Inside a Real Client Meeting with Scrummy Sweets!

Foreign.

Welcome, everybody, to this edition of CPG Insiders. I'm your host, Mark Young, my co host, Justin Gerard. And folks, we're going to be doing something a little different today that we've been talking about. And what we're going to do is we're going to talk to a new CPG brand, we're going to talk to a young company and we're going to listen to their challenges, see what kind of issues they have, and we're going to see what can we do to help them. How do we come up with some solutions for them? We have not talked in advance, so we don't know what all their issues are or anything of that nature. And keep in mind that sometimes you don't want to see sausage made because it won't taste as good if you see what goes into it. Well, this is gonna be one of those kind of events. So you might hear us asking questions. You might even hear Justin and I disagreeing with each other during the program.

No, no, Mark, that doesn't happen. Come on, don't lie to them because.

We'Re gonna be kicking ideas around. Just live. We're gonna be shooting from the hip on this.

Yeah.

So let's introduce who we have. So our, our guest today is Susie and Grant. Grant happens to be a race car driver, so he and I automatically have a. A compatibility thing going on here. And they have a company called Scrummy Suites. Now, the company was founded in 2020 during the pandemic. Probably not the best time to start a company, but if you're working from home, that might make sense. My husband Grant and I were semi retired after selling our digital marketing agency. After 20 years, we traveled and pursued more personal interests like racing cars till 2020. And then, Susie, I'm assuming you are the gummy bear baker in this. You guys make gummy bears and you're the gummy bear creator, correct?

Yeah, I am.

All right, so I'm going to let you guys pick your story up a little bit from there. So you started this company in 2020. What happened? Tell us. Tell us about the company. Fill us in here.

Well, so a lot of people were baking during the pandemic and I was making gummy bears. I just, I have a loose connective tissue condition, so I try to get collagen in a lot of different ways, and that's one of my fun ways. And I'm also picky about ingredients. So as you can imagine, I was making a lot of gummy bears because I was trying to refine them so they were yummier.

And.

And one day my hubby comes up behind me and he's like, so I just want you to know that I think we should bring these to market. And I was like, I'm sorry, what? And he said, well, because they're better than all the ones that are in the market now. And by the way, one of the big companies did 50 million last year in revenue. And I was like, wait, what? So I hadn't thought about it as a business, but it did become a passion. And so then we had to figure out, I mean, gummy bears are not something that anybody can make in their kitchen. And it's so cute when people are like, oh, do you guys make those at home? And we're like, oh, no, for sure we don't. No. These are made on huge multi million dollar equipment and giant factories that require thousands and thousands of square feet. We had never packaged before of anything. So.

So tell us what's different about scrummy sweets? Because it's, it's not just another gummy. This would, this is a functional food, right?

No, it's not actually.

Oh, I thought you had collagen in it. I thought. I'm sorry, I thought you had collagen.

Well, it's made with gelatin. So traditional gummy bears, like Haribo or any of the big brands that you're. Or Albanese, they are made with gelatin and then they're also made with glucose syrup as well as sugar or high fructose corn syrup, depending on where you're buying them. Right. And then they have usually flavors. Typically the traditional brands are made with artificial flavors and colors and they might have some natural flavors as well and citric acid and a handful of other ingredients. So for me, I come from a non toxic living sort of a background, so I had to create a gummy bear. That one didn't have sugar because I don't eat sugar and I actually monitor my blood sugar personally. So we had to come up with a product. Well, that's what I was doing in my kitchen anyway, was like a sugar free product that was still made with gelatin and that was made with organic natural colors. Organic, natural flavors. Because everything in my world is more like the organic end of things and the non GMO end of things. And that was how our gummy bears came to be. So they are made with organic natural colors that are only extracted with water and pressure and no hexane and organic natural flavors. And then we've even replaced some traditional ingredients and had our flavors custom formulated so that they don't have certain oils in them because you would either have an ethanol base and in a flavor or you might have an oil base. So in ours case, they have what's called MCT oil, which can have. Yeah, exactly.

So it has, it has. It would be very keto friendly.

They are ketogenic certified.

Ketogenic certified. The, the difference what happened, the way this kind of whole thing got started is she was. We. There was a brand we used to buy that was supposedly keto, supposedly zero sugar. And they used to. On the bag it would say 3 grams of net carbs.

Net carbs? Yeah, you gotta watch that. Net carbs.

Yeah.

So. And we were eating those, but she would experience blood sugar. She would experience a blood sugar spike reaction from them. And when we. And we were using similar ingredients that she was originally making hers in the kitchen with. And then in 2020, I was researching one of the ingredients, I happened across an article talking about the fact that the FDA had declared that this in fiber that they were using this big brand was actually and is still using is imo.

And were they using sugar alcohol also?

No, no.

That was their whole shtick is they didn't have sugar alcohols.

They were using another way to scam around the neck.

Yeah. So they were using isomalto oliosaccharide, imo, which is supposedly a fiber. And then the FDA was like, no, this is not a fiber. And turns out that imo, as far as blood sugar reaction is identical to pure glucose on the glycemic index, it's no different. So then we. I saw an opportunity is like, if we can figure out how to do this for real, like actually make a real traditional gummy bear, meaning with gelatin and not pectin, like an actual gummy bear that bounces and chews properly, but with actually zero sugar, that does not impact your blood sugar at all. We could jump right into this, into that hole left behind. So we researched it and we figured it out and we came up with the gummy bear that you can wear it glucose monitor and you can eat them.

And what are you using?

We use allulose as our primary sweetener and then we also use monk fruit. Those requires sometimes a little bit of extra love, especially with gummy bears. So.

Yeah.

So the first thing I want to demonstrate to the listeners today is this is a very typical story. And you'd be amazed how many companies start like this. And essentially this was a company that started out of personal necessity. This was, you Trying to solve a problem for yourself. And that's a lot of word some of the best companies come from because you solve a problem for yourself and then you realize there's other people like me who have the same issue or the same problem and they would like the problem solved also. So that's where we started. So this is where we were in 2020. Tell us about, how did it go? You sold. You sold product. So how. How are you selling it? Where are you selling it? How's that going?

Well, technically, June 2020 was that very first conversation like, hey, we should bring these to market. That was that we weren't officially in business. That was the. Just the idea. It took us 13 months till we had a product on our grocery store shelf, which we thought was slow. Turns out was actually pretty quick.

Pretty good. That's really fast.

That's pretty good.

You grab them so you can show.

It even though they're having it on the shelf. Now, how many stores is this product on a shelf in?

So we're mostly in small gourmet stores. We made, we actually made a conscious effort not to go into retail because I. Okay, so let me just back up a second. So it turns out that producing gummy bears. Sorry, it's making all the crinkly noises that we could show you.

I was just gonna scrap, but these.

Are the gummy bears as we sell them on the shelf.

And then you can see the tear away display tray.

Yeah, okay.

We got the blur background thing.

Still making it up.

But yeah, this is audio only, right?

Yeah, no, this will be on YouTube.

YouTube also.

Oh, okay.

Oh, okay.

But anyway, so just. So making gummy bears, it was very interesting. So like with any brand, we had to find a co manufacturer because we didn't have the capacity to make our own gummy bears. And we were running into hardcore capacity issues even in companies, places that normally would co manufacture gummy bears. For a couple of reasons. One, because the CD market, CBD gummies are exploding. They still are. And we're taking up most of the capacity. But the second thing is because of our formula with using allulose, most companies wouldn't touch us. So we, it was really hard to find a co manufacturer that was willing to give us a chance. And so we did. We ended up doing a trial run in May and then in July we did our first, I mean 21, 21. And we did our first big gummy bear run. And the thing is, is because there's like so much demand, you lay out, you know, a hundred thousand or $150,000. And then you're like, okay, because we're nobody. So obviously, we paid up front, and then the truck arrived, and then the gummy bears came out. And that was the first time that we actually got to see what our product looked like, what it tasted like, and it's terrifying. It was. It was pretty terrifying. We had done. We had actually done some crowdfunding to do to pay for, to offset the expense of the trial run and then part of the first run. And then, of course, we had friends and family and things like that as far as investment money. And then obviously, like most founders, our own, anything we could get our hands on to pay.

So I will share this with you, and that is decades ago. I was in your spot and took. Borrowed all the money out of 401k and took a mortgage on our house and mailed off all my money to a factory in China to make an item and waited for it to get here and then had to see if I could sell it. So I tell you that because I know how that feels. The difference is, I did it with betting all my own money. You had some other investors in it, it sounds like, but I do know how it feels to do that, and it takes a lot of courage. It takes a lot of guts to step out and do something like that. So let's fast forward now. You made that big leap.

Yeah.

How is it going? How is business doing?

It's doing good. The main thing that we've run into. So the first run, obviously you're finding out what people's taste buds are on a mass scale. In a perfect world, you'd get some funding. When I say we had backers, we did an Indiegogo campaign was what we did. So then we. Those people bought, like, you know, 10 boxes of gummy bears ahead of time or whatever. It was a whole bunch of small donations, and we raised about 35,000 doing that from nothing. And it was kind of fun. And we fulfilled those. But, like, the flavor wasn't quite what we wanted. The color didn't quite come out the way I. They didn't taste like my kitchen version, so. But we did sell those. And then we did another run and the next run, which was much more colorful, but still didn't we. We improved the sweetener a little bit, but still wasn't quite there. So then we ran into. We ran into issues on capacity, and we ended up running out of inventory when we were. We were actually getting ready to have our first profitable month. And that was November of 2022. Anyway, we were getting ready to have our first profitable month. We ran out of inventory and on Amazon and whatever. And it was a little bit kind of terrifying. And it took a while for us to get. We didn't get that next run until June of 2023. So we still had some inventory to fulfill. Store stuff. And we got into a local grocer and he loved our packaging. He's been in the business. It's. It's a big natural store that's in the area where they have two different locations and it's always Best of the Bay kind of a thing. And the buyer worked for UNFI for like 18 years. And he was like, this is one of the most beautiful products ever. Like the week it was released, he bought three sleeves of the gummy bears. And he. And he was so cute because he was like, okay, when's the expiration? We were like 18 months. And he was like, oh, that's great. Okay, we should sell them. And I was like, what? So then we announced on social media that we were there and they were sold out by. I think he. He took the.

The.

We gave them the inventory on Thursday and they were sold out by Saturday. And he was like, this is unreal. Because we brought so many new customers in. Also became a destination product. You know.

How are those stores doing now?

They're still doing amazing. This is kind of why we're having these conversations there. They reorder.

Yeah, they reorder monthly. So. But the problem is we only have a small handful. The rest of the retail stores that we're in are just through fair because of the capacity and the unreliability of the co manufacturer. We, like, we went to the first year after we launched, we got a booth at Sweets and Snacks. We got a lot of interests from a lot of different companies and distributors. But we realized that. I don't know if this was a right move or wrong move, but we realized that with the unreliability of our manufacturing that we.

We couldn't go into distribution.

Not a good idea to get into distribution or into any kind of large retailer until we, number one, sorted that out and number two, built our audience, built our brand awareness and our fan base first so that when we go into a store, we can send customers in.

So how are you solving. How are you solving the manufacturing problem?

We actually, I. It's a little hard. We had to pivot drastically and we. We have some pretty exciting things happening. But we were pretty intentional on how we're Going to control our, our QC because I have super high standards and the certifications that we want. So we were pretty diligent and persistent. I can't talk about the details of it, but we have it figured out. We have a.

But you have another co packer.

Yeah, we have a place that we can actually produce what we want to produce and then we have a long term game that we're also playing that will give us full control. So.

Okay, so do you have limitations on capacity now or would we say there's no limitation on capacity?

There shouldn't be.

Okay.

The new coman that we're planning on onboarding with has plenty of capacity available currently, so we should not have any such problems. And then by the end of 2025 we have a, a bigger long term plan to completely solve that 100%.

So how many stores are you in currently?

Currently we're only in about 30.

Okay. Are these particular area of the country?

No, scattered around. You know, it's from, you know, from Fair platform so.

Well and Unfi Marketplace.

Oh yeah, we're also on Unified Marketplace. So most, you know, a lot of them are our predominant. Probably like any or like a lot of products are primary markets for California, Texas, Florida and New York.

Yeah.

So that generally where a lot of the stores are.

How are the sales in the 30 stores? Not just the two that you launched in, but in the whole 30 and in your entire footprint. How are the numbers there?

We don't really know. Like we haven't focusing. I know it sounds terrible. We've been deep diving into obviously your podcast and we do realize that we have not been doing this necessarily correctly. But also we were holding back for sure on getting into too many stores without getting the product better. But every time like the last, the last production run we did was like, was like, you know, almost a quarter of a million dollars that we had to pay for that. And then some of it's not usable and some of it was. It's been a challenge. It wasn't and it meet my standards. So we're like. That was when I was like, I don't, I'm. I don't even want to do a PR campaign with this product. I have a background in PR and it's kind of like saying, hey, we have this brand new restaurant. We have this brand new restaurant. We just opened. We weren't able to get any fresh ingredients, but we'd love you to come down. I'm kidding. It wasn't that bad. But for me and for our standards it wasn't optimum. Right. So we've been trying to figure out and solve how to, how to get these things done. These things done. And I think when people go into the CPG world some products are easier to produce than others for sure. I know that because I have friends that even that have other CPG brands that do really well as well and we do tell them to listen to your podcast and they give us great feedback. Literally if we had found you when we started this would be a very different conversation. But you know like you start out, you don't know, you don't even know who to talk to and then you're getting a million spam things. We're amazing at helping packaged products and.

We'Re like very little and we kind.

Of, we hired, we hired a couple different food brokers over the years and they didn't work out and so we kind of this last year we've just been focused going back to basics focusing.

On our.

Getting our brand right, our products dtc.

We've been focusing on direct. Direct to consumer questions.

Let me ask a couple questions. Is need to be really thoughtful and honest on this is great. Has great become the enemy of good?

No. And I'm going to tell you why the things, the issues. So here's the thing. It's. It is a better for you candy, right. But because of the fact that we were having it produced in a traditional candy factory as our co manufacturer that does just the regular candy you find in a convenience store. There's a very different standard of that and we found that even our specific public expect more. And then we're also talking about something as stupid as like this bag, right? So, so I have this bag and it has approximately 25 gummy bears in the bag. It's a great bag. It's a single serving. It has you know, 1 gram net carbs in the entire bag and it genuinely doesn't spike blood sugar, blah blah blah. However, that all being said I for children because it is, it's. It also has ingredients that are appropriate for kids versus most keto stuff actually totally is not right. I wanted little snack bags like this for Easter, for Halloween, for holidays and things like that and for lunch boxes and we just, we weren't able to get that done. We had a sour bearer ready to release. We couldn't get capacity for that. And I was just like I'm dying. So it's not like I'm trying to make it great. I'm also trying to figure out how to just get the product to be what I want it to be like. It doesn't have to be perfect, but it does need to be like something that people are delighted to consume and we do have that client base. But I don't wanna, I don't wanna go through. I don't wanna be in all the stores with a product that isn't quite there.

Yeah.

How's Amazon and your own website doing?

Our website does pretty good. Amazon was doing good.

We have a. We average. We have a 4% and above conversion rate on us, our website.

Okay.

And Amazon, we've had, you know, we were, we started out great and had it up to about 50,000amonth. We had to pull it because we were. The delays on our production. We couldn't get inventory. So we let Amazon run out so that we could continue to fulfill direct and retail orders.

Are we back on Amazon yet or that or the problem's not resolved yet?

No, it is back on Amazon. It's interesting though. I mean that's, that's probably a whole different conversation. But Amazon customers, you know, because they're so mass market, it's almost like a one someone going into Walmart and if they didn't know, you know, al Gummy bears, even though they're delicious, they're not. They're not as sweet as Haribo.

Yeah, we're not going to compete with Haribo and we're not going to pretend to.

So it's been, it's been tough with reviews on that because it seems like the only people who leave reviews are the ones who don't like it always.

How many reviews do we have and how many stars does the product have on Amazon right now?

I think we have two. Two or three hundred. 280 somewhere around there. Stars wise.

It's like three.

Right around three.

It's killing us.

And that's, that's also because of the. We've had.

Oh yeah, we had meltage. No, it, it has been a very like. We've been learning the hard way. This is probably one of the worst. I think it. We could have done worse if we did chocolate with no knowledge of how to get it from place to place. For sure. Because we have the gummy bears and then we have caramels and our caramel. Both of them are melty. Both of them had challenges. It's been a little bit. We've had to become food scientists.

Absolutely. But what's the biggest seller? The gummy bears or the caramel?

The gummy bears are still our best seller that we Sell the most as far as the boxes of gummy bears. And then we do sell close to a comparable.

This is our best seller in terms of units. Salted Caramels.

Yeah.

They released them four or five months ago and they've already, they're outselling by unit. Salted Caramels are our top seller by dollar value. Gummy Bears because they're, they're, we sell them in a box for, you know, so it's 35 box.

So, Justin, I want to kick this to you for a minute. The first thing that jumps out at me here and we're going to get to other issues, but the first thing jumps out at me, we need more reviews on Amazon and we need to get those reviews above four stars.

Yes.

So, yes. What's your, what's your off the cuff suggestion to make that happen?

So off the cuff suggestion to try to get more reviews and to try to get high reviews. Okay. So, and I think starting off, I believe you both said it right, One of the difficulties of the Amazon platform for a product like yours that not only is a consumable and a consumable in a taste perspective. So as you said, taste buds are so different, right. And expectations so different. Right. That now all of a sudden you're not speaking directly to, for lack of a Better term, the 1% of your market that's like, hey, I love it. I get what it is. I totally. Expectations are set properly. I know what I'm buying. And this is exactly what. Right? So that's the first thing is what's going to help is running. And I don't know if you are, I've gotten that far. But it's really running strong advertising and marketing that drives the traffic to Amazon. So then you know that you have controlled the experience. You set the expectation through your interactions, your messaging. So therefore, when they convert, right, you're not getting the person that just found you. You're getting the person that you've had a dialogue with so you can control how they interact with your product from the beginning. So once they receive it, then they're having the right experience. Right. So that's the first thing that's going to help is by driving the traffic. Because right now I would assume you're getting a lot of people that have found you on Amazon because you're right, there's not a lot out there. So you're getting people that are finding you. But what's probably happening is you are getting the consumers that for One thing, as January 1st hits, right, I want to make better choices. So I'm gonna. I'm gonna. Now, you know, this is the better choice I'm gonna make. Except for, no, it doesn't taste like a company, right? So. So you're getting a lot of traffic like that. So that's the first thing. The other thing I would say is cultivate some better reviews. Leveraging your own email marketing. Okay? So go to your current audience that you've converted within your own ecosystem and have a conversation, right? And depending. And there's a couple ways to do it, right? So one would be by asking for reviews and of course, just giving them something in return and whatever that may be, you know, understanding your audience and what they value. The other way could be depending on how you're running email marketing and segmentation. If you can segment your audience to know that these are what I call my vip, right? They buy every couple months and they love us and they're telling everybody in the world about us. If you can isolate that audience, then just send an email to them and say, hey, we love you. You know you love us. You know, it would really help us out if you go to Amazon and some leave us some really good reviews so more people can hear this story because that's where they're going to hear about it. Could you do that for us as a fav. And you know, those are already your ambassadors and they're gonna, you know, they're gonna start screaming, right? And they'll just go run there, and it didn't cost you anything. So those two ways.

We just did that for our salted caramels because it was so funny. We launched them on Amazon and they're our biggest seller. And we got one review that was two stars. And she said, I love the caramels, but these are just a little too salty for me. And I was like, two stars. Do you know what this does to your brand? Like, just. Just be kinder. But anyway, so we sent it. Poor guy.

But what, Only one person gave you a review when you did that?

Yeah, because we had just. We weren't advertising or anything. So we did send an email, and usually when it comes from me, we get a really good response. Well, then they. We started getting all these emails saying, Amazon won't let me. And they were sending me their screenshots saying this. The. The reviews on this page are suspicious. You can't leave a review right now. And I was just like, that's cool.

Product on Amazon.

The caramel. So the gummy bears, either one, the.

Caramels are 9.99 a bag. The gummies are around, but around 35 for a box of 12 bags.

Yep.

So they're Gummy Bears. Are, you know, at this same price point as you'll find smart sweets or joyride or any of our.

What competitive use on the caramel.

They're great. People, like, love them. You weren't. You won't know the difference. Like, they taste.

So that one has good reviews. What is that? Is that it? Is that above four stars?

No, that was the one that only had two stars when we start. Like, when we started. So we did do that campaign. We were able to. Yeah, for sure.

Yep.

Yeah. So there, I think 3.904. Because we still.

So the other. Have you on some of these newer products, like your skirmish sweets. And again, I know it's a little bit of a risk. I'm sorry. On the caramels, have you. Have you tried just leveraging the vine program to at least get some numbers up? Are you concerned about the reviews you might get from it?

I'm hoping now we should actually do that.

We actually did the vine program with the Gummy Bears, and we got a lot of. We actually got predominantly really good quality, you know, honest, good quality reviews. So I was planning on doing that with the caramels because we haven't met as a parent child window being able.

To get in there. So you want to get in there pretty quick, right?

Yeah, it's. It's come. It's about the number of you. So currently right now, it looks like these newer products have around 10. So you could still do the vine program and qualify.

Yeah, that. That's definitely on my. On my list.

And there. There are some. There are some. There are some companies out there that do help with brands and products to get reviews.

Yeah.

The concern I have and is. Is yours, right?

Yeah.

I wouldn't leverage them for your product.

Yeah.

Because exactly what you talked about. Right. To get the proper review, you need to have the right audience with the right expectations, you know? Yeah, it's. It's a lot easier if you just sold a really fluffy blanket. And, hey, people, tell everybody how fluffy my blanket is and how awesome it is. That's easy, right? Like, who's gonna say that? Well, the blanket isn't as fluffy as I thought. Like, there's a very low risk. Right. I would be a little concerned with your product, though, so that's why I didn't recommend it. I. I think it's a very specific tasting experience that you're gonna have and so you could generate reviews, but you don't need bad ones. You. You want to get the good ones. And so I, I mean the, and you've done some of the work. I noticed in like the, I believe it was one of the gummy bears, I was kind of going through some of the reviews and I did see someone say, hey, I changed mine to a three star because the customer service is amazing. They reached out to me and didn't even ask me to change my review. So, you know, I didn't exactly get it. But they're awesome people, you know, so that's another way. And you guys already know how to do that, right? Is to reach out. And the goal isn't to get better reviews, of course. The goal is to take care of the people and make sure they have a great experience with you and your brand. But that's, that's going to be the result. Right. If you create the value, you can change some of that, some of that experience.

Kind of marketing are we doing for the, for the brand so far, other.

Than social media marketing, predominantly social media.

And just all organic social media, paid social media, what are we doing both?

Yeah, yeah, we run, I mean most of our, most of us sales come from Facebook and Instagram ads and then our social media campaigns and of course our customer, you know, customer newsletters and so forth forth email campaigns to our customers.

And on the Facebook and the Instagram that you're doing, are you breaking even or better on your ad spends versus your sales?

Yes, we're usually between two and three roas.

Okay. And your cost of goods has you in a spot where you can survive with that?

Yeah, I mean obviously I would love it if it was closer to 5 or 7. Amazing. At, at 3. For us, our threshold is as long as it's close to three, I'm happy.

Okay.

And how big are you ramping that up to how, how aggressive are you getting there?

We. Okay, so hold on a second. So, So I just want to say something. I feel very strongly, especially even after listening to some of your most recent podcasts, I don't think that just straight up regular marketing in and of itself via social media is the, is the best option. Like, I feel that as a CPG brand that is. Is now has a product that I'm more comfortable with from a marketing standpoint. There were things that we needed to fine tune after getting through the last summer, especially with the caramels. Right. So like kind of getting to a place where I can confidently send a sample pack or send out goods and we have our scrummy guarantee where we 100 guarantee all of our products and we totally stand by that. And no, taste is subjective and we appreciate people taking a chance on us, you know, and, and we make it not difficult for them to, to do that. We don't like, make them jump through a thousand hoops. We want their feedback because we're still a newer company. And where our caramels are pretty amazing, genuinely, the flavors, most people say they taste just like a real caramel. They don't stick in your teeth and they don't have the effects that sugar alcohol caramels do. And they don't have the, the, the dental impact. Right. So I think the packaging is pretty good. And we do some trade shows and samples. Those are great. When we do keto shows, that's a totally different ballgame. Like that's when we're in front of the right audience and they're obsessed and they're like, these are amazing. This is the best product that I've had. Like, we sold out every little thing that we brought to ketocon last year. We had no. And we sold it out the first day that they opened. So we were like, oh, wow. You know, so getting the right public, we need to figure out marketing.

What I'm trying to get a feel for, when in the case of Facebook and Instagram, what I'm trying to get a feel for is how have you reached the top of the scale as you're scaling it on that? Do you have a lot more room to run?

I don't think we could spend a lot more.

Roas is going to go in the wrong direction. That's as big as you're going to get in that medium. So do you have room to run in those on those two platforms to.

Like increase our ad spend? Oh, yeah, I, I believe so. Yeah. I don't think we've tapped out. I think we could, we could definitely.

Scale what's from scaling that. Is it, is it the inventory? Is it having the product?

No, I, so I don't feel like the marketing team that we like, we haven't. I don't, I don't feel like we found the right marketing team to, to properly showcase our product and to get it in front of the right people completely, if that makes sense.

Yeah.

So let me split these. Let's bifurcate this for a minute. We, we have a long term plan for the product and we have a short term plan for the, the product. Yeah, the short term plan is you're saying you're able to get a 3 roas out of Facebook and Instagram and as long as your cost of goods are under control, then that should be better than a break even. Not wildly profitable, but it's better than a break even.

Yeah.

Yes.

So on the short term side.

I.

Would be painting the airplane in the air. If I can do a three row as. I know I don't have everything right, but I'm going to move as much volume as I can. I'm going to keep putting money in the machine. I know my messaging isn't right, but if I've got a three row as and I'm better than break even, I'm going to take all the volume I can get right now. Now let's go to the long term plan. The long term plan is what is your reason for existing? What, what is the brand? What is the message that you want this brand to tell the. Tell the world.

I mean my. That, that you don't have to give up the treats and you can have a sugar free candy option. And there's. I'm not the only person out there. You have type one, type two diabetics. You have people that are in a ketogenic diet because they have epilepsy. You have people that are pre diabetic. You have such a huge mass that like miss candy and want candy in their life and they should be able to have that if they want it. It's, it's. And I personally like when a parent sends me a message and says I popped this in my son's lunchbox and he was so happy to have this option on Valentine's Day when everybody else was eating sugar because her son's one diabetic. Like that is, that's amazing to me.

What I'm hearing is our goal is to provide healthy candy to the world.

Yeah, yeah, yeah. Beautifully stated.

That's what I'm hearing. That's what I'm hearing. Our mission is to provide delicious and sweet candy that is good for people, for the whole world. That's kind of what I'm hearing. That's a little wordy what I just said there, but that's kind of what I'm getting. So.

Yeah. And clean ingredients, I mean that's a big focus on us of ours is to make sure that. Well, that becomes sure that we're producing something that we would feed to our grandkids. Yeah, yeah.

But the clean ingredients and all that stuff, that's the how. What I'm right is the why. Right now, why do we exist? And it sounds like the why, why we exist is because we want to bring sweet, delicious candy that is safe and healthy to the world.

Yes.

Guilt free. The guilt free candy company.

That's, I mean, that's what's on the back of our T shirts.

How we do it is clean ingredients and all of those type of things. So from a short term perspective, and the reason I'm focusing on the short term for a moment is because cash flow and volume makes the world go around. The more of this product you can move, the lower you can cut your cost, the more you can get your manufacturing going. It's the machine that you want to keep moving. So if I got a 3.0-roas or anywhere near that personally, I'm going to put every penny and get my hand back into that machine and I'm going to sell every last bag of product I can sell tomorrow. And I'm going to, I'm going to scale that thing up until the Roas reverses on me. Now also, keep in mind, creative messages burn out and you have to be ready to update them and continuously replace them.

Yeah.

Term, long term, you need to really sit down and do some branding work because you really need to decide who you are. Right now we're making these healthy gummies, but we're also making healthy caramels. So we're really not a gummy bear company. So we're really a candy company. So what kind of candy company are we? Well, we're the healthy candy company. But I'm going to use. What is it? Coke. That their Coke's reason for being is they want to refresh the world. Is that.

Yep.

So that's it. What's our, what's our reason for existing? Yeah, because that's going to drive all of our messaging in the future. What we need to do is we need to get in the long term. We need to have consumers that will create an ethos with you. And that ethos is simply I get these guys and they get me.

Right.

They're like me. We're part of the same tribe.

Yeah.

And I trust them. And because that goes, that takes you past somebody who buys the product and starts to create people who buy the product who are brand evangelists. Because now you have people that are out talking about the product. You have people that are taking it to work and letting other people try it. And that happens when we can get that brand ethos with people. What do you think are your biggest challenges right now? So let me, let me hit you with a question. We'll hit you both with a question. Right now, three years from today, all four of us get back together, and we're right back here in this very same place on this very same zoom meeting.

Yeah.

And what you are telling me right now is what happened over the past three years. Now, what happened over the past three years was your perfect scenario. It was exactly what you wanted. So looking back over those past three years, tell me what happened.

You want to go? Should I?

Oh, boy. I mean.

I mean, maybe hers is different than mine, but.

Well, I mean, same page for me.

I mean, for me, I think it would be, obviously, to continue driving revenue through the way we're doing it now, but if. But also figuring out a way to really grow our wholesale business and ideally find a Perth into smaller local or regional chains where we can, you know, get 50 stores or 100 stores and start. And start producing, you know, getting a. Getting.

Years from today when we're having this call.

And then.

Then of course, I would have launched that.

Let him talk.

I'm sorry.

I don't say no product in you.

What?

Wait, what?

How many. Three years from today?

Yeah.

How many stores carry your product in America?

I mean, I don't think. I don't think in terms of. Of stores it like that. I think in terms of chains that, that. But. But that we're in multiple chains that we're accessible from anywhere in the U.S. so, like when I have a customer who. Who obsesses over our gummy bears, but they go into Walmart and they buy lilies because we're not on the shelf. I would like to be on the shelf so that our customers can get our products when they're doing their regular shopping at any given time. Whether somebody's trying to be on all the major shelves. Yes. 100.

Okay.

That's what I was trying to get to. So.

Yes, yeah, absolutely.

In Walmart, Target, cvs.

Yeah.

Kroger, Albertsons, Publix, Myers, so forth. So we want to be in all those stores in three years.

Yeah.

So how many dollars in retail sales do you envision that event generates?

We would like to be. Our goal is 300 million a year, but that's not.

Okay, so you're missing one key piece.

On year three, though. This is, this is. This is our third year three years from now.

Oh, three year.

Yes, three years.

60.

60.

50. 60 million.

Okay.

Yeah.

How many SKUs will we have in three years?

So in three years we will have. No, probably eight that are in the gummy World.

Well, no, have, we'll have about six different lines but each will have.

Yeah.

Different SKUs. So probably 18. 18 SKUs. Like for example, these will come in at 12 and also a six and also the snack size packs. So each, each line will have its own.

And we want to do. And we'll have seasonal snack packs too, obviously that are branded for Those, those opportunities. 20 SKUs and sour bears and a Swedish fish. It's like we have so much stuff in R and D that we're like, not like, like this is, this is touchy because you have us like we're on.

We're just the four of us talking.

Yeah, the four of us.

Let me make some observations if I can.

Okay.

Okay. I want you to learn to think in 10 year windows and then to also think in quarters and in three year windows. So we want to think three months, three years, 10 years. And the reason is because people have a tendency to grossly overestimate what they can do in a month or a year. But they tend to grossly underestimate what they can do in 10 years.

Yeah.

So we're looking at three years. We're talking every chain. We've got 18 lines of product. We're doing $60 million in business. I'm going to tell you right now, if that's the goal, that goal probably means that you have access to probably somewhere around 5 to 10 million dollars in cash at. In your pocket now to be able to make that happen.

Not in our pocket now, but we can.

But we do get to it. Yeah, we're just gonna, we're just gonna keep.

Yeah, you could, you could get access to that. Okay.

Yeah, good.

It's going to take that kind of money.

Yeah.

When we're talking 60 million in sales at retail, that's 40 million wholesale. At 40 million wholesale and a brand that's growing that fast. We're spending 4 million 6 million in advertising and marketing. That's where our budget is for our ads and market. That's on an annual basis. Yeah. But here's the concern I have. You're falling into a trap that almost everyone in your category falls into.

Too many skus.

Too many skus.

Too many skus.

Because you have the ability to make more skus. And this is exciting to make more skus. And I can take this and I can make this taste great and I can make that taste great. The problem is you need a champion. You need an anchor product. You need one SKU that is a hit because you go to Walmart and CVS and Walgreens and Targets and Kroger and all those places, they're not going to let you bring in 18 SKUs. They're going to let you bring in one. If you're lucky. We might. Might in an exceptional case, might even get two.

Yeah.

But that would be an exception. So we're going to need one. Now here's the risk you have right now. We have gummy bears and we have caramels. Let's say that you decided we're going to go see all the big retailers. The challenge you have is the buyer at Walmart, she really likes salted caramel, so she's going to say yes to that. But the buyer over at Target really likes Gummy bear because buyers are humans also, and they make decisions for human reason, not just for balance sheet reasons. So now you have strawberry gummies at HB and you've got assortment of gummies at Target and you have salted caramels over at Walmart and you have chocolates over at Meer. What you've done is two things. One, you've put yourself in a position where you can't advertise anything.

Yeah. Oh, that's so interesting.

Right. Because how can you advertise the brand?

You can't drive people into the store because they're going to go to the wrong store for the wrong product and then they're going to be.

Exactly.

Oh, that's really interesting. Wow, what a great perspective.

So all of a sudden you could, you could brand Scrummy Sweets, but you can't tell me about the flavor. But here's the problem. New brand. I don't know what Scrummy is. So right now I'm not going to be interested in Scrummy. I'm interested in a deliverable. Right. Which means the first thing you need to talk about to get my attention isn't scrummy, it's gummy bears.

That's right.

Or it's salted caramels. You need to reach me with the product, with the promise, with the deliverable. But if you've divided your deliverables up between all these SKUs.

Yeah.

You now are running six ad campaigns and you don't have the money to do that.

Can't afford that.

So you need to narrow this focus down. You need to. You need to resist the urge to make 20 SKUs. And it's okay if you make them in your kitchen, don't produce them. You need to put. You need to put all your energy behind one. And I'll even say the maximum of two SKUs. But I would prefer one.

Yeah.

And that product needs to become the hero item.

Okay.

All my effort needs to be behind. I need to be. I need to be betting on one horse because I don't have the money to bet on 10. So I need to have this one horse. I need to make sure that I pick the greatest horse in the barn and I put everything into that horse because I don't have the money. So. And. And no one is going to say yes to more than one sku.

Yes, but what about sour and regular gummy bears?

Come on.

Maybe. I said maybe two SKUs, but we're still talking.

Okay.

I mean, gummy bears are my jam. That's like, you know, that's literally still selling gummy bears.

Right.

Caramels. Salted caramel is a whole nother business.

Yeah.

It is a distraction. Gummy bears.

Yes, I agree.

Oh, by the way, you can put the stuff on Amazon if you want to put it on Amazon.

Absolutely.

Put this stuff on your website. But when we're talking about brick and mortar, one hero sku that we're betting all, we're going. All right. On one sku. Now we have sweet and sour. Yeah, that's fine. It's still the same product.

Yeah. Something Gummy bears.

Strawberry and lemon drop. It's still the same product.

Right?

Right.

You don't need to tell me you have strawberry. You need to convince me you've got the best, healthiest gummy bears. So if I can get Walmart to bring in two flavors, great. But it's gummy bears. Gummy bears. Gummy bears. Gummy bears. Now that needs to become a hero. Now here's the other risk in having. Let's say, you say, well, we could do five flavors of gummy bears. Nope. Five flavors of gummy bears will sink you. Here's why. When you go on the shelf in retail, you have an extremely short window to prove you're successful.

I see.

So let's use Walmart as an example. This is a. How much does one package sell for?

They retail for. It's like 379. 329 some. Yeah.

So let's call it four bucks.

Okay.

$4 bag of candy. Walmart is going to expect you to move between 5 and 10 of those per week per store.

5 and 10 bags. Individual bags.

So now I say.

Everybody says that.

So I have to sell five of these a week. That's a piece of cake.

Right?

Everybody says that.

Walmart super center.

No problem.

Has 148,000 SKUs in it.

Right.

You are not just competing with the gummy bear. You're competing with a television. You're competing with a bowling ball. You're competing with shampoo. You're competing with a stalk of celery. There's 148,000 different items in that store.

Yeah.

You have been to a Walmart?

Sure.

Have you ever examined all 148,000 items?

No.

No.

There is the problem. Selling five pieces of an unknown product in a Walmart store is a feat of. Of great strength.

Yeah.

I don't go. I didn't go to Walmart to find you. I don't know you exist. So I'm buying some candy and here's the brand I recognize. I like caramels. There's Werther's. Done. Why? I know what I'm getting.

Right.

It's the reason why you pull off the interstate on vacation and stop at a McDonald's instead of a local diner. Because I know McDonald's is going to deliver me the very same bad food in Georgia as they're going to deliver me in Florida.

Right?

Sure.

Versus the fear of the unknown. When we deal with human behavior, the number one fear in humans is the fear of the unknown. It's the fear of change. So that's why the franchise on the interstate works so well. Because it's the devil I know versus the devil I don't know. So when I go to Walmart, Werther's is the devil I know. Even though you may be better, they're the devil I know. And I don't want to waste my money. I don't want to get this home and find out I'm disappointed. So to drive that traffic is going to take a lot of marketing.

Right?

You can't afford to try to market caramels. And you can't try to afford to sell the gummy bears. But here's the other reason why I'm telling you. You can't even agree to more of the two SKUs even if Walmart wanted you to. And here's why. Oftentimes we have a company and they'll come out with let's. We'll call it a mouthwash. And you have a mouthwash. And the mouthwash is doing great. They're killing it. And now they go and they say, walmart, we just invented new refreshing wintergreen. Okay? So now they experiment. Now we have wintergreen. And guess what happened to the brand? They just took their winning SKU and they Created two bad ones.

Right.

Because they didn't double their volume, they split their consumer base.

Right?

Yeah.

If you have five SKUs on the shelf, you're going to split your consumer between five choices and have five poor performing SKUs instead of one good performing SKU. Here's the other reason. The other reason is, is because selection causes paralysis.

So, yeah.

When you, when, when Smuckers did their, their testing this. Smuckers did taste testing in grocery stores where they offered people grape or strawberry and they had crackers and you put some grape on a cracker and you put some strawberry on a crapper on a cracker. And 50% of people bought a jar of product. When he introduced a third flavor, only 30% of people bought a product. When he introduced a fourth flavor, only 15% of people bought a product. Because what happens is selection doesn't drive volume. Selection drives paralysis because. Oh God, now I don't know which one to get.

Yep.

That's so accurate.

And I'm just realizing as you're telling us this, that's what happened at our local, our local store is they were carrying. They were carrying all four.

Yep.

Of these. And then the last two months ago when they reordered, he only reordered the classic and the salted.

Right.

And I was.

That are working.

Yep.

Those are the two SKUs that he can't keep in stock and the other two.

So I mean.

Yeah.

Resist.

Yes.

It's the urge. Sit on your hands if you have to.

Right.

But stop that would, that wouldn't be.

Necessarily the case for fruity and sour because those are two distinct.

They're still gummy bears markets.

Potentially. Potentially. Right. So here's, here's the concern. Here's the concern again. You've gotta, if you, you would have to know your audience so well to understand that the sour is this consumer and the regular is this consumer. Right, right. Again, just like Mark's talking about. Are they two different consumers? So I know that I've got two winning SKUs or am I going to do what he talked about? If you do not know that you're taking a risk. Right. So don't do that. But. And what's more powerful is when you go into that retailer meeting and you say, here's my hero. Right. This is the one that's winning, by the way. I've got all kinds of stuff waiting in the background. As soon as this wins for you. So. So buyer, just know we're not a one trick pony. I've got all kinds of great stuff. And I can make you a lot more money as soon as this one goes over the finish line. That will help your case with the buyer, because now they know. Okay, so I'm talking to a brand and a line, not just a product.

Right. Because ultimately retailers don't want to do business with single SKU companies.

No, it's too much work because it.

Takes just as much effort to manage a one SKU brand as it does to manage a practically 100 SKU brand.

Exactly.

So you need to get in the door because I'm going to bring you something that you don't have. Now let me tell you the other thing we have to do. We have to go in there, we have to convince that buyer that we're going to bring new money to that store. So if we go in there and convince him, we're going to get half of the people to buy Werther's to buy us. I'm going to am. I'm the buyer, I'm going to say, no, thank you.

Right.

Because now you're telling me I have to use two shelf spaces to do what I'm currently doing with one.

Right.

If your product's a dollar more than them and you can tell me we can get three dollar worther buyers to buy four dollars scrummies. Now I'm interested because now I can make 25% more. Or if you can tell me people are going to buy it more often, but you need to prove, prove that. Or if you can tell me we're going to bring people to the aisle who currently don't buy candy. Now that's a really interesting story because now I can say, hey, I'm going to bring you people who can't buy candy. But I have another warning, and that is diabetic foods and products don't do well.

Really?

So I will give you a piece of homework to do. Go to your local grocery store, and there will be a diabetic set in the store. Run your finger across all the tops of all the products there and find out how many of them are layered in dust.

Really?

I think, I mean, that doesn't, that doesn't surprise me for a couple of reasons. Like, even when we first started, I remember we were talking to a friend of ours and he's like an investment type guy, but his wife is diabetic. I actually didn't know this. So we're in her house and in her kitchen. This is the beginning of our journey. And we told her about our gummy bears and this and this and that they're diabetic friendly. And she's like, yeah, all the brands say that. And it's bs. And I was like, oh, wow. And she wears a cgm, obviously, and whatnot. And I was like, okay. I mean, I've researched our ingredients so intensely. Will you try them and give me your honest feedback? And it was. And she was like, okay. And I had to really encourage her that I had done the research, because this is one of the most betrayed industries. And there's a reason they don't buy the product, because either it has Maltitol, which is 100 not diabetic friendly, and it'll give them catastrophic digestive issues. Sure. Or they do spike their blood sugar. And it really. It's one of these arenas.

The third leg on that stool is they don't taste like the real thing.

Oh, no. They mostly taste disgusting. Or the texture is terrible. Yeah.

Give you the behavior of the typical diabetic. So we're talking about type 2 diabetes, not type 1.

Yeah.

The average type 2 diabetic will carry an insulin pen with them and give themselves additional insulin while eating cheesecake at a restaurant.

Yeah.

The reason is because this is one of the big reasons with type 2 diabetes. For the majority of people with type 2 diabetes, they broke themselves.

Right.

I have this because I created this, and I don't want to break myself, and I don't want to be treated like I'm broken. This is why they don't like shopping in the diabetic set, because that's me accepting the fact that I broke me.

Right.

So it's a mental block of, I'm not one of those. Yes. But I'm not one of those. So.

Yeah.

They will. So they will try to find things that they can have. They will cheat on it.

Yeah.

Where I'm going with this is. And we have to do some real research to work on this, but this is all shooting from the hip, as we said at the beginning.

Yeah.

I would be less about being diabetic friendly or being diabetic product.

Yeah.

And I would be far more about being the clean, pure, healthy candy with zero sugar and zero chemicals, zero dyes and whatever we can say. Because the diabetic will figure that out without making you think I made this for you. Broken person.

Right, Right. For sure.

To be a broken person. Because it's. It's the disease you did to yourself.

Right.

So there's a huge.

That's a really good point. I could see that.

Well, and that's exactly what we were Talking about earlier, right? And you mentioned it in the beginning. Way in the beginning is a lot of the journey that you're gonna. That you're gonna want to also ensue. And Mark talked about this when he said, really understand who you are, but actually understand who your target is to really understand that audience. Right? Understand who they are, how they think, how they feel, how they approach the world so that you can communicate with them even above and beyond the foundational benefits of your product. Right? Because you want to speak. It's not about. It's not about, hey, we made this great candy, and it does taste good, and it has no sugar in it. Okay? So what. Right? What that is, that's the vehicle to achieve a goal. Right? Your product is the vehicle to happiness. So now you have to be able to speak to individuals, to whatever that happiness is, but you have to understand them in order to be able to say, this is how Scrummy gets you there, because I know you.

And it might even be closer to what he just said. Which when we talk about why your reason for being is. And maybe your reason for being is to make the world happy with healthy candy.

Right?

Because that's. That's a. Even a bigger. It's a bigger message.

Yeah. If you're here to create joy, and how we do it is we make healthy treats, and here are the treats that we create. Right?

Yeah.

So here's what I would do just to wrap up, because we've been at this for an hour, and here's what I'm seeing right now. We need to fix Amazon. We need to ramp up your digital efforts to move product as much as you can. We need to do some work and decide who we are and why do we exist. What is the reason? Why are we in the world? And it can't be because we know how to make candy. We want to get rich doing it, right?

No, that's not it anymore.

Honestly, I am interested in you being rich, but the world is not interested in being rich.

Yeah, for sure.

So why. Why do we exist? You know, back to Coca Cola. We're here to refresh the world. So, yeah, why do we exist? So, Amazon, increase digital sales. Start doing the work on. On why we exist and who we are and how we do it. Do whatever you have to do to break yourself of the addiction of making more skus.

Okay?

Yes, sir.

It's a tough one. It's very difficult. I know it's difficult, but.

Yeah, no, it's not that difficult. I mean, the caramels Were an accident, a happy accident that we were like, oh, okay, well, these are delicious. We should bring in the market.

Choose who you are. Decide what product is my hero product. Where's my hero? Am I going?

Yep.

The next step would be we need to build you a network of specific brokers. You've had a couple of food brokers. Okay. You've had the wrong brokers.

Totally.

Obviously, yes.

So here's the thing. You need brokers who have big, strong relationships at the stores you want to get in. Now, any broker, when you go to a broker, if the broker tells you, oh, we call on everybody at that moment, kick him out the door. Okay, thanks for coming in. We're done.

They're lying.

They're lying. Here's why. Because the best brokers have an office next door to where they sell. So if I'm a good broker at Walmart, I have an office in Bentonville and I'm a former VP of Walmart or I'm a listen to that. So yes, yes. Or I. At Walmart.

Yes.

Wife is a VP at Walmart and I run a brokerage firm.

Right.

You need people. I'm just using Walmart as example. You need someone who's walking around Walmart headquarters three times a week minimum. Now why is that necessary? Because here's how it works. And, and we, we have a tremendous relationship with Kroger. If you decided you wanted to sell this to Kroger, it will take you two years to get a meeting. It will take me till 6 o' clock tonight when I take one of the Kroger executives to dinner after this meeting. Literally.

Yeah.

That's who you need. You need someone who can say, hey, Bob, I just got this in. I'm going to drop this off for you once you eat these. When you get a chance, try them with your kids. Let me know what you think next time I see you.

Right.

That's the relationship you need to have. And you need Bob to come back, say, hey, my kids love those things. What are they?

Awesome.

Now we're having a conversation. Because the buyer's still a human.

Yeah.

And relationships matter. And a good broker can drop it off on somebody's desk by Friday and you won't even get a return phone call for two years. If you're not in that building every day, you're not. And you, you claim you're a broker. If you're not in that building every day, you're not getting a phone call either.

Wow.

Yeah. They're not getting a return phone call. So we need to line you up with brokers who are brand specific. I'm a target broker. I'm a Walmart broker. I'm a Walgreen broker. I'm a CVS broker, I'm a Kroger broker. And I assure you that's where they live.

Yeah.

That's their relationship. And you need a broker who is not a multibillion dollar broker. You need a broker who probably has 20 or 30 winning items. 20 or 30 winning lines in that retailer. Why? Because you got 20 or 30 winning lines, then the buyers there know I make money with Bob here. Bob makes me money, he doesn't bring me junk.

Right.

But Bob's business isn't so big that adding you to his selection gets you ignored. Right. Because he only has 20 lines. You're 21.

Okay.

I put some effort behind that. I want to, I'm, I'm gonna go see the candy buyer and I want to get behind this. So that's what you need to have there. So these are the steps that we need to take. We need to, we need to work on financing because again, let's say Walmart gives you an order. Walmart's going to give you a startup order. Well, startup order is probably $3 million. And you need to make $3 million with the product and you need to send it to Walmart and know that Walmart's not going to pay you for 30 days. For 30 days. After you send it to them and send it to Kroger, they're not going to pay you for 60 days. And if you send it to Walgreens, they're not going to pay you for 120 days.

Well, that's if you have net terms. Most of the time you're paying scan.

And a lot of companies today are with new brands. Most new brands are pay on scan. Yeah, send me $3 million and we'll pay you everything after it goes through our cash register.

Right.

So now your inventory is, for lack of better words, on consignment. And you're going to get paid if it goes through the cash register. Guess what? What if it doesn't go through the cash register? So we need to make sure we're winning. So we need to get these brokers lined up. My suggestion would be that as we line the brokers up, we probably start lining you up with some big regionals first.

Yeah.

So I'd say let's go after an heb, let's go after public, let's go after some. And the reason for this is if we go after Publix, we can get heavy in market Florida. If we go after Meijer, we can get heavy in market in Michigan. If we go after H E B, we can get heavy and really hit Houston in Texas. So we can concentrate our efforts in our marketing efforts. We can really try to focus in and move the needle on these brands, because these are brands that have big market penetration in their states, in their cities. So, like, you go to Meijer here in Michigan, Meijer's got a 25% market share. So, I mean, yeah, it's a great market share. Meijer is the reason Walmart isn't bigger in Michigan.

Right.

Because Meijer, if you've never been in a Meijer store, a Meijer store is a Walmart superstore with clean floors and better lighting.

Yes.

That's amazing. I mean, we've been in TB and some of the other. I mean, we've done a lot of travel, but. But not so much up there. That's interesting.

Public shoppers, ourselves. Yeah, There you go. Goals is to.

They're on my dream list. I as silly as that.

Florida. Are you in Florida?

Yeah.

Tampa Bay.

Yeah, Tampa Bay.

I live there, too.

Wow.

I have a home on Clearwater Beach.

That's amazing.

Oh, really? We can see Clearwater beach from our house.

We're across third building north of Pier 60.

Third building north of. Oh, there we go. That's amazing. Okay. North.

So it's that way right before the San Pearl.

You're just out of our eyeline.

I am the building next to Sampro.

Yes.

There's two big towers right next to sample. I'm the tower right next to Sampra.

That's like your second home or vacation home.

That's.

That's number two.

Yeah.

Okay, cool.

And then Michigan.

Right?

And Michigan. And there's another one in another place in Florida. And so that's nice. At any rate, I know the area you're in. Publix owns the area. Yeah, Publix dominates that area. So we want to be in Publix. Of course we want to be in Publix. Is it easy to get in Publix? No, it is not easy to get in Publix.

I've heard that.

These are the things that we need to do. And what we need to do here is we need to create. We need to create. We need to work that digital marketing, but then we need to create our major market marketing.

Yeah.

And we need to create it. We need to create our brand. Create all these things. Create the story Create the tools. Publix. And we need to sit down with Publix and they're going to give us 20 minutes. And in that 20 minutes, you're going to want to tell your story and tell them how healthy your product is and how you make it and how healthy it is and how tasty it is. And they're going to say, we don't care.

No. I just listened to your ecrm literally yesterday and I was like, oh, wow.

They're going to say, take five minutes of this. 20 minutes. Take five minutes to tell me who you are and how delicious this is and how good this is for me.

Yeah.

15 minutes needs to be spent telling me how you're going to make me money and how you're going to bring new people in my store to get me that money.

Right.

So how are we going to make money? We got to figure that out. Are we a trade up? Are we a category expander? We got to figure that out. How are we going to bring people in your store? Publix. Buyer. Here's my marketing plan. I've got this radio commercial. I have this TV commercial. I'm going to be running this TV commercial all through Florida. I'm going to be running on these kids channels. I'm going to be running on these parents channels. This is what I'm going to be doing, Publix. And you can't walk in and say, I'm going to have an ad campaign if you say yes, because they will immediately say, no, we're not going to bring you in.

Right.

You need to go in and say, this is what I'm doing and this is what I'm doing whether you bring me in or not. Are we really going to do that? No, but we're really going to tell them this is what we're doing. And let's say that they replan their shelf in March. Well, this is our ad campaign that starts in April. Why? Because buyers also are affected by fomo. Fear of missing out.

Yeah.

So if you bring me in and you say, I'm launching this campaign and in April, and I look at, I'm like, this is a damn good campaign these people are going to run. I'd like to get in on this. I like to have a piece of this. So the last thing I leave you with, when you're dealing with a buyer, and you probably heard me say this, it's easier for the buyer to say no than it is to say yes. Because I don't get fired for no. I get fired. Fired I get fired for yeses.

Yeses. Yeah.

So when I say no, I kept Werther's. We know it sells. It's. It's good. I got it. I got some Nestle candy bars. I got some stuff from Mars. I know what I'm going to make next year. When I say yes to you, I have to throw someone else off. Which means if your product doesn't make more money than what I threw off, I have a vice president that's giving me a review saying, you went backward. Why did you get rid of this SKU that did a million dollars in 24 and replace it with this half a million dollar SKU in 25? So what we have to do as marketers is we have to go in there and we have to give the buyer such an overwhelming reason to say yes that the buyer knows that even if I say yes and it fails, my boss will look at what I did and say, I get it. I would have said yes to that, too. That was a good story. It had a compelling story. I get it. I'm not going to beat you up on that one because I would have agreed with it, too. But if his boss looks at it and says, what the hell were you thinking? My bonus is in trouble and even my job's in trouble. So that's our job. It's not good enough for us to be good enough. We have to go in there and overwhelm them with the opportunity that we're bringing to their store. Because let's go back to Walmart. They have 148,000 SKUs. They will live without mine.

Right.

In the grand scheme of things, unless I'm Procter and Gamble, I'm a grain of sand on Clearwater Beach. Yeah. When I go in there with my candies. Right. And not worth risking my job. So I need to fall in love with you. My kids need to try this and say, oh, my God, my children will actually eat this. And it's healthy. I love that idea and I like it. And my mother's a diabetic and she tried it and she likes it. And you're showing me how. It's a category expander. And you've got this ad campaign. All right, let's take a shot at it. That's what has to happen.

Well, and like you said earlier, as it relates back to Amazon, that's also the first place they're going to go. So we have to make sure that we've got four and a half star reviews. We've got 300 reviews. There because, and it was a very astute observation you made earlier that Amazon is just like a Walmart and that's what we're trying to get to take our product. So it better look like we know what we're doing.

Right?

Right.

When you're sitting in the room with the buyer, they have a laptop facing them and I assure you it's on, it's on Amazon.

Yep.

And they're literally looking at Amazon talking to you and they're saying, well, you don't seem to be doing so well at Amazon or how come you have only have three star reviews on Amazon?

Right.

We need to, we need to answer all the questions that they're going to ask us first so that when we walk in, we already have everything answered and we know what we're doing. Now here's, now here's the other reason I'm telling you this and that is in our world we have something which are called Nielsen scan datas and IRI reports tell us every last piece of product that passed through the scanner at every major chain. Let's say, let's say H E B says yes, every other retailer in the world now knows exactly how many of your pieces H E B are selling. If you fall down at H E B or Meyer or whoever, if you're not doing well there.

Yeah.

Walmart's going to say, you guys can't even make it at heb. I'm looking at the IRI report. You guys can't even make it there. You can't make it there. You're not going to make it here. Right. Or you're failing at Kroger, you're not going to make it to Walmart. Or Meyer's going to say, you're not making it, Heb. You're not going to make it a meijer. So we have to know that when we hit that first chain, we have product, we have inventory, we have finance, we have an ad campaign, we have a story, we have a reason for existing. And when we hit it, we make that, that buyer look like a genius. We make, we have our hero product and our goal is we want to make the buyer into a hero at his company.

Right.

And this is thinking that we try to get people to focus on in our, in our world, which is, who do you want to be a hero to? And in this case, you want to be a hero to the buyer.

Yeah.

Remember, you have two customers. You have consumers that buy this, but you have buyers that give it to consumers. So there are 15 people in America who control your entire future. Wow.

15.

Correct.

Wow.

And. And seven of them control 75% of your future.

Wow.

In fact, let's get a little tighter. Six of them can. 70% of your future.

Yeah. Wow.

So six people control 70% of the future of your company.

That's crazy.

That. And, and it's getting less. We look at Kroger's buying Albertsons. That's one more person gone out of that group of 15.

Wow.

So that number is getting smaller. So you need to go in there and say, I'm going to turn this buyer into a hero.

Yeah.

And you need to convince him he's going to be a hero, and then you need to follow through and make him a hero. That's how you succeed in this business. If you fail to make that first buyer hero, there are no more buyers. Right. And when one buyer says yes, remember that the rest of the buyers will probably say no.

No.

Because, oh, Kroger said yes. Then the Walmart buyer is going to say, I'll wait and see how Kroger does.

Oh, yeah, of course.

Because I can see Kroger's data. So give me a call in six months, let me know how you're doing at Kroger. And then the Walmart will say, look at Kroger numbers. What are you doing? You're not well at Kroger. And that's not going to work for me right now. Talk to me again next year. Maybe we'll talk next year. I mean, that's literally. That's how fast that conversation goes. So one account is going to say, yes, we go in on that account. And when we go in on that account, we are not going in to make money. We're going in to be a proof of concept.

Yes.

Our goal is if we can break even, we're winning because we're going to take every penny that we have that comes out of that account and we're going to push it back into that account. Because when we succeed in that account, the other doors open.

Yes.

Yeah.

So profitability, Profitability for what you're doing does not happen until we have about 70% ACV, all commodities volume. ACV is what percentage of America can now has access to my product. We need about 70% ACV to become profitable.

Wow.

70% ACV is Walmart. Target, Walgreens, CVS, Kroger. Okay, we can build 70%. Maybe we have publics, maybe we have Publix, H E B Meer, Kroger, Walmart.

Okay.

We can piece it together like that. There's different ways for us to piece it together, but just that group of doors I gave you is 70% of the. Of the entire country.

Yes.

Yeah. That's amazing. I mean, that's my dream. Obviously.

We can go and we can go chase. We can chase gn, you know, gnc, we can chase Whole Foods, we can chase fresh thyme. Guess what? They're. The percentage of the market that they have is a rounding error.

Yeah, yeah, yeah. You go after those places after you've already reached critical mass because then you don't have to worry about advertising for them. They're just going to draft off of what you're already doing. So now it's just more doors.

Volume is a rounding error.

That's a great perspective, huh?

Okay.

And the reason I'm telling you that is because you said your goal is we want to be hundreds of millions of dollars. Okay.

Yeah.

We're never being hundreds of millions of dollars selling in whole foods and selling through the health food channels. Nope.

Right.

Walmart controls 40% of all candy sold in America.

Wow.

Wow.

Yeah.

Period.

Oh, yeah. And almost every category, like clockwork. As soon as Walmart, you're In Walmart, it's 40% of your revenue overnight.

So has a 40 and actually it's 40 plus. They have a 40 plus market share of candy.

Wow.

Lose Walmart, you've lost your company.

Wow.

Okay, well, then we're just gonna have to produce a product that's so delicious and so amazing and then market the hell out of it and find our live.

So I'm going to wrap up, but here's what I'm going to do. This has been great and I think people have had a good time listening to this. I think this has been helpful for a lot of people who listen in on. I'm gonna, we're gonna go off air. If you guys want to set up some additional. An additional meeting with Justin and I, we'll. We'll have another conversation with you off here and, and we'll take you a little further. But I think this has been great, folks. I'm going to tell you this. If you have a brand that you want to have this kind of experience with on the show, reach out to Justin and I. You can do that@cpginsiders.com and send us an email and you'll find a contact there and we can do the same thing with you. And other than that, we will be back in the next episode of CPG Insiders. And of course, if you like the podcast subscribe to it and leave us a five star review. Wherever you get your podcast, we'll see you in the next episode. If you're looking to greatly increase sales on your CPG product, don't hesitate to contact us at Jekyll and Hyde Advertising and Marketing, by the way, the only advertising agency with a guaranteed result. Just go to jekyllheidagency.com or feel free to give us a call at 800-500-4210 SA.