My guest today is David Delcourt, founder of Grown As* Foods and Seed Ranch Flavor Co. If you’re on Linkedin, you’ve likely seen David on your feed in a bright yellow jump suit talking about his plant-based Mac and Cheese. We break down how David built a profitable brand and is raising an equity crowdfunding round to fund the next phase of the business.
If you're interested in supporting his venture and being a part of this exciting journey, check out the crowdfunding campaign.
Startup to Scale is a podcast by Foodbevy, an online community to connect emerging food, beverage, and CPG founders to great resources and partners to grow their business. Visit us at Foodbevy.com to learn about becoming a member or an industry partner today.
Building a Plant-Based Mac and Cheese w/ David Delcourt
Jordan Buckner: [00:00:00] My guest today is David Delcourt, who is the founder of Grown As* Foods and Seed Ranch Flavor Co. If you're on LinkedIn, you've likely seen David on your feed in his bright yellow jumpsuit talking about his plant based mac and cheese. He's actually wearing it today, even though you can't see, but you can imagine just the sunshine shining through your headphones.
David, welcome to the show.
David Delcourt: Thanks for having me. I like that description. Sunshine through the headphones. I'll take that one.
Jordan Buckner: All right. I know it's always great. We can get to brighten everyone's day. So David, I'd love for you to actually give some context to the audience.
Tell me a little bit about Grown As* Foods and Seed Ranch Flavor Co. And what the products are and what you're building.
David Delcourt: Yeah, we got started in 2017 at the farmer's market here in Boulder, Colorado with Seed Ranch Flavor Co. And from the beginning, we knew we wanted to be exactly that, a flavor company, not just hot sauce, not just condiments.
We really thought about plant based first and, you know, sophisticated flavors for everyday use. So, 17, 18, 19, Farmer's market, heavy bootstraps, you [00:01:00] know, events you know, managing cashflow and then the pandemic hit. So at that point I had lots of different ideas. I post on LinkedIn. At one point we were about to launch popcorn and then the sauces , we basically decided to really focus.
Back in on the core of the business, trying to not expand during the pandemic, I'm at home with my boys half the time, and we're eating tons of Mac and cheese and, you know, I've been plant based for seven years. So there wasn't one out on the market that they would eat. There wasn't really one in the market I wanted to eat, and so together with them, and I think they were six and ten at the time, seven, eleven we developed one, and that was Grown As* Foods.
And it came from a core recipe we're already using for seed ranch flavor, so the thin red line that continues to this day to, you know, the two brands together is flavor and that culinary inspiration and the CPG package food world. And that brings us kind of up to through the pandemic and into 2022 when we did go out and raise a little seed round.
And to really push out the grown as brand and get it [00:02:00] out into retail. Fast forward to today, and we're here in October, I can't believe it's fourth quarter already, but that's the short synopsis, brief history of Seed Ranch Flavor Co. and Grown Ass Foods.
Jordan Buckner: Yeah, I love that. It sounds like a typical, you know, founder journey of really honing in on What's working and doubling down as you are figuring out your customers and what you want to stand for as well.
Take me back a little bit to the beginning because I know you weren't always in the food industry. What were you kind of doing before you started these companies? And why did you decide to start the CPG brand?
David Delcourt: So I'd like to say, food was always a passion of mine, and prior to starting Seed Ranch Flavor Co., the kitchen was really my place of solace and of settling down, and cooking and flavors were really where me and my family, and historically my family growing up, we would gather in the kitchen, and so It was always near and dear to my heart, and I've been a kind of hobbyist, foodie chef for a very long time.
I have been an [00:03:00] entrepreneur now since I was 23 years old, so was briefly in investment banking and briefly in consulting out of school, and then started a sustainability and carbon energy management software called MakeMeSustainable. com. Ran that until 2011 when we sold it. Was with that company for about a year.
Year plus to be there a year and then started a consumer electronics again, focused on clean energy and basically recovering energy, kinetic energy that was through 2016. We were, Cashflow Positive had a catastrophic failure on our production run that we were doing over in China, and that kind of was the first domino that got that when we shut it down, sold off some IP, and it was in that transition period that Food again, back to being that place of comfort.
The hot sauces were born because I was working with my then co founder to make hot sauce with peppers. He was growing on his porch. And 2016, we made 5 [00:04:00] gallons of each for friends and family for. Christmas presents and holiday presents and things, and people absolutely loved them and wanted to know where they could buy them.
And that was the aha moment, right? the first inclination fact, really, of what the customers were asking for and wanted. And then you did mention customers, the farmers market. It was such a impressive place for us to learn what people resonated with, what they understood, what they didn't. What does umami mean?
Right? That was the number one question. Well, it's got so that was three. And then, you know, into food. And the good news is that having been an entrepreneur, right? There's a lot of skill sets that you take. Throughout that founding journey, you know it and I've listened to your podcast in terms of your experience from Teasquares into Foodbevy
there's a lot. Sure. there's differences, but the similarities everything from understanding cogs and margins and scale and growth and fundraising and yawn down to the nitty gritty of, you know, hiring and team and culture. So I actually had Yeah. I thought the margins would have to be higher for distributors because in the [00:05:00] consumer electronics and bike world, which was the intersection where we were, everything was turnkey pricing.
So we'd sell to a distributor for 10 bucks. They'd turn around, sell it to the retailer you know, for, let's say 50 percent markup. Right? And then the retailer would want to turnkey it. So if the retailer ended up buying it for 15, they'd want to sell it for 30. Right. So I kind of put in a little bit more buffer than I needed to, which was a really just wonderful accident.
Jordan Buckner: Yeah, I mean, that's good because as you know, when you're selling food product, right? Like a lot of times your revenue is like a couple of dollars per unit, maybe to once you actually get your wholesale price in and it's really challenging because you realize like, wait, I can't just send, sell one of these things.
I have to sell thousands or tens of thousands, hundreds of thousands to actually make any real money. I remember that with Teasquares, right? Like our, our product costs were about 50 cent per bar and we sold each one for about a dollar wholesale. And so we were really making only 50 cent for every bar that we sold.
So I'm like, geez, I had to sell at [00:06:00] least like 2 million of these just to make a million dollars. you know, grows without all the other expenses within there. It's like, oh wow, like this is really, this is why you hear people say it's a volume game, because it's like the quantity that you need to sell is so high.
David Delcourt: Yeah, so the whole game of gross margin versus gross margin percentage, right? And the law Of small numbers and a lot of large numbers such that you know, we know how that goes, right?
Jordan Buckner: Yeah. So tell me then, as you've been growing the two businesses what have you really found because now you're running two brands, essentially, how is your time kind of split between the two and where , are you focusing on one more than the other?
You kind of grow in both simultaneously. How are you managing that?
David Delcourt: So thankfully seed ranch. In large part, because we had to bootstrap it and really make it a cash flow positive business for five years Seed Ranch is pretty steady state. When grown as was, was launched. And we did think about launching grown as under the seed ranch banner, but we wanted to have a brand that absolutely popped on shelf that felt like a bit of a pirate in the [00:07:00] grocery store, you know, brands like liquid debt and bitch and sauce were big you know, ideas coming in and motivations for us where.
At the very least, you're going to grab off the shelf because you want to know what it is. So we did think we need to make this a bit more of a splash. So seed ranch, you know, from a co packing production distribution partners you know, it's pretty steady and it's pretty organic linear growth.
It's a very difficult category, right? It takes a long time to go through a bottle of hot sauce. And that. Yeah. Also, you know, is can be a positive in the sense that it's a little bit more reliable in terms of our forecasts and it's easier for us the way we set up. We have a small code backer and a large code packer.
We can incrementally work on inventory versus, okay, we're going to do 800 or 1600 gallons, you know, for you know, a large order. Let's say, yeah, hot ones. We run hot ones in 2020, Justin Timberlake and Tim, you know Will Farrell and Halsey. And it was. So much fun and it helped our brand grow tremendously.
But that was the first time where I was like, Oh, wow, [00:08:00] we'd have to do a lot of 90 gallon batches to get to the PO that they want. Right. So a lot of my time is spent on the Grown As* side. And what we've found is because Grown As* is that fun brand, clean label. All the things, again, the same fundamental principles as seed ranch, but the brand pop means a lot of grocery managers discover seed ranch because of Grown As*, and so when I'm working together.
You know, with my team or our brokers, , here's, you know, often it'll be the category review, say, for boxed meals, right? But that same grocery manager , might be either them or somebody who sits right next to them, you know, on the team is going to be the condiments buyer, right? And so it's an opportunity to bring some awareness and some education.
So they dovetail together. Is it hard running two brands? Yeah, but it's also a lot of fun and we get to play with grown as foods in a way that we never did with seed ranch. And that's the, I like to say, you know, two to 3 percent of my time is [00:09:00] probably spent on the things I'm really excited about doing.
And yet those you know, two to three percent of me in the kitchen coming up with a new recipe or you know, doing events where I get to see people like eating the food and loving it and the eyes wide open moment of like, wow, this is vegan mac and cheese tastes so damn good. I'm like, all right, those energize me for the rest of the 97 percent where it's like, all right, I know I have to do it.
So I'm going to do it. I'm going to do my best at it. But we need , that balance of energy at the end of the day.
Jordan Buckner: One thing you mentioned a couple of times was having to bootstrap the company for the first five years. Did you happen upon just like doing so? Did you think that you're going to have to raise money from the beginning and couldn't, or was it the kind of conscious effort to say, Hey, we're just going to grow with our own cash flows to start?
David Delcourt: I did have. Experience raising angel dollars from my past companies and so I knew that that would be an option and I wanted to make sure it could be an option very quickly. In learning more about CPG specifically and our category and our [00:10:00] velocities, I realized there's not a whole lot of sauce companies out there that are financeable.
Let's put it that way from a venture standpoint from a, you know and so we really put the emphasis on steady growth, solid margins, omni channel. You know, within the first year, I'd already decided I'm never going to do a fresh product. I'm never going to do a frozen product, right? It has to shift ambient.
No chocolate. I don't know if you had chocolate with Teasquares, but, you know, I know who deals with chocolate, it's like, all right, well, 6 months of the year. It's a nightmare. So there was some of those pieces, right? That we recognized early on. We also literally the first session of brainstorming, what were the mission vision values of our company?
What were we standing for? You know, flavor. And this idea that hot sauce is not where we stop was there. So there was going to be. A flavor company that could be financed that would probably need to raise money based on the reality of this industry in order to grow to seven figures and above.
And that was. The kind of future forecast, but the lessons of cash in cash out and being able to do that are [00:11:00] really powerful. You know, they make you look at things like cogs, especially when you're small and you're running, you know, whether you're copack your manufacturing yourself. My cogs will change every single month for the most part.
You know, red onions might cost three times as much as they did the last time because there's a shortage of the harvest in India. And it's like, Oh wow, that has global ramifications. I'm down to my little distributor here in Colorado. Right. And so , we're constantly looking at those pieces and even after we raised our seed round in May of 2022 You know, it was okay.
There's going to be some cash outlay to make sure we can push grown ass foods out there. But let's keep a hold of those cogs and the gross margin and make sure that we're not telling ourselves, Oh, I'll just start with a 20 percent gross margin and scale that magical thing. Scale. We'll just come in and go you know, step one, step two, step 10.
I think, I think
Jordan Buckner: we've all heard never happens that way.
David Delcourt: Yeah. So yeah, the lessons have been, they've been good. They've been hard at times, you know, definitely, but It's been [00:12:00] a fun journey, and I think all those lessons, I try and say, you know, fool me once, shame on you, fool me twice, shame on me.
So I need to learn, and we need to learn every time we have those opportunities.
Jordan Buckner: Yeah, you know, it's a delicate balance because with the CPG industry, especially right, like if you can have a self funded business, you can have obviously more control of the company, more control of the decisions and decide your own path as you want to grow, but it's also very expensive.
And I can tell you like there's two types of founders that I've met. There's one type that comes in, they're like. I barely have a product and I'm like trying to raise money. Like we don't even have a product in the market. It's kind of pre launch and I like want to raise a million dollars from VCs.
And you know, a couple of years ago that was possible for a lot of them. And there are other founders who get into and they're like, okay, I want it. Like they don't even think about the VC world. If they do, they're like, that's not for me right now. And they'll start building their company and invariably at a certain point, get into an issue where they're [00:13:00] running low on cash and to actually fund the business, they're kind of like, oh, crap, like I need to bring in money to be able to grow to where I want to be.
And some of those get to a point where they're actually like breaking and profitable. Other founders are at a point where they're. Losing money and they're like, either I'm going to have to shut down the company or bring in money from the outside because take out a lot longer than I need. And so I think that's a really difficult position for founders to be in and frankly, end up on their back foot a little bit because they are often put in positions of making decisions for the business that.
Are about trying to just stay in business versus building a thriving company and thriving product. And so I think it's , a real challenge that founders go towards. And so, you know, my recommendation is always, if you can get to a point of breakeven sustainability on your own, and it gives you more optionality and a 1 thing that.
You're launching right now is an equity crowdfunding round to bring in more capital to kind of grow the business. Can you [00:14:00] talk about why you decide to go the equity crowdfunding route and what that process has been like?
David Delcourt: Absolutely. And you're spot on. In terms of founder personalities, and I know some 7, maybe 8 figure businesses, you know, that never raised a dime of capital and can make it work.
I know some smaller businesses that founders. As lifestyle founders live very happy lives, maybe working six to nine months of the year, doing lots of markets and events and things where they don't have terms, they don't have cash, you know, bridge and things like that. So it is all possible. I think for the most part, the well capitalized companies are the ones that are going to grow the strongest in CPG.
And that's just a fact of the matter, but for us in looking at that seed round last year, where that took us, which and where we wanted to and when we wanted to raise money was both impacted by market conditions and Inflationary pressures and just [00:15:00] the, especially the angel world really hunkering down, right.
And as markets , got tough, but fundamentally the equity crowd fund is scary in some ways as a founder, cause you've got to show everyone under the hood. Right. And so you have to but it's also exciting because , for me. I think we have great fundamentals. I think we've grown in a diligent way without saying yes to everything, which I know , we've all said yes to some things we wish we hadn't.
But so under the hood, it looks like a really good foundation to continue growing. And the equity crowdfund from the community build standpoint also is really impressive to me because you're getting people who are actually invested. In the company, in the vision, in the team, in the founder. And it's an opportunity to plumb that community for expertise, for feedback.
It's a great way, I should say, to build a 1 plus 1 equals 11 kind of model with a group of investors rather than maybe 1 or 2 main investors who, or a [00:16:00] VC, you know, primary leading around where it's many fewer touch points.
Jordan Buckner: Yeah, you know, , I've become a big fan of, and even seeing a lot of brands leverage it beyond just the initial equity crowdfunding round, where you say, Hey, if I have a successful round, it actually gives an opportunity for some like angel investors to put a little bit of money.
And maybe if they're like, once in 5, 000 to start and see how things are going, but then give them the opportunity to then say, Hey. That's put together a larger round in a year or two, sometimes even right after the, say, you've gotten some traction, you have community members involved, you know, we know that there's like a demand, not just for your products, but people who believe enough in your company to put money in, and then you can leverage that to get even larger funding rounds later.
David Delcourt: Yeah, that's a great point. And we're certainly looking at that saying, is this the last money we're going to raise? Maybe, maybe not. Probably not, to be honest. but when I think about strategic plan, you know, 12 months out, you know, 2, [00:17:00] 3 years out there are opportunities that you cannot take advantage of without the proper financing.
And that's just the harsh truth of it. And so the cash is definitely needed to continue growing at the same time. You know, we're leveraging AI tools. We're using third party resource. We're doing everything we can as a company to be as capital efficient. As possible, something that five years ago was really much more difficult to do.
It was a very linear. Okay. I need this human to do this. I need, you know, this person to this contract to do that. So in the same vein as the growth of AI, the growth of all these tools, , even just CPG tools that we all use, you know, like the, you know, startup CPG Slack community, right?
Like that didn't exist when I was first getting started. That's where I point so many people these days, like, oh, well, I'm looking for a co packer who can deal with peanuts and chocolate. I'm like, well, go ask, go ask. So that's crowdfund. I think it's the right time for us.
It's a great set of [00:18:00] people out there investing in companies, you know, and as well as investing in founders and visions and. we're anticipating, you know, we're in the reservation mode now we'll be live probably by the time this podcast goes live. And we're just excited about what we've already built and what we can continue to build, you know, through this crowdfund process.
Jordan Buckner: Well, David, I think that we'll definitely post the link to the crowdfund in the show notes. So everyone can check that out. But what I admire most is you've been able to one select a product that has very high awareness, right? Like box mac and cheese have a strong differentiator of having it be a vegan product and also a really great.
Fun and nostalgic brand behind it. And I think those are the elements of really growing a successful company and building a successful business. So I am excited to follow along with your journey and to see this really take off and grow.
David Delcourt: Thank you. Thank you. I appreciate that. Yeah. I mean, I like to say it's clean label, high protein, dairy free.
It's vegan, but I promise you it won't taste like [00:19:00] it's vegan and all of our products, even though I've been plant based for seven years, all of our products go to my kids who are not vegan, to plenty of omnivores, to people who, you know, probably would never buy a vegan product except for the fact that they tasted our mac and cheese.
Right. I mean that's literally the line that I heard would put it in the campaign video, but a friend of mine said, historically, vegan products have under delivered on flavor. I just laughed really hard because I was like, you know what, I've tried them all and it's true. It's true. It's so yeah thanks for inviting me on and being a part of this journey too. I mean, I think this is. Part of what you do for this community and what a lot of us you know, on LinkedIn and other places are doing is trying to help other people, other founders, other CPG companies be successful. Is as much as some of us might be competitors.
There's always a bigger fish out there, right? And so there's always opportunity for us to keep growing in the same marketplace.
Jordan Buckner: I completely agree. David, thanks so much for being on the show today and looking forward to following your journey.[00:20:00]
David Delcourt: Awesome. Thanks so much, Jordan.