(upbeat music) Hello friends, I'm Ray LaTeef, and you're listening to the number one podcast for anyone building a business in food or beverage, taste radio. This episode features in a interview with Andrew Benin, the co-founder and CEO of Graza. The olive oil brand and viral sensation, known for its chef-inspired, squeezable green bottles. A claim, and there's been plenty aside, Graza is sometimes mocked as quote, the Instagram olive oil. But, "Darition is fine with co-founder and CEO, Andrew Benin. Being aligned with one of the world's most popular social media platforms is a good thing," he says, and should be celebrated. Since its debut in 2022, Graza, which markets extra virgin olive oil, sold in sizzle and drizzle varieties, has been a constant presence in the pantries and kitchens of Instagram, YouTube, and TikTok influencers. Verality has helped the brand generate millions of dollars in direct to consumer sales, and supported the brand's presence at national retailers, including Whole Foods, Target, and Walmart. According to a recent CNBC report, Graza expects to bring in over $48 million in gross sales by the end of 2024. I sat down with Andrew for a conversation about how Graza has inspired authentic and fervent enthusiasm for its products on social media, how the company has maintained relationships with influencers, quote, "at scale," and how taking a bet on the upside has guided its demand planning strategy. He also explains why he describes Graza as, quote, "an early team-led company versus a founder-led one and shares his nuance perspective on profitability." [Explosion] Hey folks, it's Ray with Taste Radio, right now I'm honored to be sitting down with Andrew Benin, the co-founder and CEO of Graza. Andrew, great to see you. Great to see you too. I saw you at Expo West. You were on the move. You were interviewing people on the go, but now I see you in your nice little office. I like it. It is our nice little office. I wish we had a studio set up at Expo West. It would make things a lot easier for us, but it's not that kind of show. You're always on the go. I'm sure you can get a brand to sponsor your studio at Expo West. Are you offering us studio space? I mean, I know a guy. Okay, well let's connect after we help off the mics on who that guy is, because I think our accounting department would love to hear more about it. So the last time we spoke virtually anyway was when Graza got off the ground essentially. It was in March of 2022. You joined us for an episode of Elevator Talk, which is a series that highlights early stage and disruptive brands in the food and beverage business. I recall your hair was a little bit bigger. Your video is a little bit chopier. Things have changed in terms of your AV, but things have changed quite a bit just for Graza as a brand. And I want to talk about one thing in particular, which is the New York Times. A year ago or a few months back, you were in Graza was in the New York Times because of a scribe that you posted on LinkedIn that was deemed by many to be fair as controversial. And the New York Times covered that controversy or what people deemed as controversial. But last week, the New York Times rated Graza, or described Graza as the best overall olive oil that you can buy in a grocery store. So things have kind of come full circle in a way with the New York Times, which is kind of awesome. We love the New York Times. (laughing) It's funny, it's hard to assess which rating systems or which ratings agencies are legitimate. You almost have to value which ones have the consumers trust. And like the New York Times does. And we were unaware that this was taking place. So at least there's some genuine curiosity that we have to procure products. That way, brands like Graza, we don't actually have control over what they're testing, right? When retail asks you for a sample, you have some control over what you're sending them. But this was just, I guess, then picking up a product on the shelf and loving it meant a lot. - You had no idea your PR team did not send any product, it was nothing like that. - No idea. - Outstanding. What's been the impact? I gotta think you're probably inventory is low at this point. - We're stocked. - Oh good. - And you said change from the inventory side also. I think the impact is the kind of validation reverberates around the omnichannel business, right? Like they're linking out to our squeeze bottles to Amazon because I think the commission structure with Amazon cart is so aggressive. But then they're linking directly to our site for the refill cans. So we have seen an uptick in traffic. And then, I don't know, I think a retailer or our buyers fueling powered that they're carrying this product that is getting national recognition and recognition for what's inside the bottle, not just the beautiful brand that it is. So I don't know, it's all good. - What's inside the bottle you would think is the most important thing. But my first experience with Graza was as a very convenient option for olive oil that I didn't know I needed. And I think that's the experience a lot of people have. Clearly, and everyone knows this, you know, people have been using squeeze bottles for some time. But when did you think that there was gonna be a big opportunity for a brand like Graza in the package that you have the package that you're most known for? - I actually worked in the line at restaurants used olive oil in squeeze bottles and it didn't click. At that point, nor years later, the kind of founding story of the package that we decided to go in was a shower using a Dr. Bronner's bottle. Also shout out Dr. Bronner's for launching their new refills. We love 'em. I hope you like our Smosh. - They also use olive oil in their products too. (laughing) - I was just showering, squeezing their soap that takes forever to get off. And it had the moment ran out of the shower and just in a towel and washed out all the soap out of this Dr. Bronner's bottle, filled it up with olive oil and squeezed it into a large cast iron pan. And then the next day, Photoshopped, Bobby Flay, YouTube video and a Gordon Ramsay YouTube video, photoshopping this obscure green object in their hand where there was a different brand in olive oil. This squeeze bottle looking thing and it just happened. It came to life. It was like, wow, this is an opportunity here. And then as you're describing this initial experience with the vessel, we definitely benefit as a company from having a tactile experience that is memorable. I think other things that you open and use is hard to have a memorable tactile experience that is different from what you were used to in the past. So if I'm opening a bag of granola or cereal box and it's like, there's nothing memorable about that right now. You just do it because you have to access what's inside. With bras, there's a memorable action, which is squeezing it into a pan, squeezing it into a sheet pan. It's a tactile experience that didn't exist before in this category and it's resonating for sure. I think now everyone wants to talk about the functionality of it and the dosing and the control that you have. And I would superior to other things but I think fundamentally actually it's just this motion. Like this squeeze and this motion has stuck with people and they enjoy it and it feels empowering and it's an emotional tactile experience in the kitchen. Guessing your margins, that's risky. The lay financial gives CPG brands the clarity to scale smarter, faster, stronger. Get your free inventory ebook by texting Taste to 55123 and start making data work for you. Tune in at the end of this episode for an exclusive interview with Matt Lynn of Ballet Solutions. He sits down with Melissa Traverse to break down the biggest inventory and accounting mistakes CPG founders often make. You'll learn how to bring clarity to your numbers so you can scale with confidence. - I think a lot of entrepreneurs have that moment that you were describing, not necessarily in the shower, but have that moment where they were like, "Hey, I could create a brand, I could create a product that people will love because I love this idea myself." - However, not everyone knows they wanna be entrepreneur and tell maybe that light bulb moment has. Did you feel that way? 'Cause I look through your resume, Andrew. You have one of the weirdest assortments, I don't know, weirdest wrong word, but you have one of the most diverse assortments of jobs I've ever seen. You worked at War of Be Parker. You starved at Grammar Street Tavern. You worked at IKEA in Spain. You worked for Magic Spoon. I mean, you did all these different things. When did you realize, I mean, was it that moment you were in the shower that you realized you wanted to be an entrepreneur? Was it well before that?
No, I think it was well before that. I don't know if it was as much the desire to be an entrepreneur, as more of the desire to actualize a vision, right? Like, I've expressed in other interviews that I think entrepreneurs and artists and designers, we share, and probably everyone actually shares this desire to express yourself. I think entrepreneurs use products or services to express themselves or express a branding vision that they had. It's just a medium, I think. For me, I'd always worked for entrepreneurs and I think developed eventually a two-sided equation. I mean, one was appreciation for how much I was learning and the exposure that I had and the other was envy. Envy of them creating something, envy of them having a seat at the table for every decision, one that they earned. So combining this knowledge base and these experiences and channeling the energy from the envy, which became frustration, which eventually gets materialized as creating something, if you're lucky, is how it all happened for me. When I was getting started on this and pitching it, I didn't even like being referred to as a startup or even an entrepreneur because it felt like it minimized that there are millions of small business owners that are just trying to materialize their vision. And there is absolutely equal respect for a new landscaping business that puts up a website and hires the sales force to get clients. Like, that's a startup and that's someone that had a vision whether for their life or for their brand or their business and Grazow was kind of the same way. It's just how I figured out how to express myself. For sure, but starting a landscaping company and getting known for your business and finding clients in a small town might be as easy as taking out and adding a newspaper. I'm just showing my age by saying something like that. But you know what I mean. And it's like, it's finding ways to promote your brand and get your name out there and get clients in CPG, in modern CPG in particular, it's a lot more difficult, especially when you have to use social media, you have to work within that system to highlight what you're doing. And you did and Grazow has done an amazing job on social media from the get-go. How did you think about that social strategy working with micro-influencers early into the brand's development? Yeah, I mean, I think it's prerequisite to having success and having a strategy for it is necessary. I think that you also can't fit a square peg into a round hole no matter what your budget is. If the product is not right for the media that you're looking to distribute it upon. Grazow wasn't engineered for social media, but through the experience having a highly noticeable package that does not need to be the star of a video but can be a best supporting actor in a variety of environments has worked very well for us. So olive oil as a category is a supporting actor in everything that people are doing at home. We don't need to have people say, I just discovered olive oil and it's delicious. Our messaging is much more on making homemade hummus because that's so fun on my new food processor and I'm topping it with Grazow Drizzle. And it's like, oh, great, you know, I love cooking. I love hummus, I love Drizzle. There's not like 18 mac pros that we need to be read off a script. Right. Yeah, it's pretty intuitive on what olive oil is and how to use it. You don't need to teach people. But when I look at Instagram videos these days and I see cooking Instagram videos, whether it's a pro or just an ad home chef, I'm not even kidding. Like half the time, half the time or more, they're using Grazow. Are you sending products to these folks? Or I mean, do you have direct relationships with folks right now that are is broad in its scope? Or I mean, are people just buying your product and using it? I think all of it. I think some of it is a pat on the back of how ubiquitous we've become in such little time. And the rest of it obviously is incredibly hard work, maintaining relationships with people directly at scale. And then of course they're on YouTube, for example, we have been investing in sponsored placement because we believe in the audience that someone's able to garner. But I'd say paid versus unpaid for us product placement. We're probably talking about 99.5% organic placement or we send product out to someone or they ask for a re-up because it's just part of their routine or 0.5% being paid placement that we procure and manage our own without agency support. So I don't know. I mean, I think if you're in a boardroom of a massive CPG conglomerate, social media is probably what is being spoken about the most besides the bottom line and even I would think so. That's how important it is. But if it's not in your DNA and your brand's inception, I think, or in the early team that you build, I think it's going to be hard to feel natural for a bigger brand. For us, it's been we've celebrated being called Instagrams all-voil and TikToks all-voil. Some people would call it demeaning, right? You're just the olive oil of the internet. Do you understand the power of the internet? That is a massive compliment. Like, great that we got a New York Times tastiest olive oil award, sold at scale at grocery. We feel that way. That's how our internal team feels about our products that we create. But the internet's olive oil. Hopefully I can want to keep that cap forever. I wanted to dive a bit deeper into social media. You were born as a social media brand. But how has your social media strategy, how has your team evolved since? Yeah, I mean, we have a big brand marketing team. How big is big for you? Brand marketers. I feel like we have five full-time brand marketers out of 12 full-time employees. So that's pretty big. Yeah. Big for us. And how has it changed? Well, it's not as much a changing, like the outreach strategy is consistent with how it's always been. I think it's the maintenance plus outreach piece and necessitates more resources. Like, if you're just spewing out product seating requests to everyone, that's how you're going to be interpreted as a business. The same as like, if you're spewing out emails to hundreds of people a day asking for support, it's like eventually being a bit more thoughtful is going to be reciprocated. So for us investing in resources and personnel to continue maintaining relationships that we built and other personnel that are responsible for procuring new relationships and new opportunities has been the biggest change. That's a commitment to the people that have helped us to date and the people that we think can help us moving forward. I think a lot of people in social media strategy will view it as paying for someone's community. But multi-touchpoint marketing applies to building trust with a creator's community. So you have to have some longevity to your investment as well, which is scary for brands that can't miss. There are plenty of people including us that can't spend $100,000 and not have a return on it. Who's going to write that off in these days? So yeah, still scary. It's not easy. 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That's tasteradio.com/octops. Earlier you alluded to the fact that you have your inventory strategy where you want it to be, or at least it seems like it's much more solidified than it had been when you started out. And I think this is part of growing up as a brand, growing up as a founder, as understanding that you're running a business. and operation side to what you do that is.
as important, if not the most important thing that you do. How has that changed? I mean, how have you thought about what we need at the time that you launched? How quickly you're growing, how do you manage that process of rapid growth with the back end of, we've got to do all this stuff to be prepared to sell as much as we expect we can sell? It's hard. You're always taking a bet on the upside, which is challenging for your cash flow and your cash conversion cycles, especially in a commodity marketplace, especially if you don't have a co-man model, but that provides a healthy pressure on us to deliver on our expectations. So it's a double-edged sword, and then how do we manage it? There is no silver bullet there. It is a lot of re-forecasting and re-forecasting and re-forecasting over and over and over again, especially once we have this much warehouse distribution at all the big distributors in the country, direct accounts that are picking up from our warehouse. I think it's a forcing function because the thing you know that once you get into, say, a Walmart, there's less flexibility for a misstep. We've been told as CPG operators that if there's a mistake with an account like that, or if you don't succeed once you're in, then you're out and you're never getting back in. I actually don't think that's true, but it's part of the neuroses, I think, that forces us to invest in demand planning resources. So it's all just incredibly hard work. It really is. Is sales forecasting a demand planning? Is that all happening internally or are you outsourcing to support that type of long-term business planning? All internal. Is it a function of you hiring the right people or is it just you learning along the way you and your team? I think those are the same thing, actually. If you hire the right people in early stage that are motivated and nimble enough to evolve to the organization's needs, those become your lifers. And that's one of the most motivating parts of this is understanding that it hasn't been a founder-led company. It's been an early team-led company. And a lot of people have developed to address what the businesses needs are, both from a operational perspective and a marketing perspective. As shopper marketing gets as important as brand marketing, like the first default for us is do we have an internal resource that can learn quickly and learn in the context of Grazon. Operations is the same way our operations and our finance team are quite overlapped. And that works for us. What about innovation? I think about this can that I have my hand, which is your new or part of your new refill lineup of products. This is a 24.5 ounce can of your sizzle. And this was developed. I think it feels like with the Whole Foods buyer team that you've been working with for some time, is innovation a factor of what your retail buyers are asking for? How closely do you work with them when it comes to launching new products? I mean, they definitely didn't ask for a 750 ml. I mean, we work closely with them because I don't know, data talks, right? So once your trospers in the data, you've allowed yourself the opportunity to work hand in hand with the retailers because there's less risk that the things that you put out and that they accept aren't going to work. You have a proof point. So a refill solution is something that I think everyone wanted, retailer and online customer and the brand itself, even our branding agency early on, was really pressing us on, do you have an NPD schedule for refills? You're like, "Guys, we don't even have a website yet." Once that bit of time here, but we did start working on the cans, you know, 16, 17 months ago. So pretty quick after a launch. And it did hit what was at that time and still remains our product development formula for evergreen products, which is, you know, is it fun? Is it functional? Is it love it? Is it new and exciting? Is it different? And most importantly, is it good for the oil? So this checked those boxes really quick. There are actually things that retailers have asked for that we don't feel are the best for the oil, but might be a pure economic opportunity. And thus far, we've pushed back. You know, we didn't launch cans to hit a certain price point or to hit a certain sustainability metric. We launched cans because they were perfect for what is a refill for our bottles, which we believe it. And because there were people that were not buying Garaza, means they didn't want to buy anything in PET and now they can. So it was how many things can we address at once with this launch? And there were a lot. Sales and velocity solve a lot of problems in biorelationships. And they enhance biorelationships for sure. Are there any things, any other, you know, factors that have made your relationships with retailers and their teams better? Yeah, I mean, I think because of the way that we need to purchase our olive oil and how intimate we are in our supply chain, we get viewed as another resource for them to learn about the category and what's going on. There's been severe fluctuations in price of extra virgin olive oil and having that kind of direct line and dialogue to what Garaza is seeing, what are retailers seeing. Retailers have private label businesses that they're trying to plan around. Has been a new level of partnership that we've been able to establish, but we're buying oil every single day, you know, so we're on the farms every single month, we're in our manufacturing facility every two weeks. So at the end of the day, I think it's different than I produce my products, you know, at these two comands and we qualify our components and our ingredients and its services and need, but just a different type of business. So with our buyers that has gone a long way for our category. You know, I read that Garaza is at this point profitable. There's probably less than a one percent of all CPG companies that are profitable after two years in the market, you know, with all the fluctuations in terms of your supply and the inflationary pressures that you have and the, you know, desire to keep the cost of your end product at a reasonable price for consumers. How have you navigated all those different things, all those elements to get to a point where you are in a position to be profitable? My perspective on this, I think, is a bit nuanced, Greg. I'm going to be honest, like being profitable and being in control of your destiny are different things. I think there are plenty of businesses that don't need to use whether or not they were profitable in any given fiscal year as the main moniker of success. So Garaza could just as easily be unprofitable by choice because accelerated growth or market share that we wanted to capture was more important to us. So I don't think you should get too much credit for being profitable the same way I don't think you should get completely bashed for being unprofitable. If there's longevity to your business, that should be weeded out rather than, you know, isn't in the black or in the red. For us, you know, we don't spend that much on marketing. We budget bottoms up and it works for us, but I don't know if it'll work for somebody else. Strangely profitability has been one of the busiest words in our industry for some time and it's investor driven. Have your investors been pushing you to be profitable? They have not. No. I think there's a cyclical panic right now and in five years things will change where when I was at Casper, you know, top line was everything that everyone was talking about. I think that it's, you should always be operating your business with profitability as a goal, but I think you should be able to make decisions that have a bit more longevity to them than do I need to cut anything drastically just to prove to my investors that I'm profitable or minimize my growth. Like, Gras is a growing business. That's what's actually really important to us. Like, this is up into the right. You are definitely up into the right and there are so many amazing things that are going on with Gras and I'm just so honored to have had this opportunity to sit down with you. Andrew, thank you so much for taking the time. I feel like we need a part two pretty soon. So maybe later this year we can make that happen. That's good. I'd be honored as well. That brings us to the end of this episode of Taste Radio. Thank you so much for listening. Taste Radio is a production of BevNet.com Incorporated. Our audio engineer for Taste Radio is Joe Cratchy. 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[email protected]. On behalf of the entire Taste Radio team, thank you for listening and we'll talk to you next time. [Music] Hello, I am Melissa Travers here for the Taste Radio podcast, talking about some of the biggest tension points that CPG brands and founders face when they're scaling a brand, and those are financial accounting and inventory management. I am joined by Matt Lynn, inventory accounting guru from Belay Solutions, and he's going to shed some light on all of this that is going to help everybody out quite a bit. Matt, thank you so much for joining us today. Thank you for having us, Melissa. It's great to be out here at Expo West, and it's great to sit down and be able to chat this because it's kind of a passion project of ours, working mainly with CPG brands, and hoping to help them scale. It's been such a pleasure chatting with you and the team and learning all about what you do over there, Belay Solutions. Can you tell us a little bit about yourself and what your role is and the kinds of solutions that Belay gives to CPG brands and founders? Yeah, absolutely. My role with Belay, I'm actually our inventory accounting manager. I run our inventory department, so we work with CPG brands, taking them from spreadsheets, finding them on inventory management systems, and really helping connect their tech stack between their sales online marketplaces to that inventory management system, even down to their financial systems like QuickBooks. Belay overall is kind of an outsourced accounting firm, and with that we're helping teams we have different levels with bookkeeping, controller level work, even high level into CFO type items. So we really help those brands in any way that they need financially, and then I just have a subset of a department where we're really just laser focused on inventory. It's certainly a complex topic, and there are plenty of places to go wrong. Let's start by going right and start super simple. Can you tell us what some of the biggest red flags are that would help a founder understand or the person running a brand understand that it really is time to get some help with some of these areas? Yeah, absolutely. I think some of the early red flags is just everything is chaos. So when they're looking in their financial software, maybe they don't really have an accounting background, and they're kind of just piecing it together and doing their best. And what they'll see is that reconciliation take forever. If they even happen, they have a lot of transactions that don't get coded or they just put them into placeholders to just get rid of it so it's not an isore. They'll notice they have revenue, but no cash. Or they notice that they have a good amount of cash, but their blind spot is really seeing the vendor invoices that are sitting there just needing to be paid. So they just lack that clarity that's going to really be around the corner. You know, you were talking about one of the red flags that comes up that I think makes so much sense when somebody asks you what your numbers are and you can't come up with the right number, that's a big problem because that's something that you really should be able to share with decision makers who, you know, you're ideally looking to do business with. What should you be able to call up at a moment's notice? You should be able to know and accurate margin. It's amazing how many founders wind up talking to that they can tell you their revenue numbers. I can tell you their selling price. And then the minute you start talking about cost or their cost of goods sold, they just get a deer and headlights look. So really it's very hard to tell. Am I even making money? Or if you don't know your entire landed cost. Maybe you know what the freight cost is, the duties separately, but you're not really getting that as part of your unit cost. So it's really hard to tell. Am I even making money or am I losing money from the very beginning? And do you recommend that founders are able to call up a margin by channel? Absolutely. And depending on the number of products and channels, you kind of want to know what are your best sellers, which ones are making the most and which ones maybe you're not making as much. But especially if you're branching out and you're doing D to C with B to B, absolutely you want to know that. Gotcha. You mentioned that when things feel really chaotic, that's probably your red flag. I would say that it probably almost always feels chaotic if you're running a CBD brand. And I know this may be hard to quantify. But is there a revenue number? Is there a number of doors number that would help a brand understand whether or not it makes sense to bring on a partner like belief understanding that so many brands are bootstrapped or they might be tight for cash. What is that friction point? Absolutely. So there's not really a set number. It's a little bit different for everybody. Depending on where you're at in your process and sometimes just your level of understanding of financial aspects. When you're first starting and you really cash conscious and don't want to spend that much money, you may keep it on yourself. But as you're growing, as you're getting to those six figure revenue numbers and especially as you're approaching seven, you want to make sure you've got good financials. Because as you scale to that point, most likely you're going to be looking to raise capital and investors. That's the first thing they're going to look at your books and are they clean and did they show a clear picture of your business? You know another area that folks might look to to organize some of the chaos are their systems. So many folks stick with Excel spreadsheets for a good amount of time. How do you know that you need to outsource some of your accounting to an organization like Belay Solutions versus maybe signing on to a since seven or not sweet or something like that? Well that's actually something we really help with when it comes to that cost question. That's something that trips people up. And sometimes if you just have a turnkey business, you buy and sell a finish good, you can maintain with spreadsheets and we've had clients with million dollar revenue that can do that. But we see so many brands nowadays are using contract manufacturers and they're just sourcing certain parts of their product. So when you start talking costs, they have no idea exactly what their unit cost is. So that's where we come in and we kind of understand, we'll speak with the customers and the clients and get their needs. And then if we think they're ready for a system, they will help put them on that system so they can get some of that clarity. And it's not something we force on anybody. There are plenty of times where founders come to us and we'll tell them bluntly, you're not ready for it right now. But we'll let you know when we thank you are. That sounds like excellent advice. What should a founder or somebody running a brand look for in an outsourced accounting partner? Are certain checklist items that they should make sure that their partner be able to execute or be able to help them understand? Absolutely. I think one of the keys, there's a lot of outsourced accounting firms out there. Some focus on service-based SaaS companies. But if you're a CPG founder, you really want to make sure that your accounting firm has CPG experience. I would ask them, you know, what kind of brands have they work with and even beyond that industry specific because there's so many subsets of CPG. And that's something that I think is great about what we do with Belaay is that we kind of run the gamut. It's kind of like the insurance commercial we know with finger two because we've seen a finger two across a broad spectrum. Probably getting references is always helpful, right? Absolutely. All right, so this all sounds great. I think we have a really good understanding of would it make sense to hire an outsourced partner, you know, what some of the things you should be looking for are, what does offloading this kind of work mean for the brand? What can this do for lightening the load of a founder or lightening the load of a brand operator? Like, how does that help them in their everyday business? It just tries to really help quiet the chaos. So what we're looking to do is just take some of the weight off that founder's shoulder. Let them focus on building the brand, building the business, getting that exposure. If you don't have sales, you really don't have anything. So we want them to be able to focus on that while we take care of your back end office work. And we can just present that to you on a monthly basis. You can help make decisions. You can take that to investors. And really you can just focus on growing your business. I feel like I felt founders and the folks who are running brands collectively sigh. Breath of relief just hearing that. How can people learn more about belay solutions? So people can text tastes to 55123 for their free inventory guide to get started. Atlin, inventory accounting, Guru, at belay solutions. Thank you so much for joining me here at Expo West. It's been such a pleasure to chat with you and learn about what you all do over there to help founders and brands with their financial accounting and inventory management. For everybody else out there, thank you for listening to the Taste Radio podcast. I am Melissa Travers and we'll see you next time.