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The Barcode Podcast is presented by Titanium CPG Insurance. Titanium protects forward-thinking consumer brands with a range of commercial insurance products and risk management services designed specifically for natural and organic food and beverage companies. Learn more at titaniumcpg.com

Making the leap from the farmers market to the grocery store shelf is no small thing. And when you’re selling something with a really tricky production schedule like eggs and trying to do it in a way that takes the welfare of the animals into account, there’s an entirely different layer of complexity to creating the systems that allow you to scale.

Our guest today has deep experience with that very thing. Today I’m talking with Jason Jones, co-founder of Vital Farms. Vital changed grocery shelves nationwide through their pioneering approach to making quality food by emphasizing animal welfare. Before Vital Farms, you could only really get pasture-raised eggs from your backyard or from the farmer’s market, and now you can get them at just about every grocery store in America.

 

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BEN PONDER:        All right. Welcome to the Barcode Podcast. I’m Ben Ponder and I, it is my privilege to be sitting across today, uh, from Jason Jones who is a co-founder of Vital Farms. Many of you are familiar with their amazing pasture raised, uh, eggs and other, uh, oth- other products now. In, in the early days it was just eggs, but it has become more than that. An- and Jason has over the last several years really become a remarkable and trusted advisor to a lot of early stage brands in the, in the natural organic food and beverage space. And so I’m thrilled to talk to him. I actually think that Jason is one of these unsung heroes in the industry who, uh, more-

Jason Jones:           (laughs).

Ben:                           … people should know about, uh, because he’s such a great, a great guy. Has been tremendously helpful to so many people and I think brings a wealth of insight and knowledge and experience that, that more people need to, to hear from. So I’m, I’m really thrilled and, and honored to have Jason with, with me today in the studio.

Jason:                        Thanks for having me Ben.

Ben:                           So welcome. Absolutely.

Jason:                        I’m gonna have trouble living up to that. Oh, well-

Ben:                           No, I, I, I have all the confidence in the world than you. So, um, so, so to get started, o- one thing th- that I like to do, especially with folks who are coming from the food space is to, is to ask you a question around, uh, your either your favorite meal or th- the most important meal to you growing up or something like that. To really kind of hone in on, uh, the, the role of food in, in your life and maybe how that’s, how that’s evolved? But specifically, let’s, let’s go back to, to early, early Jason Jones.

Jason:                        (laughs) Well, like a lot of us, I’m sure, uh, especially the gen X that we grew up eating out of a can, um, you know, pseudo cooking-

Ben:                           Mm-hmm (affirmative).

Jason:                        … this was before blue apron. This was like, do you have a can opener?

Ben:                           Chef Boyardee(laughs).

Jason:                        … electric stove top? Yep, exactly. A lot of SpaghettiOs, that kind of thing. Uh, what stands out is, a, a classic in the Jones household. This was growing up in Memphis, in the Southeast where most everything was deep fried. But what became a staple for us was Dorito casserole (laughs).

Ben:                           Oh, that’s great. Tell me more about Dorito casserole.

Jason:                        It was a heinous amalgamation of, uh, just food-like substance. So, you know, you’d get a bag of Doritos and crush it up and in it goes. You’d get some kind of greasy ground meat, brown it off, throw it in, and you top it off with a big hunk of Velveeta that you just melt all-

Ben:                           Beautiful, beautiful.

Jason:                        So (laughs).

Ben:                           A little, uh, was there a little Rotel in there? Uh, i- it’s usually-

Jason:                        That’s the idea-

Ben:                           That (laughs).

Jason:                        Yes, stuff that, um-

Ben:                           Which in Memphis at Rotel (laughs).

Jason:                        Yeah. That, like you gotta have that good, that good Memphis draw to it (laughs). Rotel, when you weren’t eating pork ribs, that’s, that’s where you were going. Yeah. Um, stuff that actually I think in large part, uh, kind of as a reaction to that type of diet.

Ben:                           Sure.

Jason:                        That has spawned a lot of the industry that we’re in. So-

Ben:                           Exactly.

Jason:                        Uh, I still look back fondly, but I couldn’t do it anymore.

Ben:                           Fair, fair. Oh, that’s beautiful. Well, we’ll, uh, we’ll, we’ll make sure that Jason shares that, that recipe with our, with our listeners (laughter).

Jason:                        Just did.

Ben:                           I think that was actually the full recipe. So, uh, which made it very accessible to many people-

Jason:                        of Rolaids afterwards.

Ben:                           Exactly. That you can top it, garnish, garnish with Rolaids. And uh, so, uh, Jason grew up in Memphis and took a, initially more of a finance and accounting, but it became a, a marketing path for, for a while and worked for Auto Zone. Uh, and in the early days, uh, which is headquartered in, in that part of the, the world.

Jason:                        Yep. Right on the river in Memphis.

Ben:                           That’s right. And uh, and then switched later, uh, moved up to the Chicago area and, and worked for Motorola-

Jason:                        Yeah.

Ben:                           … in, in more of the, the tech telecom space.

Jason:                        Yup. Yup. Uh, things in Memphis had been stagnant, just being born and raised there. I actually did undergrad at Oklahoma, moved to Chicago to work at Motorola because it was, um, uh, a chance to travel abroad. I, I joined the corporate audit team where it was a, for better or for worse, a pack of, uh, probably a hundred of us, uh, 25 to 35 year olds flying around a, 100 or so installations. This was a fortune 40 company at the time. What’s happened since is a little tragic. Uh, but anyhow, it was, it was a great gig. Uh, learned a lot. Um, spent a lot of time all over the world. Three or four weeks or sometimes a couple of months at a time.

Ben:                           Where, what kind of places did you travel to?

Jason:                        You know, you name it. Um, Russia, Malaysia, Japan, all over China. Lots of places in-

Ben:                           Anywhere that Motorola was, was manufacturing or sourcing things?

Jason:                        Yeah, yeah, we had engineering sites, R&D sites. Um, you know, a lot of manufacturing. We really opened up the manufacturing, um, play in China back in the, probably the early ’90s, maybe, maybe late ’90s. So, um, yeah, 150,000 people in the company when I joined, I think when I left in ’08, there were maybe 40,000 left.  If that sounds

Ben:                           Well, it had been fractured and, and sold off piecemeal in some ways.

Jason:                        Yeah. It’s kind of… It was one of those where you… Every couple of years a different leadership team would take, take the four and pull it apart, stick it together in a different way, come up with new acronyms for the same, uh, divisions. After about 10 years of that, I did my MBA up at Kellogg. Um, thanks Motorola paying for that.

Ben:                           (laughs).

Jason:                        Uh, as soon as I graduated it was how soon can we get to Austin? Having worked on some projects here, had fallen in love with the place just as a place to live. But it’s also so friendly as you know, to anything entrepreneurial, a lot of support and energy here for-

Ben:                           Absolutely.

Jason:                        … all those pursuits and-

Ben:                           You don’t, you don’t feel as weird here in Austin being an entrepreneur as-

Jason:                        Right.

Ben:                           … as you might in some other places, well, that’s true.

Jason:                        There you go. And so I just couldn’t take s, you know, being a cubicle warrior, cranking out those TPS reports, I guess. And anyhow, got here in ’08, uh, left Motorola, um, I was working for the CMO of mode at the time and the mobile device division. And, and I, I think the comment was made, let me, let me call Ron over it over at, over at Dell. I’m like, “No thanks.” That’s the, like exactly-

Ben:                           I’m out.

Jason:                        … the same-

Ben:                           That’s right. Yeah.

Jason:                        … set of, uh, circumstances. I’m leaving, but-

Ben:                           Yes. So how, how did you go, uh, tell, tell us the story of, from, uh, from mobile devices to, uh, to mobile, mobile chicken’s-

Jason:                        Mobile. Mobile chicken coops. Yes.

Ben:                           That’s right.

Jason:                        (laughs) Well, I, yo- you know, I think like so many of us, and this was granted 10 or 11 years ago, but you start thinking about what purpose am I advancing in the world with what I get up and do every day. And I knew that was part of what I was looking for or had been lacking. So, um, got a chance to, I guess, meld that with an opportunity, uh, a few months after coming to Austin, heard about this organic egg farm where the chickens were running around outside and immediately that’s more interesting than, you know, um, putting Silicon wafers and plastic together to, to make, you know, devices and, and we had been, um-

Ben:                           And by the way, that’s, that’s the most like paradigmatic Austin career change moment that you could imagine.

Jason:                        All right (laughs).

Ben:                           Right. And, and like if you had somehow started a country band at the same time that I think that’s the-

Jason:                        (laughs).

Ben:                           … only other thing you could have done right there.

Jason:                        (laughs).

Ben:                           That would be more Austin than, than going from Silicon (laughter) wait for a-

Jason:                        We didn’t know it at the time that maybe we were hipsters in the making.

Ben:                           That’s right. So you hear about this farm here-

Jason:                        Yeah, heard about a farm and, and we had been on a journey personally to, you know, clean up from our Dorito days I guess. You know, let’s, let’s buy organic milk instead of this stuff with hormones in it. And-

Ben:                           Right.

Jason:                        … we had been, I, I guess on our own pace and really ahead of the, the wave of, of adoption kind of been evolving to that conscious consumer. And so it resonated for a lot of reasons. Um, also because it just sounded fun and it was a, I don’t know, I, I called up Matt who became my business partner on that and uh, he had had the property and, and the chickens and uh-

Ben:                           This is Matt O’Hayer-

Jason:                        Uh-huh (affirmative).

Ben:                           … co founder along with Jason of Vital Farms.

Jason:                        And he’s today… We’re, we’re both on the board. He’s executive chairman, I believe. Um, we’ve since had professionals come in and take it off our hands (laughter). Uh, um, from a management standpoint, they- they’re doing great. But, um, met him out there. It wasn’t much to look at, but-

Ben:                           How did you hear about it? What was the, what was the initial connection?

Jason:                        Ah, something online. You know, maybe there was a small article or something.

Ben:                           Okay.

Jason:                        Uh, but I just called him up, met him out there and at that point it was more of a, well, being a freshly minted MBA, uh, it was definitely more of a heart decision than something that penciled out, right?

Ben:                           Right.

Jason:                        Uh, (laughs) I was going through some old files the other day and I, I actually found, um, just some of the old like balance sheet or something from, from that era of the farm. And it wasn’t, it wasn’t even a company. It was, it was a sole proprietorship really with Matt and Catherine. Um, anyhow, what we knew was people ought to eat eggs that were raised this way. Um, we probably had a hunch that Austin was a good place to do it. Obviously Whole Foods is here. People are pretty aware. We were woke even back then.

Ben:                           That’s right.

Jason:                        And it felt right more than, um, the b, more than the business case made sense in Excel for sure.

Ben:                           Mm-hmm (affirmative).

Jason:                        A- and you gotta remember this was, uh, this was before the CPG industry here in town had really risen up and it- it’s still not completely formalized today, but there’s, it’s just a hot bed here in Austin as everybody knows. And, um, but this was the Wild Wild West and we didn’t know what we were getting ourselves into, but you know, we were trying to, trying to brand and elevate a commodity, which is not the easiest thing in the world-

Ben:                           It is not.

Jason:                        But it’s actually great that we didn’t know what we were getting into at the time.

Ben:                           Absolutely. That’s so, so the, tell me about the first time you actually went to the O’Hayer’s Farm. Like describe that, describe that scene?

Jason:                        Well, Austin in the summertime, is, is kind of a tough place to be (laughs) as a human or as, as one of our feathered friends.

Ben:                           (laughs).

Jason:                        And this was about 27 acres of floodplain land. That’s the reason why it was affordable enough to, to do this stuff on. And, and in fact probably gave rise to some of our operating model where everything was portable.

Ben:                           Mm-hmm (affirmative).

Jason:                        Uh, number one, it’s better for birds to move around. But number two, you gotta get that stuff out of the way when there’s rises-

Ben:                           That’s right.

Jason:                        … that’s, that’s (laughs) not a colloquialism. That’s what, what happened to us every few months. We had half a mile of Onion Creek running through that farm and it was beautiful. But you couldn’t do anything permanent because it was in the flood plain. Several occasions where the rains came and, uh, we were out there in the middle of the night with headlamps pushing chickens into these converted cotton tr, cotton trailers-

Ben:                           Mm-hmm (affirmative).

Jason:                        And dragging them off the property so they didn’t get washed down creek.

Ben:                           Ho- how many chickens were out there?

Jason:                        I think a few hundred.

Ben:                           Okay.

Jason:                        Yeah, a few hundred. And, and that was our, our entire supply base for a while. But-

Ben:                           And people had been… To be fair, yo- you guys didn’t invent pasture raised eggs, but you, you thought that there was an opportunity to not just do this as a cute little, uh, mom and pop operation that was, that, that, that could only service a handful of people at a farmer’s market.

Jason:                        Yeah, that’s right. So that was where you access that type of product was you’d go to your farmer’s market on Saturday morning. And our intent was to scale that. Um, and so pretty quickly we realized, hey, this is a… Actually Texas is a hard place to do this. We had signed up some farmers in, you know, between here and Lockhart and down really toward the Rio Grande and Eagle Pass. And, um, we learned a lot.

It turns out as we were learning, how do you take care of this bird that for better for worse, has been selectively bred over many generations to do a certain thing with a certain input in a very controlled environment. And we were turning a lot of that on its head.

Ben:                           And they’re very fragile.

Jason:                        They’re finicky. Yeah. Um, the girls as we still refer to them or, um, if they’re acting the right the ladies and-

Ben:                           Mm-hmm (affirmative).

Jason:                        … yeah, you can, you can mess them up in a lot of ways. And, um, we had to learn the hard way. How do you drastically alter the biological environment and still get a, get a result that makes the, the exercise economically viable. And so that was the trick. We were able to codify what that meant, what does pasture raising really mean and then develop a model that was scalable. And for us that meant doing this in an, in an environment where the, actually the climate here, we discovered, um, it- it’s not very accommodating, especially during a summer like we’ve just had where you know, it just, hey, it doesn’t rain for four months well-

Ben:                           Yes, ce- central Texas has, for those of you who aren’t here is almost a monsoon / drought climate. It’s really bizarre. It’s not, it’s not West Texas. We’re not, we, it’s not desert or step, but it will rain every day for a month or two and then it will not rain every day for, in this case, three or four months. And it makes it really, really tough to grow things..

Jason:                        It does, it- it’s not all bad. I, I just cut my grass a couple of days ago and it had been about five months since I had been out there. That’s nice. But when you’re trying to basically feed a whole lot of chickens on the grass and stuff that comes out of, uh, you know, out of that, that’s it’s not optimal. And so pretty quickly after we formed an S Corp in July, um, signed up some more farmers, and really-

Ben:                           So this is July of-

Jason:                        ’09.

Ben:                           ’09. Okay.

Jason:                        So just over 10 years ago now. And, uh, we realized we needed to take the show on the road and, and, uh, do this in a more conducive environment. And so Northwest Arkansas, or Eastern Oklahoma, that’s actually already chicken country.

Ben:                           It’s where, where Tyson foods is headquartered-

Jason:                        Mm-hmm (affirmative).

Ben:                           … and there has… For many decades has been kind of one of the major hubs of growing poultry.

Jason:                        Exactly. And so you had a lot of infrastructure there that we were having to just be creative and scrappy to achieve, um, down here. And, uh, a lot of how we would court new farmers would, would be talking to folks who had done this for the Tysons.

Ben:                           Georgia. Those are some of the other egg producers, yeah.

Jason:                        Exactly. A lot of these other, large companies and broilers as well. And you know, we would come in with a, and a model that said, “Hey, we’ll, we’ll actually pay you more to have less birds. How does that sound?” And they always like that.

Ben:                           It’s very appealing.

Jason:                        And then the next sentence was, by the way, we’re going to need to cut big holes in the sides of your, of your houses (laughter), will that be something you’re interested in?

So it was tough. You had to, you had to try to find more progressive farmers who had been part of a very conventional system for, in some cases, many generations. And, um, but we were able to do that and there’re weather patterns and uh, soil and, and, you know-

Ben:                           Very different.

Jason:                        Yeah, it’s just a, it feels like a different part of the world. It’s much more lush.

Ben:                           It’s very beautiful country.

Jason:                        It, it is. And you’re not fighting uphill. Um having to irrigate things that just, it just rains on you and that’s helpful. So, uh, that’s how we were able to scale the production side, and, and really the biggest risks that I suppose still holds today to some degree, um, was balancing your supply base with the level of demand. Because a lot of commodities, especially eggs, are distinct from a lot of other products in the food space or larger CPG space in that you got about 30 days to deal with that egg. And oh, by the way, it’s fragile and oh, by the way, it’s perishable. And that means you can’t just stick them on a, on a rack in a warehouse until you can sell them next season or even a few months down the road.

Ben:                           Right.

Jason:                        Which is really helpful being able to manage inventory that way, but not having that luxury, um, we had to plan very far ahead a year or two even for the supply we thought we would need based on a demand curve that we were learning about every week (laughs).

Ben:                           That’s fascinating and super complex and especially when you’re scaling again because you guys are effectively defining, and we’ll get back to this in a minute, defining what a pasture raised egg, uh, means to the consumer. Any time you talk to somebody who does, e, demand planning or forecasting for a larger CPG company, they have data, they have, they have all kinds of historical data and so they can be pretty accurate. Uh, they’re, they’re using statistical models and, and, and regression analysis and all this kind of stuff-

Jason:                        (laughs)

Ben:                           … but you had no data so you like, are, are you just kind of l-licking your finger and sticking it in the wind and, and hoping or ho- how did you guys solve that?

Jason:                        Well, thankfully today it’s a lot more sophisticated and we can actually do a lot of that-

Ben:                           Totally ’cause, ’cause you have some data now. Yeah.

Jason:                        Yeah. Back then we would look back at the month prior and it was-

Ben:                           Mm-hmm (affirmative).

Jason:                        … you know, orders of magnitude lower. And you know, I, I remember we would turn on distribution, let’s say to a new, a new, um, a warehouse of UNFI, the service Whole Foods accounts and um, or a new region came on and-

Ben:                           Mm-hmm (affirmative).

Jason:                        … yeah, orders would, they would sometimes go up two or three X from one month to the next and we were on a weekly order cycle. So, um, there was a drum beat to it-

Ben:                           And the chicken only lay so many eggs?

Jason:                        And you can’t turn them off. You can’t slow them down. They’re either doing well or-

Ben:                           That’s right.

Jason:                        … and, and that whole game is, it’s down to lay rate. So you have 100 chickens, how many eggs are you getting, um, per day or per week? And so at the same time we were juggling how to keep that number as high as you can by introducing, uh… while you were introducing rather a lot more variables to their, their life, which all impact that late rate. We were experiencing just surging demand because, um, you know, the big question at the time was, will people pay more for this?

Ben:                           Because it wasn’t a little bit more, it was a lot more,

Jason:                        People were used to paying a couple of bucks for a dozen eggs.

And here’s a pasture raised and organic certified egg for seven, eight bucks depending on how much freight we had to put on it.

Ben:                           Right.

Jason:                        So yeah, bit of a step up. And even-

Ben:                           How did the consumer make that decision? Because a- again, you’re, you really are talking about let’s say a three to four X leap in price and people did it. Did, did you guys feel like that was… Did you see that coming or did you do, did, did it surpass even your, your wildest expectations and, and how do you attribute how people… Wh- where did this groundswell come from?

Jason:                        In those days it was, uh, I think at the beginning of the education, the deluge of education that was-

Ben:                           Mm-hmm (affirmative).

Jason:                        … heading consumer’s way for those who were on to this stuff. Um, you had Michael Pollan writing his books, The Omnivore’s Dilemma. You had Food Inc.

Ben:                           Mm-hmm (affirmative).

Jason:                        Wonderful documentary that, you know, we, we owe Mr. Pollan and whoever did Food Inc, um, because they helped generate a lot of awareness that led to demand for products like ours. And-

Ben:                           That’s right.

Jason:                        Uh, you know, in the early days before we had real salaries, we, you know, I would work 70 hours a week on the business and then Saturday morning I was at the farmer’s market here, uh, schlepping eggs to make the mortgage and-

Ben:                           Mm-hmm (affirmative).

Jason:                        … you know, literally, and, um, you know, I’d talked to dozens of people every Saturday and we’d get questions like, “Hey, I just watched Food Inc, let me ask you how you, how do you treat your chickens? What do you feed them?”

Ben:                           Absolutely.

Jason:                        “What happens when this or that?” We were always very transparent and we would meet consumers at whatever level they desired. Um, wherever they were on that curve. And that continues today. We’ve never hidden any aspect of our supply chain. Um, you know, there’s still, I, I guess you could say some dark sides to the industry. You know, you think about, um, raising livestock for the purpose of producing food. There is not a nursing home somewhere where they go and play out their days. You know, there are realities to this.

Ben:                           Right.

Jason:                        Um, you know-

Ben:                           There’s an end of life.

Jason:                        (laughs) There is, and it’s, and it’s, you know, the important thing is that you take every step of that journey with the animal who’s working hard for you respectfully.

Ben:                           Right.

Jason:                        And every, every step of, of, you know, our model is done with the utmost, I would say reverence for what we’re doing here it’s kind of important what we put in our bodies. It’s kind of important, uh, how you raise said food and, and you know, it wasn’t just us evangelizing out in the wilderness about this stuff.

People were ready. We didn’t have marketing studies and all this research that showed, you know, 55% of consumers are willing to do X or Y. It was a hunch and we were actually that target consumer and we were in a place being Austin where we knew there were a bunch of folks like us-

Ben:                           There was a core group of those consumers around you.

Jason:                        And also it’s important to say, you know, a great partner in Whole Foods because um, they, even they had reservations about our price point but they were willing to try it.

Ben:                           Right.

Jason:                        And so I was just part of a board meeting just yesterday. Um, not with Vital, but we were talking about this, when the heart, when the hearts and minds of really anyone between you and the consumer, that could be the global buyer at a major retailer. It could be folks at the regional level. Certainly the store level may be the most important guy to you is actually the fellow stocking the shelves.

Ben:                           That’s right.

Jason:                        Could be your distributors. There’s all, you know, everyone involved in marketing online and influencers and all these levers you can pull-

Ben:                           Partners and gatekeepers and, eh, yeah, to me it’s, I always think about it if, if, if the store itself, if the individual i- in this case, grocery store is out of stock because the, the person who is charged with purchasing from the, in, in the backroom of that store doesn’t buy enough of your product then like that, that significantly hampers your business. So how are you developing the relationship with that person or with the stockers of the shelves so that they are aware of your, your product or brand and in some way are committed to in champion what you’re, what you’re trying to do. Because if you’re not there and your set is a, is a wreck, then it’s not going to, it’s not going to do well for you or for those consumers or shoppers.

Jason:                        Yeah, it’s a high maintenance proposition and you know, um, we would interface with those people as much as we were allowed. And back then it was actually a little easier thinking about Whole Foods, for example-

Ben:                           Mm-hmm (affirmative).

Jason:                        … uh, there’s less that you can do directly, but it doesn’t mean it’s not as critical. And so, um, yeah, it’s, education isn’t only at the consumer level, it’s everyone in between. And, and wi- winning those hearts and minds, it’s not just getting them to like your brand because it’s, I don’t know, because the logo’s great or your messaging is on point or they happen to be g, be gluten free and so they really get it.

It’s, it’s deeper than that. Every day it’s how are you to deal with as a business partner. Are you filling their POS and if you’re not, are you giving them, them the run around, and I see this a lot, uh, in the last few years I’ve worked with a lot of, usually first time entrepreneurs who have a young growth stage brand.

You know, transparency isn’t just about how you make the food, it’s, um, what’s your situation? And, um, w- why is it that this week you might be making that buyer’s life a little bit harder, just being a- a transparent human being and having that culture permeate your entire company, it means that, it means a lot. And you know, uh, that comes through. So we are from the very early days, we set up Vital on the premise of a conscious capitalism. And so that’s a stakeholder model where we’re not just doing this for the benefit of shareholders or what you’re taught in those business schools of maximizing shareholder return and value that all matters and, and you don’t have a real ongoing proposition if you don’t have that.

Ben:                           Correct.

Jason:                        So that is that- that’s a given. And so th- the economics, yes, they matter but-

Ben:                           But you guys were really focused on that, that more triple bottom line model.

Jason:                        Yeah. There’s different flavors of, of, you know, how you describe that approach and, for us it was, it wasn’t just a philosophy or a decision framework. I- it’s a part of the DNA from the beginning. And you know, not one stakeholder is elevated over any other. And really the impact to all of them is considered before any major decision happens. And so we named very specifically who are our s, uh, stakeholders were and, and then, you know, one of them was our girls, you know, those animals who were, who were working hard, um, the environment. How does the way we farm impact our waterways and climate and in all of these other?… Now they’re top of mind. They weren’t so much back then but-

Ben:                           Because at scale again, you can do a few things when you’re tiny and it, you can’t necessarily see the, the impact that it’s having, good or bad-

Jason:                        Mm-hmm (affirmative).

Ben:                           … but when you start to grow, you go, “Oh no, I didn’t think that this would have this negative impact.” And you, you have to face that.

Jason:                        Yeah, like more chickens, more manure, you know. So you need to understand it. And, um, you know, your internal team may be your most important stake holder. John Mackey who’s written a lot about this, we were always very proud of our culture and, um, you know, so that was the, um, I guess that’s the DNA of Vital and it still is-

Ben:                           No-

Jason:                        … and, and it’s almost, you’re doing things right every day. And as it turns out, uh, your business is healthier for it.

Ben:                           Right.

Jason:                        And I, I guess a corollary would be, you know, how, how our eggs are as a, as an end product and an eating experience. It wasn’t that we were trying to make any certain type of egg, we wanted to do things right by the land and by the animals.

Ben:                           Happier chickens produce better eggs, richer, brighter-

Jason:                        What do you know, yeah.

Ben:                           … orangeish. Uh, you’ll see that.

Jason:                        Exactly.

Ben:                           Yeah.

Jason:                        Yeah. You, you go through the, the, the proper and you know, intentional steps and it turns you get a better product. Well, you build the best culture and just way of moving through the world into your young company. And it turns out those companies perform better and there’s studies on this. And, um, we definitely have found that to be true.

Ben:                           That’s awesome. You mentioned two different things that I want to come back to. One of them is, uh, is, is engaging in the right way with stakeholders at every, at every level of, of the company or, uh, in this case with the retail partners. But you also mentioned John Mackey the CEO of, of Whole Foods and uh, founder did and I know Matt and John were friends, uh, along the way. And I think it’s important to surface that a little bit because I sometimes I think people can either undersell or oversell the impact of knowing a “important person” right?

Jason:                        Yeah.

Ben:                           So sometimes that’s helpful. Sometimes it’s not as helpful as you might assume it is, right?

Jason:                        (laughs).

Ben:                           And so how do you, h-how do you navigate that world? You know, again, let’s say yo- you aren’t in a situation where, where you’re your, your neighbor or close friend happens to be the CEO of Whole Foods. Like does that matter?

Jason:                        Yes and no, uh, day to day no, it doesn’t matter in a sense that it has probably been, I don’t know, 35 years since John Mackey has sent a PO (laughs). Right?

Ben:                           Right.

Jason:                        There are… These are large organizations. There’s so many layers, um, I think where it was valuable for Vital was, uh, I believe John may have provided some directional input, probably an offhand comment at, you know, a Christmas party or something before the company was even a figment in anyone’s imagination that, you know, uh, we could use a better egg. And it was no different than anyone else pointing out white space on a shelf.

Ben:                           Correct.

Jason:                        Yeah. Obviously it means a lot coming from the, the founder that you got this massively successful and really industry leading, uh, s- set of stores. But, um, yeah, I, I had a… I, I was meeting with, um, it was actually a business owner who had a little side hustle and he has this great salsa (laughter), you know, and his is the best, you know, just ask him, he’s got-

Ben:                           Correct.

Jason:                        … he’s got it down and uh, knew that I had done business with Whole Foods and um, you know, he was like, “Hey, do you think you can get me a meeting with, with John ’cause I’ve got this salsa (laughter).”

Ben:                           It’s the best.

Jason:                        Wow! Um, bless his heart.

Ben:                           That’s right.

Jason:                        But, uh, not gonna work-

Ben:                           Jo- John’s not taking those meetings (laughter).

Jason:                        Yeah. So it’s-

Ben:                           And even if he did, it wouldn’t matter, right? So that a- a- again, it’s like understanding how that, how that-

Jason:                        Yeah. They have a healthy culture in Whole Foods-

Ben:                           Of course.

Jason:                        Uh, you know, a, any buyer worth his salt isn’t going to stick around in a place where someone above him and tells him, you know what to buy.

Ben:                           Yeah.

Jason:                        I mean that’s, these environments are, you know, progressive cultural, you know, corporate environments and it’s-

Ben:                           Right.

Jason:                        … collaborative and people are empowered and there’s tons of spans and layers in the first place.

Ben:                           Correct.

Jason:                        So, um, it’s kind of funny when people assume, yeah.

Ben:                           Oh, because I know somebody that that’s, that’s the magic bullet as-

Jason:                        Yeah. It’s really what that does is show kind of a lack of understanding of how it works.

Ben:                           Mm-hmm (affirmative).

Jason:                        And it’s not that they’re bad people, they just haven’t lived it yet.

Ben:                           Correct. Correct. No, that’s great. Now, uh, another, another direction here that I, I think you guys did a really good job of and you saw early on at, at Vital, once the consumer demand started to grow, that it’s very easy, it’s actually much easier to put cage-free, a cage-free sticker or stamp on your eggs than to actually be committed to the animal welfare and, and all of these other concerns that you guys were focused on. Now, so what you guys had to do was define for yourselves and for consumers, what was the difference between a, a cage free egg in a pasture raised egg? Because, and, and you can, you can describe for our listeners that just because something is cage free could, th- that can actually be a worst, eh, situation for, for the hens than, than a caged investment.

Jason:                        Yeah. So this gets into label claims and greenwashing, that kind of thing-

Ben:                           Right.

Jason:                        … where you’re, you’re throwing a merit badge on a package. And, um, really, for better or for worse. So this was the heart of what we were trying to bring to life for people. Um, continues to be, you know, the, the, the egg set is a confusing place to go shop. Um, like a lot of places in the grocery store-

Ben:                           But it’s one of the key places that most people are stopping at when they, when they take a trip to the grocery store-

Jason:                        Yes-

Ben:                           … so it’s very important.

Jason:                        Yeah. And that, um, being in that kind of staple commodity space, that gave rise to a lot of the really drastic volumes that we started dealing with very early on. But yeah, it’s, you know, eggs, milk, butter, bread-

Ben:                           Bananas.

Jason:                        There you go. Coffee. So, uh, in Austin Craft beer I suppose, but-

Ben:                           Fair.

Jason:                        Yeah. Uh, kombucha, we, uh, we wanted people to understand the spectrum of production and when you think about it, that’s pretty technical stuff. When you have however many seconds it is probably to, to get something across, um, that’s a tall order and in a space where it’s set up to be confusing-

Ben:                           And the shoppers themselves are distracted and in a hurry often-

Jason:                        Right.

Ben:                           … maybe they’ve got a kid with them or something else. So it’s really hard to cut through that noise.

Jason:                        Yeah. So we, you know, again, our approach was, um, very transparent and authentic. So what we have always tried to impart was the feeling that when you engage with our brand, and hopefully it still feels this way today, it’s not too much different or it kind of at least hearkens to, if you were strolling through the farmer’s market on that Saturday morning, I always wanted to kind of capture that and that be that what was evoked and certainly our, you know, artwork and all of our, um, you know, messaging, however you bake it in the, the tone of it all is very much that way.

Ben:                           That’s a really important point that I just want to underscore here, tha- tha- that was a deliberate, uh, like take on, on your part to say how do we give, even though we’re in this sterile grocery store, a more of that, that alive feeling that you have on a Saturday or Sunday morning at the farmer’s market and how do we, how do we al- allow our packaging and messaging to, to, to transport people to this place?

Jason:                        Yeah. It was not hard to stand out actually because this is a commodity space. All the, all of the producers at a grocery store were pretty big companies and things had been pretty stagnant there for a while. Disrupting that from that angle, um, was a lot easier than figuring out a production model and you know-

Ben:                           Absolutely.

Jason:                        … have it be reliable. But yeah, I, I remember just looking at these egg sets and saying, well there’s the styrofoam stuff and then there’s like, there’s a red label and a green label and it’s all just kind of primary. And once I understood from working with those packaging companies how a lot of these firms were approaching it, it was, they would actually call a packaging company who, who manufacturers pulp cartons-

Ben:                           Mm-hmm (affirmative).

Jason:                        … and you know, they have designers and they would say, well give me something that looks like this. And like, okay, it’s not going to be hard to do better than that.

Ben:                           Correct.

Jason:                        Right. In a world of CPG with just, uh, being a marketing guy-

Ben:                           You’re actually building a brand.

Jason:                        Yeah. So we, you know, uh, my starting point was let’s do what’s not there.

Ben:                           Mm-hmm (affirmative).

Jason:                        And so, um, unfortunately just due to, I’d say operational limitations ’cause you’ve got all these expensive egg processing machines, there’s, you can’t just do whatever you want to get eggs in a package. It turns out the, you know, the carton with the lid is actually a, a very functional format. So, but we, um, through a lot of work, just p- putting more thought into our labels and then finally-

Ben:                           Yo- you can’t just make a, a Pringles sleeve of eggs and just say, I’m going to completely, radically transform every way-

Jason:                        Actually. Yeah. I tried (laughter)-

Ben:                           Yeah.

Jason:                        … I, I had several meetings with BOSCH, you know, the-

Ben:                           Yeah, that’s right [crosstalk 00:40:33] company equipment manufacture.

Jason:                        … dishwashers and-

Ben:                           Right.

Jason:                        … basically everything they do is awesome. They would come over from wherever, Germany-

Ben:                           That’s right.

Jason:                        … and, uh, we, we tried (laughter), we were, you know.

Ben:                           Which is good, that’s, that’s like more part of the process.

Jason:                        You know, that’s more like three deep instead of two, anyhow, uh, that didn’t go anywhere-

Ben:                           (laughs).

Jason:                        … but you know, we were always trying to innovate even though what we’re doing is, you know, this kind of staple product.

Ben:                           Right.

Jason:                        So finally a packaging company came out with a new design and that’s what we’re in today. It’s, it’s called a hybrid. It’s more of like a cereal box top where it’s not a label applied over a, a pulp carton. It’s, um, gives you way more real estate.

Ben:                           Mm-hmm (affirmative).

Jason:                        Um, I jumped on that-

Ben:                           The paperboard on there, yeah.

Jason:                        Paperboard and, and had an exclusive, we were the first anywhere to do that and got an exclusive on it for as long as they would let me and that was a year but yeah, um-

Ben:                           That’s helpful.

Jason:                        Very. And, you know, we had this chalkboard concept that had been in my head for a while and, uh, hadn’t been able to really birth it right just yet. And, um, we found this was just as the chalkboard art was really coming out.

Ben:                           Right.

Jason:                        And, um, we found our way to, it was like Oprah’s chalkboard artist in New York city-

Ben:                           Right.

Jason:                        … you know, or somewhere in, in, you know, convinced that-

Ben:                           Why, why settle for second best when you can get Oprah’s?

Jason:                        (laughs) you know, she’s doing this for Oprah and Martha, you know-

Ben:                           She’s approved.

Jason:                        … she’s really, she’s gonna-

Ben:                           She’s approved.

Jason:                        So yeah, she, we got her to take the project and, uh, at the time it was a vast sum of money.

Ben:                           (laughter) Sure.

Jason:                        Although now I realize how much more, even m- much smaller companies spend on this stuff.

Ben:                           Oh, sure.

Jason:                        As they should in a sense it’s very important. It’s how you engage the customer. Um, so that birthed, the whole chalkboard theme, and we’re still riding it today. And, and that was, um, a- an attempt to feel like you were, you know, walking up on that little tent in the farmer’s market with the chalkboard that says, “Hey, you know, fresh eggs, or, you know, we’ve got peaches this week.”

Ben:                           Absolutely. So you’ve evoked that thing. I, I, I apologize, I, I got you off on that, that packaging thing, but let’s go back to the, the pasture raised versus e- e- egg, a cage free egg scenario. How did you guys engage that or how did you educate consumers, uh, about the difference between those two things?

Jason:                        Yeah, so there’s this spectrum of production, you know, the conventional cage stuff. Then as you’re referring to moving up in theory to cage-free, it actually is worse for the animals in certain ways that are kind of gross. So we can talk about it or not, but-

Ben:                           Well, they, i- i- in short, they can get trampled because there’s, they’re, they’re not protected in the same way.

Jason:                        Yeah. Just imagine, you know, being in a studio apartment your entire life with, you know, 100 of your best friends (laughter), uh-

Ben:                           That, that doubles as a mosh pit (laughter)-

Jason:                        Without the music. Yeah-

Ben:                           That’s right.

Jason:                        It’s, it’s a, so in theory you progress up from there. Um, free range is usually a next stop and that, that is a misleading one also because it doesn’t necessarily mean that there, there is this bucolic pasture with, you know, chickens frolicking around and chasing butterflies. It’s a, that’s a USDA definition. That means there is access “access” to the outdoors. So you could have a 400 foot chicken house with a door on it. Th- those chickens may not-

Ben:                           If they can’t find-

Jason:                        … even realize it’s there. Yeah. So, uh, greenwashing, you know, that’s-

Ben:                           Sure.

Jason:                        … for you to decide, but-

Ben:                           That’s right.

Jason:                        … it means access not i- in practice.

Ben:                           Right.

Jason:                        Then there’s organic, which basically means there is also some outdoor access, but the feed input is organic, which is terrific. That’s, you know, not genetically modified-

Ben:                           Right.

Jason:                        … and just better quality of feed that, um, that the chickens are taken in. And by the way, our chickens, they’re not just out eating grass and other, other pasture goodies, but it’s, uh, the- they’re getting as much corn as any other layer. You know, back to the fact that that’s what these things are bred to do.

Pasture-raised is really more of a lifestyle. So it’s pretty holistic in that it’s not just cage-free, it’s not just free range. We are actually, I’d say making them, but you don’t have to make them because that’s what they naturally want to do is run around and, and be outdoors. Um, so our farms have overnight protection and barns for the chickens. And in the mornings the, the doors come up and there’s a beautiful green stuff out there, uh, uh, more than they would ever really need. And on top of that, we layer in effectively a rotational grazing program, not unlike what’s done with grass fed beef where, um, you know, they’re not just on the same patch of ground and-

Ben:                           Turning into a feed lot.

Jason:                        … consuming… Yes.

Ben:                           Right. Kind of a mud pit.

Jason:                        That’s-

Ben:                           Yeah.

Jason:                        Uh, yeah, it took us a while to figure out how to execute on that. But-

Ben:                           Right.

Jason:                        … there’re always on fresh green stuff that we think makes them healthier. We don’t make any claims around that-

Ben:                           Mm-hmm (affirmative).

Jason:                        … but certainly if you’re eating a rounded diet and not just one ingredient all the time getting exercise and fresh air, you’re probably gonna be a healthier critter than-

Ben:                           Correct.

Jason:                        You know, indoors eating off of a conveyor belt.

Ben:                           Exactly, exactly.

Jason:                        And so, um, that- that’s, that’s uh-

Ben:                           So you, you, you really, I guess, codified that, that, that spectrum of, of, of a variety of, of different states of the, of the chicken. And then how did you communicate that to, uh, to the consumer tor the shopper?

Jason:                        Yeah. So we would talk about it every chance we got at whatever touch point we had. So certainly online social, on your website and email list and that kind of thing. Um, that’s all there. This was really before influencers became their own niche industry.

Ben:                           That’s right.

Jason:                        Uh, but you know, you do the PR and whatever you can afford. One of the more effective marketing pieces we’ve ever done are really tactics, has been the, the newsletter, it’s called the Vital Times. It’s you open the lid of carton, which we realized probably 90% of the time, we actually studied this at one point, but when you pick up a dozen eggs, what do you do? You open the lid (laughs).

Ben:                           Are any of them cracked?

Jason:                        Yeah, exactly.

Ben:                           Right.

Jason:                        By necessity and everybody’s kind of trained to do that now. And so this little insert, we, we were putting that in from the very early days and that was, you know, an educational piece and, and it’s something-

Ben:                           Which isn’t an, an extra, uh, cost and-

Jason:                        Hugely expensive at first.

Ben:                           Probably a hassle, I would assume as well.

Jason:                        Yeah. It was n- nothing about, it was automated in the early days.

Ben:                           Right.

Jason:                        We were having really small runs of the printer and it was probably cost us a dime per unit to put that thing-

Ben:                           Which is a lot.

Jason:                        It’s massive when you-

Ben:                           At scale.

Jason:                        … when you look at yeah, the unit economics, right. So now it, it costs a fraction of one cent and a, it’s, you know, there are ways to automate that stuff-

Ben:                           Mm-hmm (affirmative).

Jason:                        … but, um, what we continue to do there is, uh, just educate, kind of say basically the same message, you know, what does it mean to be pasture-raised, uh, in different ways. And we also try to have a lot of fun with it. Um, you know, there’s the bird of the month and-

Ben:                           There’s personality to it.

Jason:                        … cartoons and yeah. And our tone was always, this is really important because you see a lot of natural products producers or you know, organic farmers in, uh, it’s, people need to understand the dark side-

Ben:                           Mm-hmm (affirmative).

Jason:                        … of food production. That’s what we’re migrating the industry and our eating practices away from. But you dwell on that or you try to-

Ben:                           It can be very shrill. I think it’s-

Jason:                        Well it’s negative.

Ben:                           Yeah.

Jason:                        And nobody wants to receive a negative message all the time.

Ben:                           Right, right.

Jason:                        And, it’s sometimes hard for, you know, better quality producers to avoid that ’cause you need context.

Ben:                           Mm-hmm (affirmative).

Jason:                        The consumer needs it, but you need to have a positive message and tone. And so from the early days we, we would incorporate, you know, um, not, uh, not overly kitschy or uh, uh, you know, not just blowing sunshine ’cause we don’t-

Ben:                           Yeah.

Jason:                        … and detail, but-

Ben:                           Right.

Jason:                        But yeah, I was positive.

Ben:                           Yeah.

Jason:                        It was more like this is why what we’re doing is superior.

Ben:                           Right.

Jason:                        And it was less about, you know, kicking the other players in the industry and um, you know, you’ve gotta realize if you’re a brand and you feel like you’ve innovated and you’re doing something better, you need a retailer to put you on a shelf. Uh, D to C is an important parallel path that-

Ben:                           Curl.

Jason:                        … work in tandem anymore. But what you may not want to do or you want to be careful about is, is kicking all the other people around you because that buyer who is choosing to give you a shelf slot also has the same meeting with the people next to you who you say are evil people-

Ben:                           That’s right.

Jason:                        … and you need to, you need to-

Ben:                           And they probably have known those people a lot longer than they’ve known you.

Jason:                        Exactly, ’cause you’re new to the game and who knows?

Ben:                           Mm-hmm (affirmative).

Jason:                        Maybe, you know, they’re, they’re golfing buddies.

Ben:                           That’s right.

Jason:                        You know, so, um, yet another reason, very practical one to deal in the positive-

Ben:                           Right.

Jason:                        … and um, you know, we, I think have done a, we struck a pretty good tone and voice and that’s really important even today. People look at some of the, they look at the brand and I think it’s, there’s also, when you incorporate humor, we’ve been able to be pretty subversive with some of the points that we’re making-

Ben:                           Right.

Jason:                        … while keeping it fun, some of our campaigns are, um, you know, they’re edgy in a certain sense, but it’s still positive, at least highlighting the great aspects of, of what we’re doing and why that makes a difference.

Ben:                           Absolutely. That’s awesome. Just a second – we’re going to take a quick break.

 

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Back to the episode!

 

 

Ben:                           So over the last handful of years you have, uh, yo- you’re, you’re not like, as, as you mentioned before, you- you’re still very active, you serve on the board, but you’ve, you’ve been involved in a number of other startup ventures as, as an ad- advisor, investor and, and mentor. What are some of the things, a- again, now you’ve seen, you’ve, you’ve grown this, this really sizeable and exciting business, but then you’ve also seen a number of other ones that have been typically at that, at that very early stage to, to in some cases more of a growth stage. What are some of the lessons or, or patterns that you’ve begun, you’ve begun to detect across the industry for better or worse? Like things that you see, oh, this is a really common mistake that people make or this is something that I’m really excited about because I’m seeing more of this.

Jason:                        Yeah. The last three years or so, so I, I peeled out of the day to day at Vital. Um, there’s a, this is a whole other thread that’s worth talking about.

Ben:                           Sure.

Jason:                        It’s kind of self-care as an entrepreneur, I suppose in a business owner who is really-

Ben:                           ‘Cause it’s a very intense lifestyle.

Jason:                        Yeah, man. I, I lived that for, you know, seven years in the, the, our growth rate, um, being scrappy and not, you know, equity backed to-

Ben:                           Mm-hmm (affirmative).

Jason:                        … flush with funding, you know, uh, from the beginning we were always really, let’s say resourceful (laughs).

Ben:                           That’s right. Yeah.

Jason:                        Make do with not a lot. And um, and on top of that, what we were doing is really low margin compared to most branded products. But anyhow, I needed a break and, and was able to, to do that two or three years ago. Um, because of the quality of, uh, leadership, you know, new people we had brought on the team who are today running with the thing and just, uh, professionalize a lot of it, you know. A company when you have growth like that, it’s, it’s going to evolve and it has to evolve. Um, you know, the spreadsheets that were the backbone of our business in 2011, um, I hope they’re dead and buried by now (laughs)-

Ben:                           For sure.

Jason:                        And, and they are. Uh, the, the level of sophistication the team is bringing in today, um, in the ways the leadership-

Ben:                           I suspect they have a pa, a, a, a more robust ERP system than you had back in the day to, right. The ERP system might’ve been-

Jason:                        I’m not gonna say what is ERP, but-

Ben:                           (laughs) exactly.

Jason:                        No, exactly, there’s systems and systems on systems. It’s, uh, just impressive. The quality of the crew today is, um, I think you could say singular for what we’re doing.

Ben:                           You have a lot of confidence in that team.

Jason:                        Well, it’s earned and you know, the company continues to thrive and that’s what we’re, you know, we’re 10 years in and still have loads of runway and the intent is to gobble that up and so-

Ben:                           That’s awesome.

Jason:                        Yeah. So anyhow, I took some time and um, I guess for the last two or three years have been doing a lot of, as you said, advisory work, fractional executive work, where I realized really what fills me up is the early days of a new thing. And really the bigger the challenge you’re tackling, the better. Um, lot of introspection and, you know, coaching and things that I’ve done for myself, I’ve, uh, kinda realized what matters to me. And, um, one of those things I really enjoy is, I won’t say the next generation of entrepreneurs, but just, you know, other folks who were trying to do what Vital has done, what companies here in Austin, like Siete have done, helping them, you know, because I’ve got a lot of scars and I want people to learn from them. And, um-

Ben:                           Yeah.

Jason:                        I’m not saying there’s a ton of money in that (laughs), but it’s been real, real fulfilling. Um, I just like the entrepreneurial journey and so I’ve helped a number of companies in a number of capacities and in a number of, uh, categories, which has been, you know, it’s helped me to grow. Um-

Ben:                           So you don’t not just no eggs right at this point. Not that that was ever really characteristic of you, but, but, but you see you, that’s right. You, you, you see some commonalities. You see the differences.

Jason:                        Oh, yeah.

Ben:                           You see the processes.

Jason:                        There’s a, you know, a quote playbook as it’s referred to.

Ben:                           Mm-hmm (affirmative).

Jason:                        Um, although every situation is different, it’s been nice to play in different parts of the grocery store and also, you know, with companies that are digitally native and just learned a ton. And um, yeah, there are definitely, uh, s- some commonalities and themes.

Ben:                           What- what’s different about growing an early stage company today from when you were in the early days of Vital?

Jason:                        Well, there’s just loads more resources now. This space has matured. It’s still, I wouldn’t call it mature, but it has matured just in this town. There’s so many other people doing what you’re doing and then, you know, folks like me with a little bit of gray who have done it and, uh, can just save you a lot of time. I mean, I, I look back and I think yeah, it could’ve shaved a lot of the learning curve and uh, not cost ourselves, you know, time by-

Ben:                           Months or thousands of dollars…

Jason:                        The team you’re assembling… Yeah. Or the level ex, of expertise you went out and got, um, you know, in a certain function that, that really could have gotten you down the field even faster. I’m not sure really how we would’ve done that given how fast we were, we were, you know, more than doubling every year for, you know, seven years straight, but you know, lot more assets and resources, a lot of help that you can, you can take advantage of in the space now.

Um, you know, Naturally Austin is a group that has been formed about six months ago and I’m involved with that. And the idea is, um, to kind of formalize that network or pardon the buzzword-

Ben:                           Right.

Jason:                        … but the ecosystem that’s really out there that people need to know about. And that’s a real advantage to firms today that we didn’t have. Um, that’s not what it was me, but the fact is, yeah, we figured out a lot. And, um, I think companies can proceed through the exercise a lot more intelligently these days, although now it’s way more crowded. So that’s-

Ben:                           Right.

Jason:                        … the, the other side of that coin. Uh, just, it’s so frothy. It continues to be, but-

Ben:                           So do you think it’s, so wh- when you mentioned frothy, do you think it’s easy now to, to start a company? Do you think it’s easy to raise money for that company?

Jason:                        Yeah, in some ways there’s a lot more funds, and investors out there who are keen to, to ride this train and, um, you know, a lot of the other resources you need just accounting help that specific to the industry or you know, uh, infrastructure wise there’s, there has been a response to the lack of supply of, of certain things you need to be in this space. And so, uh, but at the same time it is, uh, in certain ways harder I think, because you’re not going to be the first gluten-free snack out there (laughs) anymore five years ago maybe. But, um, you know, first mover advantage has been claimed a lot of times and, and these are strong firms who, who may not let go of it.

Ben:                           So what kind of advice do you give to some of these early stage brands about differentiation and whe- when they don’t, either they don’t have that mover advantage or, uh, maybe they’re even trying to decide what, what segment to go after.

Jason:                        In this space, the barrier is pretty low to coming up with something “new.” Uh, you know, it doesn’t take much to sit at your stove top or in your garage and come up with, you know, a recipe like our friend with the world’s best salsa. Right?

Ben:                           Correct.

Jason:                        But, uh, it actually doesn’t mean that it’s novel. It doesn’t necessarily mean that the world needs it. And that’s a hard lesson sometimes, but you definitely see many entrepreneurs who, and it can be pretty sad, you know, they’ve sunk their life savings or their nest egg into some really smart branding and their stuff looks really good, but is it gonna go, uh, that’s, that’s the eternal question-

Ben:                           Right.

Jason:                        … and um-

Ben:                           And sometimes-

Jason:                        … the answer is no, a lot of times.

Ben:                           That’s right back to your, your playbook. I see this sometimes that people will sink their nest egg or, or whatever other resources into this smart branding, sometimes too early, right? Be, like I think there is a, there’s a consumer, uh, permissiveness that that is out there. I refer to it as the sad brown bag stage, right?-

Jason:                        (laughs).

Ben:                           … where, where you, you know, you, you got a thing off U-Line or something like that and your, i- it looks like farmer’s market level. And on some level, if you can sell a product in that sad brown bag and it, it actually moves and people are willing to pay a premium for it, you can always come back and upgrade your branding later. It’s, uh, some- sometimes-

Jason:                        (laughs).

Ben:                           … I see people put the kind of the cart before the horse a bit in that way.

Jason:                        All the time. I mean, if people could see, w- we hopefully somewhere this lives, there’s a collection of the, the egg cartons and the labels.

Ben:                           That’s right. Yeah.

Jason:                        Not that everything else has to refer back to Vital

Ben:                           Yeah.

Jason:                        … but I, the fact is we and I have made a lot of those mistakes.

Ben:                           That’s right.

Jason:                        Uh, but in, in, you know, in our case, yeah, we evolved over many iterations into what we look like and how we present to the world today. The DNA is the same and basically the message is too, but, uh, it’s much better packaged and you know, presented. So you see it a lot, uh, g- great brand, cute package. But, um, you know, no sales, a lack of understanding of really your unit economics and oh, hang on, the distributor is gonna do what to me (laughs).

Ben:                           Tremendous.

Jason:                        I’m gonna have to support this with what level of trade spend, um, that’s something-

Ben:                           Or in your, in your Vital experience where you, you would assume, again, I, I talk with entrepreneurs regularly who would say they, they go to the grocery store, they see that the eggs are a dollar 99, they assume that their eggs need to be a dollar 99 too. And so then they, they tell a, a buyer category manager type person, all right, we’re here, here’s my fancy, fancy pasteurized egg and it’s a dollar 99. And they never again, which feels, uh, just kinda ridiculous to me, but it, I wouldn’t believe it if I hadn’t seen it and experienced it myself so often that, that people like you, you have to walk through methodically actually, how much does it cost you to make those eggs? And so your, your margins, like you’re either you’re making nothing or you’re losing money on every carton o- of eggs. So, uh, how- how’s that business go- going to work out for you?

Jason:                        Yeah. And in some cases, unfortunately, the entrepreneur is so far down the road and kinda committed in that nest egg is sunk. That, uh, if they could go back, they may not even be trying to advance this anymore. Yeah. Yo- your unit economics are everything and the quicker you can understand what it’s gonna take to s, to support es- especially something new, ’cause it’s not cheap, um, to get a message out and there are uh, arbiters between you and the customer who have their hand out and you will pay them (laughs).

Ben:                           That’s right.

Jason:                        Uh, one reason why, you know, direct to consumer is so attractive for a lot of brands, but um, yeah, it’s, it’s easy for them to get down the field with certain aspects of a business model. Let’s say the marketing stuff-

Ben:                           Mm-hmm (affirmative).

Jason:                        … and maybe the product itself is awesome, but operationally, how are they gonna scale? Uh, do they have the money at a certain wholesale price to really play the game?

Ben:                           Mm-hmm (affirmative).

Jason:                        Thankfully-

Ben:                           And play the game means promote it?

Jason:                        Yeah.

Ben:                           Uh, potentially a deal down if they need to on in, in certain instances?

Jason:                        Mm-hmm (affirmative).

Ben:                           And in how, how you, how you figure out how do you move more product at the, at the shelf?

Jason:                        Yup. And you know, that’s, if you haven’t lived it, you haven’t lived it. And the sooner you get on board folks who already understand that the better. And that’s why this is a great time to start a food business because um, you know, there are fractional, like you could, you don’t have to get a great CFO who’s been in the space and has a real healthy salary requirement. You don’t need that person 50 hours a week. You can get by with a bookkeeper and somebody like that coming in for five hours a month and you know, you then you have their talent on your team, but you’re not having to pay the full price-

Ben:                           And you grow that, you grow that engagement-

Jason:                        Yeah.

Ben:                           … a- as necessary as you [crosstalk 01:05:36].

Jason:                        And they’re gonna keep you out of trouble. You know, like-

Ben:                           Mm-hmm (affirmative).

Jason:                        … myself, when I engage with an entrepreneur who I think is onto something and I enjoy dealing with it, that’s usually the first stop. Like, you know, give me the keys to the books and let’s see what we’ve got here. Do you really understand what has to go into doing this? And um, and yeah, the other stuff, it’s not that it sizzle because this is CPG, you know, you need to be beautiful and delicious and all these things, um, in the right places. But, um, yeah, certain things are more fundamental even than that. And you know, if, if you’ve truly cracked a code and you’ve got something great that the world needs, you can get by in that brown paper bag.

Ben:                           Absolutely. So what do you see in, in your experience working with a variety of these, these different companies? Are there, are, are there particular traits in an entrepreneur or a founder, co-founder that you say, oh, this person has, has the it factor?

Jason:                        Mm-hmm (affirmative).

Ben:                           What, what, what are… Are there any commonalities that you see across certain people who really are going somewhere?

Jason:                        Yeah. You know, entrepreneurs, whether they’re born or made or can you learn this stuff? Um, who knows? But there’s a certainly a risk, a risk tolerance. Um, there’s kind of a classical entrepreneur, I think that is very much an idea person. So a lot of times either they can or they cannot execute.

Ben:                           Right.

Jason:                        And you know, in addition to, you know, having the germ of something new, you know, pop up, uh-

Ben:                           But when you’re, when you’re, when you’re, when you’ve actually done this, you recognize that th- th- the axiom that that ideas are nothing execution is everything.

Jason:                        (laughs) yeah.

Ben:                           Because it really is like-

Jason:                        25 years it didn’t go anywhere.

Ben:                           Lots of ideas. You and I have had lots of ideas-

Jason:                        I have a lot of those (laughs).

Ben:                           It doesn’t matter. Did you do something?

Jason:                        Mm-hmm (affirmative).

Ben:                           So, so obviously there, there is that classical entrepreneur who is, is an idea generator. I have seven ideas today or something, but what did you do with it?

Jason:                        Mm-hmm (affirmative).

Ben:                           And that ultimately is kind of separates the wantrepreneur from the entrepreneur.

Jason:                        Yeah. And you know, necessarily it’s, it’s hard and it ought to be hard. You know, there’s stuff that could get out there that isn’t, you know, as meaningful or doesn’t really impact the world or our food system for the better. Uh, and you see some of that stuff squeak through I guess. But, um, with a lot of, especially the first timers, one thing that’s important is to, you got to blend moving forward in the world wi- with listening. Um, you know, I’ve, we’ve benefited from having, uh, a lot of times opposing thought processes or differing views on, on something. You know, I, I see this a lot, especially with entrepreneurs who don’t have a partner where there’s not another voice, you know.

Ben:                           There aren’t complimentary skill sets.

Jason:                        Yeah. And, and that’s something we always enjoyed and, and I in a lot of cases, try to, try to fill that role because it’s really critical-

Ben:                           Right.

Jason:                        … if you’re in your own head all the time-

Ben:                           And, and, and if you don’t Matt here, Matt, Matt and Jason have very different personalities. So yeah, very-

Jason:                        Turns out Matt’s wrong a lot.

Ben:                           (laughs).

Jason:                        And I’m right (laughter).

Ben:                           Exactly, yeah.

Jason:                        It’s not that at all. It’s-

Ben:                           No.

Jason:                        I- in fact, I, I’m pretty open minded about most things. Um, but you know, Matt, he, he would bring a certain, um, you know, strident opinion on something and, and just because I’m gonna say the opposite thing.

Ben:                           That’s right. That’s right.

Jason:                        Just so that there’s… I- I’ve always believed healthy tension and debate, uh, competition within a company it produces a better result.

Ben:                           The ir- iron sharpens iron principle.

Jason:                        Well said. So, um, we, you know, I, I would make sure we had that happen a lot and uh, it doesn’t mean it’s comfortable, but when you don’t have that and you’re constantly mulling this stuff even when your head’s on your pillow at night and-

Ben:                           Mm-hmm (affirmative).

Jason:                        … y- you know, you can get in these thought loops and um, you need to help, you need help sometimes getting out of your own head and just seeing a different way. And then again, taking advice from somebody for whom this isn’t actually nearly as close to guesswork as it might be for you as a first timer. So one thing that separates the ones that will go is being open to input, not, you know, you can be paralyzed by such if you get too much of that. And I’ve seen that too where you listen to everybody and (laughs) as a result-

Ben:                           So you’re, you’re blown and tossed by the wind.

Jason:                        Yeah, and you’re not putting one foot in front of the next, just at the end of the day you need to be selling stuff and you need to be selling more next month than you are now. And um, luckily there’s a, again, plenty of help out there to do that. I think it’s a great time in this space.

Ben:                           And it’s always easier to sell a really good product than a, than a mediocre or a bad product.

Jason:                        You know, I’ve seen that too where you’ve, you’ve got some of the sizzle, maybe even great distribution, but it tastes like crap. So (laughs).

Ben:                           That’s right.

Jason:                        You know, this is food. Don’t overthink it. It needs to be delicious.

Ben:                           The best marketer can get your product sold once, but if, if the product doesn’t deliver in taste, texture, whatever the attributes are, it’s, it’s gonna be a really hard sell to get somebody to buy it a second time.

Jason:                        Yeah, not to be academic, but you know, your sales funnel, what you’re trying to get to is repeat purchase, not trial.

Ben:                           That’s right.

Jason:                        If they don’t come back next week or at least next month, um, so you’ve gotta understand-

Ben:                           If there’s a customer acquisition cost every single time they purchased, then that’s not a-

Jason:                        Too expensive.

Ben:                           … very scalable business.

Jason:                        There you go. So you got to hook them.

Ben:                           Absolutely. And that, that kind of fundamentally comes to the, the value proposition and the, the attributes of, of the product itself. And so what are you, what are you excited about right now? What are you seeing in the, in the industry that you think is, is kind of new again, there, there are plenty of fads and trends that, that come and go. Uh, certainly everything is, it, it has CBD in it right now.

Jason:                        (laughs).

Ben:                           Everything has a, a number of other things that might, might be a big deal for at a time. Maybe a flash in the pan, maybe they last. But are, are there any kind of fundamental shifts that you’re, that you’re seeing across the space?

Jason:                        Well, personally, I do have a bit of the fatigue that can come from being in an industry and then every year, if it’s not kale, it’s coconut water, then it’s, as you said, it was probably still is Keto. And of course, yeah, CBD is everything right now. Um, you can get kind of tired of that whole scene. And I, I have suffered from a bit of that have not been to some of the trade shows in a cycle or two. And that’s actually been really nice.

Ben:                           Sure.

Jason:                        But, uh, yeah, I, I think for me personally, it’s, I wonder how many, how many permutations can we go through of slicing and dicing in order to identify white space? You know-

Ben:                           That’s right.

Jason:                        … there’s a lot of smart people with a lot of really big whiteboards who are going through that. I mean, what you still see of course, are the biggest players. They’re not the ones doing cutting edge innovation. They still do that through acquisition largely, and-

Ben:                           They’re outsourcing their R&D to these startups.

Jason:                        Sure. And you know, that creates a whole playbook again for startups, which is, which is a great thing, but it’s a, yeah, there’s just such a, I guess fight too. Like what’s the next again, merit badge that we need and how do we incorporate, you know, CBD into everything will when you could just take a CBD pill at night. Like how much is too much? And I think a lot about that. It’s been so, uh, so such a dynamic space for awhile. It’s, I think it’s a little harder to tease out what is truly the next innovative either ingredient or you know, market to cater to like what’s, we got gluten free, we got Keto, what’s next? Um, I don’t know if that’s infinite. I mean there’ll always be something else we can do.

Ben:                           Right.

Jason:                        I think there’s myriad ways we can improve the system in what we eat. Certainly if you think about industrial ag there’s, you know, just there’s white space there that’s harder to tackle then calling a co-packer up and mixing some ingredients and getting something “novel”.

Ben:                           Absolutely.

Jason:                        It’s, you know, how different is it? I don’t know. I, I think a lot about that. Um, personally what I get excited about are, are areas where you could truly impact something in a bigger way. And, um, something that I don’t know whether the TAM is really big-

Ben:                           Mm-hmm (affirmative).

Jason:                        Um-

Ben:                           Total addressable market.

Jason:                        Yeah. It’s, you think about, um, like the protein space or certainly commodities are still there to be shaken up as opposed to, you know, certain packaged goods. I mean, there’s nothing wrong with that stuff. And, um, so it’s just what’s cool is this place is, uh, it’s not slowing down anytime soon.

Ben:                           Right.

Jason:                        Because the barriers are low. Even if there’s a downturn, there’s still gonna be a lot of activity here. There’s more investment money piling up every day wanting to get into this space, and so-

Ben:                           Is it all good investment money?

Jason:                        (laughs) Uh-

Ben:                           Like how do you advise people-

Jason:                        Yeah.

Ben:                           … like i- i- in terms of evaluating whether this is good money or mm-hmm (affirmative), this may, this may come with too many strings attached?

Jason:                        Yeah, it’s in the details. I mean, everybody is going to say they’re value added and we’re going to bring all this strategic benefit. The fact is-

Ben:                           You’ll never meet an investor who says-

Jason:                        Yeah (laughs).

Ben:                           … “Oh, I’m just, I’m just a check.”

Jason:                        (laughs).

Ben:                           I, like they- they’re all value.

Jason:                        I have yet to meet them.

Ben:                           That’s right.

Jason:                        Uh, and by the way, they all wear, uh, leather lace ups, dark blue jeans and uh, yeah, like checkered shirts with Patagonia vests.

Ben:                           Exactly.

Jason:                        That’s the thing. It’s a real thing. Um, certainly s- some of it actually is value added, but, um, you know, making sure you find an investor as of very critical stakeholder in your sphere of, of stake holders, um, who shares your values and truly does critical, um, you know, it’s, it’s, um, important to know what their real time horizon is. Uh, what their, what is their scorecard look like for themselves. There truly is some patient capital out there-

Ben:                           Are they investing their-

Jason:                        [crosstalk 01:16:52] nice.

Ben:                           … own personal money or are-

Jason:                        Right.

Ben:                           … they investing other people’s money, in which case there is likely at a, a time clock associated with that?

Jason:                        Yeah, you gotta understand, I mean that, for a lot of them, it’s a j- job and they are there to shepherd and have a certain performance level with other people’s money. And, um, it may not be that they’re bad people, but that’s their job. In five years they’re gonna need to see something. So-

Ben:                           And you have to understand those incentives.

Jason:                        Yeah. How are, what, what are, what is governing how they, they are moving through this exercise with you at your board table. And, um, you know, everybody’s looking down the road to exit. I mean, it’s, it’s pretty rare that you see a, a growth stage food company whose plan is to have their grandchildren working at that company. Uh, I think that’s a wonderful thing. I, I don’t think that it’s a bad thing at all that, you know, a common goal is to run it up to X amount of sales and then exit at three X. Like that’s great. M- makes the world go around. And as a capitalist, that’s quite beautiful to me.

Ben:                           Right.

Jason:                        When I’m engaging with, uh, a growth stage company or a, or a founder, um, something they’ve got to be very intimate with is their cash position. And I don’t mean today, I mean every week out foreseeably um-

Ben:                           Because many of them assume if we grow cash is no problem.

Jason:                        Yeah. Well it gets tighter in a lot of cases. And so you need to be forecasting and this is where you may need help. So just go get somebody who knows how to do this specific to this space, not the CPA who’s done your dad’s taxes for the last 20 years-

Ben:                           Right.

Jason:                        … and he’s a great guy. You need somebody from this space who can help you see around the corners, especially when you’re growing, uh, so that you, i- it can be, uh, insurmountable in some cases if you start raising too late. And that’s something you wanna identify well ahead of when you need to-

Ben:                           Because that doesn’t happen overnight.

Jason:                        No, it’s its own job in fact. And when you’re doing that, by the way, you’re not running your business, improving it, growing it. So, um, especially if you’re thin or a one person show, you really need to get into fundraising on the early side, move through it as quick as you can and put it down and maybe take a bigger drink at the wheel while you’re there. But, um, that’s-

Ben:                           And get back to work.

Jason:                        Yeah, yeah, yeah. So, um, yeah, there’s, there’s, there’s great money out there and you know, ESG as it’s termed or you know, triple bottom line, people wanting to invest in minority or women owned businesses or things in a certain space that support rural development or, um, just impact on whatever flavor they’re giving it. Um, there’s a lot of those and, and a lot of them are doing it just because that’s the logical next fund-

Ben:                           That’s right, for that group, they are creating their own differentiation.

Jason:                        Right. Um, but what’s cool, again, and I think this has to do with the ethos of a lot of the companies playing that game is actually in the right place, is they actually do perform better. Um, and so, um, yeah, everybody, uh, from the highest level of, levels of wall street on down is, is talking about this stuff. So it’s, it’s actually helpful, um, to be starting off in a space like that.

Ben:                           Absolutely. Do you… S- so you guys at Vital Farms, you, you branded a commodity. If somebody came to you and said, I want to brand a commodity in, in general, do you say that’s a great idea or you should, you know, tread cautiously in that, in that world. Certainly it could be a big opportunity. What’s your, what’s your take on that?

Jason:                        Yeah, uh, it’s tough. It’s tough. We were entering a, a already very stagnant space and again, this is stuff kinda realized along the way as opposed to in a business case up front where, you know, you had this great plan and it was an academic exercise. It (laughs) again, uh-

Ben:                           Some shooting from the hip along the way.

Jason:                        Mm-hmm (affirmative). Yeah. Um, th- thankfully no longer, but yeah, i- it’s just real tough. Inherently, commodities are spaces dominated by big, big players where things have consolidated over time. Margins are low because that can tend to be a race to the bottom. And so it’s, it’s about how do we take cost out of this thing, not add value. So when you’re coming in trying to push the ball up hill when everybody else is trying to roll it down, yeah, that’s, that’s tough. It can be easy to stand out messaging wise, but due to the scale and the economics involved and the fact that it, you know, may not be possible to triple the price point on something, uh.

Ben:                           Right.

Jason:                        I, I see it a lot and man, I wish those companies lack and I personally will pay it a lot of times if I know how, let’s say an animal was treated to get that ribeye on the grill. Um, but yeah, it’s tough.

Ben:                           It’s really rare, it’s really rare. You know, obviously Vital Farms did it in its own way. I still remember the first time I saw a, a blueprint juice, which was the, I think the first of the HPP juices and they had a juice cleanse on the shelf at Whole Foods and it was about $100. And I thought, wow!

Jason:                        (laughs).

Ben:                           … this is a tremendous (laughs), this is a tremendously expensive juice that we’ve got here. So you can do that, but, but that can be a really tough, or you go from, a- again, just a regular juice to HPP juice where it’s, you know, you- you’re accustomed to 89 cent Tropicana something-

Jason:                        Mm-hmm (affirmative).

Ben:                           … and now it’s 8.99 Suja or pick another brand there that, that’s a really tough, yo- you have to, you have to have a, a really strong value proposition there.

Jason:                        Yeah. Do you, do you really bring something different that people will pay for? Um, thankfully there’s ways to, if you concoct something like that, then you can, you can test it out without maybe sinking everything your entire family has ever worked for before you really, if you have a path forward. So I would encourage testing not to sound clinical, but-

Ben:                           You’re running little experiments.

Jason:                        Yeah, I get the booth at the farmer’s market or you know, um, there are inexpensive ways to confirm that, yeah you’re actually onto something. And I would say if you actually are onto something, you will know it.

Ben:                           It’s unequivocal.

Jason:                        It’s clear.

Ben:                           And it, you know, I think another thing that you mentioned earlier in our conversation that I, is really important I want to highlight is you, you made the comment just to kind of make ends meet that you’re, you’re schlepping eggs at the farmer’s market. I, I meet a lot of founders who, who frankly want to skip steps. They, they think, oh, I’m not going to do that part of it. You did that and yeah, you were trying to make some money to, to pay the, the mortgage, but I, I’m going to bet that a, a huge part of the value that you got from that moment was in actually having those face to face conversations with, with customers and consumers. So really ends up being a tremendous marketing exercise too.

Jason:                        Oh yeah, no substitute for dealing really face to face three feet away with your core customer. What you get out of that is, is priceless. And that’s going to be more valuable than a $30,000 marketing study. That stuff has its place but yeah, that that in, is very informative. And it also helps you, especially as if you’re the face of something or let’s say you’re customer facing, you get it down, you get, you know, you could, there are multiple threads about why you’re own product is terrific.

Ben:                           [crosstalk 01:25:14].

Jason:                        Yeah. In your sleep. So, yeah, that’s uh-

Ben:                           But you’re also seeing, and that’s one of the things you lose when you get bigger.

Jason:                        Mm-hmm (affirmative).

Ben:                           You don’t have, even if you’re buying this very expensive data, what you, here’s what you don’t have. You don’t have the facial expressions of, of a person standing at the shelf looking at something. You don’t have the, the noise that they make when they first try the product or something like that. Is it, ew! Or is it or is it wow! And that sort of thing. And so you get that when you have that face to face-

Jason:                        Mm-hmm (affirmative).

Ben:                           … interaction, you have the full richness of that communication and you can begin to see what are, uh, what, what is the senior citizens response to this? What is the, the, the little kid’s response to this and, and how, how are people processing? What when I say my, my message, what are they resonating with? What are they, what, what seems to go completely, uh, over their head or, or, or through their ears.

Jason:                        Yeah. You know, let’s say marketing or selling, it’s a lot… With consumer products it’s largely emotional. Hard to do that from a Spins report.

Ben:                           That’s right.

Jason:                        You need to look at that too. But yeah, it was so informative for us and it helped us to crystallize really three key reasons why people were, were buying what we were selling and it- it’s not that if they’re one, they’re not the other like sociographics, you know, there’s those things kind of merge on a lot of levels anymore. The, the Venn diagrams. But certainly we knew what, uh, where I mean messages. And it was-

Ben:                           What were those three key things?

Jason:                        Well, animal welfare, um, the, you know, there’s the sustainable aspect of it, um, to in there, but that’s, um, we’ll call that one. There is the nutritional aspect. Because when you raise eggs a certain way, and just like with grass fed beef, you can, you can see differences and Omega threes isn’t certain vitamin levels-

Ben:                           It’s more nutrient dense.

Jason:                        There you go. And the third that actually shows how little we know and it’s just a good reminders like, hey, this is food. It needs to taste great. Oh yeah, these eggs taste better (laughs). We continue to hear that every day. And you know, that was kind of an output for us, um, trying to lead with, with another intention that actually, yeah, it did produce a better egg. Your stuff needs to be delicious. It doesn’t matter what label claims you can make and merit badges you have, it needs to be real tasty.

Ben:                           There might be a fourth that I wonder if you guys saw, which is social status. It’s very subtle, right?

Jason:                        Mm-hmm (affirmative).

Ben:                           But so what you see with, with millennials, gen Z in particular, you, you see these studies that, that relate to rather than spending money on the things that their parents’ generation might’ve spent money on, they’re actually investing more money in experiences and in food, right?

Jason:                        I’d say building on that wellness.

Ben:                           Right.

Jason:                        Through… You could say food is medicine, but you know what goes in matters and a lot of what the boomers are dealing with, maybe it’s because they were eating Dorito casserole-

Ben:                           Correct.

Jason:                        … three times a week for too many decades. Like there’s a consequence to that. You know, certainly they’re highly informed. Talking about whoever has come after us is maybe we’re gen X or isn’t, you know, the next couple of iterations. Now they’re connected, informed, almost conscious by default about certain things. Um, part of it too, I think because they’re, they’re so much better informed, they’re willing to spend in different places. You think about, you know, the same income, uh, you know, 25 year old has today back then, that if you go back to the turn of the ce, the 20th century, we were spending just a massive, I forget what the actual rate number is, but it was a, it could have been 30-40% of a household income went toward food.

Ben:                           Right.

Jason:                        We inverted that through the course of several decades. And you know, it was certainly-

Ben:                           Industrialized aggravates [crosstalk 01:29:38]-

Jason:                        … and everything scales, yeah.

Ben:                           Subsidi- subsidies.

Jason:                        That race to the bottom, that in a way we’d benefit from, you know.

Ben:                           Mm-hmm (affirmative).

Jason:                        $2 eggs are actually, they have their place and this is the Vital Farms guy saying this and-

Ben:                           Right, right.

Jason:                        … and again, that’s why it’s important to talk about choices and positives than beating up on everything else. Like, eh, not everything is for everybody.

Ben:                           Right.

Jason:                        Not everyone lives around the, the street, eh, around the corner from a Whole Foods or can afford it anyhow.

Ben:                           Right.

Jason:                        So everything has its place. But, um, you know, we got that percentage of our income that we spend on the stuff that we put in our body to either make us more healthy or less. We spent so little so recently on that and to their credit millennials years, they, uh, they don’t view the world that way and they will make choices. Maybe it’s they have a roommate (laughs) instead of their own place or so that they can have better inputs. And I’m not assuming that I understand all of their motivations and I’m not generalizing them, hopefully, but I, I-

Ben:                           But it’s not uncommon-

Jason:                        I think it’s to very credit.

Ben:                           … to think, you know, you think about how expensive a yoga studio or CrossFit box or a SoulCycle membership-

Jason:                        These are, these are investments.

Ben:                           R, significant in- investments.

Jason:                        Yeah.

Ben:                           Sometimes from people who aren’t necessarily making tons of money, right?

Jason:                        Mm-hmm (affirmative).

Ben:                           So they’re, they’re prioritizing that part of their, their life and their identity. And I think that this, you know, in, in, in some respects what, what happened with Vital is part of that it’s, it’s certainly you, you become aware, you’re educated about what’s happening and then you want to be the kind of person who buys pasture raised USD organic eggs.

Jason:                        Well maybe it goes back to Pollan and when he writes that, you know, you’re voting with your dollars, people want to support the right things.

Ben:                           Right.

Jason:                        And you know, when, you know on one hand there’s feed lots and Monsanto and just big monolithic automated stuff cranking out crap. You want to support something different. And so when you said status, it threw me for a second, but I think it’s um, maybe how that coalesces to me is like you want to support the right things in the world and like this is the system that I want to advance and not, not the pink Styrofoam.

Ben:                           What’s up may, status might not be the right word. Maybe it’s social identity, right?

Jason:                        Fair enough.

Ben:                           Yeah.

Jason:                        Because it at that farmers market, and this is again something you wouldn’t garner from a spreadsheet. I would, there would be people who are obviously pretty well off and they might buy six or seven dozen a week. And we love them. We love those people.

Ben:                           Sure.

Jason:                        (laughs) But there was also the single mom who would be pushing a kid in a stroller who, you know, very defined budget and she would just straight up tell you there are things in her life that she is not doing so that she can buy food like this. And so-

Ben:                           For her kids.

Jason:                        Absolutely.

Ben:                           Yeah.

Jason:                        And that’s again where those Venn diagrams, they can get blurry. And I think it’s more complicated than just education and income. It’s, uh, what are people’s values. And so that leads to a, you know, a g- great thread to push on a little bit. And in that a, a lot of companies in this space in the better for you arena are mission-based, purpose driven, very intentional about everything. And like yo- you buy our product and it, it almost has become, uh, so commonplace that you, it’s almost the price of entry anymore.

Ben:                           Right.

Jason:                        You need to be supporting a course or sending one unit for every one sold to someplace and, and-

Ben:                           It’s the, it’s the Toms one for one, that cliche that whatever. So ye- yeah, you have to do it in a way that feels authentic to you and to the brand-

Jason:                        Actually is hard anymore (laughs).

Ben:                           Yeah.

Jason:                        You know, I, I advising one just phenomenal young company who, who has something that I think is really special. We knew we needed to add in this layer of let’s say, impact.

Ben:                           Mm-hmm (affirmative).

Jason:                        And there was another competing brand who had already started supporting the nonprofit that we had circled. And it doesn’t mean that we couldn’t, but what it does mean is for whatever it matters that our story would not be distinguished from the other competitors-

Ben:                           [crosstalk 01:34:18] feels to me too-ish in the sense of-

Jason:                        Yeah.

Ben:                           … like just copycatting.

Jason:                        Yeah. Yep. So, but certainly that’s a way to differentiate. It’s a reason it feels good to move around in this space because it’s, uh, again, what we eat matters. How it gets produced matters. There’s implications to the soil now. You know, you have a company like you probably know our friends at EPIC Bar, you know, they ran that company three years. General Mills came along. Um, people probably give them crap for, you know, oh, you sold out. Well they absolutely did not.

Ben:                           They had a reason for it.

Jason:                        You look at General Mills’s display at the latest trade show and there’s a suite of products talking about regenerative agriculture, like EPIC is influencing General Mills. So, you know, how do you-

Ben:                           Converting a, a million acres of, of, you know-

Jason:                        Yeah, how-

Ben:                           … native grasslands, yeah.

Jason:                        Exactly. How are you going to criticize that? Like, is it better that more people eat better? You know, don’t give people a hard time for scaling something. We have to scale this and to, in my view have often wished, um, you know, Pollan with circle back around to writing about food and maybe the next story is like, yeah, and here’s how the industry has changed over the last decade.

You know, the, this startup in the garage needs to become a real company and then it needs to grow into a medium sized company and then it needs to go on somehow to, you know, influence, um, you know, more people and provide that choice and anyhow. That’s the way we change it, as opposed to something top-down or waiting on, you know, a top 10 food company to change, you know, ground up is, is the way and the entre- entrepreneurial is, is how it’s going to happen.

Ben:                           And it even allows you… It puts you in a position to lead upward to, right? So even if you-

Jason:                        Yeah.

Ben:                           … were acquired by some larger, larger company or organization, you can actually set a mandate from, from your, your vantage point, because you, you really do, if you, if you do it right, you have the moral high ground and, uh, and, and, and hopefully the credibility that you’ve been, you’ve been walking the walk for a while.

Jason:                        Mm-hmm (affirmative), yeah. And it goes back to, you know, every, everyone on the investment side, they’re wanting to support, you know, sustainability in some form and impact. And, um, you know, really at every tier of, of what you need to support your company moving through its journey. Um, there’s, you know, people are, are on your side and there’s support systems out there and they look, you know, it’s not just crunchy hippie types.

You know, who you smell of patchouli and you know (laughter), have been making their own granola. I was talking about this, I was on some forum or a panel not too long ago and the theme was like sustainability in the food system and regenerative agriculture and there’s a penchant for the folks who have all this information in there at the forefront of, I don’t know, you know, being aware, uh, this and this is broken.

Mono-cultures are bad, feed lots, you know, these massive companies and pesticides. We’re pretty hard on ourselves. If you zoom out and take, take a big picture. And again, I’m a natural foods guy. This is where I’ve been living a long time.

Ben:                           Yeah.

Jason:                        So it may sound a little funny for me to say this, but if you zoom out, you look at the whole of human history, at least how we think we understand it. You know, it was largely a struggle just to keep everybody fed and it’s kind of a miracle we are all here.

Ben:                           Right.

Jason:                        And then maybe 60 years ago, seventy, you know, somewhere in there things start scaling. And yeah. Um, there are that supported a lot of great things, a lot of great, you know, growth and innovation and you know, that, um, you could say there’s downsides and certainly there are a population is pretty large now. What does that mean for potentially finite set of resources we’re dealing with and now, but you know, now we have monoculture and we need to go back to the, to the way… The, the older ways that are more regenerative, sustainable, all that’s true. But we really beat ourselves up a lot and I, I give us as a species more credit than that.

I think we have actually realized the other side of the coin, you know, some of the dark sides that um, you know, industrialization of, of food has brought. I think we’ve realized that stuff pretty quickly and look at what we’ve done in this space even over the last 10 years from the ground up, which I would deem to be the right way as opposed to legislation-

Ben:                           Top down.

Jason:                        … from the top down or bureaucracy cut stepping in. That tends to muck things up more than anything-

Ben:                           Right.

Jason:                        … subsidies or whatnot. But-

Ben:                           It’s on a huge time lag as well.

Jason:                        Right. So very quickly, we’ve already had a big impact, you know, 10 years ago pasture raised eggs just as an example, were 0.0001 of the market and now it’s somewhere between three and four, maybe even more percent. Like that is massive.

Ben:                           It’s huge.

Jason:                        It’s-

Ben:                           It sounds like a little number, but it’s actually huge.

Jason:                        Well, yeah, it’s (laughs), it’s exceeded what we would have put on our business case had we done one.

Ben:                           That’s right.

Jason:                        Uh-

Ben:                           You made the-

Jason:                        10 years ago.

Ben:                           … slideshow.

Jason:                        (laughs) You gotta have a deck.

Ben:                           That’s right.

Jason:                        But, uh, you know, I think we’re realizing, um, not the error of our, of our ways, I just don’t see it so negatively. I think we’re addressing it quite effectively, quite quickly in the totality of really the scope of our human experience.

Ben:                           Right.

Jason:                        So we’re pivoting on a dime and we’re gonna continue to make progress against it. And it’s, again, maybe this is because I just like to talk about this stuff in a more positive light.

Ben:                           Sure.

Jason:                        But I do give us more credit. It’s just easy in certain forums to, you know, bash the system and like, hang on. We’re all on the same team here. We can change this and actually-

Ben:                           Right.

Jason:                        … we’re really killing it. I really think we are.

Ben:                           Right, and, and then it’s easy in that bashing m- mentality to, to abstract the, the questions out and it becomes this, let’s talk about the food system. But most of us don’t actually feel empowered to make a change to the, th- this large- larger concept of a food system. What we can change is our own personal consumption habits, our own, if, if we’re entrepreneurs or involved in this world in any way, how our, our companies do business, what, what our missions are, et cetera. And I think it sometimes can be strangely unhelpful to that, that kind of self-flagellation thing that you’re talking about that can, uh, disempower people in, in some respects.

It’s good to be aware of it, but, but your point is, okay, let’s acknowledge that. Yes, there’s, there’s some really bad things here. If you zoom the camera out far enough in the grand scheme of things, we’ve actually made a shift pretty quickly here and now how do we empower more people to continue that, that pivot.

Jason:                        Exactly. And you know, I, I think, um, yeah, I, just give us more credit and, um, yeah, you’ve said it well.

Ben:                           You had mentioned to me that in the early days of Vital, you had to go all in. And you see sometimes founders who aren’t willing or able in some sense to do that, or they’re hesitant to do that. Tell us just a little bit about what going all in at Vital in those early days looked like for you.

Jason:                       Well, certainly it’s not uncommon for an entrepreneur who has an existing job – maybe it’s not a career they love, or they just have a great idea and so they come up with something new, whether it’s a product or service, whatever. And it’s effectively on the side. I think that’s a pretty common situation, and it’s a great one sometimes, you know? You’re not taking on the full risk of, you know, jumping on that ship just yet. You can pay your bills, keep your medical insurance for your family, that kind of thing. There’s some pretty harsh realities that come with actually going all in. And you know, for me in the Vital journey, we weren’t funded. We had basically my 401K and pension and a teacher’s retirement fund that we cashed out that became the working capital for the business. It wasn’t some impact fund who injected three million bucks into our idea. It was kind of before those days, and that probably wasn’t the approach we would have taken anyhow. But, you know, from the beginning, I didn’t have any other side work going on and so this had to work. And it’s given rise to an idea that I’ve found myself referring to in advisory work or just talking with early-stage entrepreneurs, and that’s the idea of sometimes you’ve got to burn your ship. You know, you’ve taken off, you’ve put some distance behind you, landed on, somewhere. Sometimes there’s that gut check moment and if you don’t burn your ship, you’re never actually going to be all in.

Ben:                           It’s too easy to turn around and go back.

Jason:                       And you know, life is…life and, responsibilities are real, and kids need insurance, and I get it. But usually, I’m not going to claim to know enough to make such a generalization, but I would say quite often in the journey of a new venture, sometimes it’s, there’s a, there’s that moment, that time where you’ve got to burn that ship or otherwise it’s not going to go.

                                    You know, in our case, because we had done that early on, we went from you know a dual-income, heathy salaries and benefits and all that. Our income, overnight almost, became a quarter of what it was. And this was at a time where we were pregnant with our first child, had not one but two mortgages because I couldn’t sell the first house when we moved here…

Ben:                           Plenty of obligations.

Jason:                       It was pretty real. Pretty raw. And hence, you know, schlepping eggs on a Saturday, right?

Ben:                           So then you actually had to sell one of your houses, right?

Jason:                       Yes, well, we rented one out where we had come from in Chicago. And sold the nice house, like I bought the thing, let’s see, October of ’08, so pretty much the worst probably week on the calendar in the last several decades to make a purchase like that. Sold it probably in ’11 or whatever because I just couldn’t hang on. I didn’t have the money every month. It was, you know…

Ben:                           Too much of a burden.

Jason:                       Yes, so, we moved a double-wide trailer out on to the farm.

Ben:                           In the one spot that didn’t flood.

Jason:                       It almost did. It came up to the foundation in 2013 when the, really the farm pretty much got flushed down the drain, wiped off the face of the earth. That’d be another great thread there.

Ben:                           That’s right, that’s right.

Jason:                       But, yeah, that required a lot of humility.

Ben:                           Because you’d been successful in your career to that point.

Jason:                       Yeah, I mean I was on the typical executive path in a big company, and whatever.

Ben:                           You had an MBA from a top business school, like you had all these colleagues and peers who I’m sure were doing really well for themselves…

Jason:                       Yeah – there’s partners at McKinsey and all that stuff now. But you know, are you in? There’s a time to go all in, or maybe get all out. And we had already made that choice, so changed our lifestyle. And had a couple, you know, kids by that time and had several hundred feet of raised beds that I built on Sunday to raise food for ourselves. Now, we weren’t that hand to mouth – I’m not trying to overdramatize it. But, yeah. Here’s, I suppose, in one sense, here’s a corporate, Kellogg MBA living in a trailer. Well, are you in?

Ben:                           That’s right. Are you willing to go there?

Jason:                       Yeah. And, you know what? I would not trade those few years for anything. There was actually a level of just extreme comfort. Part of it was because I really managed to lower my monthly nut quite a bit, and that felt good. And the business was growing because of sacrifices made, you know, and maybe what I could have taken in a better salary was invested in more great people who we really needed their energy to make this thing go.

                                    But it was just a special time. It was kind of stripped down, pretense was gone. You know, I had accepted all those things, like well, you know – my classmates are doing major things, and here I am kicking around on a dusty farm, chasing chickens around and going home to my double-wide.

Ben:                           It gets back to your comment about risk tolerance too. And for me, it’s an acknowledgement that entrepreneurship, and the entrepreneurial life is a calling, and it’s not for the faint of heart. If you think, if you’re watching TV shows or dramatizations of these things, and you think it’s going to be, go-g0, let’s raise some venture capital money and scale this thing up and we’re all driving Bugatti’s or something like that. That’s not what it’s like.

Jason:                       That hasn’t been my experience yet.

Ben:                           It’s really, really hard. Like can be soul crushing at times. And can you endure, can you persevere in those moments that feel pretty bleak?

Jason:                       Yeah – I was there. And you know, there were other people on the team who made sacrifices too, so it isn’t that I’m, you know, anything special or you know, it was…part of it was believing in an idea, and part of it was just truly doing whatever it took. And you know, those are some of the fondest years of my life – driving back to that dusty farm in an orange mobile home. It was very clarifying. Not that every entrepreneur is going to go through necessarily that same scenario, but sometimes you may be required to. And you know, you either will or you won’t.

Ben:                           Well, I wanna give you more credit and, uh, so thank you so much, Jason Jones for, for joining us today and I, I love your, your spirit and how you have gone about building this, uh, one, one really remarkable business and have, have had, uh, an instrumental role, uh, often behind the scenes and building a number of other really exciting next generation businesses and also sharing your, your time and, and wisdom with us. So thanks, thanks for being here.

Jason:                        Man I enjoyed it. Thank you for doing what you’re doing. This is, um, a great forum. I appreciate it. Excellent.

Ben:                           Thanks man.

 

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