Khloud Has Khloé, But Community Builds The Brand

[Music] Hello friends, I'm Ray Latif and you're tuned into Taste Radio, the leading podcast for entrepreneurs, makers and innovators in the food and beverage industry. Celebrity may open the door, but execution is what blows it wide open and cloud is proving it. Co-founded by Chloe Kardashian, the fast-growing functional snack brand has raised from launch to 29,000 doors in just months, secured nationwide placement in Starbucks and expanded beyond its flagship protein popcorn with a new line of protein chips. But cloud momentum isn't just about celebrity. In this episode co-founder and CEO Jeff Rubenstein, a seasoned CPG operator with leadership experience at Vita Coco and Poppy shares lessons on execution, early pricing missteps, and why star power alone doesn't build a lasting brand. He also explains how balancing broad visibility with grassroots community is key to long-term success. Hey folks, it's Ray with Taste Radio right now. I'm supremely honored to be sitting down with Jeff Rubenstein, who's the co-founder and CEO of Cloud. Jeff, great to see you. Good to see you. Thank you for having me. You're looking very laid back and chill, and that's kind of rare for Expo West when everything is chaotic and crazy. Well, we've had a phenomenal morning, a lot to celebrate. We've had some very interesting retailer meetings. We've had some great editorial conversations. Okay. This is the best one of the day. Of course it is. You've been doing this a long time. 26 years since the Vita Coco Gaze. Before Vita Coco. What was before Vita Coco? Coca-Cola. They do pretty well for themselves. I spent five and a half years working at Coca-Cola as Rohan's intern and up to brand director. He was a tremendous learning experience, but I had this crave to do something more entrepreneurial. And Vita Coco was my first, and we've done now five since then. So over the course of 2009 to 2026. We've done five pretty interesting businesses, some of which became Household Names. The most recent of which is, of course, Poppy. Yeah, you had a pretty big hand in that company, and it's evolution. At least, I mean, that was a really quick evolution for that brand. I mean, going from essentially zero to five years and exiting two PepsiCo for almost two billion dollars. Good job, Jeff. Thank you. I was the very first employee. I joined pre-revenue as Allison, Stephen and me, and we were working out of a Dallas garage, and we figured it out. You know, that was just the right product at the right time with the right personalities involved. Allison became a very big personality, actually. And the business did exceptionally well. And I think this cloud brand has the same exact opportunity. Yeah, right place for right time. I was just going to say it's a great segue to what you're doing now with cloud. Cloud with a KKH L-O-U-D. And of course, it's the KH because Chloe, Chloe Kardashian, exactly is your co-founder. How'd you meet Chloe? So, one of the investors in Poppy was an investor in a concept that she was pioneering and called me and said, would you be open to being the operating partner on this business? And I looked at her and said, she is a absolute gem and a wonderful potential partner. And so I took it on and I joined first as a consultant and then eventually came on into the operating seat in September. And a lot's happened since September. I mean, the brand has really blown up. I think if folks listening have seen it, you've probably seen it at Starbucks where you're national. And just for context, where else are you sold right now? Walmart, Target, Kroger, Albertsons. We have 29,000 retail doors active by April 1st. So, nothing really going on with the brand? Not much. Yeah, I just did. Trying to figure it out. Okay, good. One step at a time, you know? Not too fast. The thing that's interesting about a major personality attached to a brand like this is you get a lot of phone calls back. And so when Chris Jenner, who's the momager, calls and speaks to somebody very senior at Starbucks, they tend to return that call. And so the timeline from outrage to confirmation was 90 days. And that is extremely unusual. I've been working my entire professional career to land an item in Starbucks. I've never had anybody say yes, never once in all the businesses. Some of which have been very successful as you know. And this is the first one. And I'm super proud of how we scaled that opportunity. When we first launched a Starbucks, they gave us a certain revenue and volume threshold. And we've exceeded that by almost two and a half X. And they're now adding a second skew, which is going live May 15th, which we're excited about. And we're expanding internationally. We're going to be adding the rest of North America for now. And then hopefully in 2027 going to Europe and Asia. So a very big platform that came off of a very simple conversation between Chris and a senior executive. I want to talk about the origins of the brand for a sec, but clearly you're thinking big. You're thinking really big. Has your ambition been influenced by your experience with other brands? I mean, obviously coming off a poppy where you're seeing the remarkable opportunity for a billion, multi billion dollar exit. Is that your vision for this brand as well? Well, functional snacking as a category has as much potential as functional soda. So yes, I think functional snacking generally is the next breakout category. And if I look at what's happening at the moment with free Delay, introductions of Doritos with protein and other concepts, they're already thinking the same way too. But they're lacking what we have in spades, which is authenticity. And my fear is for them that they're going to put a small amount of emphasis on a pretty big launch for a very short period of time. It's going to be a blip. And they may not see the performance and very quickly abandoned that opportunity. And I think for us, we're going to capitalize on, you know, on that momentum. And my feeling is that there really isn't another brand doing functional snacking in this way. We're doing it with a feminine touch. We're doing it with a female founder. We're doing it with a certain fashion sense. We're doing it with a lot more fun. So all those Fs, right? Female, fun, functionality, and flavor. And I think we've sort of nailed that in a way that nobody else has. Most functional snacks are dude food, very masculine, belonging in the gym, and we belong on the runway. And it's just a very different positioning. And that should lead to some interesting opportunity for us. And I think it's as much a global brand as any. I think this plays as well in Tokyo as it does in Times Square. And I think that the Cardassian brand name resonates all over the world. And if you look at their Q score, which is a measure of their sort of popularity, Australia and London and Tokyo pop up as high as the United States. So I think we will probably be a big global functional brand within a couple of years. But for now, the focus is on winning the United States. And it's one retailer, one door at a time. But you're doing it so quickly. And you know, growth strategy, especially for early stage brands, you're typically told or encouraged to build one step at a time. You know, how many times have we heard inch wide mile deep Jeff, you know, in this business? But when you have a hot product like cloud and you have a hot functional ingredient like protein, it seems like the momentum is one that you can't ignore. You've got to run fast. But let's back up again, a sec for, you know, folks in the audience who are not familiar, cloud is a protein popcorn brand. And in a lot of ways, it feels like you were slightly ahead of the game, right? Because now you're at Expo West and nearly every part of the chairs that we're sitting in have protein in them now. So it's just like, it's gotten out of control. But when did you realize that there was an opportunity for protein, particularly in its snack food like popcorn? So GLP ones are becoming a very big part of American culture. There was a Costco buyer that said to me recently, they think 25% of the US population will be on a GLP one within a year. The two things that GLP one users need are fiber and protein. So we're capitalizing on a macro and a macro trend. And I'm convinced that there is probably no ingredient that has more sustainability than this. I was involved with fiber for the last five years with prebiotics, as you know. And that had its moment. But I think protein is having its moment right now. And so to your point, we are absolutely capitalizing on that wave. However, we would not be going this fast if we also didn't have the velocity story. And I'll look at Target as an example. We launched with them in April. They gave us an end cap display in all 1900 stores. And Stephen, who's our buyer there has been a wonderful partner. And he said, if you guys can get to X, we'd be very happy. And we came in at three and a half X. And he quickly started to expand the portfolio. We added two new skews in December. And we're adding an additional 13 new skews in the April reset. A few of those skews are actually here today for you to taste. And we're very pumped about the possibilities of this particular skew. 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 Lin 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. You know, it feels like you could go in a lot of different directions with cloud. Popcorn is your first snack product. It seems like the sky's the limit in terms of what you could do infusing protein into products. But why popcorn at the outset? Why did you feel like popcorn was the right snack to begin with? White space. So, really isn't anybody else doing a protein popcorn? And there's been a lot of folks who've introduced better for you healthy popcorn. So, and I can give you a laundry list less rave will be in the most recent. Sure. But nobody has figured out how to apply protein onto a popcorn kernel and make it taste good. The challenge is that you topically have to make the application. In a protein chip, in a protein bar, you're adding in the protein to the formula. So, it's baked in. So, you don't have that sort of chalkiness. We spent a lot of time and honestly a lot of money on R&D to perfect the kernel. To make sure that we weren't losing the flavor while we were adding the functionality. So, we think we've nailed it. We have lots of great flavors that are now in the market from dill pickle to cinnamon that deliver a tremendous taste but also have those macros. And so, in popcorn, there's really nobody else. So, it was a white space territory that we wanted to explore. What we're here to talk about today is the introduction of cloud's protein chip, which is a tortilla chip, 7 grams of protein, made using a pea-based protein format and avocado oil. There is no seed oils, there's no chemicals, there's no MSG, none of that sort of stuff. And it delivers full flavor of a Dorito in a nacho or a ranch flavor with none of the additives or chemicals that you'd expect from the category. And so, we're proud of the clean label. We're excited about the fact that this is delivering on the macros and the taste is lights out. I mean, I think it's the natural evolution to go into a salty snack like tortilla chips. I mean, chips in general, like protein chips that I've had in the past, they don't really taste that great. I don't expect them to taste that great anytime soon. But because of the texture of tortilla chips, it feels like it's a natural fit for your brand. Again, you know, Chloe Kardashian, a very, very well-known personality. Someone who everyone seems to know, at least the Kardashian name is very, very well-known. How does she fit into the brand as the ambassador without being the brand? Very good point. So we say we're not a celebrity brand. We're brand to be celebrated. Celebrated for the functionality, celebrated for the fun, celebrated for the flavor, celebrated for the feminine sort of angle. And I think that we utilize Chloe as a creative force. There is no contract with her. There's no deliverables. We don't go through a checklist of activities that she needs to go satisfy. We don't talk to her agent. She is directly involved. She makes the decisions on the packaging. She makes the decisions on the way we go to market. And I think she's been a good of a partner as anybody I've worked with in 26 years in this business. We are so privileged because she happens to have 305 million followers on her Instagram. And her sisters and mom, when you sort of aggregate them, right over two billion total followers. So the visibility that she can create and the credibility that she's able to generate are pretty powerful. And that is not replicable by the competition. But we've seen celebrities create brands in the past, even ones with huge social followings, even ones with great Q scores, really well known in film, movies, music. And their brands have kind of just flopped. How do you avoid the pitfalls of what's happened in the past in the context of those brands? Duality. So you need to have both celebrity and community. So the celebrity brings you visibility. The community brings you some additional credibility. We are very active in building an email and an SMS community. We focus a lot on colleges. Tate is in the audience today and she's amazing at helping us to generate a very significant following amongst sorority and fraternity folks. We invest in programs at retail. We are building a very localized, very strategic strategy which has been utilized by others in the past, particularly in the beauty space, particularly in the fashion space, to create brands that are beloved. And so when you're disrupting, you can build a big celebrity brand that lasts for a moment or you can build a sustaining brand that lasts forever and we'd prefer to do the latter. And it's really that duality. Celebrity plus community equals success. And separate from that, I think the operating team are a bunch of very experienced people that have been doing this for 100 years. So we have a really sophisticated ground game that gets amplified in turbocharged by the celebrity affiliation. And that is the one, two punch that works. How much of what you do on the promotion and marketing side of things is in house. How much do you outsource your on the ground marketing teams? Almost none. So we have a really terrific woman named Kathleen and Tate who's here with us who do almost everything internally. So we don't have a big creative agency. There's no creative director externally. We don't have a director of photography. We're not working with external parties. We do all of that ourselves. I think that's part of the secret sauce. Chloe has a particular vision. It's high fashion. It's high design as all the Kardashians are. And that is manifesting into packaging. That's manifesting into the trade show booth downstairs. We take a very different eye. And I think that is a separator for us. Think about fashion, functionality, fun in stacking. Nobody else is doing this. Nobody. And I can't even think in beverages if anybody's doing that. Really, in the category of CPG, there's very few fashion driven lifestyle oriented businesses that have that female touch. Alani knew maybe it's the closest, but I don't think their packaging has that same high design. This could be in the Smithsonian. Well, that is something that I hope all founders feel about their brands, especially because if you're putting something out there that doesn't look great, that doesn't taste great. And what are you doing? It's something where taste has to be first and foremost, but your billboard is that package. I actually wonder, when I think about demoing and getting into those retail liles and talking to people about the brand, if they get it, do consumers get this as intuitively as they might think they do? Yeah, this is popcorn, and it has protein. I'm pretty simple, right? Pretty simple. Now, the key that you have to articulate is that it's seven grams of protein, which is 10% of your daily value. It's lower in calories and sugar than the standard. It has a cleaner label. We aren't using seed oils, which is a trendy topic at the moment. We have invested significantly into the quality to ensure that every kernel delivers a big full bite, and our flavor, I think, is meeting expectations. This is not a complicated story. It's actually even less complicated as we start to get into the protea chip, protein chip concept, because people have some experience with that. There's other players quest wild that are doing it, just not in a feminine way. Yeah, well, I think that's the thing about simplicity is, you know, we are here at Expo West, and sometimes you ask someone about a product or a brand, and it takes them 60 seconds to talk about what it is and why it's beneficial for you. And the consumer is not going to listen to you for 60 seconds. They've got to get it pretty quickly. With a tortilla chip, I think, again, it's pretty intuitive. Everybody knows what a tortilla chip is as well. But the functional benefit itself, I'm glad you touched on seven grams and talking to people exactly about how much that fits into their recommended daily value of protein. I think that's the thing that sometimes doesn't always get understood, but is protein the reason people are buying your product? I would think, honestly, for me, it's almost the third part of why I would buy your brand. The first part is because it tastes great. The second part is because the association was Chloe, but where does protein fit into that hierarchy? I think in the first two years of a brand's life cycle, you're spending a lot of time talking about product. When should I consume it? Why should I consume it? What should I consume it instead of all those basic fundamentals? As you start to evolve into a bigger business, North of 50 million, North of 100 million, tracking for a billion dollars of revenue, your talk track really moves from product, which is very primitive and basic to brand. You start to ladder up to a more emotional place. You start to create stories. You have a narrative that's visceral, that's emotional, that connects with people at the heart level. And if you can transfer the consideration process from the rational brain, where you process price and commodities and product ingredients and get into that heart space, you can charge any amount of money. Steve Jobs would tell you that, Elon Musk with the Tesla would tell you that. We crave building a world-class brand that has badge value, that has crave ability, that has personality, and the product is a sort of entree. It's an entry point. For now, we're very focused on it. Protein and popcorn, protein and chips, but we eventually will be talking less about the product and a lot more about the brand. Yeah, I imagine it makes you feel. I imagine there might be a day, probably no time soon, where a cloud could say, "Well, we're just going to come up with a popcorn without a protein, without anything." And I feel like if you have that, then you really have something. If you don't have to sell the additional functionality, then you know you have a brand, to your point. Yeah, let's take some of the tortilla chips here now. We have- I would start with the nacho. The nacho, okay, good. I have some black coffee next to me too, which is, as everyone knows, a great pairing with tortilla chips, specifically nacho tortilla chips. Let's try this first one. ASMR. You know what's great about this? There's no compromise. There's no protein notes. You don't taste the protein at all. It just tastes like what you said it was going to taste like. That's also how you know you have a winner. I mean, if you're tasting you're like, "Oh, it's gonna taste like this," and it tastes nothing like that. You know, who's gonna buy your products? I mean, maybe your mom, but, you know, other than that, nobody else. The next one is sweet heat. Sweet heat, all right. So big trend at the moment. Sweet heat has become a, or swicy, is another way of saying it, it's become a very popular subcategory, particularly in chips. We have tried to err on the side of slightly more heat, so you're gonna feel it in the back of the throat. It does build. And I think what you're delivering here is a beautiful packaging graphic. For your audience, it's a purple pack that is a gradient. You see the image of the product in the front. It's a gorgeous looking package. There's nothing else in snack that looks anything even close to this. We're really pleased with the design. But then you get the sensory, the flavor, and it hits you on the back of the throat, without compromising on that sweet undertone at the beginning. Why is it called protein chips, as opposed to protein tortilla chips? - It's fit on the line. - Okay, that's simple as that. - We also have the picture, so it's illustrative. - Okay. - We like consumers close that loop. - Good stuff, zero fluff, that's the tagline. You got Chloe's note on the back. She's definitely not on the front, which I think also speaks to the power of the brand and anywhere it's going from here. All right, the last one is I believe the cool, is this the cool one? - That's the buffalo. - Well, buffalo, okay. That's the winner right there. - Yeah. - You feel it? - It got me. (laughing) - It's really good. - It's got a little bit of spice. - I love it. - But a ton of flavor. - Yeah, lots of flavor. That one's coated with the most flavor. I think that's a really good one. - So the seasoning application is different because we have these shipped in, so forgive us, but once you get them at retail, it'll be a different consumer. - Don't change the thing about the buffalo one. That's a really good phenomenal, right? - Yeah. - And if you do, Jeff, I'm going to email you directly and be like, "You really screw this one up." You know, I don't know if you're gonna have a job tomorrow. - Well, these are production samples. They came right off of the line, so this is the finished product. What I can tell you is that we've been tasting them over the course of the last two days here at Expo West, and we found that consumers are falling in love immediately with this product line. Two reasons why. Number one, it delivers on what it says is going to. You feel the flavor, the heat and the intensity in the back are working. And number two, is that they're especially surprised that we're able to take such a highly designed package and deliver on a really tremendous sensory in the back end. It's unique that you have both. The look and the taste. Either one or the other for most brands, in our case, we're delivering it in both ways. Really proud of this. It's launching officially on four at Target Stores Nation wide exclusively. - Amazing. - Are we gonna see these in Starbucks at 10.2? - I think you will. - Yeah. - Not confirmed. Haven't even started the conversation yet, but Starbucks has been very bullish on the brand and is interested in expanding the portfolio. You might see these chips. You might see something different from us. - Do you want more repeat buyers on Amazon? Will this free resource in collaboration with straight up growth will help your brand turn first time buyers into long term subscribers? Download winning the repeat purchase game on Amazon now at tasteradio.com/sug. That's tasteradio.com/sug to start building retention-driven growth for your brand on Amazon. Scaling a beverage brand into major retail comes down to operational readiness. From packaging lead times to co-manufacturing strategy, the details can make or break a launch. In a new e-book in collaboration with Octopi and a Sahi beer USA, industry leaders share what they've learned in helping brand scale. Download it now at tasteradio.com/octopi. Do you need to scale your team faster without compromising on talent? Join oceans for a live webinar on April 20th and learn how leading companies are hiring top global professionals who are ready to grow with your business. Register for the webinar now at tasteradio.com/octions. That's tasteradio.com/octions. - I almost feel like, and I mentioned this before you hopped on the mics, that Starbucks is benefiting from this deal almost more than you guys are, right? I mean Starbucks, let's call it what it is, has been having a hard time. Do you see it their way? Do you see Starbucks? And I know you don't wanna be like, "Yeah, we're bigger than Starbucks." But again, I mean, do you agree with me in that point? - Yeah, so Starbucks is brilliant. They brought in a woman named Tressi Lieberman to be their chief marketing officer. She came from Chipotle with Brian. And-- - Who's their new CEO? Or was their new CEO from like a year ago? - Correct, yeah. And Chipotle did a phenomenal job, I think, of democratizing their digital influencer community and building out a very progressive sort of brand, especially in the restaurant space. And they're applying that same pressure and that same strategy to what they're doing at Starbucks. And so for us, while the distribution was lovely, 13,600 doors in just in the US, 1500 in Canada, lots more in Latin America and the Caribbean that we're now in, it was less about the distribution, it was more about the power of that relationship. They have, in my opinion, one of the strongest, most connected brands, culturally and digitally. And that is the exact point that we would be playing in. Where popcorn can meet pop culture. - I like that. - You think you're in marketing or have been in marketing for a few years? I mean, that's-- - Well, I'm a retired marketer. - Your retired marketer now? - First half of my career was in marketing. Second half was in selling. - I don't know if you can do that. It's like an entrepreneur. Once an entrepreneur, always an entrepreneur. Once a marketer, always a marketer. - Maybe. - Yeah, maybe. (laughing) You know, you've worked with so many amazing brands in ones that are now iconic. And we've mentioned a couple, Vite Coco, Poppy, Coca-Cola, relatively iconic. But every one of those brands, when they started out, made some mistakes. And in some cases made really big mistakes. It seems like everything's been going along swimmingly with cloud, but I gotta think, there've been some hiccups here and there. Have there been and how have you addressed them? Many hiccups. More than your audience probably wants to hear. - No, we want to hear about all the hiccups. You know, everyone talks about the great stories and people learn and get the great lessons from TASRADIO, but every single time I talk to you a very loyal listener, they're like, you need to get some folks on there. We'll tell us the horror stories as well. 'Cause the solidarity is part of it. Everyone's gone through these problems. - Totally. - So the most important position at the company, in my opinion, is not the head of marketing or the head of sales, especially not for a brand that has this kind of momentum and mojo. It's actually the head of operations. Because if the front of the house is moving at an aggressive pace and the back of the house is not able to keep up, then you have a recipe for challenges. And I'm not gonna lie, 29,000 doors within six months requires a very sophisticated operations team. And we were slow to bring on more talent quickly. We did not find the right commercial partners on co-manufacturing and production. And we had our handful of challenges, big challenges. And we had, at the beginning, about two to three months have had a stock, or we call lower stock, where we couldn't fulfill all the demand. In the month of January, as an example, we were only able to get 64% of our total POs out the door. - That's not gonna make Target happy. - Left a lot on the table, right? And so we've now evolved. We've identified a new partner. We've signed a long-term supply agreement. It's with a world-class production partner who has A+ quality and has the ability to scale with us to their 17 plants across North America. We were with two independent folks that couldn't scale at all. So that's one very important lesson. Make sure you hire the right head of operations on day one. And make sure you have the right production partners to scale with you, especially if you're going at this pace. The second thing that I think we've learned, and this is probably the most important lesson for me, is that you don't need to be discounted. We made the mistake, I think, of listening to certain retailers or pushing us to a bargain basement low price because they thought the only way we would get to the velocities that they expected is if we were at a discounted price. And so we took that advice and we went with it. We did not need to do it. As an example at Target, we've pulled back on 100% of our promotions. There are no promotions. We run everything every day at full price. And the velocities are still well exceeding expectations. And so we over-promoted and we under-delivered. And so we had some pretty real challenges. That created big time out of stock issues that we are now just finally recovering from. And I can probably give you 100 more. But over the course of the last seven, eight months, we have scaled very, very quickly. And we've now commercialized, I think, an A+ partner for manufacturing. And we brought on an A+ team to support our operations. >> Every single time I talk to an entrepreneur who's scaling their brand very quickly, they talk about operations as being critical. And I was just talking to the founders of a brand called Protein Pines, which is a really great company led by these two young guys. And I asked them yesterday, I mean, how are you managing the scale at which you're growing? Because they went from 14 stores to over 10,000 stores in 14 months, or even less than that. They talk about operations, operations, operations. Because clearly, you don't want those out of stocks. Clearly, you want to be able to forecast demand and have that kind of lead time to fulfill all the orders that are coming in, to demand planning and generation, et cetera. They go hand in hand. But I'm glad you talked about that. Because even for an early stage brand that's babies is in 29 stores, as opposed to 29,000 stores, you've got to keep an eye on operations. And hire the right people. >> That's right. >> Yeah. >> So you speak about demand planning. In the month of December, we had a plan, forecast, demand, we exceeded by almost 3X. In the month of January, we exceeded by 2.4X. The month of February, we exceeded by 2.7X. That's exciting for an investor. It's horrible for an operator. Because we are underprepared for the volume that the consumer is demanding. And so there are a lot of things we have to go fix to make sure that we are not in a position where we're playing from a defensive standpoint. We want to be playing from an offensive standpoint. Skates where the puck is going to be, right? And we have not yet achieved that. So we have two months, this calendar year, one last calendar year, three months in a row, where we have failed to deliver 100% of the purchase orders that have come through. That is a real problem, maybe just short to think about our growth. And to go from launch to 29,000 dollars is going to require quite a bit. And that level of operational sophistication is being built, as we speak, and we're really, really proud of the team we've established. For a simple tin like me, there's a simple answer to say, "Probably, say no." Why not, you just say no? Two of these retailers. Good question. So you could say no. But then you run the risk that there's a two-year delay before you get back in. So what we're trying to do now is very quickly build our supply capabilities, increase our points of distribution responsibly and smartly, and take on channels one at a time. So the typical strategy is you start in natural, then you evolve to grocery, then you go to mass, then you go to club, and then your last stop in the train would be the C-store channel. For us, we launched with Target. So we went mass on day one, and now we're working to get grocery up and running. We're working to get natural up and running. We're just launching a fresh market, for example. And we haven't even launched Whole Foods yet. So we have a lot of work to still do to retroactively get the train moving in the right direction. Yeah. All the celebrity endorsement with all the Instagram mentions, all the social media content out there, they're going to be people in stores who are not part of the demographic that are paying attention to the Kardashians. They're going to be people that are a great fit in terms of customers for a cloud, and you've got to have people in those stores. And your ground game seems like it's going well right now. But how do you prepare a ground game for a year from now? Is that something you even think about? Yeah. So the question we're debating at the moment is should we continue with a direct distribution model, where we go in through warehouses, retailer warehouses, or should we identify a DSD partner? My training in beverages was always DSD. Right. So you have a KDP, Coke, Pepsi, Frito Lay, UTS, whoever it is, a big national partner, and you scale through them. They have account people. They can help you with in-store merchandising. They can serve as real partners. Other option is you build it yourself. And you go warehouse direct, and you have merchandisers that are either third party, relentless advantage to any step resorganization or others like that. And you build that an army of people internally who go store to store. We have not yet made that decision. We've been approached even at the show, Expo West, by all kinds of big national partners who have seen the value of what we're creating and want to participate in the upside. We just don't know yet which direction we're going to go. We're still evaluating. But I think back to your earlier question, the answer to me comes down to a single word, it's discipline. So it's easy to say yes, it's much harder to say no. And we have been very hesitant to launch in certain places. As an example, Costco, the club channel, about nine months ago, came to us with multiple regions and an authorization ready to go, asking for buy docs. I have lots of examples of regional buyers from Costco that said we're ready to go right now. And we waited a long time to re-engage in those conversations. I don't know yet what we're going to be launching the club channel. For now, our focus is on winning in the current $29,000. We have plenty to chew on. Good news is that our current velocities are well outpacing expectations. I look at the target example. Our dollars per TDP in the most recent 24-week period are outperforming every other salty snack at target. 100% of them, including Doritos and Fritos and Pringles and Lays and all the big players. And what's more interesting is that 80% of the consumption is coming from folks that are new to the category of popcorn, meaning that we're bringing in a new generation of snackers. People are new to the category of popcorn. Correct. This is a numerator file. Happy to share it with you guys as a follow-up. It's a pretty impressive, fun fact. 80% of the folks that are buying cloud at target are buying popcorn at target for the first time. That's, yeah, my mind is long. I don't have to say about that. It's very strange, but it seems like the opportunity is humongous then at that point. It seems like it's almost like Poppy, right? I mean, for all the consumers that weren't drinking soda before, Poppy became their first soda. Exactly the same thing. Yeah. Yeah, very interesting. What else is amazing is your PR team. Cooper Consulting over here is also a world-class organization. Absolutely. And Rachel and her team are just doing an amazing thing. Obviously, for all the praise I give this team, I think it really matters. PR is important. And making sure that you're sending the right message out to the right audience is critical. When you're looking for PR help and support, what are you looking for? How do you know when you found a partner that can deliver on what you need to do, particularly as an early stage brand? So PR has completely changed. 10 years ago, 15 years ago. PR was writing a brief and then pitching it to 15 editors of long-lead magazines and maybe local morning radio and local morning television and radio. I know it's the podcast. We're going back. This is digital radio. It's my goal involved. Oh, I see. XM. And today, it's as much about the influencer and about the digital social apparatus that you're building as it is about those original outlets. So the way that we approach PR is very different and I don't think we're necessarily looking for a traditional firm. There are plenty of traditional corporate firms that represent PNG and Coke and Kraft and Nike and they can do great long-lead outreach and that's fine. But what we're more excited about is somebody who can take our content, amplify it in the appropriate way through the right digital channels and reach our next generation audience. Remember that we're not talking to grandma. We're talking to Gen Z. And because we're talking to a younger consumer, they consume media in a different way. So we have to have a Rachel Krupa who understands how to translate corporate messaging. It's written in a brief to much more dynamic conversation messaging that resonates with a younger consumer. We go back to the fun fact about the 80% of folks at Target. They don't necessarily read the newspaper and they're probably not watching a lot of TV. And if they are, it's probably YouTube TV or some sort of a non-linear format. So how do we engage and connect where they are? You do the next generation PR company for the next generation brand. >> Exactly right. >> All right. Jeff, thank you so much for taking the time. I know how busy you guys are. >> Thank you. >> And I really appreciate you sitting down with me today. Really excited for Cloud and really excited for the Toyota chips. >> Please send some to our office. >> Yes. >> I can leave a little dumb in mind and not share with any of my teammates. Especially the Buffalo one. >> Good product, isn't it? >> Really good product. >> Yeah, yeah. Once again, thank you so much for the time and I look forward to staying in touch. >> Thank you. >> 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. Our technical director is Joshua Pratt, and our video editor is Ryan Galang. Our social marketing manager is Amanda Smirlinski, and our designer is Amanda Huang. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues. And of course, we would love it if you could review us on the Apple Podcast app or your listening platform of choice. Check us out on Instagram. Our handle is Bevnet Taste Radio. As always for questions, comments, ideas for future podcasts, please send us an email to [email protected]. On behalf of the entire Taste Radio team, thank you for listening, and we'll talk to you next time. 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 departments that we work with CPG brands, taking them from spreadsheets, putting them on inventory management systems, and really help and 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 us? 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 place holders to just get rid of it so it's not an eye sore, 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. And 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? - Really at any time, you should be able to know an accurate margin. It's amazing how many founders wind up talking to that they can tell you their revenue numbers, they 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. 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 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, believe 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, and 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 the first thing they're going to look at your books and are they clean and do 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 SIN7 or a Net Suite 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 finished 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 think you are. - That sounds like excellent advice. What should a founder or somebody running a brand look for in an outsourced accounting partner? Like are there 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 Belae 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. (laughing) 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. - Mattlin, inventory accounting, Guru, it belays 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.