96. Unlocking the Secrets to Building a Successful CPG Brand with Chris Cuvelier

Chris Cuvelier

[00:00:00] Hey everyone, and welcome to today's start to Scale episode. Today is my guest, Chris Cuvelier , who is the founder of Zola. He started the company in 2002 and led the business as CEO for 17 years until 2019. Originally started as an Nazi juice business. He added coconut water 10 years later and eventually dropped the Acai juice to focus on coconut water.

Chris had a goal to build Zola to be a hundred million dollar business and sold the company to a private equity firm in 2016 while staying on as. Ceo, the company continued to grow and was been acquired in 2019 by Caliva, a cannabis company where Chris joined as head of beverage and a member of the executive team.

Most recently, Chris joined Beyond Brands as Chief Growth Officer and for today's conversation, we have a lot to get into. We're gonna tell and learn a little bit more about Chris's story, lessons learned along the way that are relevant to emerging CPG brands and advice that he [00:01:00] would give brands starting today.

So Chris welcome, Hello, Jordan. Thanks for having me. I'm excited to, to get into this because you've been in this business a long time and even before the last 17 years was, or the 17 years you had with Zola of kind of working in the industry doing a couple other things. So starting out, I would love for you really to tell me about why you started Zola and what were your first products.

Sure. After I graduated college, I opened a juice and smoothie bar in Walnut Creek, California, which is up here in Northern California. And the store was super successful. We got some good press in the LA time. and we had people that came to us wanting to buy a franchise. And at that time I wasn't capitalized enough, nor did I have the experience enough to, to lead a franchise organization.

And so we started up a consulting company and so I traveled all around the world helping people open up to some smoothie bars and We wound up getting this [00:02:00] call from this guy from Brazil. He had this really thick Portuguese accent and he told us about Acai and he was saying Acai has vitamina and gave people energy.

And so net net he wound up sending us some samples. We blended up the product. Thought it was pretty good. And then really didn't think about it for a few months. And then several months later I was in a meeting at a large nutritional company with a friend of mine and Brazil got brought up during that conversation.

And so I had mentioned that I tried Acai from Brazil and the global director of agribusiness from that meeting called me and my friend afterwards and said, this Acai , I've heard about it. I think it's really interesting. Would you guys be interested in exploring it? So we jumped on a plane, went down to Brazil, ate Acai down the beach.

Absolutely fell in love with the culture, and decided we were going to build the world's first Acai Juice. So we raised a little bit of capital. And in 2003 that's exactly what we did. We launched the world's first package outside Acai. It was one [00:03:00] skew in a toucher pack. It was 11 ounce juice.

Had this very vibrant design showing the Acai palm tree with this very bright and vibrant samba dancer with a jaguar up on a tree. And so that's, that's how it all got started. That's exciting. And you know, I say it's interesting because at the time, I'm sure it was very low awareness in the US is that.

Yeah, super low awareness. So you know, Sam, Amazon was out there with their frozen packs and there was very, very little a aware awareness until later on and, you know, those guys did such a great job in the media. I think, you know, founders were on the cover of People Magazine and Oprah started talking about.

The product, it was actually Dr. Oz on Oprah. And so there was all this media happening around Acai, but no one really had big scale distribution yet. So the story, the romance story started getting out there about Acai. But it was very, very low awareness until the media started picking up on it. I'm personally a big fans, so with my [00:04:00] brand, T-Square is one of our flavors of our t infused energy bites.

Were Acai blue bar. Yep. And we use a freeze-dried Acai powder as part of it for the antioxidant content and all the nutrient benefits. And so something that I'm fairly familiar with and a huge fan of. Cool. Yeah, we love Acai too. And Acai with blueberry is actually a good flavor. One of our juice, juice skews was Acai and blueberry.

Good combo. Sweet. . So you mentioned having this connection to Brazil. How is that important to your kind of sourcing story and why you chose to go to Brazil for the asset? So, you know, Acai is commercialized out of Brazil. I actually spent a trip years ago going to Bolivia and there's another strain of, or, another variety of Acai there.

But Brazil is really the main country that that grows it and commercializes it. And so when we first went down there, we. Got connected to an agency called embrapa. And Embrapa is a government agency that promotes the sale of [00:05:00] Brazilian products internationally. And so when we went down to Brazil, , it was really young and in kind of the life cycle of Acai, it was growing.

In a big way throughout Brazil. And it was changing from being more of a staple food from up in the Amazon, in its pure liquid form. Meaning as pulp. And , it was becoming more commercial and getting out into Rio de Janeiro and Sao Paulo, and they started freezing it and adding guana or syrup, which gave it a little caffeine.

And then people started blending it into Acai bowls and so that, , the Acai industry was growing very, very quickly in Brazil, very little distribution in the US. And one of the things , that was cool during our whole supply chain was we met a guy down in Brazil named Ben Herr, and it was our last day of the trip..

And Ben Herr had a really unique property. He owned an island where the Acai trees grew. There was a little school on the island. And there was a boat that went all the way around the island and picked up the kids every day. And they brought in two teachers from Be, which is the, the main city, just [00:06:00] across the river.

And he had this dream of creating an Acai factory where you could pick the berries, wash them, clean it, pulp 'em, freeze it , to preserve the fresh taste, the nutrients, and the color. And so when we met Ben Herr we fell in love with him. He was a forest engineer, an amazing story teller. And we formed a partnership with him.

And so that wound up being the foundation for our Acai, where we had the freshest tasting Acai coming into the market. And we had a partnership with him for many years. So in 2002, 2003, you had a great sourcing story and a great access. to Acai you had experience kinda working. In the juice and smoothie business and we were launching in the the us what were your goals for what you wanted to achieve or what you thought you could achieve, and then how'd you go about building the company?

You know, today we would go into this with, you know, a good smart business plan in gold . You know, we, we went with just loving Acai and we wanted , to really share [00:07:00] it with the world. One of my partners, a good friend of mine named Andrew sold produce to Melissa's from Melissa's world driving produce.

And the other partner was really good on the sourcing side and. You know, so I'd love to tell you that we had these very specific goals. We didn't, we were entrepreneurs and we just wanted to get into business. And so you know, we were on the very front edge of creating a category. You know, and being the tip of the spear and trying to educate consumers, you know, takes time , and it is a grind.

So we raised about 650 grand. We raised that over a two year period. We launched our first. Our first year we did about 250,000 revenue. Our second year we did a little over a half million. Our third year we did about 750,000. And then our fourth year we got to about 1.7 million and that's right when the media was starting to pick up on Acai and that really helped with some of the awareness.

I think that's amazing. And I think, like you said, there's, you're building a new category and you had to build this business almost door by door. And so what are some of the key things that you learned in [00:08:00] educating both retail buyers and consumers on Acai that might apply to other founders who are building new categories?

Well, it was funny. So we got our first authorization of a store called Bernardi's Market, which is eight stores, a specialty retailer up here in Northern California. And Phil Jordan was the buyer still is today. And he said, Chris I love this story, but no one knows what it is. What's your plan to market?

He said, what do you think? And he said, well, you really don't know this business at all to. And I laughed. I said, Phil, tell me what to do and we'll do it. He goes, here's what we're gonna do. You're gonna buy I'm gonna buy three cases from you. You're gonna set up a demo and you're gonna come do it personally.

If you sell the product, I'll buy more. I said, sure. So I went in there, I did a four hour demo. I sold all the product. I called him the next day and said, Hey, Phil, we sold it all. He goes, Hey, you're gonna do it again. So this time he bought 10 cases. I sold about half of it during the next demo. And then I, I stacked up the rest , on a case stack and put the price in there.

Called him next day and said, Phil, I sold through half the product. He goes, [00:09:00] nice job. He said, how would you like to sell in all the stores? I said, I would love that. He said, I'm gonna buy 10 cases for every store. And you're gonna come in and do a demo in each one of those stores. And so that's how we got things going is we drove trial at the point of purchase.

And that's how we really started driving our success with consumers. And so, you know, myself, my wife and my partner Andrew, we were doing demos up here in Northern California now my wife and I, and Andrew was facing Redondo Beach, and so he was doing demos down there in Southern California.

You know, you didn't have social media back then. There was, we didn't have the tools back then that we had today. And so we just highly invested in doing demos and in doing out store events to build awareness. And so that program helped us, you know, get into Whole Foods down in Sopac down in the southern California division and then up here in Northern California.

And we literally performed hundreds and hundreds of those demos and that led to some really nice growth for us and really strong velocities. . I think that's amazing. One [00:10:00] thing that I found out about myself as a founder when I got started was it was very easy in this day and age to build a business from behind the computer screen.

But even now, it takes a lot to get out, get , into stores, get in front of people, really introduce yourself, tell your story, and get the product into people's mouths. Because without that, it's really difficult to build a business in the food and beverage. . Yeah. You know, I remember Alex from from Genius doing a post where, you know, he was doing a little tour around the US and visiting the stores himself.

And, you know, you learn so much from being out there in the store because you know, you need to listen to consumers. You need to get that feedback. You need to get people in the stores excited and, you know, you really can't do that behind a computer screen. You really do need to get out there and.

Especially in the early years, I think being a founder and getting that feedback directly it is very important. And part of that is really having the ability to listen and decipher, you know, what you want to take [00:11:00] action on and what not to, you know, and you gotta realize you can't be everything to everybody.

You need to know why you're bringing this product to market. But you're right. You know, having that direct connection to your consumer early on is really, important and then, you know, things can layer on digitally and, you know, you can have feedback loops through other mechanisms, but I think being out in the field as much as you can early on , is a big field.

I'm curious to hear your thoughts as well, because one thing that I've found is that most brands under. Underutilized their awareness per store location. If you think about any, you know, a single, whole food store, right? There's thousands of people who shop there. Maybe you do a demo or two, but most of the people in the store who shop there have probably never seen your product or never heard about it.

Number of them, they're not the customer, but a number of them might be. They just happen to show up on the wrong day that you're doing a demo and don't see you on shelf, right? And. I, I've really been a fan of companies who Beaumont is one of them who really are building their brand store by store [00:12:00] to build that awareness so that most, the majority of the people who shop there, no other product, right?

And they can choose if it's four of them or not, but at least they have some awareness that it's there because I think a lot of founders expand really fast into lots of stores without capitalizing on each individual occasion. Yeah. You know, we learned that lesson early on , and then learned it the hard way.

 And what I mean by that is, you know, what was my wife and I and my partner Andrew, doing the demos ourself we crushed it and we were doing 10 demos, you know, in a store, you know, over a several month period. And, you know, that's why our velocities were so strong. And you know, to me, if you had, you know, making the number up, but if you had a million dollars in sales and you could do that out of 200 stores versus a million dollars in sales out of 2000 stores, you know, the, you'd much rather have those sales , out of a much smaller pool because, It's those velocities that are going to build your data story, it's velocities that are going to lead a better shelf's space.

It's those velocities that are going to get you the ability to [00:13:00] sell in case stacks and so that, you know, early on, , in our life stage of Zola was big. And what wound up happening with us is U NFI was one of our major distributors and we made the What's Hot section. Mm-hmm. . And next thing you know, we had authorizations with Whole Foods nationally.

 We went into all these debt, different mantle food stores, and we had just brought on our first million dollars of investment capital. But even with that investment capital, we had a lot of those dollars going towards inventory. And so, you know, number one, it. You know, the founders out doing the demos.

So we were either doing demos with the marketing agency or didn't have the Capital review demos at all. And so we just weren't, we didn't have the same model that we were doing in California in these other areas. And so, you know, it was great because we got these big opening orders to UNFI and our growth was really there.

But you know, within a year we'll discontinue that of a couple of Whole Foods Division. We decided to pull out of a couple divisions because we realized we weren't able to get the cold box. We had nobody selling in those secondary displays that we didn't have [00:14:00] the right people doing the demos. And we really decided to focus regionally in with specific retailers and go deeper.

Right, and that wound up. Being , a good move for us, but, you know, we've, we've lost a year of our business, you know, until we figured that out. And so I think today if I was a, a young founder or an early stage company going out, I would absolutely focus geographically and go very, very deep with those retailers, as you mentioned.

You know, and do multiple demos for stores. So you are reaching as. Consumers as possible. You know, and if you think about it, you know, if you have a brand in a Whole Foods , or a good natural food store, you know, you really need to get up to 2030, you know, units per store per week from a velocity standpoint.

And that can vary by category, but that doesn't take a lot of consumers to love your brand. So if you run five, 10 demos in a store and you go build out basic consumers, you know, even if you have 10 or 20 very, very solid people that love your product and buy multiples, , you're gonna see really good philosophies.

So I agree with you wholeheartedly. I think doing multiple demos in each store , [00:15:00] is boom. I really appreciate you sharing that story about expanding to Whole Foods nationally and then retracting some because it really took a toll on your business. I'm curious if you remember, What the morale was for you or for the team, and how do you manage that?

What seems like a great opportunity in national expansion and realizing that it wasn't what you thought it would be, or that you weren't managing it like you wanted to. Yeah, I think today, you know, what you really realize after you have experiences, you know, getting in the store is the first part, right?

The buyers Is the first gatekeeper, but it's after that of when the work really starts, right? It's your placement in the store, making sure you have the pricing, making sure you're on promo, making sure you're merchandising the cold box, making sure you're getting those secondary displays, and then you know how you get that trial and awareness for your brand so you can actually build consumers.

And so from a morale standpoint, you know, we went from being super excited about it to looking at the results and saying, wow, this isn't really working. And you realize that [00:16:00] people on the other side of the country might not have the same awareness, you know, as people in California just because, you know, you tend to have trends that happen, you know, on in California or certainly on the coast.

And then expand inland. So you know, the morale goes down. You know, for us overall, we continue to see sales growth because we started to expand in different channels. So we went from what, you know, as I was telling you, our revenue growth trajectory you know, we went from 1.7 to 3 million, to five, to seven to 10, and You know, I think, you know, even though we had these big revenue pops and then saw flatten out, because we didn't have the velocity, we were still growing the business because strategically we were going into other channels.

So you know, for us it was more lessons learned. And, and it wound up retouring our strategy. And one of the big changes for us was, what we did was we wound up taking our Acai juice after we got good penetration and natural and we wound up taking it in the conventional grocery. And what we realized is the better for you consumer [00:17:00] and conventional grocery was shopping the produce.

And so we started selling our Acai juice in the produce department which wound up being a really good move for us. I like that . So looking as you've been growing the company, it sounds like you had great revenue, success and growth over the years, and I know about nine, 10 years into it you introduced coconut water to your portfolio.

Can you talk about why you made that addition? . Yeah, so we were about 10 million in revenue. And we had at that point I was the president. We had a ceo and our CEO at the time had some pretty major health issues. And like any company you know, , in that kind of revenue range, typically you know, we were still consuming capital and the issue was happening with our business.

We had, we had three 12 ounce skews and we had 3 32 ounce skews. And our business was 2 99 for our 12 ounce and 5 99 for our 32 ounce. And at that point in time, our margins were in the low thirties and we got a price increase from our co [00:18:00] pathway. And so in order to maintain margins, we were going to have to increase the price of 3 49 for the 12 ounce.

6 99 for the 32 ounces, which we thought was going to really impact the business. And the other thing that was we were seeing was that Acai was really growing quickly in food service, right? So it was an Acai bowl with the bananas and the granola on top, and that was a better way to experience Acai versus an Acai Juice.

And so, I realized that we needed to pivot if we wanted to grow. And so we had a business that was 10 million of revenue at the time. You know, we had margins in the low thirties and we're going down the high twenties. And we were losing about two and a half million dollars a year. And when I was in Brazil during my supply chain trips I would surf down there and would enjoy coconut water after a good surf session.

And so I had been watching Vita Coco in in Zico, which was both coming out of Brazil. And I happened to walk into a Whole Foods and I [00:19:00] saw that they were serving fresh coconuts. And on the little chalkboard sign there, it said from Thailand, and I tasted the coconut and said, my God, this coconut water tastes so much better.

The coconut's coming out of Brazil. So I jumped on a plane, went out to Thailand came back with some suppliers lined up. And I went out to the board of directors and they said, okay, you guys, we need 3 million in capital and here's how we're gonna do it and hang on, because it's gonna sound a little crazy.

The first thing I'm gonna do is I'm gonna take our business from 5 million in revenue and I'm gonna take, or from 10 millions in revenue and I'm gonna take it down to five. And my board of directors did look at me like I was . I said, look, here's our business Today. We have 5 million in Acai Juice in the US We have two and a half million dollars in Acai Juice up in Canada, and we have a partnership with Jamba Juice with Acai supplements.

It is another two and a half million dollars. I said, I'm gonna get rid of the Jamba Juice side of the business because it's not building our brand. We're not gonna focus on Costco Canada anymore. We're going to focus on the US and we're going to bring in a new product line, [00:20:00] which is going to be higher margin and has a lot higher growth opportunity for the visitor.

We're going to reposition the brand from Zola, Brazilian Superfruits to Zola fruits, the. Which will give us license to have the best tasting fruits coming out of Brazil, which will be our outside juice. And coming out of Thailand, which is the coconut water. And our distribution strategy is because we've built a brand produce, we're going to put our coconut water in the produce department, build up big case stacks and drive trial let flexco invite a coco, educate the consumer about hydration, and let's go in there and win on taste.

So we took the dollars, we would've paid a distributor. And we sold the product warehouse direct. We invested in displays in driving that trial. And that big strategy worked. So we wound up 12 months later after launch, having the number one. Skew from a sales per point of distribution standpoint out of the entire produce department.

So we were outselling Naked Juice, a Walla Boathouse farms from a dollar perspective on sales point of [00:21:00] distribution and in fact in on a national basis in the coconut water. Category, we had the fastest selling due on a sales per point of of distribution basis as well. So that strategy really paid off.

So even though we came in late taking it, the produce department first really worked. That's amazing. I mean, you let with taste, which I think consumers. Always, it makes the biggest difference for consumers, right? You need to have nutritional values and the consumer benefits, but if it doesn't taste great, you're not going to get the BP purchase , that you want.

So I think that was so important and love your way of differentiating and standing out in store with the K stacks that being in produce. Cuz it's a really great way of standing out from the competition, from the crowd. So it sounds like it was a big bet, but it pay of it did. So, you know, we started, as I said, from 10 million in revenue.

We stripped it down to five, 18 months later. We were north of 14 million in revenue. Our margins went back up to the mid and high thirties and we were at cash flow break even. So at that point when we were at 14 million, that's when we launched coconut water and and grew the [00:22:00] brand. And then eventually sold it to KarpReilly where I stayed on as ceo.

Did at a certain point, did you drop the Acai juice and just focus on the coconut? You know, we did we actually coconut water just kept declining and it was our lowest Western product. The velocity were going down and so we wound up exiting the business and after the KarpReilly purchased the business, we wound up getting in some plant-based energy drinks.

We put that in four or 5,000 stores in 90. And, and started growing the business. We used the capital KarpReilly put in to double down on being a hundred percent plant-based. We revamped the brand and then we started to get into hemp and I looked at hemp and cannabis as being one of the ultimate plant-based ingredients.

And then back in 2018, I was doing the speaking. In Las Vegas and I was paired with Dennis O'Malley, who was the CEO of Caliva, which was a very large cannabis company down in San Jose, California. And they had 140,000 square foot facility with 13 grow [00:23:00] rooms. Main product manufacturing, a very high-end dispensary on property.

And very long story short really liked Dennis and took a tour of the facility, wound up investing in the company, and Dennis asked me to consult for them and build out a cannabis beverage platform. And so my board authorized me doing that because it would help us. Learn about the hemp industry quickly, kind of being in the hood of a cannabis company and one thing led to another and caliva wound up purchasing Zola and I joined the team as the head of beverage and joined the executive team.

And we essentially grew that business to about 80 million revenue. And then took that public via spac back in 2020 so it was quite the wild ride. Got to learn an awful lot. You know, working on a bigger team like that and being able to take a company up to 80 million revenue.

That's amazing. So Chris you've been in this industry for decades now, and with Zola for almost two decades. In it's a long time. And to think about kind of building a brand , [00:24:00] I know, especially when a lot of young founders think they'll build a company and sell in five years for millions of dollars. What was that journey like of being in the same, well, I guess , you've pivoted a little bit, but being in with the same company for almost two decades, Yeah, really good question.

Couple things to unpack there. One is, you know, if you're starting a beverage company because you think you're gonna sell it in five years don't do it. It's very hard to sell a beverage company. I don't know what the percentages are, but it's for sure single digits. And, you know, the beverage industry is a grind and it's fun.

 It can be very, very rewarding. But I would not get into a business just with the mindset of selling it. The reason I was with Zola for so long is because I was constantly learning. There was constantly new phases of the. And I, it was, I was very fascinated of, of staying on even after I sold the business because it gave us a new investor group to work with.

You know, immigrant Capital outta New York was our lead investor outside of our angel investors and we're [00:25:00] incredibly supportive of new, personally, and at the brand. But I learned so much from KarpReilly and how they approached it and you know, I think through selling the company actually twice, you know, it gave me experience of leading, you know, leading those different efforts.

 And continually being able to expand. My knowledge base. And so for me on a personal level, I really went from, you know, being an entrepreneur that the scale businesses, I've cut businesses back. I've been heavily involved in product development. I've set up supply chains. I've taken, you know, the business all the way through exits for different reasons.

And you know, now that knowledge, you know, enables me to go back and do consulting work for other companies that are getting into cpg. And so today I'm the chief Growth Officer for Beyond Brand. And so I'm helping build out the growth strategy there and working with my friend Eric Schnell who.

He's the CEO opening on brands and he started Steves when I started Zola and we used to speak on different speaking engagements and panels together and have brought together a lot of really unique experiences. [00:26:00] And so they built out an amazing team of people that just have, you know, great experiences and said, for me, I'm in there being able to bolt on different things

in terms of bringing on a group of investors that can fund some of the young brands that we're involved in. And I'm very interested in that side of the business of funding young brands that, you know, we see promise in. And you know, because I, I've been on the other side of that table and I'm able to talk to founders.

And tell them and show them how to position the business to go get funding and to build the basic fundamentals. And because I've raised capital and I've sold businesses multiple times, you know, I'm able to look at it through an investor lens and really marry those two things up.

So I think that I can bring a lot of of great experience to beyond brands and I can take all the learnings through the various life stages of Zola to help execute and drive value. Not only the young brands we work with, but but also beyond brands as an agency. Well, let's get into that a little bit because I'd love to hear some of the top lessons that you learned in building Zola that you will you have [00:27:00] shared with other emerging brands or would like to share with other emerging brands in the space now.

Yeah, I, you know, I think number one, you know, you really have to have a product that has a unique point of difference and really solves the consumer need. You know, getting in with a me too product is tough. And, you know, we did that to degree with Zola. We had a different distribution strategy that enabled us to get an edge and drive sales and capture market.

But an example of that would be our coconut water with espresso. You know, we were the first company to launch that skew, and that was a monster skew that you know, really combined natural energy to the coffee and then hydration. And so, you know, we saw people with double fist, you know, Saturday and Sunday mornings that they had a big night out because they needed caffeine and the needed hydration.

So, you know, that one wound up being one of our unique points of difference. I think two is, you know, really make sure that, you know, younger companies are properly capitalized. And I think having a very smart working capital plan is critical. And I think as a founder, you know, most founders have one or two superpowers, right?

Some founders are really good at sales or they're really good at [00:28:00] marketing. And I think Identifying that upfront is big, and then deploying that capital where you can get surround yourself with people that have the experience and have other superpowers which are going to need to be successful.

And you know, I think for me, I think. I wish when I started Zola that I learned that faster and brought on other people that have been there and done that. Because , if you can bring people on the team, whether that's an employee or an agency or a consultant, whatever that might be, that can help you avoid pitfalls and can bring some of those contacts and strategic vision and tools you need to be successful, the faster young companies can bring that in, the more efficient they can be with their capital.

I love those points because you had such experience in beverage. I'd be curious, do you see it possible of bootstrapping a brand in beverage? As, yeah, I'm thinking for people who don't come from wealthy backgrounds, or do you think it really requires a significant amount of capital because of how the business is [00:29:00] structured?

I mean, beverage typically does require a significant amount of capital depending on the strategy. But if I didn't have a lot of capital, there's a couple key factors. One the entrepreneur's gotta make sure. That they can do a lot of different things. Kinda like what we did in the early days where, you know, we were making the product and you know, we were driving or selling the product outta my expedition, we were doing our own demos, right?

So be prepared for a lot of time in two, you gotta make sure you have a really high gross margin north of 40 for sure, and hopefully more than 50. So, you know, the bigger you grow. You're not tying up all your capital , in that inventory and you can convert your sales to cash as quickly as possible.

And then three, you would have to be hyper focused on a local market. So ideally produce a product in your market like California. Do your sales in California so you're not spending a lot of shipping costs across the country. You know, and go build a core out and build a solid business in one area, and then go out and build capital.

And you know, I think, you know, [00:30:00] capitalizing the business up front through angel investors and depending on , the terms of your product and how much inventory and minimum production run, you know, figuring out. Funding mechanisms on how to fund that inventory. So any growth capital you bring on is going towards growing capital and not just buying, you know, buying up inventory.

And I think those are a lot of, some of the things that I would focus on if I was, if I was capital strong. And along with that, I know you mentioned you have an interest in helping fund emerging brands. What are some of the things you see founders doing? well in their business strategy or their pick checks.

And where do you see founders lacking or kind of missing missing the mark , on their strategy? You know, I think a lot of young brands come at this and try to look bigger than they are. And I think having a good funding partner you know, means being very transparent, having good communication, and I think being able to identify what you really need the capital for and where you're [00:31:00] going, and that sets a really good foundation for your investors.

So they know where they. And I think, you know, a good investor's gonna look at the business and say, are they in a category that's growing? Do they have any point of difference in that category? Does the founder have the skill sets or the team or the ability to lead, you know, a company and get where they need to go?

Does a business have high margins? And do they have opportunities to grow margins? And could this be a, a significant business that could be profitable one day or, you know, potentially be an exit opportunity. So I think those things, you know, are really important to get out there quickly.

And then I think, you know, keep it simple. You know, it really is about you know, the idea where we're going. What are the proof points? You know, what would you do with the, that use of funds? And then really have a strategic vision of where you want to go and make sure that you're very clear in that strategic direction for the business.

I see a lot of founders struggling with this idea of getting into the industry [00:32:00] with a certain vision, then realizing how much money it actually takes to build a business, especially. You know, high inventory levels that they'll need as they grow and they end up trying to figure out like, do I take on venture capital money really, really early before kind of proving out product market fit?

Do I try to stay small and lean for five, 10 years to really build out the core business before taking on money? Do you have a perspective. When it could be multiple times, but like when founders should look towards maybe some of the higher venture capital funds to, to invest in their businesses and when they might be better served by angels or staying smaller and bootstrapping.

Yeah. To me, I don't think there's one size that fits all because everyone's going to have different skill sets you know, different capital needs depending on, you know, the product inventory and what. Minimum run sizes are, et cetera. So I don't think there's one strategy overall. However, I would say the longer you can use your own [00:33:00] funds or friends and family money or maybe some potential angel money to go build proof of concept you know, that I wouldn't try to take on private equity or vc money..

You know, upfront, unless you've got something that's so breakthrough that you know, it's got a lot of excitement. I think, you know, , you're going to be a younger company's going to be in a much better position working with a VC or working with a private equity firm for. If they already have checked some of those boxes of, you know, the brand has legs, consumers like the product, there is some velocity demonstration of margins, demonstration of being able to operate the business.

And I would say people need to get in the business and either get out or make tweaks quickly and then figure out where and how to capitalize that business. So I would say kind of in order from inception, it would be, you know, self-fund friends and family money. Angel investors get a good debt partner, and I've been involved in some of these calls recently of some very smart people on [00:34:00] debt that know how to do that.

And then go out and look at a venture money and eventually private equity money because you know, a lot of these venture funds and a lot of these private equity firms, You know, they invest in different stages, right? They have different times, they like to get involved, but sometimes they might get involved after a million dollars, you know, in revenue.

Some might get involved with 5 million. They have different check size and different appetites of how much they like to invest. But I think at the end of the day, the most common theme is every investor wants to see that the business has the fundamentals and it's working and it's got some.

 And for businesses that have, that capital's there. But if a business doesn't have that you know, it's , much harder to raise capital. And Chris, as we close out, I'd love to know from your vantage point looking at the food and beverage industry, are there any trends or categories or kind of exciting areas within the industry that are ripe for innovation that you see right now?

Could be a product [00:35:00] type or a neat state that consumers are having or anything like that? And I ask because it seems like some of the best brands are able to identify. Can consumer waves or things were like, where people are moving and jump on those. So I'm just curious if there's any that you're excited.

You know, I, there's nothing that's jumping out at me, you know, very specifically I think that, you know, we're going to continue to see plant-based be, be a big driver. I think natural and organic are going to continue to drive. I think taste is always really important in that we were talking to our plant-based pasta company here recently, and you know, just making sure that, that flavor and that experience of the category you know, matches up.

And you know, one of the things that. I thought was really interesting. If Beyond Brands was there was a brand called good Catch that was built by the Beyond Brands team, right? So the product development, the marketing and brand positioning, the sales execution, that was all done, you know, in-house.

And [00:36:00] then they brought on, this was before my time. They brought on a couple different in investors that funded a large part of the business, and then they took that to an exit. And I just thought that was really interesting because they were able to identify, you know, some different trends in there.

I think there's I guess to add to that, I think there's some non-alcoholic trends that are starting to percolate a little bit. And I do see that some of these gut health soda companies are starting to get some traction. And then over on the spirit side you know, we've seen some amazing tequila brands come out there.

In fact, I was doing some consulting work for a tequila brand over the last year. Raise and capital and build some of the grow to market strategies and you know, the tequila markets on fire. So it's cutting across a lot of things, food, beverage, in the spirits industry. But yeah, there's some fascinating innovation happening out there in market and it's fun to see the creativity, you know, coming from all these founders that are coming up with all these ideas.

I completely agree and talk to dozens of founders every week and love seeing all the innovative ideas out there. Really pushing the industry for it, [00:37:00] and I think that it's very, we have a very bright future ahead. . Yeah. It's fun, you know, and I think that's where, you know, taking these ideas and being able to vet them out early and say, does this have legs?

And how do you do that quickly? How do you do that with the least amount of capital? And I really do think it comes down to building out a plan, getting some people that have some experience in the space, you know, doing some financial model. You know, to your point earlier, Jordan, of, you know, understanding how much capital it is going to take to get this thing, you know, past the proof of concept phase , is really important.

And what I would say to some of these companies is, you know, there's two approaches to it, right? One is sometimes you need to tinker until you get it right. You know, like I was presenting some. You know, like letting something up like we were the 12 year overnight success because it took us a long time.

But you know, the other side of that coin is, you know, you might have a great idea and I think you need to be able to listen and say either you have the time in the runway to tinker with something until you did [00:38:00] it right or. At some point do you cut bait and say, well, it was a good idea, but it's just not gonna get there.

And I think that's why bringing experts up and trying to help you, whether it's an advisor or an employee an investor, whatever that might be is critical you know, to be able to vet out these good ideas as best as you can. I love that Chris, and especially as you mentioned as well, having that clear understanding of where you want the business to go at a certain point.

Because at, you know, with 10 million, you might think like, oh, that sounds like a great business, but you mentioned, you know, you're still losing $2 million a year or so, and just having an understanding of, you know, if it's venture back or it's a high growth model. You need to hit certain larger growth points in order to be successful versus if you have a much smaller, slower growth plan.

Maybe 10 million profitable could be a good business for someone, but it's really understanding how your personal goals and where you want the business to be as well. Yeah, totally. I, you know, a good example of that would be, you know, Todd Ard and Highball, you know, those guys were local here, and Todd's a friend of mine and [00:39:00] Todd was a hustler man.

He and his partner, , they went out there and grew that business and they did everything and they were all taking, you know, the people at Whole Foods out. And they were always involved in trade shows and they were, you know, working. Day and night and they were sub 10 million and you know, they were actually profitable in making money and they didn't take out a lot of investor capital.

You know, they brought in a little bit of family money and they got that thing to be profitable early on because you know, they didn't want to. You know, go out there and take on big capital. And so, you know, that's why I think, you know, every situation is different. It's different based than the founder, the category.

You know, there's about 15 different things that we're gonna make every situation unique. And I think, you know, getting people that can help you pull all that together and make key decisions up front. You know, before you put in a ton of time and a lot of money is a good thing. And you know, one other point I'll add to all of this is, you know, sometimes it's good not having capital up upfront because it forces you to be scrappy.

And if [00:40:00] it's your own money or your family money, You know, you are not gonna spend that waste weight. And it teaches you know, how to save that money. And, you know, I one of my mentors was again named Pat Muldoon. He was, he was one of our early CEOs that came on and you know, he had this phrase, which I thought was awesome.

It was like, you know, we're going, we're going to raise some money and we're gonna protect that capital that gets oxygen on Mars. Right? We are not gonna spend that capital frivolously. We are going to spend it towards things that are going to drive growth. Or get us to better gross margins or get us close to the profitability or to connect with the consumer.

That's it. And not always stuck with it. And so, you know, I think having, not having capital early, you know, can teach you some really good lessons and the discipline you need. So when you do bring on capital, you know, you can deploy that capital in a way that is intelligent and you know, helps you keep, you know, the majority of the company and keep that valuable.

And that's a brilliant point. I appreciate you being on the show today, sharing your wealth of knowledge and sharing the story of [00:41:00] Zola because I think it's so educational for other founders to learn from both the successes and the obstacles along your way so that they can see some of their journey maybe in it or see , other ideas of how they can think through their business.

So thanks so much for being on today. My pleasure. It was was fun talking with you and have a good one.