Disney.
[00:03:42] Harbinger Ventures: You know, that was what my goal was.
[00:03:45] Megan Bent: Was it because you liked the movies? I'm curious. That's interesting.
[00:03:48] Harbinger Ventures: I just was fascinated with everything Disney, like how they were running their business, how their marketing was, going to the theme parks. I went not, of course, enjoying the park, but I would go through and like make comments to my parents about how they were marketing their services. And so it was definitely a different angle that most kids would go to Disney World.
[00:04:10] Megan Bent: Did you know who Michael Eisner was?
[00:04:12] Harbinger Ventures: I did. That was my dream to meet Michael Eisner. I haven't met him yet, but I'm still crossing my fingers.
[00:04:18] Megan Bent: His son's involved in the food and beverage industry. You could make your way that way, right?
[00:04:22] Harbinger Ventures: For sure. Yes.
[00:04:24] Megan Bent: I'm sorry. I keep interrupting you, Elizabeth.
[00:04:25] Harbinger Ventures: No, that's OK. So when I was 13, I wrote this letter to Michael Eisner. that I had this great concept that I was taking like Planet Hollywood meets Disney and having breakfast with the characters, dinner with the characters at restaurants across the country, which I still think is a great idea. Unfortunately, they sent a letter back saying for legal reasons that they couldn't open it and therefore they couldn't give me feedback on this concept.
[00:04:55] Megan Bent: Dinner with Donald Duck?
[00:04:56] Harbinger Ventures: Yeah.
[00:04:56] Megan Bent: Interesting. I like that. But eventually, you know, you're not the CEO of Disney, still, you know, one day. One day. But how did your work career, I guess, get started? And when did you start thinking about entrepreneurship as like a career?
[00:05:09] Harbinger Ventures: Yeah, so after BU, I moved to New York City right away and worked for a company who was doing skincare and perfume. So they were kind of a holding company for both those categories. And I did marketing for them and then moved on to a handbag company doing sales and marketing. Definitely in the back of my mind knew, you know, I wanted to start my own business. I was taking some classes at FIT and kind of starting on the side to create handbags and thought maybe I would go in that direction. And then I met my boyfriend at the time who was a big triathlete and marathon runner. And he got me really into health and wellness. And I was always healthy, but not someone who was doing marathons or triathlons. So I really was trying to find something career-wise that was more in line with this new passion that I had. And I ended up finding the Institute for Integrative Nutrition.
[00:06:09] Megan Bent: Where is that based?
[00:06:10] Harbinger Ventures: It was based in New York City at the time. Today, their program is just an online platform. But somehow I searched something online and their website came up and they had 10 questions that said, answer us today if you've said yes to all 10. And I called them that afternoon and immediately signed up for the program. And that was really what took me in this direction.
[00:06:32] Megan Bent: You could have gone a lot of different ways in that field. What drew you to food?
[00:06:37] Harbinger Ventures: So during that program, it was really ahead of its time. So this was 2007 and it was way before people were talking about wellness and really connecting the dots between what you eat and how you feel and really food is medicine. Thinking back to that time, it's unbelievable how far things have shifted and just the knowledge that consumers now have is just so different.
[00:07:01] Megan Bent: That's the key right there is education and awareness.
[00:07:04] Harbinger Ventures: Yeah. So in that program, I really learned not only about these different dietary theories, but also about a lot of unknown foods that were nutrient rich, that were kind of these obscure superfoods. So things like coconut oil and chia seeds and quinoa, like none of those ingredients were really being used in food products, let alone as a ingredient by itself. So I was working with clients who were eating a gluten-free diet mainly, and I was eating that way. And when it came time to recommend products for them to buy, there was nothing on the market that was healthy. And so I think that was really kind of a subconscious moment where I thought there was a real opportunity in that gluten-free segment for better-for-you, better-tasting products. But I did not set out and have a business plan to create this business. It really ended up kind of finding me. So I went to a local triathlon to promote my nutrition practice. And the night before the race, I figured, you know what? I need to make some money. food products because no one's really going to care about coming over to my booth and chatting with me about nutrition. Health and wellness wasn't a thing. So I ended up making this batch of blueberry muffins that had all of these nutrient-rich ingredients and brought them to the race the next day. And as person after person came over, really not excited about my nutrition practice, but they just wanted to know where they could buy the muffins. And that became the aha moment. eventually by the end of the day. And I started making it up on the spot and told people that when they sign up for my nutrition newsletter, I would let them know when the products would be available.
[00:08:48] Megan Bent: It sounds like taste was the big differentiator between what you were offering consumers or what you were offering people who were coming to your booth and others. You could make healthy ingredients taste really good.
[00:09:01] Harbinger Ventures: Exactly.
[00:09:02] Megan Bent: That seems to be the case today more so than ever. It's like if you have a healthy product, it still has to taste great. You can't forget about the people that really want flavorful products regardless of their nutrient content. When did you start to realize that there was a real scalable opportunity, that there was a potential mainstream opportunity for your brand?
[00:09:22] Harbinger Ventures: Well, as we got started or how it really got started is that I went back to that triathlon a year later and sold out at the race. And then a couple of days later got incredible online press and within three hours had about $10,000 of orders. And so I think that immediately said to me like, wow, this was something that was really unique, that nothing was like it on the market and that consumers were really interested in having both something healthy, different, and great tasting. While that was wide open to these consumers, I did also think at the time, like, This is a great concept, but it felt that it was so niche to me that I, you know, at the time kind of raw food was the most innovative thing in the marketplace. And I kind of thought that it would be great if it was part of the raw food set at the natural health food store. Like I didn't, my passion of course was for it to be big, but I presumed it would be in that kind of space and that we would never be able to be mainstream in the Target or Walmart.
[00:10:23] Megan Bent: So when did you start to realize that there was this opportunity to go beyond that small nichey part of the health food store? Because I mean, that still exists and there are still small brands that do pretty well in that space. But as you alluded to, you're sold in a lot of different places, including Target.
[00:10:40] Harbinger Ventures: After year one of business, I went to Expo East for the first time, which was very early on, but I felt like it was the time to either decide like, are we going to make it or not? And is there really interest from the industry? And after that first show, we just got, and by we it was myself and my mom, we just got such incredible feedback. Not only that the product was so unique and different and so it really stood out, but I think just on our overall branding and packaging and people really were drawn to our booth and our space. And so that really felt like to me, okay, this is going to be way beyond what I had thought it would be. And this has a lot of potential.
[00:11:23] Megan Bent: Did you think people were interested in the brand or were they interested in you and your story and the fact that you're baking muffins with your mom?
[00:11:31] Harbinger Ventures: Maybe it was my mom flipping pancakes. I don't know. I think it was probably all of it.
[00:11:39] Ray Latif: Guessing your margins? That's risky. Belay Financial gives CPG brands the clarity to scale smarter, faster, stronger. Get your free inventory ebook by texting TASTE to 55123 and start making data work for you.
[00:11:59] Purely Elizabeth: Tune in at the end of this episode for an exclusive interview with Matt Lynn of Belay Solutions. He sits down with Melissa Traverse to break down the biggest inventory and accounting mistakes CPG founders often make. You'll learn how to bring clarity to your numbers so you can scale with confidence.
[00:12:17] Megan Bent: I mean, it's interesting because you are very much the face of the brand. I think I've seen you at different events and there's always a crowd around you of people who want to know who the Elizabeth Stein behind Purely Elizabeth. Are you comfortable with that? I mean, is that something that, you know, you made a conscious decision to make you a big part of the brand?
[00:12:40] Harbinger Ventures: Yeah, I mean it's funny because I did make a very conscious decision. I knew I wanted that personal connection and I knew as a consumer how I felt with brands that had a person behind it and I wanted that same thing. I'm an introverted person, so to say, you know, am I comfortable with that is... I am. So it's a funny thing. But I love being able to connect, I think, one on one with our consumers and really being able to take what I was trying to do from day one, which was working with nutrition clients and creating a better health and wellness journey for them. And now being able to do that at larger scale.
[00:13:16] Megan Bent: This won't be titled The Introvert Entrepreneur. But isn't that kind of difficult when your job is to go out there and sell and be the face of the company?
[00:13:25] Harbinger Ventures: Yeah, it is.
[00:13:27] Megan Bent: In a nutshell. It is.
[00:13:28] Harbinger Ventures: I think that I've learned so much over the last 10 years of that, of being comfortable and that it's allowed me to become more extroverted. Also allowing me to know what kind of space I need. And if I, at the end of the show, like don't want to go out to dinner with other people and we've had a long enough day, like my team kind of knows that that's what we do.
[00:13:51] Megan Bent: You don't want to glad hand and go to the parties and things like that?
[00:13:54] Harbinger Ventures: Sometimes.
[00:13:55] Megan Bent: There was just a very, for listeners at home, Elizabeth Stein just like, sometimes, but she didn't really mean sometimes. She went, you know what, after a long day, eight hours on my feet, I just want to go and have a glass of wine in my room by myself, which sounds like an amazing thing to do. With my team. Oh, with your team, excuse me. Yes. I always get sucked into the those after parties and stuff. They're fun. But you know, it's once you've been to one, you've been to all of them. Can we talk about your granola? Because your granola is pretty incredible. And one of the reasons that people really know Purely Elizabeth Stein from the granola. You called it an accident. You got into the granola business as an accident. How'd that happen?
[00:14:33] Harbinger Ventures: So we were making muffin mixes and pancake mix and cookie mix. And one random Sunday, I was living in New York at the time. And it was the winter. It was cold. There was kind of nothing to do. And something inspired me to get off the couch and make a batch of granola. And quite honestly, I wasn't a real granola eater at the time, and I'd never made granola in my life. So this was the first time I made granola. And my mom was in town visiting. She was actually a huge granola eater herself. She was like a granola connoisseur, knew every product on the market. And she came over to my apartment shortly after this batch of granola came out of the oven. And she was like, oh my God, this is the best tasting granola I've ever had. This needs to be your next product. And that was our original granola. I never changed the recipe from that day. And that's now our number one skew.
[00:15:30] Megan Bent: Okay, so you make amazing, great tasting muffin mixes, pancake mixes, cookie mixes, and amazing tasting granola. Everyone at home is wondering, how did you do it? What's your secret?
[00:15:43] Harbinger Ventures: I don't know. The granola had found me. I just.
[00:15:47] Megan Bent: Well, I mean, what do you do to make it taste so good?
[00:15:49] Harbinger Ventures: It's a mixture of our ingredients, the way that we make it, which was not an intention behind it. It's just how I made it that one day at home. And thankfully, I wrote down what I made because I hardly ever write down recipes. So it was very lucky. I still have my pink spatula from making it that day, which is my lucky spatula I always use when I'm working on new products.
[00:16:11] Megan Bent: Oh, that's pretty cool. Do you still keep the recipe that you wrote down? Is that anywhere?
[00:16:15] Harbinger Ventures: No, I don't know where that is, unfortunately. I have my pancake mix recipe from the beginning.
[00:16:21] Megan Bent: You don't make pancake mixes anymore, though.
[00:16:23] Harbinger Ventures: We do not.
[00:16:24] Megan Bent: You don't.
[00:16:24] Harbinger Ventures: Do you think we should bring them back?
[00:16:26] Megan Bent: Possibly. I never got to try them. So yeah, maybe if you wanted to bring them back, at least I could try them. You'd have one customer. Perfect.
[00:16:33] Ray Latif: Yeah.
[00:16:33] Megan Bent: Well, there's a lot of pancake mixes on the market now. But it was an important decision for you to scale back on, you know, what you led with when you started the brand and really focus on different items, specifically the granola. You know, what went into that decision and how hard was it for you?
[00:16:50] Harbinger Ventures: You know, it's hard when you're that small and don't have a lot of resources and decisions need to be made so quickly. I honestly would say it wasn't this whole drawn out thought process. It was the granola came out and it was selling really well. And in comparison to the movement on the mixes, there was only so much resources that we had that it was like, OK, I just got to make a decision here. And that was ultimately.
[00:17:18] Megan Bent: It was very rational. There was not a lot of emotion. It's like, look, one product is selling better than the other. That's it. Right. With the granola, it was selling really fast. It was doing really well. Did you just say, OK, let's go pedal to the metal and see where this goes? Or did you have a more thought out strategy in terms of how you wanted to roll it out to the market?
[00:17:38] Harbinger Ventures: Yeah, so we really concentrated on the East Coast first. You know, I was based in New York, and certainly New York was a huge, wonderful place to be able to really drive a lot of sampling and being able to support it from that perspective. But really driving it on the East Coast and into Whole Foods on the East Coast first. And then once we were there I would say for about a year within UNFI and getting distribution and a broker team in place. Once that felt like we had that under control and really could manage that piece of the business, then we started to move out west and got into Whole Foods Rocky Mountain region and then that opened up our entire western distribution.
[00:18:22] Megan Bent: With Whole Foods, I mean, everyone from right around the time that I think you started probably one or two years in, I remember that was like the Holy Grail of retailers. Everyone wanted to be in Whole Foods. You could incubate and scale at Whole Foods. That's not necessarily the only place you can do it nowadays. But, you know, how did you win in Whole Foods? Like, how did you convince them to take you from a couple of regions to go national?
[00:18:47] Harbinger Ventures: So Whole Foods was definitely an incubator and still is an incubator today for us. We really launched most of our newest products there and have always really stuck to supporting the products with demos. I mean, that's been the biggest thing, I think, from day one within Whole Foods that we concentrated on and focused on and put a lot of energy behind it. We were in about five Whole Foods regions before I got an email from them saying we're pushing you out nationally, we're losing money by not having you in all these other regions, which was one of the best days of my life.
[00:19:24] Megan Bent: I can imagine it would be. For context, you know, what did your demo program look like? I mean, it's expensive to demo. Yeah. And if you're in different regions, it can be pretty costly. Was your goal to drive revenue? Was it exposure and awareness? You know, what was your thinking? And how did you execute?
[00:19:43] Harbinger Ventures: Yeah. So it was definitely exposure and awareness. I mean, to me, I felt like we have a great tasting product and we need to just get this product into people's mouths. So whether they're converting to sales right there in the store or they're getting it in their mouth and then going to buy it later and spread it. So we really did focus a ton on our marketing dollars were solely demoing and Whole Foods and doing a ton of events. And so of course it wasn't, you know, always converting to sales, but we did a combination of our own demoing. So with our own internal small team, certainly in the New York stores, as well as using brand ambassadors in some of the regions and then third party demo company in some of the territories.
[00:20:24] Megan Bent: I'm sure there's a way that you demo that's specific and that you think is the best way to demo, but you can't control how other people do it. You can train for sure. What's the best way to get people to understand your brand so that they are not only sampling it, but that they're incredibly passionate about it?
[00:20:42] Harbinger Ventures: I mean, I think certainly being able to have your own team is ideal, right? And it's interesting, actually, this year we are going back to doing a ton of demos and just revisiting that because I think we've gotten away from it. And so that's a challenge for us this year of how do we really best educate a third party team to really be our own and get that full story in the two minutes that you have with the consumer.
[00:21:07] Megan Bent: It's challenging. I mean, you're relying on other people to be the brand when they're not. But the Whole Foods experience, going back to that, really worked for you to the point where it drove mainstream interest in Purely Elizabeth, right?
[00:21:22] Harbinger Ventures: Yes, for sure.
[00:21:24] Megan Bent: We talked prior to sitting down now about Target. And Target's pretty interesting because I think Target keeps a pretty close eye on what Whole Foods is saying and saying, OK, let's try out this brand and see if it works in our stores. How did it work out for you? Because there were some bumps and bruises before it actually worked.
[00:21:40] Harbinger Ventures: So we first got into target, it was 2014. It was actually right when I moved to Boulder. Uh, it was an extremely exciting time of course to say, okay, now we've done really well in natural and this is really this next test of how we're going to do in a Mormon stream environment. And I will say there were a lot of lessons from it. We got kicked out of target a couple of months after being in target.
[00:22:04] Megan Bent: How many stories are we talking about, though? It wasn't a national rollout, right?
[00:22:06] Harbinger Ventures: It was a national rollout.
[00:22:07] Megan Bent: It was a national rollout.
[00:22:08] Harbinger Ventures: Yeah, I think our first PO was like a million dollars. I mean, it was the most exciting order.
[00:22:12] Megan Bent: So that was the second most important day of your life.
[00:22:15] SPEAKER_??: Yeah.
[00:22:15] Megan Bent: The third, but...
[00:22:19] Harbinger Ventures: Yes, it was huge. And what we learned was that we didn't have the right promotions in place. We didn't necessarily know all the nuances of Target. And so that was the lesson. But also, we had a new buyer come in. And so he came in and said, hey, I'm kicking you out, but you're the first brand I'm going to bring back in. And we were priced at our same price that we are in the rest of the market. And he wanted the category to all have a $4.99 price point. So he said, hey, look, if you can come back and give us a different ounce size bag, I'll bring you back in. So that was ultimately what we did so that we could hit that price point and we've been in ever since.
[00:23:00] Megan Bent: If you could elaborate on those mistakes in Target, you know, what were some of those things that looking back were relatively easy things to fix or easy things to strategize around that you just didn't do?
[00:23:12] Harbinger Ventures: I think probably the biggest thing, honestly, was having a Target-specific broker. I mean, that really changed the game for us. So going in the first time, I actually met the Target broker at a fancy food show. And funny enough, it was a fancy food show where they lost my entire display for the show. So this was a really great lesson that sometimes everything doesn't have to be perfect. We went actually to Target and bought just a tablecloth and different things
[00:23:42] Megan Bent: This is incredible. You went, you lost everything. You went to Target to go buy a new stand or table or whatever. And then you ended up getting into Target. How about that? Okay.
[00:23:51] Harbinger Ventures: Yeah, it was quite ironic. So we met the Target buyer there at the show and she loved the product and wanted to bring us in. And so we worked through a distributor partner just to get in, and that was kind of the process, and we were relying on that to be enough, and really realized that we needed a Target-specific broker who had the knowledge, the ins and outs, really recommending the promotions to do and how to really best work with Target, which is a whole other, you know, entity of even shipping with them. You know, it's very specific.
[00:24:25] Megan Bent: Were you trying, actively trying to get into Target at the time? No. The broker was just like, look, I think your brand could do well on Target.
[00:24:31] Harbinger Ventures: Well, that was when we were already in, when we had gotten kicked out of Target, we were recommended, Hey, you should use this broker. And they were great.
[00:24:42] Megan Bent: What kind of relationship do you have with the buyer at Target now? I mean, or is it everything kind of just through the broker?
[00:24:49] Harbinger Ventures: Um, our buyer has changed several times, so we actually have a brand new buyer next week.
[00:24:55] Megan Bent: That's going to be challenging, right? I mean, because it seems like you've got to reconvince everybody about why your brand is better than what's behind you. And there's a lot of new granola brands popping up every single day. So in an environment where there's a lot of turnover, what's the best way to maintain strong relationships with those buyers?
[00:25:15] Harbinger Ventures: Yeah, it's very hard. You know, we've certainly been fortunate to have some buyers and some retailers who've been there for a while and then, you know, you build that relationship, but it's starting fresh every time. And so. It's hard.
[00:25:29] Megan Bent: Yeah, I can imagine. I can also imagine. I mean, I mentioned that there's a new granola brand that launches every single day. I mean, there's also a lot of private label store brands that pop up every single day. Has it become sort of an issue for you? I mean, 10 years in, it seems like you're fending off the big guys and now you're having to worry about the smaller brands and the store brands as well.
[00:25:50] Harbinger Ventures: Yeah, it's interesting. You know, I think, I think the smaller brands were always something that was, um, you know, we were obviously one of the smaller brands, but over the last couple of years, the small brands is something that's always going to be there, especially in granola, where there's so much of that, like small batch. at home kind of farmer's market feel to it. So that's always going to be there and part of it. I think what's interesting is seeing some of the private label brands coming out where that competition would have never existed five years ago when we were so ahead of the market.
[00:26:22] Megan Bent: Do you love the competition or is it something that kind of drives you nuts?
[00:26:26] Harbinger Ventures: I'm a very competitive person, so I probably thrive on it, is the truth of the matter.
[00:26:32] Megan Bent: Hence being on the phone for the past eight hours.
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[00:27:48] Megan Bent: How do you stay motivated? You know, what keeps you in the game and what keeps you focused and razor sharp every day?
[00:27:55] Harbinger Ventures: I still feel like we're at day one. Like every day to me is exciting, getting out of bed and I'm just so energized by it. And I think it's probably in part because this business is just constantly evolving. And so at every phase it feels like something's new. It's like we just onboarded a new employee for econ. Like that's a whole new role in a whole new world. And so it's, staying up with, you know, whatever the latest is that we're working on that's energizing, you know, new products are very energizing to me. That's probably part of my favorite part of what we do and that creativity and just constantly being involved in all the different aspects of the business.
[00:28:37] Megan Bent: How many products do you sell? How many SKUs do you have?
[00:28:39] Harbinger Ventures: I think our operations team is going to kill me right now, but I think we have 76 SKUs, but that's with different, you know, Amazon configurations and things like that.
[00:28:50] Megan Bent: 76 SKUs.
[00:28:52] Harbinger Ventures: That's not individual, unique items.
[00:28:54] Megan Bent: Well, that's still a lot. But I mean, you have some pretty interesting products. In my hand right now, I'm holding an ancient green granola bar. This one is salty, sweet and crunchy, which, as I mentioned, are things I love. You know, when you're considering opportunities to expand upon your business and expand upon things that you're really successful at, like the granola, you know, what comes into play? What are the key components of your innovation strategy at this point?
[00:29:27] Harbinger Ventures: You know, for so long, it was honestly just going off my gut. So it was seeing a category that I felt like needed some innovation in it. Take oatmeal for an example. When we first got into that, to me, it was this traditional boring category. And how could we add something that was more innovative, nutrient rich, and better tasting? And then within that really innovating, I think off my gut of what I felt like, whether it's from a flavor profile or from an added nutritional benefit, like the probiotics, for example. Now, as we're getting bigger, there's definitely a little bit more science to it. But at the end of the day, it's still coming to my gut. But really looking at, you know, what's the category opportunity and what's happening in the category? And do we have a right to win in that space?
[00:30:16] Megan Bent: It's interesting because I love oatmeal. Not a lot of people do though. And when you're innovating in a legacy space, in a sort of sleepy space like oatmeal, you got to think about who is your consumer and who's the one who's going to buy this product. But can innovation expand the customer opportunity as much as it does the category opportunity?
[00:30:36] Harbinger Ventures: Yeah, I mean, I think that's a great point. Actually, we just came out or a couple months ago came out with Kali hot cereals. So it's a grain free oatmeal made of freeze dry diced cauliflower.
[00:30:48] Megan Bent: That is interesting.
[00:30:49] Harbinger Ventures: Yeah. So it really tastes like oatmeal. So the freeze-dried diced cauliflower mimics oats, just like diced cauliflower kind of mimics rice.
[00:30:59] Megan Bent: How have I not tried this yet? We get these products that come to our office and it's probably so good and so tasty that someone ate it and then grabbed all the products that you sent and took them home. And I didn't get to try it. That's definitely what happened. Folks that are listening who are BevNET or Nosh employees, you heard me. Don't steal all the samples, please. How did that come to be? I mean, I know cauliflower is a hot ingredient, but really.
[00:31:20] Harbinger Ventures: So I was actually going to work on our new collagen oatmeal that we also just came out with and was working on the formula. And the night before my trip to go work on the products, I was laying in bed, nine o'clock laying there thinking, wow, you know, cauliflower is being used in all these applications. really looking to have a grain-free option for oatmeal. Why would cauliflower not be a perfect substitute as an oat? And so I went on Amazon, ordered freeze-dried florets to come to my hotel room the next day. And we had about 20 minutes left in our innovation session, quickly put together this formula. And we all tasted it and were like, wow, this really works. And I actually sent off that formulation to Whole Foods. It was their review for oatmeal that following week. And we got them into Whole Foods and now they're actually about to go into Whole Foods as an exclusive in January in a big pouch size because they're that good.
[00:32:22] Megan Bent: And so because it uses cauliflower, do you feel like more people are going to be interested in trying oatmeal or trying oatmeal for the second time, assuming the first time they never liked it?
[00:32:31] Harbinger Ventures: Yeah, I mean, it's certainly going to be hitting on that grain free consumer who's not even going to that category or someone who's looking for lower carbs because it's half the amount of carbs as a traditional type of oatmeal is. So it's hitting on a lot of those key attributes right now, whether it's grain free, paleo protein, low sugar, keto friendly.
[00:32:54] Megan Bent: So given all those, you know, food trends that you just mentioned, do you feel like there's an opportunity to go back to what you had? I know you said, you know, do you want, should I, should you bring back the pancake mix? But it's interesting because pancakes are pretty hot right now, especially ones that are grain free and better for you, et cetera. I mean, do you see an opportunity to go back in time and, and pull these things back into the market?
[00:33:17] Harbinger Ventures: I do actually. Yeah. I think it'd be pretty cool.
[00:33:20] Megan Bent: In terms of your marketing strategy, and social is a great way to learn about, especially if you can interact with your customers, social is a great way to understand how they're using your product and in ways that you might not have considered. Has that become a really difficult thing for you to do at this point? Is it complicated and complex or did you just go kind of back to the basics and just listen and learn?
[00:33:45] Harbinger Ventures: Yeah, I think we just go back to basics and listen and learn. I mean, I personally like still look at all of our mentions and really find our whole marketing team does it actually. And everyone takes turns really so that you do have that close connection and really understand what consumers are saying and doing, but pretty basic, just listening.
[00:34:06] Megan Bent: So when you infuse something like probiotics into your granola bars, is that coming from your customers or, you know, who's telling you, or how do you know that that is something that you should incorporate into your products?
[00:34:19] Harbinger Ventures: I would say that a lot of the nutritional pieces like that is something that ultimately came from my nutrition background and probiotics were something probably seven years ago that I wanted to use in our products. So much of it is married with that nutritional foundation. And what I really see as like, here's the real future of nutrition and how do we deliver that to our consumers in an accessible way? And then also seeing at the same time what they're interested in and liking.
[00:34:49] Megan Bent: 10 years doing this, there was a 301 Inc investment. I got to think that there are other people that are interested in being a part of Purely Elizabeth or perhaps even buying the brand. Have there been offers to buy the company?
[00:35:03] Harbinger Ventures: People are interesting.
[00:35:06] Megan Bent: Fair enough.
[00:35:07] Harbinger Ventures: I'm having too much fun right now.
[00:35:10] Megan Bent: Okay. Well, I mean, you know, at a certain point, someone makes an offer that you probably can't refuse. I mean, is there a number out there for you or are you thinking about it in that kind of way? Are you thinking about sort of the legacy of the brand and maintaining what you built?
[00:35:26] Harbinger Ventures: Yeah, I think I really think about it more so of building this brand and feeling like there's still a lot I want to accomplish and do. And it's not about a number to me.
[00:35:38] Megan Bent: Okay. That's a fair answer. I mean, I guess I'm thinking about it from the perspective of, okay, what else could I do?
[00:35:45] Harbinger Ventures: Yeah.
[00:35:46] Megan Bent: Because at a certain point, everything ends. And is there another sort of thing? Is there another part of the food and beverage industry that you see as, hey, this is ripe for someone with my experience and my capabilities to explore and potentially be really successful in?
[00:36:03] Harbinger Ventures: Yeah, I think I've definitely had, have other ideas on a broader kind of wellness space, not necessarily a food product or in the CPG space, but there's definitely other ways of how to make nutrition, health, wellness, more accessible to people.
[00:36:22] Megan Bent: Sure. They're trying to do that with CBD right now, right? Like put CBD in everything and it's automatically nutritious and better for you. Right. I don't know if nutritious is the right way of saying it because CBD really, does it have nutrients in it?
[00:36:33] Harbinger Ventures: I don't know.
[00:36:35] Megan Bent: It's a little confusing. Nobody knows anything. Well, anyway, Elizabeth Stein has been a lot of fun. I really appreciate you taking the time. I know you're extremely busy, so it means a lot to me that you came and sat down here for an interview on Taste Radio. And good luck with everything going forward. And I hope to catch up again really soon.
[00:36:53] Harbinger Ventures: Thanks so much for having me. This was fun.
[00:36:58] Megan Bent: That brings us to the end of episode 192. Thank you so much for listening. And thanks for our guest, Elizabeth Stein. You can catch both Taste Radio and Taste Radio Insider on Taste Radio, the Apple Podcasts app, Stitcher, Google Play, SoundCloud, or 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, thank you for listening, and we'll talk to you next time.
[00:37:38] Elizabeth Stein: 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.
[00:38:08] Taste Radio: 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.
[00:38:19] Elizabeth Stein: 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?
[00:38:35] Taste Radio: 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.
[00:39:18] Elizabeth Stein: 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?
[00:39:38] Taste Radio: Yeah, absolutely. I think some of the early red flags is just everything is chaos. So when they're looking in their financial software, maybe they don't really have an accounting background and they're kind of just piecing it together and doing their best. And what they'll see is that reconciliations take forever, if they even happen. 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.
[00:40:16] Elizabeth Stein: 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?
[00:40:40] Taste Radio: 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?
[00:41:13] Elizabeth Stein: And do you recommend that founders are able to call up a margin by channel?
[00:41:18] Taste Radio: 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.
[00:41:34] Elizabeth Stein: 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?
[00:42:05] Taste Radio: 3 3 3 3 3 But as you're growing, as you're getting into 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?
[00:42:38] Elizabeth Stein: 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?
[00:43:00] Taste Radio: 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.
[00:43:46] Elizabeth Stein: 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?
[00:44:03] Taste Radio: 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.
[00:44:33] Elizabeth Stein: 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 outsource 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?
[00:45:02] Taste Radio: 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.
[00:45:28] Elizabeth Stein: 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?
[00:45:39] Taste Radio: So people can text TASTE to 55123 for their free inventory guide to get started.
[00:45:44] Elizabeth Stein: Matt Lynn, 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.
