Melissa Travers [00:05] Hello, and thanks for joining us. I am Melissa Travers, director of community here at Bevnet CPG Media, and this is the How Do I Build this podcast for CPG Brands, where we talk with the people building the industry to share practical advice for building stronger, more efficient businesses. Visit nombase.com, Bevnet's platform for the CPG community where you'll find this podcast, educational courses, and more content to help you grow. Today we are talking about a challenge a lot of CPG brands face, and that is how do you build demand for a product that consumers don't immediately understand, have a use for. They need a little help figuring out how to fit it into their everyday routine. How do you Get them to experience the difference, make it become part of the routine, choose the right channels, and ultimately come back and buy it again. Bhavna Kolakuri is the founder of Sorcery, a single origin spice company sourcing from small family farms across South Asia. Three years in, Sorcery is in roughly 80 to 100 specialty retailers and increasingly focused on B2B. Ethan Frisch co-founded Burlap and Barrel in 2016 after working as a chef and an aid worker. Today, the bootstrapped company sources spices from more than 20 countries and ships over 100,000 orders a year. Ethan is here because he has been where Bhavna is, and many of the challenges that she's facing are ones that Burlap and Barrel faced, and, you know, first in some part are still navigating. Today, so Bhavna and Ethan, thank you so much for joining the Nombase podcast.
Speaker 2 [01:46] Thanks for inviting us, Melissa. This is really fun.
Melissa Travers [01:49] It's gonna be great. Um, all right, let's start with a couple of intros. Bhavna, give us the background on Sorcery, where the business is today, and what you're trying to figure out right now.
Speaker 2 [01:59] I started the company 3 years ago and my primary goal initially was to start with like D2C and then I quickly figured out the challenge with D2C, which is like kind of distribution is a huge challenge there and I definitely did not have the skills then to understand how to sell to D2C and over the years I've kind of like grown it into like a multi-channel strategy. So I sell D2C through retail and also now we're getting into B2B. Over the last 6 months we've been working on. Um, kind of aligning our business to cater to that category, and so, I mean, my challenges are multifold, but I think it really is understanding the category deeper, like spices are a challenging, not super exciting category and like across all of the different channels, like how do you make this something that people want to buy over and over again and to build a business that is sustainable.
Melissa Travers [02:56] And can you talk to us a little bit about the product itself? You do have a really special offering. I used your jaggery just the other day and some banana bread. Tell us a little bit about what sets sorcery apart.
Speaker 2 [03:09] I mean, so when I started, I was thinking about how do I bring products that are there in India where I'm from, um. Here in America because you can't find really good quality jaggery, you can't find a lot of like high quality things that we use in Indian cuisine here. So jaggery is an ingredient that like in India we use pretty regularly. We use it in coffee, chai. And so I found that I, I thought that it would kind of like apply here. So what sets apart like Sorcery's products are we are focused on like a couple of different things when it comes to sourcing. One is we are sourcing heirloom varieties of spices, so these are spices. That are grown from seeds that are native to India. These have been like been around there for a long time, so they're very well accustomed to the um the growing conditions there, so they're very resource efficient and they produce really tasty products. So heirloom varieties of spices and also spices that are um sourced within the year of harvest. So these are fresher spices, they are more complex and layered flavors.
Melissa Travers [04:13] Excellent. Ethan, thank you so much for joining us. Burlap and Barrel has been around for a long time, and you know, Burlap and Barrel is one of the brands that I think of when I think of sort of the, you know, latest wave of specialty spices, paying attention to freshness, sourcing, and quality. Catch us up on Burlap and Barrel's origin story and how the business has evolved over the last 10 years. Yeah,
Speaker 3 [04:41] thanks. For having me and for bringing me onto this, into this conversation. Uh, Ari and I started Burlap and Barrel 10 years ago out of my one bedroom apartment in Queens with no money, no background at all in the spice business or import export, or even sales, e-commerce, any of it. We had to learn it all from scratch. I had worked as a line cook and a pastry chef in New York City and in London. And then I got a master's degree and moved to Afghanistan where I worked for a big NGO doing aid work. I was there for over 2 years and then went on to the Middle East with Doctors Without Borders, doing logistics for a maternity hospital, but I love to cook and so I would come across these amazing ingredients as I was traveling. And realized how good they would have tasted on the menus at the restaurants that I had used to work at. Meanwhile, you know, the restaurants might have known the source of their meat or their veggies from the farmer's market, that kind of thing, but had no clue. Even the top restaurants had no clue where their spices were coming from. Uh, so we saw the opportunity there being twofold. One, Uh, to have traceable supply chains. Let's, let's know, let's understand exactly where our all of our ingredients are coming from, but also to, to find things that just tasted a lot better. I think most people will relate to the experience of having eaten an apple from an orchard or from a farmer's market, and then eating a, you know, waxy supermarket, red delicious, totally different experience. And, and that's true for apples, it's true for coffee, it's true for All kinds of things. It's, it's absolutely true for spices. Most people in the US don't think about spices as being agricultural, agricultural products at all. You know, the idea that a spice comes from a plant, comes from a farm, comes from a farmer, that's, uh, it's not just not something people have thought a lot about. So we saw, you know, we saw a chance to change all of that, to get higher quality ingredients, really let people know exactly where they were coming from. And, and, and just broaden their understanding of what spices were and are and can be in our cooking. We saw an opportunity to change all of that, to get to build supply chains so people would know exactly where all of their ingredients were coming from, including the spices, to bring much higher quality spices to the US for the first time and also to help people in the US, whether they're professional cooks or home cooks, understand. Uh, the agricultural supply chains behind these everyday ingredients, you know, things like cinnamon. Cinnamon is tree bark and black pepper is a fruit, a berry on a climbing vine. You know, that's new information for most, both professional and home cooks in the US. So, uh, we started the company 10 years ago. And, and for better or for worse, we still face a lot of the same challenges that we had in the early days, the same ones that Bhavna is facing as well. We've learned a lot, but, but the, the reality of the market has not changed that much. And, and what I mean by that is Um, most Americans are not that comfortable or familiar cooking with spices, especially new spices that they haven't come across before. So, if you talk about cinnamon or garlic powder or paprika, those are, are very well established, and people love them and use them all the time. But you know, Bhavna and I was talking about jaggery earlier. You know, once you start using words that Americans are not familiar with, unfortunately, there's a, there's an education and a marketing process that has to happen to get, to get somebody to be willing to buy something new, especially from a small company, especially online, you know, where there are these sort of additional barriers to experimenting with a new ingredient. So Uh, we've gotten good at it in certain ways, but we also still struggle with a lot of that core kind of, uh, the realities of the spice market in the US.
Melissa Travers [08:13] I covered that banana bread in the Burlap and Barrel cinnamon sugar, and you know that's a great way to introduce consumers to new spices and new ingredients. It had cinnamon in it but also some more unusual ingredients, so we'll we'll get. To some of that later. What Ethan, what has gotten easier and what are some of the challenges that remain? Like getting people to cook with unfamiliar ingredients is one of them, but what's gotten easier and what are some other things that are still challenging?
Speaker 3 [08:45] One thing that has definitely gotten easier is the supply chains and the operations that go into them, you know, I think in the very early days or for, you know, early stage entrepreneurs navigating, especially international supply chains for the first time, they're very bumpy, stop and start, and, and you kind of feel like you're going to live there forever. The supply chain is never going to work, and all the obstacles are, are just. Impossible to get around. But, but actually that does get easier. The more shipments you do, the more you work with, especially if you're, as we are sourcing from the same supplier year in and year out, the relationship is really important, the practice that, that everybody gets managing those, you know, the paperwork and logistics and all the, the elements of it when we talk about supply chain, that's what we're talking about how do we move turmeric or cinnamon from India or Vietnam or wherever it might be to the US, uh, that gets a lot easier and we've gotten a lot better at that. And you mentioned at the top of the conversation, we import from more than 20 countries, so we have shipments coming in, you know, often multiple times a week throughout the year. It's busy. There's a lot, a lot of stuff coming in, and we have a small team, but that all goes not, not 100% smoothly, but, you know, whatever the obstacles are at this point, we know how to navigate them and, and we're, we're comfortable with that. So, so the sourcing is something that has definitely gotten a lot easier over time.
Melissa Travers [09:59] Bhavna, earlier you were talking about D2C, but then the distribution that comes with being a retail can be helpful in in overcoming some of the challenges that come with D2C, but it's a bit of a hard nut to crack. The stores already have spices. They know they don't have super high velocities. They may not be looking for another brand. What do you want to ask Ethan about how to break through that barrier, because that one comes up immediately.
Speaker 2 [10:28] I guess when you think about retail, there's like the specialty retail that are more independent where a lot of like the folks are making decisions are based are are making buying decisions based on values and a lot of these stores already have. Good spices, and they're pretty reluctant to bring on someone new, um, or that's like that's the challenge that I, I face. I'm wondering like as you were growing Burlap and Barrel, like did you have like challenges like this and how did you, Kind of tackle that.
Speaker 3 [11:02] As you both have pointed out, the spice section of the supermarket is pretty well established at this point. There are longstanding players, and to be honest, grocery stores, whether they're, you know, big national chains or small specialty grocery stores, they often don't make a lot of money. They don't have high margins. There's not a lot of velocity behind spices. So there's not a lot of incentive for a store to invest in their spice selection. They have to have certain things their customers are looking for, but there's not a lot of um Not a lot of upside for them in in bringing in new brands and and experimenting with new things. So it's definitely a challenge. And, and I absolutely endorse your multi-channel approach here. Have an e-commerce presence, have a retail presence, have an Amazon presence, have a food service presence, you know, because, because spices are kind of modular in that way, you can pack them in almost any size packaging. They're much more flexible than a lot of other products in terms of being able to meet the demands of different types of customers, restaurants, grocery stores, manufacturers, even. So I fully endorse that approach, you know, try to be in as many channels as you can, even as a small company in terms of getting into the store. There's a few pieces of advice I would, I would say. One is to, one is to be patient, you know, build the relationship with the buyer. Sometimes it just takes a little while. They're not ready today, but they might be ready in 6 months or a year, and just being, you know, a friendly presence in their inbox, uh, periodically goes a lot. Long way to to being ready when, when they're ready, uh, which, you know, uh, that's, that's just sales, you know, waiting for the customer to be ready for you. So that's one thing is just be patient and be, be friendly and be present in front of them. And then another thing is to look for the gaps in their lineup, you know, maybe they're missing something seasonal, for example, maybe they Uh, could use a grilling blend for the summer or a baking blend for the winter, and they're not totally happy with the options that they have available, and you can kind of fit in, uh, and that, that can often, you know, having one product on the shelf often opens the door to having more. If they see that one thing is selling well, then they're they're more likely to bring in, bring in more skews. And then especially, you know, for you as a, as a solo founder and a small operation. Uh, especially if, if you are local to the store, having, you know, being in person in the store, not every day, but, but to be make yourself available to do demos, whether that's a tasting for the staff of the store itself, so that they understand what makes your product distinct, uh, or it's a customer facing event where you could stand with a table and give out samples and talk about how amazing your product is and give people a sense of your passion and your motivation as a founder, um, that can, that can also be really valuable.
Speaker 2 [13:50] Yeah, that makes a lot of sense. I mean, when I, when we first launched, a lot of my work was just like going around to all of the specialty stores in New York City, just kind of dropping off samples and just kind of following up. So that that like resonates.
Speaker 3 [14:05] To that point, New York City is a really tough market. And I think, you know, like I live in Queens, you live in Brooklyn, like we live in New York City, so this is, we think this is the be all end all, but actually, there's a lot, you know, like there's the whole rest of the country, and New York City because of the high rent and high cost of labor and other considerations. Uh, New York City is a hard place to break in, whether it's a restaurant customer or a retail customer. So, uh, we have had a lot more, or I should say easier success, easier time getting into stores that are not in big cities, but are in suburbs or in, uh, on the edges of cities where there's just less competition and less, um, less financial pressure on the store to maximize every inch of shelf space.
Speaker 2 [14:45] Initially, did you do the sales yourself or did you kind of hire any sales agencies because a lot of like My fear with like using an external party is that like that story is lost, that like connection is lost, and that's like the value that a small business has.
Speaker 3 [15:01] Yeah, I totally agree with you. I think your concern is correct and just knowing you and having seen you operate a little bit, I think you are absolutely going to be the best salesperson for your product. Nobody you can hire is going to do as good a job as you. I did all the sales myself in the early days, me and Ori, I mean, I We were, when we first started, we were more focused on restaurants than retailers, but I would take a backpack full of samples and walk through the East Village at 4 p.m. and knock on restaurant doors, you know, like really door to door sales. I don't know that I made a single sale, uh, or not very many at least, but, uh, yeah, you, as the founder, as the person who's most passionate about these individual products, I think you're going to be the strongest salesperson. So then it's a question of deciding how you spend your time, right? Prioritizing. Uh, are you focused on sales, or are you focused on, you know, all the other, I'm sure the very long list of other things you could be working on, from design to, uh, to ecom to sourcing and operations. But, um, I, I don't, I, I, uh, I found it helpful to have kind of a a regular time on my schedule that I was doing sales, you know, like set aside a few hours a couple of times a week and have that be my focused, uh, sales time. Uh, and whether that was cold outreach by email or by phone or going in person, uh, that, that I could really dedicate focus that, uh, that time on, on selling.
Speaker 2 [16:25] Have you used any of these um um what do they call it, platforms like uh Fair, Airgoods, um, have you seen any success using these platforms?
Speaker 3 [16:36] Yeah, and, and even beyond that we sell to some other e-commerce sites, uh, King Arthur Baking as an example. They're a big retailer for us, uh, online, you know, through their own website as well as through their brick and mortar store, but mostly online, um. Fair, as one example that you mentioned, has been, excuse me, has been really good for us because it reaches those smaller shops, especially outside of big cities where the buyers are already looking for more interesting pantry products to diversify their own selections. Um, so far has been great for us, but you know, I would say like any sales channel, it, it rewards attention. So the more time you spend on it, the more time you're like messaging customers and reminding them to reorder and telling them about new products, and it does better. So we have on our team now we have 20 people on the team overall up from 1 when we, you know, 1 and 2, you know, like me and Ari when we started, we have a, a salesperson who's largely focused on fair in particular and so it has grown into a nice channel for us, but, uh, but you know, it has, it has, has its constraints as well.
Speaker 2 [17:42] Right, right, right, and, and the 150% cut
Speaker 3 [17:45] and the 50% cut, although I, the, uh, the nice thing about fair in particular, I mean, I'm not to like talk about fair specifically, but uh the fact that they, um, That if you've already been in touch with that retailer separately, they waive, they waive the fee. So, so you can do your own outreach and then shift those customers over to fair for kind of operational ease, uh, you know, there's ways around it.
Speaker 2 [18:08] So you sell your spices at Whole Foods. I'm curious like how you kind of What your strategy was and like how that kind of like played out.
Speaker 3 [18:19] At the time, our strategy was throw everything at the wall and see what sticks. Uh, I, I don't recommend selling to Whole Foods, to be honest. Uh, we have not had a good experience there, not to like throw anybody under the bus here, but, um, like I said, grocery stores don't care about their spice selection at all. And Whole Foods buys almost everything from one co-packer who does their private label and their 365 and they're all everything comes from basically one factory. And, and for us, we start off with 6 skews and then we got the 3 SKUs, and then they dropped us down to, you know, like knee height. Nobody, we, so we don't, we don't do hardly any sales numbers through Whole Foods. And in fact, uh, there's always a little bit of a pressure back and forth. They want us to sell more. Volume and we say, well, put them up higher on the shelf, you know, like, uh, and they don't do that, so the sales sales volumes don't increase. Uh, so I, I really don't recommend, especially for a small company, especially for a new company, especially for a company selling something as niche as spices in the US market, um, to try to get into a big retailer like Whole Foods or anybody else, uh, can, can really, uh, sink your company. Uh, it can just, uh, it can, it can require a lot of time and attention and cash, and, um, other things that where it just doesn't return. You know, if, if you could spend 10 hours a week. Getting into Whole Foods or building out your e-commerce, I think you would be way better off focusing it on e-commerce or or independent specialty grocery stores rather than trying to get into a big chain. So if you get into a big chain, remember, you're not only selling to the chain, in fact, you're not even really selling to the chain, you're really selling to the distributor. Um, and distributors suck. I mean, no, no, nothing personal, but they suck, you know, I think we haven't heard before. Yeah, right, exactly. So, uh, if you can avoid dealing with, especially the big distributors, avoid it as long as possible. We, we have continued to avoid it. We're not going after any big chains at all in our, in our sales outreach now. We're really focused on, you know, the channels that we've already talked about, food service, especially independent, uh, bulk, that kind of thing.
Speaker 2 [20:27] Yeah, I think like one of the things this happens to me quite a lot when I'm trying to get into stores, as you mentioned before, like try to see how you can get into it, and oftentimes it's niche spices that they that most people don't use. So like black cardamom for instance, like a lot of people buy black cardamom, but it just sits on the shelves because like nobody knows how to use it and then like that I feel. Then like the impression that the that the stores get is that OK, this product is not moving, but it is black cardom that not a lot of people use, right? so it's, it's a, it's a weird problem. Yeah,
Speaker 3 [21:04] well, it's a great point and something we've experienced also that the buyer is often, often has different tastes or different ideas about what's going to be successful than what the customer is actually looking for. I mean, even in our, our Whole Foods journey where we started with 6 and have been winnowed down to 3. The 3, you know, the, the, the original spices that they asked for didn't sell that well. Uh, it's very similar to what you're talking about. Uh, no, I mean, I think it's important in those relationships, conversations with buyers to remind them. Uh, what you're selling and what a reasonable velocity expectation might be, and to steer them towards the products that you're confident will sell faster, that you know from your own site and, and from other customers sell faster. And I mean, Melissa, to your point earlier, then the cinnamon sugar crunch and some of the other products that we've developed over the past year have been very directly targeted at, at this exact problem, where single spices are Slow movers. There's slow movers on the grocery store shelf, and there's slow movers in people's kitchens too. I mean, I talk about our central challenge as a business being how long it takes somebody to finish one jar, and even the higher volume things like cinnamon or chili flakes or black pepper. Best case scenario, somebody will use it up in 3 to 6 months, but a jar of black cardamom, you know, some, that's a lifetime investment. Somebody's going to be holding on to that for a long time. Uh, Star Anise, my, my favorite example, like people hold on to jars of Star anise forever. I mean, you know, whatever, everybody can use whatever they want, but, but we have in the past year and change, have shifted our product development strategy away from sourcing new products, which we still do a fair amount, but Um, but we've redirected it towards developing our own blends based on what we're confident will, will sell, whether it's online or at the grocery store, and what we're confident people will use up a little bit faster, you know, something that'll be easier to put on a wider range of products, something that has a little bit more of a familiar name and concept like cinnamon sugar or lemon pepper or steak seasoning. Those are all blends that we've developed in the past year and a half, uh, because, um, Cause we saw that exactly the problem you're talking about about of people buying something and then not knowing how to use it. And, and uh those products on our in our lineup are doing really well. Those many of those new that new set, we call them our classics reinvented, uh, that new set have really risen to the top of our sales charts, you know, those several of them are our our top 10 and even our top 5.
Melissa Travers [23:27] Ethan, I actually have a question for you. When you were talking about your blends, I thought about the Trader Joe's blends, um, you know, and how useful those are in a very similar way to Bburlap and Barrel, except that Briurlap and Barrel's vices are of a much higher quality. But that made me wonder, how do you think about private label. I would think that your spices are of such a high caliber that it would be difficult to meet the pricing requirements for something that's private label. How do you think about that?
Speaker 3 [23:58] Yeah, we don't do private label at all, uh, as a, as a policy, uh, no, I think what makes our spices stand out on the shelf, it's different once you've started to use them. You can really taste the difference. Likewise with bones spices too. Fresher spices just taste better. It's not complicated, but, uh, it's very easy even for an inexperienced cook to taste the difference between a higher quality spice and a lower quality spice. And so anything private label is going to be lower quality. It's going to be lower cost. Trader Joe's has the longest list of food safety violations. I don't know of any retailer. I don't buy anything at Trader Joe's, but that's, you know, the brand, the power of the brand, especially for a startup where you can really stand behind the products and you, even you personally as the founder know who grew something and where it came from. Uh, that's really powerful. So we don't do, we don't do private label at all. And, and even the idea of single origin, that term that both of our companies use. Uh, is almost a placeholder. It's a kind of a proxy term, because customers don't really understand what that means literally, but what I hope they get from it is that there have been intentional decisions made in the sourcing of this product, that this, this is a product that somebody, an individual and a brand really stands behind because of the work that has gone into setting up that supply chain and selecting that origin uh intentionally versus Trader Joe's or or really any commodity spice brand where You know, you barely even know what species, you know, there, there are actually 4 commercially cultivated species of cinnamon. So if you buy cinnamon at the supermarket, do you know which species it is? And there are differences. There are certain species that have higher levels of Uh, a liver toxin called Coumarin. The flavor could be different in a, in a recipe. So it's, it's important information, but often it's not even printed on the jar. Uh, the, the brand doesn't, the supermarket doesn't know that maybe even the company that's packing it doesn't know, and certainly the customer doesn't know. So, just the downsides of private label, uh, there's a lot of core easy, you know, information that should be easily accessible that isn't, uh, when something is presented in a private label.
Melissa Travers [25:59] Bhavna, I know you've been thinking about trial quite a bit and whether that's demos or, you know, other ways to introduce consumers to your product and get them to try it. Can you talk a little bit about how, how you've been encouraging trial, the sampling issues, and then, you know, what you want to ask Ethan about some of the best ways to encourage trial for a product that may require a little bit more energy.
Speaker 2 [26:27] Yeah, I mean this is kind of the second challenge, right? Like the first challenge is getting on the shelves, the second challenge is getting off the shelves. Samping for spices is a bit of a challenge because you have to cook with it to kind of appreciate it a little bit, um, and so. My best way to sample is just like kind of stick a jar on people's noses and make it smell, um, but I'm wondering like Ethan, do you have, like, how have you tackled sampling spices? Uh,
Speaker 3 [26:55] sticking a jar in people's noses and making them smell it. I mean, I, I've been kind of obsessed for a long time with not sampling the spices on or with anything and making people taste the spice as its own ingredient. Even when we went on Shark Tank in 2023. Uh, there was a fair amount of pressure from the producers for us to cook something or present the spices to the sharks in a, in a more accessible way in a dish, and I absolutely refused and even came to the point where we almost didn't get on the show because I was not, I refused to make an apple pie or whatever they wanted me to make. No, I wanted the sharks to taste peppercorn straight up and taste cinnamon straight up. Um, people mostly have not had that experience, uh, if they, especially if they're kind of unfamiliar with spices, but it, it is very eye opening to have to have a taste of an ingredient that you thought you knew, cinnamon as an example, and then to actually taste the real thing on its own. Um, I have found that's really helpful for helping people understand. Uh, what it actually tastes like, you know, this has a building block of flavor in your cooking, taste, taste the ingredients. That was, you know, that was the instruction I got as a young line cook in New York. Taste everything, you know, like understand what all the components are that are going into your dish and how they're going to work together. Uh, so, so I do that, um, but, you know, we, we have also done other things over the years, uh, tasted spices on fresh mozzarella or tofu, something kind of neutral like that, uh, on apples or cucumbers. I think, uh, Charles on our sales team has been making croutons at home with spices so that people can kind of crunch on a buttery little crouton. Great idea. Um, there are lots of ways to do it, but I think you're, the goal is to imagine somebody using it in their own home and their own cooking. I mean, you talked about the challenge of getting on the shelf, challenge of getting off the shelf, and then the challenge of getting them to come back to the shelf, you know, to actually use up the product and, and come back for more. So, Uh, you know, I'm always recommending very simple applications. People always ask, how do I use this? And my answers are always like, put it on scrambled eggs, put it in a tomato sauce, put it in a soup, you know, like just very simple things, you know, um. Uh, one, tip that I give people is if they ask how to use something new that they haven't tasted before, I always recommend that they use it in a dish that they already know how to cook. Just swap out the spice so you can really taste how that spice changes the flavor of, you know, if you want to make a tomato sauce instead of using black pepper, maybe use cardamom seeds, you know, like make that switch and see the impact that it has on a on a dish where you already understand how the flavors work together, um. But uh yeah, sampling and spices is, is uh is an endless challenge. There's there's no like right way to do it, and, and people are, are often intimidated by the prospect of tasting spices straight, or even just the idea of, of buying a new spice in general can be intimidating. So, uh, just lowering the barrier to entry, making sure that they understand, um, how versatile something really is, uh, and, and how impactful it can be, especially, especially now where Money is tight and people are trying to save money on groceries. Like you can really upgrade your food inexpensively, you know, we talk about our spices as pennies per serving, where if you're trying to buy higher quality meat or go from conventional to organic veggies, that could be a big, you know, increase in your grocery bill. But you can buy a jar of really good spices for 10 bucks and improve the flavor of everything and in fact make inexpensive ingredients like eggs or tofu or other things taste amazing and taste very varied, you know, have the same. Uh, base ingredient, uh, whether it's tofu or veggies or anything, but swap the spices out and, you know, eat a different meal every night. So, uh, we really try to set that up for people, ways that spices can save them money in their, in their grocery shopping, and at the same time improve their, their day to day cooking, making it more diverse and more interesting, and, and not to mention more, uh, nutritious, healthier, you know, there're all all kinds of other benefits associated with spices as well.
Speaker 2 [30:56] Yeah, Melissa, maybe you'll get a kick out of this. I tried to sample Jaggery by making a chocolate chip cookie and then people thought I was selling chocolate chip cookies. But they. They were not excited about the prospect of taking the jacket back home and making a chocolate chip cookie themselves.
Melissa Travers [31:17] Yeah, and that, I mean, that is one of the challenges that you're up against. I mean, you know, people don't necessarily cook a meal from scratch every day, like even once a day. Um, so I certainly the ask of consumers is significant, but you know with B2B you do solve some of those challenges. It's fewer people to convince. Bhavna, you've been shifting your focus a little bit more towards B2B. Tell us how, which, which pieces of that are going well, what's hard about it, and, you know, maybe some questions for Ethan around that channel of business.
Speaker 2 [31:57] So 6 months ago, I started kind of approaching chefs in the city, um, giving them samples to the spices. They, I mean, I was really kind of surprised that a lot of the New York City chefs are buying spices from like, mm, without having to throw anybody on the bus, just like regular, regular qua regular spices like grocery store spices. So like they could immediately tell the difference, but then what I found is that like chefs don't plan that far ahead, so they kind of, when they want something, you have to have the stock to give it to them, and that required a lot of like re-engineering on my end to just kind of bring larger quantities of spices, because who knows what if someone wants something, I would need to be able to provide it. But then there is this kind of core tension between Having a lot of inventory and then like then like the value proposition of freshness kind of is at odds with it. So that's like what I'm trying to kind of figure out how, how do you like vary the right, like how do you kind of align the supply and demand in the way that Still keeps the spices fresh, and I don't lose business. So Ethan, how have you done that?
Speaker 3 [33:16] Uh, with a lot of difficulty, uh, no, it's challenging, it's challenging at your scale, at our scale, much bigger scale as well, because, uh, the more, the bigger you are, the more inventory you have to keep on hand. You know, it, uh, it doesn't get easier. In fact, it gets more expensive because the numbers are bigger overall. There are a couple of ways that we've handled it. One is To really, you know, and this comes with time, but to have a better sense of projections, to have a pretty clear sense of projections, how much we sold last year, how much we're trying to grow, what we think we can sell this year. So being able to buy on a, because we're on a yearly, as you may be also a yearly purchasing cycle with most of our partner farmers. Their harvest might be in May or it might be in October, and we're committing to a certain quantity well before the harvest and then receiving that quantity and And it's a slow cycle, you know, we, we, uh, our Hungarian paprika, for example, we, we make a big down payment in March. The product was harvested in October. It probably arrives at our warehouse by January, and we start selling it by March. You know, it's a, it's a 12 month cycle on the cash that we've laid out before we even start seeing any return on it. It's a lot to float. Uh, and very hard, especially as a bootstrapped business to manage. Um, one thing I would say is that, uh, the standards for freshness are very, very low. So, you, you know, anything at the supermarket is 3 years old already, at least, uh, before anybody even picks up the jar, you know what I mean? And then it sits in people's cupboards forever. So, uh, you know, as long as you're, you're doing better than that, you're, you're OK. Um, The other thing, uh, you know, we made good use of in the early years was air freight shipments where we could bring in small quantities based on what we could afford at the time, rather than doing now what we do now is, you know, it's annual buying cycle, we're doing ocean freight, and there's a lot of planning that goes into that and a lot of cash that goes to supporting that style of purchasing. Uh, but air freight, you know, I think I would buy like 50 pounds of turmeric at a time and have them, you know, ship it to me by even by DHL. We found some good rates by DHL, you know, there's sort of squirrelly ways around that slow transit cycle, and then you just let customers know, OK, we'll have it in a few weeks, you know. Uh, let them know about the lead times. But, uh, you know, obviously we talked earlier about the advantages a little bit of, of a multi-channel approach. But as you've mentioned, there are also disadvantages to a multi-channel approach where different customers really need different things in terms of, uh, in terms of customer service, in terms of product packaging and quantities, pricing, and, and restaurants do expect things to come the next day, uh, and that is almost impossible for a small company to meet. So, we have recently in the last year have gotten on board with a couple of food service distributors, but even that was a multi-year process to get to get into those catalogs, and that has helped. Uh, in terms of being able to meet the restaurant demand. I think if you're focused on restaurants, your advantage is going to be the direct relationship that you have with the chef, being able to stop in a couple of times a month in person and drop off samples of cool new things and essentially use it as, as a little bit of an R&D platform for yourself, see what the chefs are doing it, doing with the spice, and communicate that back to your customers. Put recipes on your social media or your website from the chef, you know, use, use the spotlight that you have to highlight their work. Um. Uh, but also, uh, so using it as for, for some recipe development, R&D, but also using it as, as marketing and validation to show your home cooked customers that look, this chef loves this product. Uh, so that's a good, uh, a good indication that you as a home cook might want to try it too. That's, uh, you know, those are some of the advantages of, of that multi-channel approach.
Melissa Travers [36:56] I have a question about that actually. So, you know, certainly someone in Bhavna's position, she wants to be building brand equity. When a, you know, consumer tastes a sorcery, jaggery or cardamom in something, she wants them to know where it's coming from. How do you intertwine that with B2B relationships, you know, specifically food service relationships? Do you just assume that If a restaurant uses the spice, the consumer may not know it unless you're talking about it. How does that work?
Speaker 3 [37:27] Uh, yeah, restaurants often don't talk about their spices. Uh, we've tried for years, you know, like restaurants have like a Stumptown coffee sticker in the window or a thing on the thing on the menu maybe. We've gotten it a couple of times, but mostly restaurants don't call out the spices at all. And, and in fact, we've found when we sell to restaurants where We're often not replacing their kind of large volume spices, their garlic powders or whatever it might be, but they come to us for the specialty, the hero ingredient, so to speak, where the spice really needs to stand alone and as the finisher on the dish, that's, that's where, uh, that's where we come in, not exclusively. I mean, we have a lot of restaurants that buy a lot from us across the full range, but um, Yeah, that's, that's one piece of it. And then using your social media and your email marketing and all the other channels that you have, Bob, to talk about this amazing chef and this amazing restaurant and pictures of the dishes and talk about what they're doing. I also, I got a, I got a big kick out of this in the early days too was sending pictures of the chef's dishes back to, back to my partner farmers around the world. Like tell the, tell farmers how their product is being used, you know, on the other side of the of the earth in a restaurant that they may not have had a personal experience with. Uh, but it's, I, I, you know, like sending pictures of a dessert to the nutmeg farmer in Zanzibar, that kind of thing. Uh, farmers really appreciate that. Uh, nobody often had, at least in my case, nobody had really done that before. Uh, so being able to share the information back is, is really fun and valuable for, for the relationship, uh, as well. But, uh, no, just talking about it as much as possible. In the early days, we, um, we sold to 11 Madison Park at a loss. Essentially, we, I agreed to, to match their. Uh, you know, they're like, you know, commodity distributor prices, so that I could say we're on the menu at 11 Madison Park, and then I talked about it as much as I possibly could, every interview, every public thing, every tasting, same chef, same spice they use at 11 Madison Park. So, you know, fine, it's a little squirrelly, but, uh, but it got the job done. So, you know, you, you use it, uh, however you can. Some of it is marketing, some of it is validation, some of it is sales. Uh, but at least you're making money on the deal overall, you know, you're not losing money, at least in my case we weren't losing money, we were breaking even on those 11 Madison Parks Korea or whatever we were selling to them, but, uh, Try not to lose money, so you make money on the sale, but then you also have this sort of broader network effect of, of a positive impact across the business.
Speaker 2 [39:49] How do you think about like growing burlap and Barrel and like as you scale the business kind of keeping the core values intact? Like why, why does the business need to grow?
Speaker 3 [40:02] We exist in a capitalist paradigm where growth is life, unfortunately, uh, that if a company isn't growing, it's seen as stagnant. And that's the, the sort of high-level philosophical answer to your question, but the, but the, the more tactical answer to your question is you, you're, you're too small to survive at this level. No, no, uh, no offense. I mean, we, we are too, almost, right? Uh, that, uh, that you have to get it to a certain base, you know, base level in order for you to be able to pay yourself well, to be able to cover all your costs, to have the resilience that a business needs to weather whatever is happening around it. Uh, that's just hard to do, you know, it takes a while. So, so that's, that's kind of the more immediate tactical reason for growth. Uh, is to get it to a level where you're comfortable, where the business feels solid and stable, where you're making money. Go ahead, what were you gonna say?
Speaker 2 [40:57] Is there a number or like a stage where you can see for your business that like if I get there, my business will like I can be steady state, not steady state, but you know like I don't have to do a BT's growth, and that's what I'm curious about is, is this like Do businesses have to like always keep swimming like sharks or they die, or can, is there like a happy medium somewhere like
Speaker 3 [41:21] I hope there's a happy medium and we have, I mean, I, I don't mean to be flippant about it, we have, we have gotten there, you know, like we're, I'm, I'm, I'm confident about our, you know, sales and growth and my salary and, you know, like we pay our team well, you know, like the business, our business is in a stable, uh, state now, but It's very tenuous, you know, like the if the economy crashes or uh a big external event like tariffs and and other, you know, like we've seen this happen, those can have an immediate impact on a business where, where you need to have some resilience to be able to weather those those obstacles. You know, I think if There, there is a number, I guess, to answer your question, there is a number, but the number changes a lot, changes every year, basically. So, for, for now, maybe the number is getting to a million dollars in sales a year, and then once you get to a million dollars, it's going to be to get to $3 or to 5. And those, you know, those can take a little while. It could take a few years to, to build up to that next threshold. Um, Uh, but it does get easier, you know, once you've hit kind of a baseline, I would say a million dollars in sales is a, is a really solid target to aim for for a small company. If you can get to that level, there's enough money to go around for the, for the core set of activities that you need to cover. And then from a million dollars, try to get to 5, and then you get to 10. We did, we did about $10 million in sales last year. We're hoping to get to 13 depending on how the holiday season goes this year. Maybe we'll hit $13 this year. Uh, so now our target is maybe 15 and it'll take us a couple more years to get there. And then after that maybe our target will be 20 or 25, you know, you sort of keep setting, at least for us, we keep trying to set ambitious targets so that we can keep growing. Uh, but, but, um, you know, as we, as we talked about at the start of this conversation, the, the spice, uh, market is, is quite niche in the US and quite limited, and there's not a lot of dynamic growth. There are new companies that, that pop up, but not every day, you know, it's, it's a hard, uh, business to break into. To figure out the sourcing and the, the operations, but it's also a hard product to sell. So for us, one of our growth strategies has been to expand beyond spices, uh, into a broader pantry or ingredient set, um, that we can sell to the same group of customers, whether that's uh wholesale or retail. So, you know, we've launched, uh, condiments like mustard and hot sauce, harissa, we've launched uh jam, we've launched Um, we have uh capers coming, that's going to be a, a big, a big part of our holiday season this year, uh, from the only caper farm in India, a regenerative caper farm in India. Anyway, there's, you know, similar sourcing processes, yeah, they're delicious. Uh, better than any of the Moroccan capers I tried. Anyway, different conversation, but um, there's a, yeah, we've, we've tried to grow Beyond spices and, and, you know, you were talking about jaggery quite a bit as well. That was one of our attempts was to roll out a line of sweeteners, including single origin sugars. Jaggery has been our bestseller, but we have a coconut and a maple and a um a turbonato style, and then we have a set of honeys and a pomegranate molasses. You know, we've built these one product at a time to have a category of sweeteners and a category of seasonings and a category of condiments. Uh, so that our business can hit some of those growth numbers that we're kind of ambitious about ourselves, but also can find a little more resilience and stability across these, uh, you know, multiple categories, not just being stuck in, in spices alone.
Melissa Travers [44:36] I have one last question for you, Ethan, on that. As you're describing the number of SKUs that Burlap and Barrel has now. I mean when you think about like a beverage brand, they may have 4 skews, 5 SKUs, something like that, and you're talking, I don't know if it's hundreds, but what's the line between keeping your operations as simple as possible versus offering Wide enough range of products so that you're able to get the traction that you need to grow.
Speaker 3 [45:05] Great question. We talk about that almost weekly, right? Like because we do, we have about 150 individual products. That's over 300 skews with, you know, multiple sizes of each spice, and we launch. 30 to 50 new products a year. Uh, many of those are LTOs, limited time offerings. So we have a small quantity of something special, we sell through it and that's it. Um, some of those do well enough that we decide to keep them in the permanent lineup, but most of them come and go. We have seen a lot of value in the tail skews as we. Talk about them because I don't know the exact numbers, but maybe 80% of our sales come from our top 50 products, our top 50 bestsellers. Then we have another 100+, uh, spices behind that. But, but that 20% of sales, you know, if it's 80 come from the top 50 and 20% comes from the, the, the, the next 100 spices. That's a, that's a significant portion of our business that's worth having 20% of, uh, of $10 million. You know what I mean? That's, uh, that there's real value in those tail skews. And, and we can fiddle around the edges. Do we drop, you know, what are we, we recently decided to drop, um, Allspice as A standalone product. We use it in some of our blends, so we'll keep having it, you know, we'll keep using it there, but we're not going to sell it as a standalone. So, like, you know, like I said, we can play around in the edges, drop this one spice or that one spice, but it doesn't make a material impact on the overall complexity of what we do. Um, yeah, we have an amazing operations team and, uh, not very sophisticated systems, but strong systems. It's all in spreadsheets. We don't use an ERP or any kind of, uh, complex, complex piece of software to manage our, our supply chains. Uh, and we do have stock outs as anybody does. Things go out of stock for a period of time while we're, while we're doing another packing run or waiting for a shipment to arrive. But, uh, the nice thing about having so many SKUs is that there's always more things that customers can buy, especially in the direct to consumer channel on our website. You know, maybe we didn't, you didn't find the exact thing that you came looking for, but here's 5 other things that we hope will appeal to you, and, and it helps get the order value up, helps people hit the free shipping minimum, helps us become a bigger part of their, of, of a customer's kitchen and daily cooking experience, and, and for retailers as well, being able to, to take up more space, you know, have them bring in more skews. Uh, that's definitely a goal of ours on wholesale is Have, have retailers just have more skews on the shelf. So we shifted away from a 12 count case, which is what we've done for years because it was the easiest from that's what we were getting from our co-packer, 12 jars of a, of a single spice in a case. We're now doing 6 count cases, which costs us quite a bit more and adds a lot more operational complexity, uh, in terms of building and assembling those cases, but lets us have more facings on the shelf. So a, a small retailer who might only have a budget. To buy, you know, $300 worth of spices, they were going to pick a few cases before. Now they can a few facings, uh, now they can, now they can pick quite a few more, you know, essentially double the number of individual options on the shelf at the retailer, which gives us more space and hopefully increases their sales and our sales. So that was a, uh, took us a long time to get to that decision, uh, and it comes with some costs and some complexity, but so far so good. I mean it's been worth it, you know, it's, it's early stages. It was just in the last few months, but That's, that's been one way that we've handled it. No, you know, we have a lot of products and we learned early on that spice companies need to have a lot of products because whatever you have, somebody's always going to want the other thing. Uh, some specific blend that they read about or heard about or tasted, and then you don't have it, you know, like you want to have something close enough. And not, not to mention, I mean, I can talk about this forever, but not to mention the importance of having a little bit of redundancy in the supply chain. So, you know, we have a couple of sources for cinnamon from different countries and a couple of sources for turmeric in different countries and a couple of sources for black pepper in different countries, so that if for some reason, Uh, there's a drought, as there has been, you know, like, uh, it's, this is a real thing, you know, if, um, if we can't get a product from one supplier, we will be able to get it from another, uh, so that we have some resilience built in across the supply chains, which adds, of course, even more complexity, but, uh, but it's worth it cause customers buy more than one thing at a time, and, and they see us as sort of a full service, uh, pantry, uh, destination. So, uh, it's, it works.
Melissa Travers [49:26] Well, the complexity in the spice business and in both of your businesses, I feel like matches the complexity that you get with the product itself, so. Um, really, really appreciate having you both here, and I'd like to point out that, you know, you two are in the same category, and I think it's so nice to be in an industry where two businesses who are playing in the same space can come together and share information. Ethan, thank you so much for your generosity and for, um, you know, sharing everything that you've learned. In the business so far in the last 10 years. Um, Ethan Frisch, uh, co-founder of Burlap and Barrel, such a pleasure to have you, really appreciate it. And Bhavna Kola Kalui, I think I've been talking to you for, you know, a little while about collaborating on a Nombase Podcast, and I'm so glad that we finally made it happen. Um, thank you so much for joining us from Sorcery and really that Um, the jaggery and the cardamom too, just totally amazing. So keep up all the great work and, um, and keep in touch. So thank you both for joining, for everybody in the audience. Thank you so much for joining the Nombase Podcast, and we'll see you next time. That concludes another episode of the Nombase Podcast. If you enjoyed the show, please leave us a review and follow us on your listening platform of choice. You can also watch and listen to past episodes on Nombase.com and don't forget to join our Nombase Slack at slack.bevnet.com for company updates, industry networking, and community discussions. See you next time.
