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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

When you’re competing against huge CPG brands to get your product on a store shelf, you need all the insight and advantages you can get. And our guest today is the perfect person to share those insights.

Matt Gase’s career has spanned every size and stage of CPG. He spent the first part of his career running giant global brands around the world for Ralston Purina (now Nestlé Purina) and Conagra.

In Austin, he led two mid-sized, companies with strong legacies: Commemorative Brands (Balfour) and Stubb’s Legendary Bar-B-Q. Following the acquisition of Stubb’s by McCormick, Matt took the reins at a scrappy challenger hummus brand, Lantana Foods.

 

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BEN                            So Matt Gase has had a distinguished career in CPG, writ large. He is a veteran of Big CPG and held a- a number of increasingly senior positions in, uh, in- in large uh… companies such as, at the time Ralston Purina, now Nestle Purina, and uh, also Conagra, and then also ran Commemorative Brands, which uh made the class ring that your high school and college uh very likely uh… used or- or sold. Balfour, that’s right. And then was, uh the CEO at Stubb’s Legendary Barbecue, uh Austin favorite, and shepherded that team through an acquisition by McCormick, the big spice company, and… after that acquisition made a very strategic and deliberate decision to enter into a uh a more of a challenger brand setting, and we’ll certainly talk about that more and took over the helm of uh a company that at the time was Eat Well Embrace Life Hummus.

Rebranded as Lantana Foods and you have likely seen it in the store as the striped rim a- around it and that sort of thing so- so Matt uh leads that team and recruited an all-star cast to surround him and uh, and- and they’re doing really good things, and we’ll talk a about a little bit too. So- so that just as a- as a brief intro you’ll- you’ll get more color commentary as- as we continue.

Before we get into, uh more detail – I know you shared a particularly interesting story from your days, I believe it was with Purina, when you were getting started in Singapore and- and launching that business in Southeast Asia in the Asia Pacific region, and some of the- some of the learnings that you had where you assumed certain things about how to launch a- how to launch a brand in a new market. Can you share some of that story with them?

MATT                        Sure, an- and the- the really, the takeaway of what I’m going to share you shows the flat spot in the big food companies. It’s just- because I was on the big food side, I’m like holy crap. I want to compete against me. That was my conclusion. I was like, I could beat me if I wasn’t part of Purina.

Uh set up shop, hired local guy and said, you know, okay I’ve got the playbook. I’ve got- I’m Purina. I’m Purina Dog Chow, the number 1 global brand of dog chow. And it was going to be dogs in Singapore because it just culturally, cats in Malaysia, dogs in Singapore, so I’m focusing on dogs in Singapore, and I- in the playbook, you know, there you go. 20 pound- 20 pound bag, top seller, lowest price of goods- lowest price of goods anywhere. Purina is a monster. 20 pound bag dog chow, I call on Cold Storage, well Joe Wong did, you know I- you know he was my man in Cairo so to speak, and they were like, oh thank god, Purina. There- there’s this growing pet population, we don’t know how to take advantage of it, and- and have people buy pet food from my stores. Cold Storage was like- like the HEB of Singapore, best way to describe ’em. And, they gave me the whole friggin’ like bottom shelf and next shelf, I was- it was like, I took pictures, you know different sort of cameras back then. This was in the- in the 1990’s and… I’m like- I- I’m just waiting. I’m just w- you know, waiting for the- for the reorders. And… kept on going to stores, and I thought, boy these people really know how to stock well. They restock so well, this is amazing. I started to notice after a while some dust, and then worse, some bugs. Uh and Singapore’s 97 degrees, 365 days a year, 95 percent humidity, and almost every kibble if doesn’t maintain a certain temperature is going to grow weevils, well my stuff hadn’t sold in three weeks. Cold Storage said, come pick it up, get it out of here.

Um, I mean it was a complete bomb, bust, I did not take photos of that, by the way. Uh, and said, you know, what the hell happened? I talked to some- some locals, I was um, Michigan Wolverine so I was, you know starting it up with some local Singaporeans, the- the Michigan Alumni club, and I- and I said, introduce me to some friends who have pets. I need to figure this out. I- I don’t know what the heck happened. And, they did. They let me talk to their friends and I said, can I come visit you? And I met with three families, separately. In all cases, Singapore, you live in high rises. You live in 700 square-foot apartments. The kitchen by the way is not air conditioned. And, as I’m up there visiting these folks with their dogs I notice a couple things right away. One, the dog’s small, because the room’s really small. Its 700 square-feet, and they live on the 15th floor, so they had to carry the little dog down to do the dog’s number. And where does the dog to the number? On this really small little piece of grass that everybody has to share.

And, I’m like, what do you feed this dog? And they went to their very hot kitchen and showed me this product. And, I got the same takeaway at the next and the same takeaway at the next, and I said, okay. I- I know where I need to go. They- one family said, you know, they- they bought their dog from this breeder, so I went to the breeder, and I just sort of watched… families coming in and the breeder said, okay now. You have this new puppy. You’ve got to feed the dog this. Eukanuba, it’s a one kilo bag developed specifically for small dogs and if you don’t feed this dog this food, this dog’s going to die. They didn’t say it quite that way, but it was like, you know, the- the you know here you are. You’re like S- Singapore’s- Singaporeans were just new to owning pets. They didn’t know. Then I went and checked out the other channel where I realized people were buying their pet food, and it was at the vet. And you can imagine the same thing. There though, it was Hill’s Science Diet. And the vet had exclusivity for Hill’s Science Diet. So i- imagine the person coming in, they have their new puppy, and the vet’s saying, hey, great, dog’s looking super. What are you feeding it? Oh I’m feeding it Eukanuba. Erghh. You know, no no. Dog might die. You got to feed it Hill’s Science Diet. One kilo bag, small kibble. Oh by the way, this small kibble means you know, nutrient dense, very digestible.

So, I- I- I learned enough to know I’ve got absolutely the wrong product, flew to Denver where Purina’s big pet food facility was, and said it- guys, all right. I’ve got your 20 pound bag. That’s not working… in a market that needs a one kilo sized bag. And I know you guys don’t do metric but I need a one kilo. Two, your kibble’s designed for a- for a large lab, which is the average sized dog in the U.S.. These little puppies can’t even get it in their mouths. The kibble’s too big. I need a small kibble. I need a nutrient-dense kibble, I need something that’s going to be very digestible, and I need it in a form and filled bag uh versus a paper bags where weevils can crawl in and- and spread. And they’re like, there’s no way we’re going to do that. We can’t do that. We can’t give you what your market needs to sell product. I- it took me literally a year, I had to go to Purina Korea, Purina Hong Kong, Purina China, Purina Japan, and- and say guys, we have to put our volume together. So a year for me to get the right product into the market to be- to be able to compete. And this is Purina, this is like a monster company.

The largest pet food company in the world could not fathom, the plant just could not understand why isn’t our 20 pound bag dog chow good enough for you? Throughout my time with big food, you would have always a road block. Either at ops, because it’s production driven and this is what you get, this is all you’re going to get, or there’s going to be finance. I mean there’s so many hurdles to go through and I lived ’em all, in you know a year.

BEN                            So as a small- as a small brand, your main advantage then is- is being nimble and responsive in the market, right?

MATT                        For sure, for sure. Even if your cost- because your cost is going to be higher. No one’s going to beat low cost but who cares? If you can get the right product for the market, it- it- it you know that’s the number one thing. That-

BEN                            So let- let’s pivot a little bit to- so you go, you- you move to Stubb’s, eventually. And, you have a uh, sort of what- what is seen as this craft Texas barbecue sauce that was going up against, uh some heavy-duty com- competition also, you know craft and others.  How did you create a strategic plan that enabled you to compete against, again, much larger companies?

MATT                        Well, um. Th- you know, having worked for big companies, I- i- it helps, to know their uh, what might be going on with some companies uh, with um pretty much every company and so, um, yeah. First, I- I hired a- a good broad range of people. Folks that have experience, and- and you know if there’s a bit of advice I- I- I give you is don’t- don’t shy away from talent. You know, it’s it- as much as your budget can’t afford uh, and don’t shy away from somebody that has experience. Uh, that’s- that’s- that’s not a- that’s not a bad thing to have. Especially in the food industry where relationships, you know are- go deep, broad and deep, uh in many cases. So, I- I- I- I had a really good eclectic team in place. We cleaned up the ingredients, which hadn’t been done, which all you guys do, you’re- s- you’re food’s so super clean. That’s your- you know it- it the big companies really struggle. It’s like, well what do you mean I have to take out high-fructose corn syrup?

And that’s from the VP of ops, I’m not doing that, you know? The purchasing, er I can’t- er I might, high-fructose corn syrup costs so much cheaper than this cane sugar. I’m not going to do that. So you get a lot of resistance. They eventually get there, and they’re getting there now, big foods really awakening up, but you know, speeds to your- speed kills, and we took advantage of being first to take out high-fructose, gluten-free, non-GMO project we were out in front of that.

Data. Data is something that- that you know, I had a uh my- my VP of marketing came from Clorox, which was KC Masterpiece. I- you just borrowing some of the ben- you know some of the things that big food does well, big beverage or big beauty, is leveraged out. And, we’re able to- we’re big enough to be able to afford IRI or Nielson or Spins or whatever you use, even if you can’t get a monthly, get s- you know this is a great sharing community, get somebody say, hey can you get me a Spins report from, even a 6 months old to give you a snapshot, because where there’s- there’s gold there.

And they were just like wow, look at this. 30% of the growth in barbecue sauce is coming from 10% of the- the volume, and its… sweet and spicy. S- you know we didn’t have a- a- a sweet and spicy at all. We had sweet and we had spicy and the biggest, fastest growing area, but we wouldn’t have seen that if it wasn’t for looking at the data and seeing what was happening, so we launched sweet. So we- we- we filled out the portfolio.

We knew who to attack, and- and that’s something that a- again maybe my- my- my big food background uh y- you know was helpful, so I’ll tell you another story. When I was at Purina, there are certain brands, and even at Conagra foods, you know if you’re like, you want to be a rock star, you want Healthy Choice, right? You don’t want Patio Burrito. Patio Burrito’s not the brand you want so if you’re an aspiring, you know guy or gal and you want to like- [crosstalk 00:16:59]

BEN                            That’s a career dead end.

MATT                        That- that’s a career dead end. Uh, so Purina- I remember I was sitting in the cafeteria at Checkerboard Square and this- and one of my buddies came in and he’s like, holy crap they just gave me the Moist & Meaty brand. He was devastated, and we were all like devasta- oh shit, you got to Moist & Meaty? Really? Whoa, man. So Moist & Meaty was a pet food. I think it’s still out there. It’s an extruded wet food that’s dry. It’s in a little bag.

BEN                            Everything about it is wrong.

MATT                        It’s wrong, it’s wrong. And it was really doing bad, and this poor guy got it. And so what’s he going to do with that brand? He- he- he’s got to harvest it. That’s all you could do. He’s going to- he’s- he has to figure out, okay how am I going to like, not lose as much revenue in the new year as I lost this year? Or…and how can I, you know m- manage to make the same profit with reduced sales? And that’s like, that’s a really good thing to- to you know, try to get promoted- [crosstalk]

BEN                            A little less moist and a little less meaty? Yeah?

MATT                        Hey boss, I uh, I- I manage declines really well. Uh, so you- the data tells you that. You see it. You see it all day long. It’s like, I found out in the pet food business, I’m going to go after Moist & Meaty, because I know that brand’s dead. It’s just- it’s just going to hang- it’s barely hanging on and some poor guy or gal’s gotta manage it for a year and a half before they get the hell off it.

BEN                            A lot of these brands- a lot of upstart brands are premium, and they need to be premium f- for a lot of economic reasons, margin, et cetera. How do you go after a legacy, often value-priced brand when you’re a premium brand?

MATT                        It’s shelf space, it’s just plain shelf space. So, at Stubb’s, you looked at it, and it’s like okay you got Sweet Baby Ray’s, they’re- they’re growing, they’re a monster. You know, I’m not going to get shelf space from Sweet Baby Ray’s. And- and the category wasn’t growing, so it’s absolutely a share play. It wasn’t like, you know barbecue sauce was, woohoo, and you know you’re behind a Mack truck and just- just catching a draft. So-

BEN                            So a share play is the category is what it is, the- the retailers not giving you extra shelf space. You’ve got your- your set and its somebody’s got to go for you to- for you to hit that shelf. [crosstalk]

MATT                        Yeah, you got to take business away from someone else. You got to like, say hey if I’m going to grow 5% someone’s going to decline 5%, sort of thing. A- and- and looking at it, I’ve found my Moist & Meaty’s. I said I’m going to- I know Clorox isn’t supporting KC Masterpiece. It is obvious as hell that business has been in decline for two years, is down 10% every year. That poor product manager is dying to get off the desk, I’m going after that. So in every one of our category reviews, w- where’s the premium section. You need a premium section and- and where’s the space come from? It’s coming from OpenPet. It’s coming from Huntz. It’s coming from those brands where that-

BEN                            They’re already declining.

MATT                        They’re already declining and that company’s making a bet on other brands. That big company is saying, okay, I- I’m not going to waste any money trying to invest and grow with these brands. I’m putting my bet here. And those brands are vulnerable, and that’s what we went after. Same thing at l- at- with- at- Lantana. I mean Sabra is 65% share. They’re a- they’re a- they’re a monster in hummus, I mean it’s- it’s Sabra, and then everybody else.

BEN                            Well, and Sabra’s owned by-

MATT                        Strauss, which is a big Israeli firm and a joint venture with Pepsi Co. And you had a number two brand was Tribe, owned by Nestle. Number three was Athenos, owned by Kraft. Uh, number four was Garden Fresh, owned by Campbell’s Soup. They just acquired uh you know uh Garden Fresh. But, you know again, similar story, you could start seeing Tribe and Garden Fresh and Athenos… and Kraft, Kraf- Kraft they turned all of their Athenos attention to feta cheese. You just see it in their marketing, it their trade spend, everything they’re doing is- Athenos is the Moist & Meaty of- of Heinz Kraft

Ooh. Is anybody here from Heinz Kraft? I married a Greek so, you know (laughs) we- we like feta. (Laughs) uh.

But, so we- in our category presentations, you know look, you don’t need this. In those cases, it wasn’t just like taking three facings of KC Masterpiece away, you were about to just plain wipe a brand out and say, you know we’re- we’re unique, we’re fun, flavorful, vibrant culinary, totally different, you don’t need another chickpea hummus same…

BEN                            Same old, same old, yeah no differentiation between other brands.

MATT                        S- sea of beige. Y- y- you don’t need it. Uh, but it was helpful to have visibility to that performance over time, that- that- that really is instructive.

BEN                            So talk a little bit about, so I- I know uh the- the previous name was very long and- and difficult to remember, and you recognized that the- that the brand equity actually existed in that- the- the striped packaging. Talk about what- what you recognized there and how you- how you built off of that.

MATT                        Again, I’m trying to think in terms of an answer that could be helpful to y’all here. Uh so it’s not so much, I think w- w- what I did but what we had to overcome. It was- it was obvious the brand Eat Well Embrace Life was a mouthful, I… it had zero aided, unaided awareness. All our equity was in this striped lid. Um, think about search s- you know, s- search engine optimization, right? Eat Well, good luck finding hummus under Eat Well, don’t do it under Embrace Life, just trust me. (laughter) Um… So it just was a- it was a nonstarter.

BEN                            So- what uh- what have you learned from this Lantana journey so far? A- again you- you’ve entered into a new category, uh against some- some really big entrenched players like, what’s different about hummus, what’s- what’s interesting about what you guys are doing in Lantana?

MATT                        Um, deli’s wild. I don’t know if anybody- does anybody have a pl- a- a brand playing in the deli? It’s like the Wild West. Nothing’s planogrammed, at all. Uh, in some cases it’s- it’s decisions are being made by the deli manager. So we have, you know deli managers uh, that like us or don’t like us or want this flavor or that flavor, so there’s- there’s no consistency. You have Cedars and Boar’s Head, Boar’s Head’s a- a you know, that’s a beast. They all have DSD, so they’re going in there… it takes me back to my early bread days when I was uh, with a high quality bread called Wonder Bread and that was all DSD. And I- I remember the bread wars uh- uh-

BEN                            And DSD for those of you who aren’t in the industry is direct store delivery.

MATT                        And- and you would have you know the brand X dislike this guy from brand Y and with a razor blade just go shh straight across the- the loaves of bread to- to stale them out. And so you- wha- what you don’t-

BEN                            It’s like car- cartel behavior.

MATT                        It was- it was bad. But you have- so you put up uh, you know you- you put up your- your pad of- of coupons or you’re- you’re- you’re doing a [inaudible} and the DSD guy’s like, no you’re not. That’s coming down. Uh, so the deli’s wild. Uh, the deli’s fun. Now I’ve got- I’ve got kids who are- so your ages, 25, 23, and 20. And- and- and they’re like, you know they’re- they’re a hummus- they’re the hummus consumers. I mean and- and to- to be able to play plant-based, vegan, fresh is fun and uh-

BEN                            There’s a tailwind behind it.

MATT                        There is, unlike some of the others, for sure. We- we know where to pick our battles. W- w- we’re not going to take on Sabra. That’s for sure. Uh, but you know we’re- we’re- we’re in a unique position in th- that the founders of our business, they came from some of these hummus companies, in very traditional uh hummus guys and you know they said, you know something, let’s blaspheme. Let’s make hummus without chickpea. Chickpea, tahini, lemon, garlic, traditional hummus.

BEN                            Sesame.

MATT                        Sesame, well the tahini. And they said, let’s make it without chickpea, let’s do an edamame hummus, let’s do a black bean hummus with some sort of cubano sort of topping, let’s do a yellow lentil hummus, let’s- let’s take a white bean hummus, dial in some carrots, some sriracha sauce and have sriracha carrot, which has given us a license to, you know they built this foundation where we have- now have a cauliflower hummus, we have a hatch hummus, and uh you probably see- we don’t- we- we have one now but other young startups have chocolate hummus, Delighted By or- or- or Boar’s Head. So, it’s- it’s fun in the sense of where you can take it. Y- some companies are just- you know we’re traditional, we’re not. We’re sort of the Ben & Jerry’s-

BEN                            You aren’t restricted by protecting your contribution margin for your particular brand, which again is bigger- these bigger brand managers have to do. Yeah.

MATT                        Contribution margin, look it up, that’s key. That’s key not just for the big companies but uh companies that might want to buy you one day. That’s a- that’s a magic metric. You want to look at your contribution margin, which is your net sales less cost of goods, uh a- you know and less you’re- you’re marketing spent, because they’re going to take out all the other stuff.

BEN                            Yeah and- and in layman’s terms how much you’re- you’re contributing to the overall big pie.

MATT                        Right.

One of our Barcode members asked Matt a question that was on everyone’s minds – why go after the dying brands to get shelf space instead of going against the big guy in the category? Why not become Sabra? Why be David when you can be Goliath? Here’s what Matt said:

 

MATT                        Well, so it’s like I’d be coming up and the highest I could reach would probably be the kneecap. So, which is- can do some damage, don’t get me wrong, kneecaps are vulnerable. Um, but there’s you know there- it- in a way, in a weird way I’d rather s- you know it’s like category manager, buyer, or just hey you, all you need. All you need in hummus, Sabra, market leader, we’re not going to displace a 65 share. $800,000,000. I’m a fraction, I’m a rounding error for- for Sabra. So $800,000,000 beast, market leader, they dictate hummus, all you need is Sabra, all you need is private label, have a local brand like Grandma’s and us, because we’re different. So we’re going after you know th- the vulnerable to- to gain our incremental SKU’s, to get our hatch hummus on the shelf. And we’re not going to get it from Sabra, and oh by the way, they’re so big they’re velocities are- my highest velocity item is like our black bean? And that velocity is still going to be less than their… I don’t know, pizza taco flavored (laughter) Sabra. They’re just- just too big.

BEN                            So one- I think one application of that- that metaphor is um, in the David and Goliath story, that- at the beginning David tries to put on the armor and it doesn’t work so well for him, right? So he’s- you don’t go head to head against, like apples to apples against a- a- a major competitor like that but you can be clever and crafty and- and creative to find other ways in and over time and- and I think there is a strategy, especially against a very large competitor that as long as possible you kind of want to fly under the radar. Because they have people, maybe they’re not s- openly slicing bread loaves but they have people in the store who have a lot of clout who can uh- at the store level and at the- that kind of national category manager level who can slow your growth down, so the more you can fly under the radar and be perceived as a niche item, the- they’re like, oh they’re not taking any of our stuff.

MATT                        We reckon if we, but we reckon if we stay under 10% market share we’re going to- we’re flying under the radar. And don’t forget, Athenos is Kraft Heinz, that’s still a- a- a Goliath and Tribe is Nestle, that’s still a Goliath. There’s just a bunch of Goliaths out there.

Another great question from the audience here – how do you add a new product to an established line? Specifically, when Matt was at Stubb’s, they grew the BBQ sauce, and then expanded out and created a line of spice rubs. Is it a good idea to add another product line like that? And if so, how do you do it? Do you ease into the market, or do you try to make a big splash?

 

MATT                        So, at Stubb’s when I use the word test, everyone around is saying, oh shit, he’s launching another product. Uh, I tested a ton, so we never swung for the fences.

AUDIENCE               How do you test?

MATT                        We test, we- we- we pick a- a retailer and we’re- we’re friendly with them and we said, hey we- we’re- we’re launching this range of- of Stubb’s Spice Rubs, pork rub, steak rub, what have you, we want- we’re going to give you an exclusive for six months. I- in return for that, all we ask is for data. This time uh, th- that way you don’t have to buy Spins y- you- you get it, it’s like quid pro quo, you’re giving them something that maybe Kroger doesn’t have, or Albertsons doesn’t have, uh but in return for that you get this, and a- a- our- our- our marinades we had a- a sort of a stodgy, you know group of marinades before the marinades and we said, well, let’s- let’s test the green hatch chili, and it was good old Whole Foods here, the Southwest division and they gave us a shot and, but it- it took off, it did really well and so we- then pivot really fast and- and went- we didn’t go national. We didn’t have the money for that. We went to Phoenix, Arizona, you know we went to Southern Cal, we went to places we thought would na- naturally be- be a hatch.

We also really screwed up and launched some- some dogs out there and you just, you’re the- the- you fail fast. You know, we- we- had a,  yeah, we- we- we had a- we thought, okay let’s get cute with Lantana with a- a sunflower chickpea, will be chickpea but it will be different instead of tahini we’ll use sunflower. And, people were like, what the- what’s this? This is not chickpea, this isn’t- who put sunflower in this thing? It was like, boom. Kill it. And- and when you test, you don’t go big in terms of like, you don’t do the same. You just live with higher cost of labels, higher cost of- of lids, in our case its just like-

BEN                            Short runs or whatever.

MATT                        And you just, you- you- you go for learnings. And that’s something the big companies can’t do. They go- they go through like, oh my God uh, you know let’s do- let’s first do a test, you know and then let’s do some in home use tests, and then we’re going to do a regional and a- it- tak- you know they’re getting better… but it could take, I don’t know. When I was at Conagra like, 18 months to get a new product out there.

BEN                            What drives these sort of uh, new trendy things like a chocolate hummus? Um, is it- is it FOMO, like wh- i- is there- is there any other sort of basis for- for those product innovation decisions?

MATT                        Well, so chocolate hummus became a thing, you know the- the- the two ladies that started Delighted By were out in the market for like four years, and then got on Shark Tank and Mark Cuban wrote the check and it got- the tongues wagging, it’s like what in the heck’s this chocolate hummus? And people were talking chocolate hummus before they could buy chocolate hummus. Uh and they got great distribution into Publix and that got more, and it’s like, talk about people you know, the purists are saying, are you kidding me? Chocolate hummus? And yet, by the same token, other people were saying, you know I don’t like hummus but this sort eats like a Hunts snack-pack pudding, and it’s made with legumes and it has a healthy fat and so was it necessarily bad?

So it’s a real sort of mixed bag…I- you know we’re watching this going, did we miss the boat? Yeah, we missed the boat. We didn’t jump on it, I was like, chocolate hummus? No. (laughter) Now it’s- it’s Boar’s Head, Boar’s Head’s number 1 selling SKU, is there chocolate hummus. They have essentially taken Delighted By out, um unfortunately for those two young ladies because of Boar’s Head’s strength. Uh and it’s like- it’s like 30% of their sales. Uh and- and it- it does, it eats like chocolate pudding, so if that’s your thing, you know go for it. We- we missed that boat, we- we do have chocolate hummus but it’s just because the customers asked for it, that doesn’t carry Boar’s Head.

 

As a startup, in addition to creating a product that solves a problem for your consumer, you need to be obsessed with data. You likely won’t be able to get it directly from the grocery stores your product is sold in, but you’ve got to be scrappy and get any information you can. Talk to people. Figure out how people are using your product. Learn about your competitors. Here, Matt talks about how he could have done things differently with Purina Dog Chow when he was in Singapore.

MATT                        So I was in Singapore in ’92… uh, ’93. So th- the data- I didn’t have have th- the benefit of data. I screwed up by not going on the street knocking on doors. I should have hit the streets. I’ve got you know my 10 pound bag, my 20 pound bad, uh you I didn’t have o- optionality. Purina only then was waking themselves up to Eukanuba and Hill’s Science Diet. They lost the plot the U.S. because you know they were the grocery brand. And s- Hill’s, which Colgate, Palmolive, they were really smart and owning to that and Iams, Eukanuba, w- which was then Paul Iams and sold P&G, he- he owned the breeders. And, but that was just developing in the U.S. and-

BEN                            And so ea- each of those are distinct channels. The- there’s a channel strategy for each of those brands.

MATT                        Right. And Purina’s channel was the grocery store. I mean Purina was built on dog uh- dog chow, cow chow, pig chow, chicken chow, the old feed stores and some bright bulb in the ’50s said, why don’t we just move the dog and cat chow to grocery stores so people don’t have to drive all the way to the feed stores to get their food? So my orientation was that, I came from within that. And so I started with people buy pet food in grocery stores and here’s the world leading product. But to your point, I should have, I- I- wouldn’t have had a solution, I would have learned sooner, holy shit, I don’t have the right product. I would’ve avoided the weevil episode. But I- I- I still was working for a company, and there are companies out there right now that just don’t have the capability to- to- to give- to create the right product for a growing niche category.

BEN                            And one- one of the fundamental axioms of- of- of Barcode in- in this community uh is- it is uh, an unfair advantage when you are solving your own problem, or problem that you have a personal connection to. And uh, and so that ethnographic research that you’re talking about is sort of baked in uh when- when you have that connection because you- you went out there and you had a small dog in Singapore and your dog couldn’t eat large kibble Purina Puppy Chow. And so you solved that pro- effectively whatever your domain is, that’s part of what you guys are doing. And so you have- you are your focus group. Your friends and- and kind of next level contacts are your focus group. They’re the core consumer and you should have that rapid iterative product feedback that’s- that’s baked into your business model.

MATT                        Well I give props to the founders because they created this really unique hummus. So we had strong points of difference. We were able to say, listen you’ve got- you’ve got Sabra here, you’ve got Tribe, which is just like Sabra, it’s chickpea. You know this- this is pine nuts and that guy has pine nuts and you know and- and Pita Pal has chickpea with pine nuts and- and Athenos has chickpea with pine nuts and oh we’re black bean, and we’ve got some- some apricot, pineapple, sesame seed topping and- and it’s spicy and. You don’t have that, so it’s sort of- it was- it was pretty easy for r- r- really for anybody who has a true point of difference, it’s not easy, it’s easier. If I was coming in with like, hey I’ve got the best tasting chickpea traditional hummus that’s called Lantana, we would’ve had a lot tougher go at it.

BEN                            That’s actually a huge point, because I see this way too often. So you make a cookie, you make a whatever the thing is. And your- your sales pitch is, my cookie tastes better than SnackWell’s or whatever the thing is. Eh-eh. It’s not enough. It’s not enough if you are incrementally better than a billion dollar brand, it is not enough. You have to be zagging while everyone else is zigging. And if- if it- if it feels like a- like a lateral substitution, then as your friend, I’m going to say this. You’re wasting years – productive years of your life… because it’s not going to go anywhere. If you’re not different at the- at this like small stage, it’s going to be tough. So- so part of a- again Matt’s point is, if they were just making another slightly better version, oh this is truly hummus because I- uh you know my grandma’s from- from this Greek island and they made it better there, man I hope that you’re like married to shipping magnate, or something because you’re going to need a lot of resources uh to- to get that to take off.

MATT                        There are so many small retailers out there. There- there are, here in Texas, they’re in California, they’re in Michigan, if you all of a sudden take off, you better figure it out, because your story’s got to be built on success. And- and there’s a word called velocity that is real key, that’s- you know both from a c- from a- a category buyer’s point of view and from a perspective buyer down the road for your business. It’s- it’s how are those terms happening. So you want to- if you get a small test, make it work.

BEN                            And in general a large retailer is not going to bring you on. There are rare exceptions, but- but for the most part if you don’t have those incremental growth stories of local to regional to some different things there, you’re not getting a national rollout at Kroger because your hummus tastes good. It’s not- it- it’s just not how it works. They want to know- a- again they’re- they’re placing bets that they’re taking something off their shelf that is making them millions to hundreds of millions of dollars in- in some cases and in order to make that bet that I’m going to lose money by taking this off the shelf and I’m going to replace it with you, I need data. And if you’re not sold anywhere and have no velocity data, no- no track record of actually being able to fulfill the orders that are placed, then they’re actually making a foolish bet if they’re a category manager. So you’re- you’re creating a story that makes you a really strong bet.

A few takeaways from this conversation:

1 – If your product flops – as Purina Dog Chow did for Matt when he first got to Singapore – get curious. Start asking questions. Figure out why the product doesn’t fit the market, and then change the product.

2 – You have a distinct advantage as a startup – speed. When you see a problem, you have the speed to market advantage that a huge CPG doesn’t have. Test, get information and get your product out there.

3 – Your authentic story matters. It’s another advantage the big CPG companies don’t have.

Thank you so much for listening to the Barcode Podcast where we share information and conversations that educate and equip emerging consumer brands so they have the knowledge and tools they need to thrive in the marketplace. 

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