Melissa Travers [00:05] Hello, and thanks for tuning in to the CPG Operator podcast. I'm Melissa Travers, director of community at Bevnet CPG Media, and the CPG Operator podcast is our How do I Build this series where we share practical advice to help CPG brands build stronger businesses. What happens when ingredients costs more than double, Suppliers have bigger customers to serve, and major retail opportunities put new demands on your business. How do you protect the quality of your products, your margins, and your ability to grow? Together we are bringing together two founders at different stages of growth to work through some of these challenges. Joining me is Lauren Cassel, founder of Sweet Lauren, who has spent more than 15 years building a Better for You baking brand, expanding from cookie dough into many new products and categories. We're also joined by the co-founder of Pepper Tux, a hat caskerloo, Pepper. Tux is a growing pistachio brand making everything from spreads and creams to snacks and sweet treats. So Pepper Tux is navigating the growing pains of scaling a brand, along with the ingredient, cost, and sourcing challenges that are facing the industry today. And Lauren is here to share what she has learned while building Sweet Lauren. Well, thank you both so much for joining me on the CPG Operator podcast. It's so great to have you here.
Speaker 2 [01:30] Happy to be here. Thanks for inviting us.
Melissa Travers [01:32] Why don't we start with you, Ahat? Can you give us a quick picture of what Pepper Tux is, what it looks like today, and how the business has changed over the last couple of years?
Speaker 3 [01:45] Yeah, for sure. I mean, thanks for having us again. Uh, Pepper Tux is, uh, we call it the modern pistachio Company. We're trying to find innovative, more fun ways for consumers to consume pistachios. And it comes in a jar, it comes in a bottle, it comes in a box. It can come in whatever format that we kind of feel like it's the best thing for the consumer to consume. And where we are today is, you know, we were a happy little brand selling in natural markets and we were having the best time of our life, you know, when somebody came and asked for a quick little TPR, we used to give it and no pressures. It was a unique item. Everybody was happy about it, but in the past couple of years we started launching with a lot of conventionals and the likes of Target, so the volume all of a sudden exploded. I might even call it overnight. And then we had the external good guys or bad guys, depending on how you look at it, food trends that impacted our business like the Dubai bar. Uh, that put a lot of pressure on pistachios, and everybody all of a sudden now overnight wanted to eat pistachios. So now we're, we're right at that stage, you know, how can we find better ways, continue to find better ways for consumers to consume pistachios, but also every single product we put out there is actually a promise of how clean it's always always going to be, how beautiful it's going to be, how delicious it's going to be. How can we maintain that balance, and especially now in, in 2026, 2027, while everything seems to be uh going through the roof, how can we mitigate these issues? That's right where we are in the thick of it.
Melissa Travers [03:19] You know, on the one hand, the challenges that you're having can be seen as a positive thing because they are what come with growing, but on the other hand, it's still hard. So hopefully today we can get into some of that and brainstorm some ideas together, and I do want everyone in the audience to know if you haven't tried pepper tuxes, creams, and wafer cookies, you're doing yourself a disservice. They are incredible and amazing, and you should. Run and find them immediately. Well, Lauren, thank you so much for joining us. And when I think of, you know, iconic brands, brands that totally change categories, Better for You cookie dough was something that I just don't remember seeing before Sweet Lauren. You guys started with cookie dough and you expanded into other baking products, snacks. Can you give us a picture of the business today and again how it's evolved?
Speaker 2 [04:12] Yeah, so we started with refrigerated cookie dough, just trying to recreate really what I think is everyone's favorite food, like a warm chocolate chip cookie, and trying to do it so that it still had delicious decadent taste, but really like such a simple clean ingredient list and also um be free of the top 9 allergens so that we could kind of feed everyone that probably felt like the conventional products on the shelf weren't, weren't good for them. And so we really wanted to take, just like, you know, you guys are the modern pistachios. We really like the modern baking brand. Like what is that modern consumer who probably really wants to be healthy, but at the same time loves good food, is also stressed for time, wants convenient products, um, but still wants something warm and fresh and delicious for themselves or their kids. And so, started with cookie dough. And really just listened to the customer and really focused on that for over a decade to really make sure the packaging was right, the recipe was right, we had the right flavors on the shelf, and I really say it took that long to really figure out what was going to work with not just the natural channel, but mainstream grocer to really compete with the 800 pound gorillas that are on the shelf right next to us. And then You know, once cookie dough really got off the ground and became the #1 natural cookie dough brand on the shelf and actually we're the #2, you know, refrigerated dough, you know, brand now, we've started to kind of outpace um some of the larger companies and major retailers. We thought, what's next? Our customers can't have cookies for breakfast, lunch, and dinner. What other products would they also love that are incremental to cookie dough? So puff pastry was our next product, so refrigerated puff pastry, that's super easy to use for savory or sweet items and then we again are listening for what's next. So we just launched these oatmeal bars, these refrigerated oatmeal bars that you can just throw in the oven or toaster oven or air fryer in less than 10 minutes have something warm and fresh for breakfast or a snack that has 6 g of protein and 3 g of fiber and And then we also launched a refrigerated scone dough, and we have a lot more products that we're working on that will launch next year as well. We also have a shelf stable item, a breakfast biscuit. So if you're on the go and don't have time to bake, you can throw that in your bag. So we've tried to be really, really smart about what innovation we've launched.
Melissa Travers [06:37] You know, the air fryer, what a, what a great idea. I hadn't even thought of that. Lauren, thank you so much for that background, and I'm sure that you've already worked through a lot of the challenges that Aha is experiencing now. One of the first challenges that you mentioned to me when we were getting ready for this call is something that I think every CBG brand can certainly empathize with, and that's ingredient prices. They are going through the roof. I think you told me that cocoa butter prices more than doubled, pistachio prices have been a big challenge. What has that meant for Pepper Tux financially, and what are some of the difficult decisions you are making right now?
Speaker 3 [07:17] Just to address the elephant in the room, margin, margin is a big problem, you know, if you know your margins, and I hope you all do, uh, it's, it's a humongous pressure on your margins, uh, because you can't go back to your distributors and retailers and say, hey guys, by the way, I'm going to be increasing my prices because of ingredient costs, and then your shelf prices start looking. higher and higher and higher again, you have to think about your margins and your velocities. So when we first got into using really high quality ingredients to make these products, we knew that that was going to be the hero, that was going to be the hero messaging, you know, we don't have a cheap whole milk version, and we're just Using cocoa butter because we want that very indulgent, um, indulgent palate feel, and we really want to make it accessible to a lot of people. Having a vegan spread was really not that much heard of, unless it's like a very vegan spread in a nut spread, you know, everybody was slapping on. Milk, we don't want to go that way. When buying pistachios, pistachios are like an ingredient where you can immediately tell if it's good or bad because green versus brown, and green means amazing and brown means not so great. So if you use, and we have 100% pistachio butter, if I were to change from that green to the brown, just like that, they would, they would pick up on it. So our biggest fear was that we would alienate a lot of our customers if we were to just do a price increase. Or B shift the quality in such a way that it would be uh detrimental to the product. And, you know, it's, it's so interesting for us to learn, obviously, because we're, we have 6 or 7 skews and uh we're growing, but this happened last year and it's still happening. So we're growing with the snacks and all, but, you know, even with 6 and 7 skews and we have these ingredients costs going up, it is so interesting for us to try to understand, you know, what can we do? And when you have multiple ingredients, when you're getting into snacks, now you're buying. Uh, real Belgian chocolate. Now you're buying flour. Uh, so how can we improve our efficiencies? And what we really quickly wanted to do as a novice brand was, you know, make some promises. I'm, I would, I would be very scared of committing to a certain number, 2 years ago, but now I can clearly say, OK, I'm going to buy this much of pistachios, and that tends to lower the price. A little bit same with cocoa butter, same with the flour, same with, but I'm like forever curious to try to understand if there's any other ways that we can use in our back pocket to go to these ingredient manufacturers and ingredient providers and tell them, you know what guys, like we're going somewhere, cut us some slack, give us a break. How do we get there?
Melissa Travers [10:06] Lauren, I see you nodding over there. I would love to hear what you think.
Speaker 2 [10:11] Yeah, I, I mean, listen, at any stage growing a business is, it's hard just because we're maybe, you know, been around longer and are bigger, you know, we're still dealing with the same issues. I think the levers we've been able to play with because we're both like, you know, chocolate is a major ingredient that we use, you know, in our top, you know, selling cookie dough. And so, you know, when those, you know, chocolate prices, cocoa prices double or triple, I mean, You know, there's only so much we can take. And I think for us, what we do is, you know, do you have to do a price increase? Like we all look at that and I think we all probably on the higher end of products, right? Like we're not the cheapest thing on the shelf, but I also don't want to outprice, you know, ourselves to a point where you become too specialty. And so, you know, you have to figure out what that middle ground is, but at the end of the day, like, if we don't have a healthy margin, I don't have a business. So, we always, you know, If it's a price increase that we have to take, we don't want to do it, but it's really just to protect the business. Or if there's a way to, well, chocolate's gone up, but it's not forever, and so for the next year, let's really work on a different ingredient that we could bring drastically down to cover it. And, you know, and, and as long as we feel like chocolate's just not triple the price forever, maybe there's a year or two that it was, it was hard because of droughts or, you know, the supply chain, but Then, you know, we can just kind of keep watching the market and be able to buy a year contract because again, we know our business better that we can predict what we're going to use for the next year and be able to buy when it's, you know, a lower number and it feels like our margin is going to be, you know, more protected.
Melissa Travers [11:53] Can I ask both of you actually, what do you think about the price of cocoa? Do you, are you thinking it's gonna be 3 years and then maybe it'll come down, or where, where do you fall there?
Speaker 3 [12:04] From my perspective, I think it's in a place where it's happy right now, uh, and a lot of, I don't wanna, I don't want to name names, but a lot of people started using uh Uh, compound chocolates versus real chocolate. So that gives us a lot more room to play right now. These, uh, these, I don't know, for us, because we're small, when we go to a supplier, they generally like shrug, and, uh, but now because a lot of people are not buying these anymore, they welcome us with open arms, which is a great, great thing to have. So I think we're going to be in a place where it's going to stay flat for a little while so we can take advantage of that.
Speaker 2 [12:42] Yeah, I was going to say the same thing. I mean, of course, we were offered compound chocolate and, you know, not real chocolate, and that's just not our brand. Like we're all about real ingredients, really decadent, delicious, high quality ingredients. So, you know, we would never cheapen the product that way. You can taste the difference, right? If you're someone who really pays attention to high quality chocolate. So, but yeah, we've definitely, we feel like it's, it's flattened out. We're, we feel good about the pricing that we've secured for the next year and And you know, I, I think like, just like coffee has also risen. I mean, I do think that things like chocolate and coffee, if, if you love them and it's your daily treat, like, you know, you're, you're not gonna be happy paying triple, but like if the price goes up 15%, you know, can you swallow it, can you handle it? Because, you know, there's certain things that just, you can't replace those with and they're your favorite parts of the day and You know, sometimes like a coffee and chocolate, those are like the treats that kinda Give you, you know, they, they make the day OK no matter what happened, um, so it's, it's hard to just, you know, say pricing is going to affect it so much.
Melissa Travers [13:53] I have another question. We're in an inflationary environment, you know, we kind of have been in an inflationary environment for, I don't know, 3 years now, and I know that there's been a round of price increases that brands took. I don't know, I'm sure they're still taking them, but do you have any thoughts on what the the timing, the best timing for a price increase, especially taking into consideration our current economic situation?
Speaker 3 [14:21] For us, it's generally tied to the pistachio harvest, coming into the harvest and harvest happens in August. Prices and wonderful dictates majority of the prices in the US and there's some foreign players as well, but they all come out in September. So for us, if we're smelling that the, the price is going to be going up, and there are some indicators that show that. We generally tend to make an internal adjustment to see how big of an impact it will have on our margins, and I think from an increased pricing standpoint, we all have our hands tied to a certain level because we can't go and say, you know what, tomorrow, starting from tomorrow it's going to be 859 instead of 799. We have to give distributors, retailers a big runway. Uh, and then also get, get approvals from them in a, in a way where they would, they won't say, well, you know what, I'm going to go look for the next best guy, that's cheaper. Um, so for us, I feel like the best time to do it would be Q4, generally, because the market is in a chaotic environment, tiny little price increases tend to get overlooked and everybody's looking for surprises and gifts and everybody's more jolly, so it tends to do a little bit better versus like in January when people are so focused on. Better life, better living, better budgeting. It grabs more attention. So I would say for me because of September harvest and then Q4 ripe, being after and it's a high market, if you adjust your margin, even a couple of price points, you will save a lot more because the majority of people's revenue, including ours, happen in Q4. That's the best time for us in all. But that being said, if, if I may, we launched this business like 5 years ago and we only did with everything like COVID. Pre-COVID, post-COVID, inflation, this, that, we only did a price adjustment once. So, and that was single digits. We really, really try to protect our customers. Our initial margins were absolutely amazing and we were super happy with them as they started getting the pressure. We started doing these contract buys to protect it a little bit, but our number one focus is definitely the customer because no customer, no business in our minds.
Speaker 2 [16:33] Yeah, and when you have one ingredient that's so, uh, you know, your whole business is dependent on, I mean, it's really everything. And so, to know like how high is too much with the price point, you know, how much, you know, margin you can really handle and how, you know, how to build those, the best relationships with the farmers and, you know, to have options like, we, for instance, use a lot of oat flour in our products and There's, there's, and it's gluten-free certified and so it's a very kind of specialized oat flour and, and so, you know, it's not, there are, there are hundreds of oat flour producers out there, but there's really only a handful that fit like our taste, our spec can produce at the level we want, you know, that are safe for all, so. Anyway, I think like we've just spent the last decade really building relationships with several farmers so that, you know, we feel like we've an ABCD, you know, so that just in case our number one producer has a crazy drought, you know, or, you know, you know, it doesn't just take out the whole crop and we're, you know, we're scared about the quality that we're going to be able to get. So, yeah, when you're really dependent on a certain ingredient, it's like super important, but I think that's great advice, you know, too in terms of the price increase, like we I would say, you know, we've only done it a couple of times. We, we feel the same. We really try to keep our product as accessibly priced as possible, but also knowing that we have really high quality ingredients and, you know, that we're saving people a lot of time and money if they were to buy all these ingredients from scratch. Themself and then baking and so, but again, we have to have a healthy business in order to maintain the quality and, and the growth. So, um there's always that balance. But yeah, I think before Q3 and Q4 is holiday time, that's really when people are baking the most and I think That we've seen success always doing, you know, if we had to do it kind of September, October, right before it kind of begins because also there's a bunch of promotions that happen throughout the holiday time. So again, it makes maybe some price increase, you know, a little bit easier to swallow and also, you really, there's a real need for the product. So the price is raised, you know, a certain amount. Hopefully, it's not too distracting that you're still going to buy it for your holiday dinner or having friends over and really only doing a price increase when it's like Uh, uh, you can't argue with it. It's like chocolate prices have, you know, risen by 300%, you know, like, I, I, we got to figure out, you know, how we, how we handle this, you know, it's a business that buys, you know, millions of pounds a year and, you know, really tries to use the highest quality. So,
Speaker 3 [19:07] I mean, that single ingredient risk is crazy. And one thing we, I don't know if you agree to this, but I just love to pick your brain on this too, because we, you know, when we launched, we launched with products that had 100% pistachio or 80% pistachio, really, Really, uh, low saturation when it comes to anything else. And then we launched our pistachio cream that kind of created the brand Pepper Tucks by itself that had 50% pistachio. And, uh, you know, we were probably using Turkish pistachios because they're the best in the market, but there's some additional risks, uh, global commerce and trade risks and logistic risks, anything can happen. Uh, so now we got into a path where we're, for example, with our drizzle, we're using American pistachios. So the pistachios are sourced from California and we wanted to kind of mitigate the risk a little bit like this, not put all the eggs in the same basket, and for the snacks too, we're doing the same now. We're using a lot more California pistachios and we're We have an understanding that we should be going in that direction where if you're launching snacks, it will have a lower percentage of of the pistachios because it's not going to be that pistachio heavy. It will be one element inside the products versus and then supported by chocolate and wafer and other things, and we kind of feel like that's the direction for us to go to mitigate that risk. What would you say to that?
Speaker 2 [20:27] I think that sounds really smart. I mean, I think we always, when we're, when we're a founder and inventor of products, you're trying to create the best story and the best sourcing and the best product, and then you start to build the business and you say like, I, this has to be a certain price point. I have to, I want, you know, less things getting in the way of this, you know, hurting. The cost of the product or even just the product getting to our door, you know, so like the farther that ingredient is away from your home, like, the more gas prices are going to affect you and fuel prices and just the chance of that, like the, that boat that's bringing it over on the water and it takes 6 weeks, somehow gets stuck, you know, at the dock for another 6 weeks, and these things happen all the time. And so all of a sudden you start to get just more real, like trying to be more strategic Strategic and realistic about how to build like, just like a more simpler business where you have your hands more wrapped around it and less issues can pop up and then you can sleep better at night and, and then you start to think about it, well, I love the idea of like a more local product. Like, why wouldn't I love California pistachios versus, you know, importing them and, and kind of like the waste of that. And then why wouldn't I want to support American farmers and, you know, our economy more and You know, all of a sudden there's like a different story that you can kind of fall in love with. And also, I'll just say too, I think it's really smart that you're moving into, I haven't had your product yet, but I'm excited to try it. Like a wafer, like something, something that someone can't make at home. So, you know, if it has 90% pistachio ingredients, not that people are making their own pistachio butter, but like, You know, the more you can add this like super interesting complexity of the chocolate in your special wafer and something that someone can't make themselves, I think that creates this very unique product that, you know, is going to be, you know, worth them spending the money to buy your product. And, and then it's harder for someone else to come in and replicate it too, because someone else can do a pistachio spread probably much easier than some really unique treat that you've
Speaker 3 [22:32] created. That's right. Great point. Yeah, thank you. I wrote it down.
Melissa Travers [22:37] I mean, you guys are on fire. You've had major launches with ATB, Target, Kroger, Albertsons. You're also signing ingredient contracts sometimes a year out. What are some of the challenges that you're facing when it comes to forecasting ingredient contracts, but also managing cash flow?
Speaker 3 [23:00] Great. I mean, this can be hours and hours, hours of uh Therapy time, it's, it's a, it's a major problem. Uh, it's growth is amazing and it makes you happy, but it also creates its own problems. It's a whole different animal. Uh, for us, you know, growing this much in this short amount of time with a product that is expensive to make and maintain. It was definitely a significant pressure on the business and before March of this year, we were 100% founder owned and we didn't even raise any money. So that that's one thing that we had to really quickly discover, but, you know, we were so blindsided by, by how this thing was going to grow. We didn't have a clear roadmap or a, or a, or a platform to kind of, we didn't create that platform to know how we would act when it comes to raising money and while running the business and bringing that cash flow and we make the product, we put it on a ship, we leave it in the warehouse, it sells really well, but we get paid 30, 45 days later. How do you maintain that gap while you're also growing, uh, 500 doors every month? It was a major problem and we had to really quickly and and Nash team has a major, major impact on this too, because we met our leading investor at the Nash Live event last year in December, uh, which was amazing. Yeah, during the coffee break, it was like the best thing ever. So we had to really jump on it and raise those funds really quickly as a safe because we didn't want, we don't want to go through like a proper Series A. We were too early for a Series A, too late for a seed. Uh, it was, it was in a weird place, so we wanted to do really quickly a bridge, and we took all that money. The glamorous part of being a startup founder is having all that stock behind you and just leaning against it and living, living the dream. So that's what we did. We really tried to build. 30 to 40 days of stock when it comes to planning for these uh forecasting for these um for these big launches. We also had to uh invest in some tech stack uh when it comes to how can we really forecast better, how can we know, because it used to be all Google Sheets, like everybody starts that way. Uh, OK, we have this many of this product, we sold this many, it's like you do a quick pivot and you do a quick macro and all of a sudden voila, you have something of a forecast. We have to take that more strategically and, um, you know, we always want to know how like larger brands like Sweet Lauren, like Lauren, how do you guys manage all that with all the ingredients coming in and Uh, so many doors happening, so many skews indoors, like for our advantage, we don't have that much depth in retailers. Max we have is like 34 skews in a retailer. How do you manage having multiple SKUs, multiple sets, what's coming in, what's going out, and it's, it's uh, for us, honestly, it is coming to a place where it's getting really sophisticated. And thankfully we raised the money when we raised the money because the growth is still happening. We launched Albertson's, we launched Kroger, we launched HEB, and for example, in the case of HEB, we chased after HEB for years, like, like everybody else does, you know, we were selling with Central Market for years and we thought, oh, we'll sell for Central Market for 18 months and they will just grab us. It didn't happen that way. We kept pitching and pitching and pitching. It didn't happen, but when it happened, March 1st week of March during the expo. Uh, we received the email saying that they want the products, but they wanted it by the end of March. So how do you, how do you manage that? It's a, it's a crazy timeline and you have a lean team, lean inventory, uh, lean money. It's, it's, uh, it, it created an amazing blessing, but also a chaotic environment where we had to fight through every single battle.
Speaker 2 [26:56] Uh, definitely, and I think every fast growing small brand will say, Like these are good problems to have, but it's, it, you literally feel like you're like a chicken with your head cut off, cause you're just, you're, you're just, it's so much to juggle and manage, and you also so much adrenaline and excitement because, you know, your dreams coming true, you're growing, you're getting into these retailers, um, you have to pull off magic, and I think I think, you know, it just sounds like you have a small scrappy team that's able to do that, and I think that that is the beginning of what you need just for success and, and so many brands don't even have that. Like they just don't know how to build that small nimble team that can kind of say, OK, this is crazy, but HEB placed an order and it has to be ready by the end of March. And instead of complaining, let's just figure it out and we'll get through the kind of major growing pains. I think like we went through all of that. We, you know, we had a very small scrappy team and, and yet like, things like that would happen and we would just figure it out. When I got into all Publix and all Kroger's supermarkets in 2016, just overnight, we went from a small Northeast. You know, local brand to really nationally distribute it, all doors and, you know, they, of course they asked like, do you have national distribution set up, you know, before we say yes, and of course I said yes, but we didn't. And then once they said yes, it was like, guys, go, like we need to figure this out. And, you know, so I think like it's a constant work in progress, especially because like our original factories were more on the East Coast and now we have a handful of factories spread all. Around the country and so, you know, different warehouses have been opened up now and, you know, to feed different factories and now we are sold in all the major retailers. We're in over 30,000 grocery stores. So our business, you know, there's not that many more retailers to get into. We still need to get into big box. We still need to get into the rest of Walmarts and there's a lot of food service that we want to grow into as well, but You know, so that's we've been able to at least say I know we're launching new SKUs in each of these retailers and the velocity is hopefully continuing to always grow, so it gets more complicated that way, but like, you know, we've been in Target, let's say for several years, you know, so there's, we can predict it more and Yeah, we got, you know, and, and, and again with AI and like so much software available, like, it really should get easier and easier for us all to like be able to protect the business more and not mean that you have to hire, you know, eventually, like obviously we have a very good VP of supply chain who really manages this. But you know, he's only been here the last 3 years, like we didn't have someone at that level before.
Melissa Travers [29:39] I would love to hear from both of you actually. How are you using AI in your day to day business, whether it's operations, marketing? I
Speaker 2 [29:48] mean, we're figuring it out. We actually are going to hire someone in-house, like full time to help with AI in all departments because what I find really interesting is I have some founder friends that are in the tech industry and AI and the technology just become, is their first language. Like they just, they love it, they speak it, they play in it. It's just how they're wired, right? Whereas in CPG it's like most of us are much more like old school, we're we're not tech first, we're more like product first and sales, and like I can't change that about, you know, our team, but I can help them by bringing in a specialist so that they don't feel like they have to learn AI. By themselves along with their day job that's already so busy, um, and so if we can have, if we can figure out how to build the right dashboards and put together the right systems for each department. Um, I think that's like stage one for us and, um, and then we'll go from there. But, you know, I think like we've used it in the past couple of years really for more marketing and like social listening of, you know, who's like maybe using our packaging online but not tagging us, like how could we find it, you know, new. Products, really like figuring out what innovation we should launch based on all of our consumer data that we have and kind of the white space available in, you know, the refrigerated section and where else we could grow and things like that have, have, we've done for the last couple of years, but there's so much more we could do and, you know, so we're, we're trying to figure that out for, for ourselves.
Speaker 3 [31:19] I mean, we use it for mainly ops and financial modeling, um. Because we don't have a portal where we can see everything together, we have, instead of creating manual processes of POs coming in and then build orders and pack lists going to the warehouse, etc. we try to automate it with AI to a certain extent and What we do is we, the data that we buy, the syndicated data that we buy, whether from Nielsen or Spins, we try to run the scan data through AI for insights because this actually is a job where you would really need a skilled analyst that knows what they're doing. But AI tends to give those snippets enough for a founder to be able to make sense of it. Normally, maybe it wouldn't be that logical, but I have a bit of a background in data, so we can, if we can have AI. Take out those snippets, visualize it a little bit better. We have some success with that, so we can see the clean, the white space and we're launching products in such a way that we want to go to the white space where we know that we have a higher chance of um success. So we use AI for that. We uh Use it to read the social space, obviously to see what's going on with Pepper Tuck is there a buzz, what's, what are being posted, us versus everybody else, and it's in the places where we're not even letting it walk. We're probably just like a little baby crawling, but yeah, it's very important. I know brand owners and founders that use AI to a place that they would, they would create dashboards and Somebody told me recently that they would have to hire 3 people if it wasn't for AI. They're using AI so efficiently. So yeah, it is, it's, it's major. Nobody should be overlooking AI and or just minimizing it to a place where you ask a question, get an answer, ask a question, get an answer. It can do a lot more for you. Like the work that I've been doing on Excel with AI last year versus now, oh my goodness, like it's, it's, it changed drastically. Um, so yeah, I mean, we're going to be on it.
Melissa Travers [33:24] I wanted to focus in on one of the components of aha it's your original question about forecasting, and you know, if AI could help CBG brands with that, I feel like that would be a huge win. Lauren, I wanted to hear from you. I mean, I kind of heard you say if we got the account, we would sort of just do whatever we had to do to get it out there. Do you have any tips on forecasting in an environment where it's almost impossible?
Speaker 2 [33:55] In the early years, our VP of sales was so like married to the business, and it wasn't so complicated yet, like maybe we're in 10 retailers, so like, even if some of them were really large, you know, you could, she could guess the business, like almost to the dollar, we were able to predict our business for a couple years, you know, and then you kind of get cocky where you're like, oh, like. You know, I, you know, we know our business so well and whether it's competitors come in, even if it's just like, it's a blip, like they come in, but they don't sell that well and then they're gone next year, um, you're, you know, it can mess with your shelf space, the amount of products you're going to get, you know, are you in the middle shelf? Are you on the top? Are you on the bottom, you know, a really good human can only do it for so long, and then I think you have to start really relying on systems and And using AI as much as possible and just really studying each retailer because it's a different beast, you know, each retailer just has different promotional strategies that move volume in completely different ways, you know, you're going to do really well in certain retailers and other ones maybe not as well, and, and it's like hard to understand exactly why. And so I think just really taking each retailer as if it's its own business and start to just kind of map it out as opposed to clumping everything together. And then I think you can kind of start to predict the business a little bit better and especially as you, and then just being like obviously having some extra inventory so that, you know, if your promotion goes incredibly well, like you can take advantage of restocking it, you know, and being there. Like for instance, during COVID. We couldn't predict our business, but, you know, everyone was, was going into the grocery store to buy food, you know, for their home and their kids, and cookie dough was a perfect product to kind of keep families happy and to keep kids happy, and people were looking for kind of healthier options because COVID really raised our awareness on that. But what sold out first were the big guys. It wasn't our brand that sold out first, but because we You know, have inventory at our fingertips. We were able to restock and restock where a lot bigger brands can't restock that fast. And so we were able to keep product on the shelf. So when the big guys were, were, you know, at an empty shelf for like a week at a time or several days at a time. We were restocked and a lot of people were like, I guess I'll try this brand. I've never heard of it, you know, and that trial got us a lot of new customers, millions of new customers, because they tried it, they had a great experience and now they're a loyal fan. Um, but you know, it's because we were able to kind of just restock quickly and so I do think when you're a smaller brand, you can, you can have these superpowers that can help help make you compete with the bigger companies.
Speaker 3 [36:48] Yeah, and then people call it luck, but I call it perseverance. It takes a lot to be ready to scale like that when you need to, or be on the shelf when you need to.
Speaker 2 [36:57] It's true. You have to have the right ducks in a row and, and be hungry for it and the right co-packer partner or production team so that you can either have enough, you know, an inventory or that you can see volume is ticking up and you're able to produce more quickly at your factory, you know, it's the combination of all of it.
Melissa Travers [37:14] Uh-huh, you've described Pepper Tucks as a pistachio platform, and, you know, Sweet Lauren is a baking platform, so two, you know, very similar ideas. And so, you know, rather than launch more spreads, you guys expanded into another snacking occasion again with the amazing wafer cookie that you launched. How are you thinking about simplifying supply chain and maximizing your supply chain as you are choosing other innovations to launch, and what are some of the questions that you have around that topic?
Speaker 3 [37:47] Yeah, I mean, for us, The biggest challenge now is, as we're getting into new products, you know, with the pistachio, we have great relationships, and Lauren, you touched on it, building relationships for 10 years. So when you get into a new product, that's the number one thing that you have to make probably because, yeah, you have the money, you have the brand power, when they go to your website, they see the retailers. They've become a little intrigued, but now you're still a new brand. You used to be an amazing brand for the past 5 years to the farmer, but now to the cocoa guy, you're a nobody. So now you have to start that from scratch, and I think Melissa, that's our number one priority right now, to everyday prove ourselves. And it doesn't even end at the supplier level. It goes to the buyer level too, because now the buyer might know pepperux, that happens in some retailers where the performance is like through the roof, everybody knows it. All the buyers talk about it, but some organizations are so large that they don't even live in the same state. They come together maybe once or twice a year. They don't know what happens in a nut butter set. So, Uh, that's our number one focus right now, to become a friendly face when we launch new products to the spice person, to the cocoa person, to the milk person, because we didn't buy those products before, and I just, I wish, I would love to hear how do you leverage your existing success, existing relationships, and just at least have a jumping start or get a running start at least so that you're not just some guy that comes and asks for some ingredients.
Speaker 2 [39:17] I mean, listen, relationships are everything, and it, it does take a while to feel, to build leverage, you know, so that you can actually feel like, you know, like we feel like we've gotten to this next stage of growth, yet with our chocolate supplier, we're still, you know, tiny, right? Compared to like their global. Huge, you know, customers. So, again, it's like, it's, it's not like it's easy at whatever level of growth you are, but I think what we've always tried to do is find the best product out there, the best suppliers, always have a backup, if you can, two backups because we all know that like, you know, if that, if that product, you know, doesn't ship on time. Uh, you know, your whole business suffers. So I think like you can't be beholden to any one product and ever, um, like it's really important, even if you like fall in love with some certain pistachio, you know, farmer that like, you know, you, you have a backup or chocolate supplier that you're like, You're, you're building a very strong relationship with the second as well, so that price-wise, you always can negotiate between the two. if one doesn't deliver, you always have a backup. So, I think that, um, just starts to build really smart tactics for you and then And then, you know, once you've had success with it, with pistachios, now you're going to chocolate, like you bring that with you. Like you, you send them samples of your product, you show them how incredible of a product you can make. Like, you get them to fall in love with your brand and then you present to them and really show them like, if you partner with me on this, this could be an $10 million dollar business over the next 3 years and you could get, you know, that business and we could grow into so much more with you. And I think really like Selling them on the growth, and yes, we're starting here, but like, the goal is to be over here, right? And, um, and I think that like, most people feel good partnering with a brand like yours, you know, or Sweet Lauren's that like is really trying to bring higher quality products to the market that really is solving a problem. There's a white space, like it's not a Me Too product. They know how hard it is to create a product like this. Probably they love the product, their family loves the product. So, I think like, they like working with, you know, high quality brands and, and honestly, they like really working with a founder or a leader that, like, is just trustworthy. You know, you're going to pay on time, you're going to be fun to work with, you know, you're going to go visit them a couple times a year. Like, you know, there's just like a relationship there and you're just a reliable partner. And I think that, just that in itself, it's like, you're way above a lot of other brands.
Melissa Travers [41:51] One last question for you both. The holidays tend to be a really good time for both of your brands, and as we approach the end of the year, what presents the the opportunity that you're most excited about for this holiday season?
Speaker 2 [42:07] You know, I love our seasonal products, so we do a pumpkin spice cookie dough, we do a sugar cookie dough, we do an oat milk cranberry, we do a gingerbread, we have a chocolate mint. So like we go big with fun seasonal flavors for Q3 and 4, and I, you know, like this is the time that most families are baking and so it's just really a fun time of year where people like just love our products. So I'm just excited because he's aren't around all year long. So you have people that email us and message us all year long, like, when is the pumpkin spice coming? When is my oatmeal cranberry hitting the shelf, you know, they, they've been waiting for the gingerbread all year round and so it's just like really sweet to be able to see families enjoying our product and it's, you know, a very happy time of the year. We also have our puff pastry, so it's the first time our puff pastry dough is really available nationwide in so many retailers like a Target, a Whole Foods, a You know, many retailers so that you can also, you know, do like, you know, a fancy brie appetizer or, you know, a chicken pot pie or whatever you wanna do for like your family that a lot of people kind of use puff pastry for the holidays for. So this is our time to shine. So like, you know, it's, it's time for us to kind of go big and make our, our fans happy.
Speaker 3 [43:21] I'm so happy about that puff pastry of yours, because, you know, the other brand that starts with D is like a French name, I'm not gonna mention it. They were like, come on, so inconsistent,
Melissa Travers [43:31] there's only one option. The
Speaker 2 [43:33] other options are frozen, so you have to like thaw it, and it's just like a whole thing, and you have to roll it out cause it's like too thick. Ours is refrigerated, and you don't have to roll it, and, you know, it's just refrigerated, so you just take it out. And make it right then and you don't have to like just stress or plan about it and it's so flaky and delicious and it happens to be gluten-free and dairy-free. So just everyone at your dinner table, you know, can enjoy it and um yeah, I mean that's our goal, right? Is that we're all so busy and it's really hard to make these recipes from scratch. So, you know, if we can make everyone's life easier and have a better meal, everyone's, you know, a lot happier.
Speaker 3 [44:12] For us for Q4, I mean, we're wishing to be in the same place next year where we come up with limited flavors for some of our options, which now for a spread, you can't really do a gingerbread pistachio cream spread, maybe you can, but it takes, I don't know, but for our snackings, we hope to be there uh next year for 2027 when we have the same conversation. I'm probably going to be very excited. It's going to be our first time. It's, it's going to be super new and innovative for us. But this year, we're actually looking forward to a couple of Costco rotations that we have, uh, for especially in our region in California. We just love selling with Costco and it's, it's, you know, the product is green. Some retailers, we've made like a tree before because it's so green and so decorative that you can just do a tree shape and then people are picking up jars. It was so much fun. So it kind of fits the, the festive mood and The colors and all that stuff. And one more thing that we're doing for the first time this year is a D2C, a specific product where we call it the grown-up set. We don't have regular names for anything. Uh, for example, like the, the 100% pistachio butter we call rich man's peanut butter, because why not? Uh, so we have these weird names for everything. The grown up set is a couple of jars are drizzle and the new wafers, the squares. So looking forward to getting that live for Black Friday, Cyber Monday, and the overall the holidays. Uh, super excited about it because we now figured out how to pack it, ship it, and um we're shipping chocolates, so it's a, it's a cold season so shipping costs are relatively low. Super excited about these two things.
Melissa Travers [45:47] Thank you both so much for sharing so much, asking such great questions, sharing such great advice. Aha Casper Liu of Pepper Tux and Lauren Castle of Sweet Lawrence. Thank you so much for joining the CPG Operator podcast. And for everybody in the audience, thank you for tuning in, and we will see you next time.
