BRAND SECRETS AND STRATEGIES

PODCAST #73

Hello and thank you for joining us today. This is the Brand Secrets and Strategies Podcast #73

Welcome to the Brand Secrets and Strategies podcast where the focus is on empowering brands and raising the bar.

I’m your host Dan Lohman. This weekly show is dedicated to getting your brand on the shelf and keeping it there.

Get ready to learn actionable insights and strategic solutions to grow your brand and save you valuable time and money.

LETS ROLL UP OUR SLEEVES AND GET STARTED!

Dan: Welcome. Before I begin, I want to remind you that there's a free downloadable guide for you at the end of most every episode of my podcasts. I always try to include one easy to download, quick to digest strategy that you can instantly adopt and make your own - one that you can use to grow sustainable sales and compete more effectively. Remember the goal is to get your product on more retailer shelves and into the hands of more shoppers. Here's today episode.

Have you ever had an opportunity to walk a trade show floor? Better yet, have you ever worked a booth at a trade show? I have. I know what they're like. They can be a lot of fun, and they can be extremely exhausting depending on what show you're going to.

The first day that the trade show floor opens, everyone is in a great mood and having a lot of fun. But by about the second or third day, everyone's pretty worn out, drained, and anxious to get out of there. I mention this because my guest today leads a very unique team. Same as other brands, they're thrilled to be there the first day, anxious to get out and meet and greet people. But what's unique about this team, is that they have the same energy, the same passion, the same drive on the last day. My point is that this is a special group of people that knows how to have fun. That's the story behind my conversation today with Dave of Dave's Gourmet. Dave's Gourmet goes out of their way to make their business fun, to continually find creative and unique ways to stand out, not only at a trade show, but on a shelf and with retailers.

Today, you're going to hear about how Dave uses that as the barometer for his success. How he continually looks at what he's doing to see if it's fun and if it makes sense. The categories that Dave competes in are very competitive. In fact, I used to compete in them back when I worked for big companies.

It can be extremely difficult for a small brand to differentiate themselves on a shelf full of mainstream products. Dave goes out of his way to infuse fun into the category, literally getting lost in a sea of red. You're going to hear Dave tell a story about how he stands out in these categories and how he's not afraid to go into different categories.

Again, if they can have fun, then it makes sense to Dave and his team. One of the primary reasons I wanted to have Dave on this show is to show you that business can be fun. A lot of us get so wrapped up in the day-to-day. We get blinders on and we get so focused on what we're doing that we forget why we started this because we wanted to have fun, because we wanted to make a difference, because we wanted to make an impact. Think about it. What gets you up in the morning? What gets you excited?

This is Dave's Secret Sauce. This is how he built a team that always looks to the positive. This is how he built a loyal following, and this is how he stands out on a crowded shelf in a very competitive category. That's what Dave talks about today. Here's Dave.

David, hi. Thanks for coming on today, and thank you so much for making time for us. Can you start by telling us a little bit about yourself and your journey to Dave's Gourmet?

Dave: Sure. Yeah. I'm Dave Hirschkop, and I'm out here in Northern California. Many years ago, 25 [inaudible 00:02:49] I had a taqueria called Burrito Madness. So it was sort of creative burritos and wraps and things in College Park, Maryland, so that's the University of Maryland. And we had a lot of drunk people come in and we love the drunk people. I started making hot sauces just to mess with them. It was so much fun that I said, "Gosh, what if I can make the world's hottest sauce."

I went on a quest, and I actually figured out how do it. And so we made what became Insanity Sauce. And we messed with drunks for a couple years. Then we took it to the National Fiery Foods Show and got banned from the show. New York Times picked up on it. It was just a joke that sort of became a business. Since then we've expanded, we're mostly a pasta sauce company now with a lot of organic and natural offerings and Overnight Oats now. We've changed, but that was sort of our start.

Dan: Great, and obviously we've talked several times at different shows, so I appreciate your sharing that. So let me back up a little bit. You were banned because your sauce was too hot? Did I understand that correctly?

Dave: Yeah. Some guy had a minor respiratory incident.

Dan: Oh no. Well, I'm glad that you're beyond that but, anyhow, I love the product, love the brand. I appreciate the fact that you're coming on today. So let's talk a little bit about your journey to becoming an entrepreneur. You created a sauce, and how did you go from where you were in Maryland to California?

Dave: I studied a semester in London and met this woman. I followed her out to California. So, it wasn't for any particular business reason, but because it was the accidental entrepreneur anyways in some fashion. But certainly the transition, I did what they actually coach people to do, so I sold the restaurant. Sauces were a hobby because they weren't that big yet. I actually, when I came to California, took a full-time job working for some friends as a mortgage broker, then did the sauces at night and on the weekends. So without the company not to have the strain of having to support a person.

Dan: It grew quickly. How did it grow quickly? How did you get the word out? How did you build the infrastructure? How did you start getting on retailer shelves?

Dave: We were fortunate because the sauce was so vastly different from everything else out there that media loved it because it was Insanity Sauce, and it was banned. I wore a straight jacket at trade shows. We had a booth that looked like an insane asylum, or our interpretation, at least. We really rolled with it and had a lot of fun, and it was the type of item you could do that with. We got called, though, really into more specialty and alternate channels. In the early 5 years of our company, I would say Bed Bath & Beyond was probably our largest customer.

Dan: Really?

Dave: We weren't that heavy into grocery at that point, and then we came up with Insanity Salsa, and Temporary Insanity Sauce, and Insanity Jellybeans. Because in a gift store, you can put different category items together in a set, in a brand block. Whereas a grocery store, those items get separated all over the store. You get much more judged on individual movement. Our original model was more just alternate channels and just had fun with it, and that has obviously changed over time.

Dan: Was that a sustainable business model back then before you pivoted into retail?

Dave: It was a sustainable model. The question is, was it a scalable model? We probably could have come out with a bunch of other lines that are gift oriented and sort of studied that channel a little better, but I think at the same time you had super markets playing more and more specialty items as were club and more mainstream channels. I think the gift stores weren't doing that well. [crosstalk 00:07:15] Picked apart [inaudible 00:07:17] mom and pops have been.

Dan: When you pivoted into retail, how did that work? Where did you launch? And then did you just start with the Insanity Sauces? How many different SKUs did you use?

Dave: Well, our first grocery chain was Tops markets in upstate New York. Terrific group. And so there were more independent chains that really were good to us, but it was really the very hot sauces. It's a little bit of a niche where we weren't judged so heavily on turn because we provided something that brought ... People that love spicy food are very enthusiastic, much more than someone who likes wheat bread. They want their wheat bread, but they're not feeling strongly about it. So, we pulled a consumer into the store that isn't gonna buy a lot of other things, so it gave us some leeway. But the problem is, when you have a sauce that's so hot, you can only go through a bottle every two years, it's sort of a self limiting. So, we wanted to grow more than that, and quite frankly, I'm sort of a classic entrepreneur of mind where I have lots of ideas, and just doing one thing, it felt very limiting to me.

Dan: Sure, makes sense. I'd love to know more about it. So, you identified your unique consumer. How did you communicate the value of your shopper to the retailer? And the reason I say that, reason I frame it that way, David, is because this podcast, all the content I put together, is about teaching brands how to leverage that unique consumer that you're attracting to help drive sales within retail. So, how did you do that? How did you come up with that strategy?

Dave: Well, we've never been accused of being the most strategic group in the world, but it was tough in some instances because a lot of them didn't, and some people still don't get it, why would anyone want that? It ruins your mouth. And so, we had to convince them by showing, "Hey, here's the New York Times, and here's the Wall Street Journal, and here's a cover article in Ink Magazine, here's our layout in GQ Magazine. Here's how fast we're turning at this other store." And so, more like those data points were very powerful for the people that aren't foodies, the buyers that aren't foodies and that don't like spicy food, or don't get spicy food. We had to sort of show them that, "Hey, we do sell well, and here's the enthusiasm, here's consumer comments and letters." That definitely helped sway with some buyers and others, not as much.

Dan: Well, at least, you got into the stores, and so you started in retail. You started getting your product on shelves. When did you start developing the other product lines, the pasta sauces, et cetera?

Dave: In the mid-90's, we had a lot of dressings that didn't do particularly well. In the late 90's, we had a line of flavored mayonnaise that was terrific, won a bunch of awards.

Dan: I actually remember that. It was good. I tried it at one of the expos.

Dave: Thank you. We thought they were fantastic products that would do well, but they did not. But then, just after the turn of the century, it just sounds old, doesn't it; we launched the pasta sauces. And interestingly, we came out ... Our theory was there's a sea of red, they're all basically marketing the same way, they all are somewhat similar, but nobody's using a tomato that I would want to actually eat.

So, we came up with heirloom tomato based sauces, was our original premise. So, we had a yellow one and a red one, and at first, they didn't really take off. And then, a few years later, we came out a butternut squash pasta sauce, and somehow, that was the tipping point for us. And then, they really took off, and so that's most of what we sell now, is those sauces. But it was sort of that experimental nature of just trying to find something that would work.

Dan: Well, I'm glad that you didn't give up, and I love the taste, the flavor of your sauces. I've used them a lot. So, what challenges do you run into? What kind of retailers are you working with? And to your point, that sea of red. How do you help the retailer understand why you're unique, you're different, and more importantly, how your consumer's more important to that retailer than some other sauce, not to mention any of the names, but the big guys?

Dave: I think that statistics are pretty clear cut, and I think the buyers understand the statistics of how specialty foods and natural foods are growing much faster than conventional. So, I think they get that, so I think they are willing, in most cases, to donate a certain amount of space to the premium set. So, then you have to battle within the premium set, and you're battling a lot of the thought process, even on your team sometimes of, "Hey, we should make the price lower." That tradition mindset, and it's like, "No, we don't make the price lower, we make people understand what they're getting better." We make it more compelling.

And so, you have to fight against and analyze, what's the right amount of promotion? Because promotional dollars are huge. And so, what's the right amount of promotion, and then beyond promotion, with other marketing dollars, how do you get the turns? How do you get this consumer awareness? And then, beyond the awareness, how do you get the conversion? And so, some trial and error. And so, for our creamy hot sauces, one of our [inaudible 00:13:18] lines, our focus is to get them on restaurant table tops, as the consumer awareness vehicle.

But that wouldn't work for pasta sauce, and it wouldn't work for our overnight oats. So the oats, we're trying to focus more direct to consumer as an awareness vehicle. But for heavy, glass jars of pasta sauce, that doesn't work. So, with those [inaudible 00:13:42] this amount of demoing, turn around of PR, or experimenting with some digital advertising strategies ... At the end of the day, we've always felt that the best thing you could do is just create the best possible product. And so, we've went back to our own products multiple times now and said, "Gosh, it's good, could it be better?" And we keep trying to tweak them to make them three percent, five percent, seven percent better. We've found that that's been our best vehicle.

Dan: I'm so glad that you didn't succumb to price, and that's one of my biggest challenges, my biggest frustrations when working with small brands, brands in the natural, organic spaces, that you're told that you need to lower your prices. The reality is, to your point, consumers want value, and they're willing to pay for it. If you can justify that your value is worth what they're paying for, then you've got that value proposition. You've got that consumer hooked. And then, also, if you can leverage it in your selling story, then that's what retailers need to be paying attention to.

Where I'm going with that is that the big brands are struggling on shelf, it's no secret now, at this point. I've done a lot of research around it, we've talked about it a little bit. The reality is that, if you remove the natural, organic chunk of the business ... and I did a thing for the 2016 Category Management Handbook that I'll link to in the show notes. But if you remove that chunk of business from almost every retailer's shelves, actually every retailer's shelf, every category would be down or declining. And so, they need you, and they need, more importantly, the consumer that you bring into the store. 'Cause the reality also is that your consumer's not just gonna buy a jar of pasta sauce and leave. They're gonna buy a lot of other artisan type products.

What experiences do you have around that?

Dave: Well, I mean, for years, I was running the Supplier Counsel for the Specialty Food Association, and we had done some white papers and some studies, and a couple of them were very clearcut with showing that the consumer that buys specialty foods ... and we'll sort of use specialty and natural somewhat the same here ... It's a higher value consumer, no matter which way you cut it. It showed that when they shop, they're shopping basket is not only larger, but more importantly, they buy the products that are higher margins for the retailer. So, they're a much more profitable consumer, and so, if you're contributing a third as many dollars to the retailer on your actual product, you might actually still be a better proposition because you're bringing that consumer to bear. Very smart retailers, like Kroger's very analytical. They look a lot at the statistics of, if your consumer doesn't buy it from them, do they go somewhere else? How much are they losing consumers when they lose certain products.

Dan: I agree, in fact, a good friend of mine, Bill Bishop, coined the phrase, personal supply chain, and then just behind that, exactly what you said, that if I can't find what I like in one store, I'll just simply go some place else, or online or wherever else. So, for retailers to remain relevant, they need to be paying attention to the stories, and also, this gives you more runway and gives you a better opportunity to help drive, hopefully, new shoppers into that store.

So, as you're building your sale story, how do you leverage this collateral, this information, these insights that you have, to help drive those sales?

Dave: It's easier and tougher in some ways 'cause the buyers are more sophisticated than ever, so they know a lot of this. But pasta sauce, for instance, there's also now, thirty some odd, pretty viable brands in the premium set, and a lot more overall in the premium set. So now, okay, they're committed to buying premium, they understand what that consumer brings, they're given pretty good commitment to that set, so now you're trying to say, "Why are you better than the other premium brands?" And so, you're gonna bring the IRI or Nielsen data to bear, which more and more retailers are looking at.

And then, you're trying to differentiate, but the categories, a strange category, it's not by itself because ninety percent of the category's marinara. So, for us, we've always been known for our innovation. So, a retailer come and say, "Okay, I want your wild mushroom sauce and your Marsala marinara." They'll pick our seventh, sixth, and fifth best sellers, but they won't pick our first and second best sellers. So then, you're going in with almost a losing proposition 'cause then you're graded as, "Hey, your sauce doesn't sell."

So, it's a very interesting category because you have to get your marinara in there 'cause it's gonna be your best seller, but then the retailer's left with a set of all marinara and not that much differentiation. So, it's a sort of a balance of, "Okay, take this number five seller that's different, but take our number one and two."

Dan: I'm so glad you brought that up. That's one of the challenges I run into when working with a lot of brands. You've gotta be able to tell the retailer, "Hey, wait a minute, you need this, this, and this, before you take five, six, seven." So, do you have a lot of ... How are you able to do that? Do you get a lot of pushback for that?

Dave: We surely have gotten pushback. You have to be willing to walk away sometimes.

Dan: Yes, exactly.

Dave: Some placements don't make sense. And one of the ways we do analyze our placements now is we plan placement and slotting, I think it's most definitely a [inaudible 00:19:51] now, is how long is it probably gonna take us to get the money back? If it's gonna take us a year and a half to get our money back, that's never gonna be something we do. If it's gonna take sixteen weeks, that's a pretty good deal. So, in situations where it's gonna take too long to get your money back, where they're putting you out in a way that's gonna make you look bad 'cause the items they pick, or how they're gonna place you on shelf, or whatever, you might wanna walk away.

Dan: True. Well, the reality is that, again, going back to the consumer that you drive into the store, that you bring into the store, I think that's the first thing, and unfortunately, most of the databases, most of the stories that I hear brands tell, ignore that, or overlook that. I don't mean to be negative about that, just I think it's a huge opportunity. Where I'm going with that is that if you're able to leverage that unique customer that you've got coming into the store and be able to say to the retailer, "Hey, don't tie my hands. I need to be able to survive. I need to be able to be here if I'm going to help support you," and leverage that in your selling story.

So, with that said, now you've got the pasta sauces and the hot sauces. How are you differentiating yourself on other shelves, as well? Or are you able to communicate, "Look at the portfolio products we have across different categories, and when someone buys our product, here's what else they buy, here's why. Again, we're really important to your successes as a retailer."

Dave: We haven't really done much, honestly, to sort of cross between our lines, and we've always been surprised how many consumers buy our pasta sauce and not realize we even make hot sauce, and vice versa. There's somewhat different consumers, there's definitely some overlap. With our [inaudible 00:21:47] and our creamy hot sauces, they're not very spicy, so you might get more overlap with the pasta sauce. But the labeling is different of the hot sauce and the pasta, they look somewhat different. So, we need to do a better job, but when we get PR, it's Dave's Gourmet, so it's not usually so specific. So, I think we've had so much media over the years that there's a lot of people that just sort of know our brand. And so, that's one of the things we haven't done a good job of is our brand is probably better known than our sales 'cause when people look at our sales, when they already know our brand, they're like, "Huh, I thought we'd be much larger."

Dan: [crosstalk 00:22:31] I'm not sure if that's good or bad.

Dave: So, the creamy hot sauces were partly launched as something that, we really wanted a hot sauce, but we don't sale that much hot sauce, so here's something that we can sale a lot of. It's very different, it's really good, but it's not so hot that it takes three years to use the bottle up.

Dan: Makes sense.

Dave: Then, we're doing shippers, and getting to the restaurant table tops, and we're doing lots of [inaudible 00:23:03] strategies.

Dan: Well, I think the restaurant strategy's a great idea. Now, how strong are you with social media, and what I mean by that is how great is your following? What is your relationship with your audience, with your fan base?

Dave: So, social media ... We're at like 25,000 people on Facebook. We're not really that super strong on social media 'cause it has never been our focus, it's not how we communicate. Our strategy's always been to do a lot of limited edition items, and sort of have fun with people that way. Sort of a creator's mindset rather than just sort of like, "Let's talk about, hey, it's National Puppy Day, and look, puppies like sauce, too!" So, that hasn't really been the way we wanted to interact. But certainly, people reach out to us on social media where I communicated that way. We've done a lot of influencer campaigns, but we've just never really found that that converts, and talking to people over the years, even ones with really big social media followings, they never said, "Wow, that made a big difference in my business."

Whereas I talk to a lot of people that said, once they took ownership of their promotional strategy, and they didn't just say, "God, promotions are bad. I feel so bad, they're forcing me to do it." Once they took ownership and analyzed it, that made a huge difference for a lot of people. Some intelligently done demo strategies with the right products have made a difference for people. Advertising, if you're big enough, can certainly be able ...

And then, there's the whole new thing of any sort of strategical [inaudible 00:24:48] ... came out, they had a special relationship with Safeway, and folks like Costco, and those two gave them so much visibility. And then you've got some [inaudible 00:25:03] that do these exclusives with Whole Foods, or some people that do a massive focus on Amazon to really get out there and get visible.

So, I think that's something that we're trying to get smarter at, too. When you come out with a new line, how do you strategically launch with the right barter to blow yourself up? QVC is something that can do that for people.

Dan: Are you on QVC?

Dave: We're not, we're not. I don't know if our items are necessarily the right type for QVC, so that's the thing about strategically launching is, you have to do in the vehicle that makes the right sense for that type.

Dan: Well, that's why I was asking. So, when you say take ownership, Dave, of your promotional strategy, what do you mean by that?

Dave: So, if you go to trade shows and walk around and talk to other vendors, what you'll hear at least multiple times every trade show is complaining about, "Oh, my gosh. The distributor acts ... the charges they're giving me, my thirty thousand dollar invoice, I got a check for seven thousand dollars." [inaudible 00:26:15] it feels, it's very abusive, but when you drill down, if you look at your PNL, you are gonna spend a big chunk of your income on promotions. And if you don't do it, the distributors will definitely punish you, and the retailers will punish you, unless your item just happens to sell like gangbusters. But ninety some odd percent items won't sell that well. I would probably ninety-eight percent items probably won't sell that well.

So, promotions are not this thing that retailers and distributors do to punish you. Do they make money on them? Yes, it is a profit center for them. But if you understand, it's gonna be happening, your item's not gonna sell well enough to avoid it, then you look at it and say, "Okay, well, what is this big bulk of money I'm spending?" And you say, "Well, gosh, done well, this really helps my items sell a lot faster, and done really well, I'll actually make a lot more money." So, maybe you should take ownership of it, start analyzing your promotions, and start saying, "Gosh, if I do it this way, it doesn't work."

'Cause you'll hear really sophisticated marketers, a lot of the guys from the bigger CPG's, they'll say, "We figured out these combinations, and one plus one equals thirty." So, where you can get double the effectiveness out of promotion by timeliness, or [inaudible 00:27:49], combining it with an end cap, or whatever you're gonna do. So, that's really about taking ownership.

It's partly being analytical and getting at least some data. It's trying to negotiate a little bit, about, "Hey, can I pay you a little bit less slotting, and I'll turn that money into this promotion?" It's just sort of working it in an intelligent way, which isn't necessarily our historical strength, but there's a lot of [inaudible 00:28:23] out there in the industry, like yourself, who are strong at it, and it makes a huge difference. And you can say you don't like it, you can say that's not your thing, but you're spending the money either way.

Dan: I'm so glad you said that, and by the way, thank you, also, for saying negotiate 'cause that's one of the things, I don't think, brands realize is that everything's negotiable. And so, let me back up a little bit. Most of trade spending is wasted, it's the largest single item on every brand's [inaudible 00:28:56] sheet. So, fortunately, unfortunately, like you said, you've gotta spend it, but you can spend it efficiently. So, if you're paying on scan, what scans through the register, then you can be pretty sure that you're gonna get your bang for your buck. But when you're just throwing it in against a black hole, the distributor, whatever, and you have no line of sight to whether or not that retailer actually promotes, or even has your product on the shelf, that's a huge mistake, that's a huge problem.

And so, if there's a way for any brand to leverage, "I will promote in this store if the store commits to a side stack to something" to make it worth your while, first of all. Secondly, backing up a little bit, the reason I was asking you about the social media program, David, you did a great job of sharing how you were able to leverage your relationship with the press, the press that you had, to help you get your brand in store shelves. I think one of the opportunities that a lot of natural, organic, specialty, et cetera, brands miss is that if you have a strong social following, you can leverage out of retail, too.

And so, think about it. If you can actually, again, go to the retailer and say, "Hey, I'm Dave, I got a great hot sauce, cool slogan, all that other stuff, and by the way, here's who buys my product, here's what they look like, here's how they buy my product." I built this into a free course, but the point is, if you're able to leverage that with the retailer and help the retailer understand that when you're promoting your brand, it's not just a matter of, are you on the shelf? Are you on an end cap? Do you have a demo? Et cetera.

But, and this is the big but, you've also got a strong, supporting social program behind that to help drive traffic into the store because, at the end of the day, retailers want two things: more foot traffic and a little bit of profit. And if you can help them get more foot traffic and increase their turns, and back to what you said earlier, market basket, increase the size of that, that's the holy grail. And any retailer that turns that away is not thinking very strategically to be bought, so I would strongly encourage you, and any brand listening to this, to leverage every single resource in your arsenal. Because the reality is whether you're buying Spence, Nielsen, or [inaudible 00:31:12], that's historical data. That's not helping the retailer understand or learn anything that they don't already know.

Your consumer, to understand your consumer, and why your consumer shops, how they shop, why they shop, and if you're the expert in your consumer, and then, conversely, you're the expert in your competition's consumer, and then you're able to help the retailer leverage you as a category leader with this great knowledge that you have. That's the turning point that I've seen for a lot of brands, and then that gets back to your ability to say, "You know what, I understand you like item five, six, and seven, but if we're gonna do this, we need one, two, and three, or we have no future here because we know it's gonna dilute our sales. You're basically diluting the foundation for to build our brand on.

Do you have any thoughts or anything else you wanna through into that conversation?

Dave: You certainly mentioned the category captain, and that's a strategy a number of brands tried to use, and I think it's powerful if you're apt to do that. But you do have to have data that is more forward looking, and you have to be thoughtful about it. If you're the number three brand, and you're saying, "Hey, put me everywhere and take out the number one and two," that's not a category captain approach. The category captain approach is saying, "Well, here's what's best for the retailer," you might adjust it a little bit in your favor, that happens, but it's sort of [inaudible 00:32:44], and it's the scan data, certainly, but it's also that sort of consumer data, like here's how the category's moving, and here's how you should adjust your mix and your layout and all that to really keep up and have consumers wanna come to you for this category. And so, I think that's a great approach.

I think the same thing is true somewhat with R and D. You got all these people watching trends. I must get an email or two a day to talk about what the trends are, but a lot of that's ... things that we've done that are innovative, if I was watching trends stuff, I would've been way behind that curve. Then, that depends if your company is more focused on making parental or truly innovative, and some of the most profitable companies are the incremental ones, which is a slight tweak on something. There's nothing wrong with that, that's just not what we're interested in.

It's more like, I think thinking is really where the trends come from. What makes sense, what's the problem, what's wrong with the chicken we're all eating? Is it too hairy? Is it too heavy? Is it too skinny? Is it too whatever? And then solving the problem. It's the same sort of analogy, but behind the curve, ahead of the curve. You don't always have to be that far ahead of the curve. Some retailers like to be slightly behind the curve, and some wanna be ahead of the curve and understand who you're talking to, also.

Dan: You're talking about being a category captain. You're right. Category captainship requires a lot of data, a lot of manpower, a lot of man hours, et cetera. I've been a category captain for national retailers, loved it, loved every minute of it, but there's a lot of costs involved in doing that. And there were a lot of times where I turned it down because it just wasn't gonna justify itself with that particular retailer.

Now, what I'm talking about is category leader. A category leader is any brand that can step up and help the retailer understand, again, whose their shoppers, why they're buying, et cetera. They're trends, they're innovation. One of the things that I love about natural, organic, this category, I'm including specialty into this, as well, is that you're a lot closer to your end consumer. So, you're not innovating based upon what a focus group wants in a laboratory type setting focus group [inaudible 00:35:18] but more importantly, if you've got that strong relationship with your tribe, your fan base via social media, et cetera, and they're telling you what they want or how they want you to innovate, that's, I think, where you can differentiate, again, at shelf within the retailer and help the retailer understand, again, how to drive sales by leveraging what you have, this unique value proposition.

And the best part about it is, most brands overlook this strategy. Sounds simple, sounds easy, but I built a career on this, kicking big brands around, including P&G, Frito, et cetera, by being able to differentiate myself by becoming an expert in the category, the brand, the others brands. And even when they were the category leader, being able to provide insights, actionable insights that they weren't providing to the retailer. So, try that, and then overlay that with your social media strategy, and I'd be anxious to see how that goes. So, you can tell me all about it at Expo West or Expo [crosstalk 00:36:19] bump into each other.

But try that. And yeah, that's why I built that course, that's what almost all this content is about. The podcast, all the articles, et cetera, is about teaching brands, like you, how to use these strategies while staying laser focused on your mission of getting through the day and building runway and driving sales, and all that other stuff. But teaching you how to do that in a manner that makes this more fun, where you can sit back, like you said, and figure out another creative way maybe burn somebody's, I'm just kidding, someone's throat. Create another insane product.

Use that if you can, if that helps.

Dave: That's great information. The thing is, we all have to be aware that we can't be good at everything, and so, if your [inaudible 00:37:09] just not good with data, and just not analytical or that detail oriented, then you better be really good at creating products that are superior and with better packaging. You can win that way.

Dan: Absolutely, you can actually win better that way. I'm sorry, go ahead.

Dave: You can. So, it just depends, and there's certainly people that do the incrementalism and are great with the numbers and the selling strategies and all that, so certainly learn about all these avenues, and then try it on, or see if there's a contractor that you can get help from, or hire somebody. We're certainly ... data is an area we're really trying to step up our game.

Dan: Good, good, good, and I'm so glad you mentioned that, too. Here's the sad reality is that most of the topline canned reports that you can get out of any of the databases don't impress the retailers. In other words, if you walk up to the retailer and say, "Here I am, Look, I printed this off. Look, it shows how I'm selling products, et cetera. I'm up number three in the category, and my sales are up two perfect or whatever." A savvy retailer already knows how well you're doing. They don't care. They don't need that reinforcement. What they do need, though, are those insights that they don't have access to, and so, again, if you could step back a little bit, find out a way to survey your customers, find out what they want. Why do they buy the products? That's far for actionable. So, yeah, the data helps, but what's really is important is your ability to leverage that relationship that you have with your unique shopper at shelf.

So, anyhow, that's why I do what I do because I'm trying to provide resources, free resources almost entirely, on teaching brands how to really leverage these strategies. And as a side note, the distribution tracker and some of the tools that you see, the advanced reporting tools, I actually created those years ago when I worked for Spence. I got them to start selling retailer and store level data.

The point being is giving you brands, giving brands like yours rather, line of sight to what's going on at shelf. You have a good starting point, but it's not the ending point. What you need to do is ask is why what happened, happened, and again, if you can say, "Well, I'm ranked number three in the category." Well, you've got a pine, it's shifting constantly, and if you took sales away from someone else, why did that happen? Or if they took sales from you. Did they promote their product? Did they get more shelf space? All critical components, and like I said, I'm focused on trying to help answer those questions in the content I put out in podcasts, et cetera, so thank you for sharing.

You told me when we were talking that you've got some new product lines, so talk about your oats, and talk about some of the new innovation you've got coming. Because, again, that shows the retailer that you're more than just a pasta sauce or a one trick pony. You're adding value to their store shelves.

Dave: I think we wanna communicate to people, 'cause it's true, is that we have an experimental mindset. We're curious about food. What if we put this with that? It doesn't work a lot of the time. We worked on one product for eight and a half years. We still haven't launched because it isn't very good. So, we want to have fun with it. The creamy hot sauces came out, they're whipped hot sauces, so they're actually vegan.

In Texas, it's sort of a thing they already know down there, but it's really savory and more complex flavors. We love it. Then, after that, the overnight oats came out a year ago. We were surprised when we first saw overnight oats. Hundreds of thousands of Americans have been making overnight oats for a while. Some as many as decades ago. In other parts of the world, they make it and call it other names. You soak the oats. It's like muesli, most of the time, but you soak it overnight, and then you get it cold. Which you might have some nutritional benefits, digestive benefits, but really, just more convenient, and the liquid absorbs the flavor. It's the apples and oranges kind of comparison to oats.

We launched that. "Why would you do oats if you're a sauce company?" Well, we're at a point now where we're like, "Why not?" We like it. We wanna launch things we like, that we think consumers will enjoy. Things to make people's lives just a little bit better. We're not curing cancer, we aren't doing anything revolutionary, but this is what we like to do. So, the oats came out a year ago, and then we're working on ...

I'm one of those people that can't resist snacking. I found all strategies to not snack, but nothing seems to really work. So, I've taken a lot of looks at what I am snacking, and a lot of the trends are toward certainly healthier snacking. I do athletics and all that, I wanna be healthier too, right? The problem I have with a lot of the healthier snacks now is I feel like they're almost a little bit on the green watching side. "Let's take potato flour, add a smidge of vegetable powder to it, and call it a veggie snack." That methodology, maybe it is incrementally healthier than eating a potato chip, but to me, it's kind of not really accurate to call that a healthy snack. I still don't really wanna eat that. I don't feel good about eating that.

So, we're working on a line of what we feel are truly health snacks. If you're not gonna eat raw vegetables, which is probably the best thing you could do, but is not always convenient and not always desirable, we wanted to create what was the next best thing. Through this winter, we'll be coming out with the first in that line. We believe with the artist mentality of, we want to really feel good about what we're doing. We don't wanna just do spin or turn of phrase, and convince people to buy it. So, we think the first one's will come out. We won't make anything unless it tastes good. I'll can the project in November if it's not gonna taste good. We're working hard on figuring that out.

The problem with innovative products is getting the ingredients [crosstalk 00:43:37] required, and then finding someone to make them because we always outsource our manufacturing. It's tough, and when you're small, you're almost the tail trying to wag the dog. You're always trying to surf on someone else's supply chain. You're hoping that a big company is using one of the ingredients for some purpose, which maybe is often different than our purpose. You're trying to find these things, and unless there's one ingredient that's so, so valuable to us that nobody's using, then we can make a big, big bet on. But it's coming together, and we think it'll last Winter.

Dan: Good. One of the things you've said several times is have fun. That's one of the things that I love about bumping into you at the trade shows and seeing you all the time is that your group is always having fun. It's not a bunch of stodgy, "Well, look, if you buy this." You guys look like you're really enjoying yourself. You look like you want to be there, and that's what's great. It's obviously contagious that you're able to surround yourself with people, that same mindset.

Dave: I like trade shows because there's always interesting people walking around, and they're all interested, well, most of them are interested in food. One year, for our Scorpion Pepper Sauce, we had live scorpions in the booth, and then one year, we had dried scorpions that you could eat. Then, we had miniature hot sauces one year, so we had these little pants and had these signs. It's like, "Is that a hot sauce in your pants, or are you just happy to see me?" The creamy hot sauces, the labels features tattoo art, so we have these tattoo sleeves now all of us wear. So, it looks like we have arm sleeve tattoos.

Dan: You mean, you don't?

Dave: No.

Dan: I thought you had a sleeve tattoo because it seems like the last several times I've seen you, you've had a sleeve of tattoos on.

Dave: Nah, that's just removable.

Dan: I didn't know that.

Dave: Over the years, I've been constantly told like, "Wait, you're the guy behind Dave's Insanity Sauce? I thought you'd be wilder."

Dan: The goatee, and the Harley, and the whole of gray hair, just kidding. It's great that you have so much fun.

You talked about the specialty gourmet, I mean as far as fancy food shows, Specialty Food Association. Can you talk a little bit about that? Well, first off, let me back up. Are you finished talking about the different brands and innovation that you're coming up with?

Dave: Yeah, I forget, was it the Bush election where the Wendy's commercial was, "Where's the beef?" Our whole thing is the product stupid? So that's been our philosophy always. We're not the best salespeople, and we're not gonna be the most sophisticated marketers. But we think we can create products.

Dan: You do.

Dave: That's it. If we don't do our job, we won't ultimately succeed, so we just have to constantly create better and better products.

Dan: Like what you've done so far, so keep it up. Don't ever forget that. A lot of brands are afraid to fail, and the reality is you've gotta try different things. I appreciate your sharing that.

So, the Specialty Food Association, what is that? How are they? And how are you connected with them? What do you do with them?

Dave: The Specialty Food Association, which used to be called the National Association for Specialty Food Trading, has been around for sixty some odd years, I think. I should know that. Originally, it started out as a bunch of importers in New York, food importers, that sort gathered and worked collectively. Now, it's really grown. Their main outreach is the two Fancy Food Shows in New York and San Francisco, and they have a lot of other educational programs, and they're trying to explore what else they can do. Which about them is they're very member oriented, so it's all about value to the member. How can they help their members? How can they get more people eating specialty foods? They always talk about specialty foods, but they have as much natural food, I think actually maybe more natural food, at the fancy food shows than they do at the Expo Show. So, it's both natural and specialty.

I think the big difference is that the SFA is really foodie culture, and they're really about, they're talking about the gourmet elements of the food and the ingredients and this and that, and not so much about the five year exit and the private equity funding. Although, certainly, that's seeping into every industry now, and there's nothing wrong with that if that money allows the industries to grow faster and do better. Their shows are less expensive, they're really interested in how to help with science, your company, and that's where a lot of our PR came from in the early days was actually through the Fancy Food Shows because they had so much great media that comes to the show that they cultivated. It's more complicated now with so many bloggers.

But they're a great group. They have a big committee structure, so people that join the association for a few hundred hours can be on committees, have a lot of input, have a lot of control. A lot of educational resources, mostly in the form of white papers, so you can learn about if it's better to be in a six pack or a twelve pack? What are better promotion strategies? And distributor or going straight to the retailer? What is the best way to work a trade show? Which I think that's one of the white papers I had contributed to. There's a lot to learn always.

Dan: Always, yes.

Dave: And continually learn. How to work with Amazon, the club channel, and all that. They just really focused on helping you. The Board of Directors is all members.

Dan: I've looked at some of the content they've put out there, and it is good stuff. And on that note, if you can think of, or if anyone can think of things that they want me to cover, people they want to talk about, have me to interview on this podcast, I welcome your input. So, if there's anything that you personally, Dave, wanna see me cover or talk about or "how do you do this?" et cetera, let me know because it's all about you, and it's for you. That's what the folks at this podcast is my goal, my mission is to help you get your product on more retailer shelves, and into the hands of more shoppers.

So, if you've got some pitfalls, comments, questions, advice, suggestions that you want to share along those lines, or if you want me to go out and figure out, if I don't already know myself, find someone that can help answer those questions, I welcome the opportunity to do that for you and for everyone else. So thanks.

Anything else you wanna cover that we haven't covered that you wanna share?

Dave: There's always so many little things to learn. The market research, how do you do that? How should companies be doing that? How do you do tastings and product research? And there's a lot of cheap things. You can do SurveyMonkey type of work, and there's lots of online resources for research. Who should be tasting your product? Should you be the taster? Do you understand your consumer that well? Should you be using panels like the big companies do? So that's certainly something.

Something for you to cover, nobody's really done, and I don't really understand why is sort of the company life cycle in the studies. What happens if out of a hundred companies that launched in 2010, how many took funding? How many didn't? How many sold out? How many went out of business? Why do people have a business? How many are gonna hand it on to their kids in 2030? Nobody really does that sort of thing, and I think it's helpful for companies going in what the probabilities are. Like, "Hey, most of the time, I'm gonna fail, and here's why I'm gonna fail, and how can I avoid that?"

Dan: Well, that's what this podcast is about, so that one I'll definitely work on. I've got some anecdotal stuff that I can share that I've already produced on that note, but back to your earlier question, panels. Here's the challenge. When a large brand hires a panel to come in and say, "What do you think about this?" sometimes the information they're getting isn't that great. And I could actually give you hours worth of examples where I know of products that were approved by the panel that got the blessing, et cetera, they went through all the vetting, and then the product failed. The reality is that shoppers want what they want, and shoppers are going to choose what they want based upon their needs, and not because a panel said, "This is what you need to do."

So, that kinda goes back to our earlier part of our conversation. Develop a strong, loyal tribe around your brand, and ask them. If you can walk up to the store, Dave, and go up to anyone picking up any hot sauce, any oats, any whatever, and say, "Hi, why did you buy this? What do you think about it? Why do you like it? Why don't you like it? What do you wanna see different? What's important to you?" The reality is this, consumer buying habits have changed. Instead of just walking up to shelf and buying the red box or the blue box, consumers walk up to shelf, look at the product, do research offline, ask their friends and family about it, and if you can get into that conversation and understand their mindset, that's where the innovation takes place.

So, the first part of your question is, I would never, ever, ever suggest a panel, especially for a small brand. They're extremely expensive 'cause they put a lot of how do you wanna answer these questions? The reality is if you can get a group of people together, and I don't mean physically together, on social media platforms and surveys, et cetera, and ask them, "What do you like about our product? What don't you like? What would you like us to do differently?" Some of those questions that you really wanna apply, that'd be great.

Side note, there was a company that I did that's actually doing extremely well today, and part of what I did as the initial project for them is I told them to run a Facebook survey. Very unscientific, but the reality is we were able to use, in the words of their loyal shoppers, quotes that I was able to bake into that presentation that I created for them that they then took to the retailer and said, "Hey, here's our shopper." Back to what I keep saying, and we're able to leverage that relationship that they have with their shopper, and then they were able to leverage that relationship with their shopper to drive foot traffic in the store by having promotions that coincided, not only with what the store was doing, but within their social media, within the given markets, et cetera.

Again, these are some of the strategies that I talk about in my course, my podcast, et cetera, so look to that as examples, but hopefully, I answered your question.

Dave: Absolutely, and we've tried all the avenues.

Dan: Okay, well, don't give up, don't quit. But I'll look forward to seeing Expo East, so you can show me what you've learned and all that.

Dave: Oh yeah, always learning, and Expo East will be exciting 'cause I think we'll be previewing the new line.

Dan: Oh! I'll look forward to it, I will definitely stop by and talk to you without the sleeve.

Dave: No, we'll have the sleeves!

Dan: That's funny.

Dave: We'll have an extra for you, if you need it.

Dan: There you go, there you go. I appreciate it.

Well, thank you for your time. I really appreciate you making time for us today. Thank you for sharing your insights, telling us about your brand, your journey to becoming an entrepreneur, and about the Specialty Food Association. I look forward to talk to you September, if not before.

Dave: That sounds great. Thanks, Daniel.

Dan: Thanks, Dave

I wanna thank Dave for joining us today, for his time, and his wisdom, and to remind us to always have fun. Always try to find the bright side of things. I'll be certain to put a link to Dave's Gourmet in the show notes and on this podcast webpage. You can get there by going to brandsecretsandstrategies.com/session73.

Today's freebie is my eight strategies to maximize trade marketing ROI. This is one of the areas that Dave talked about a lot. It's an area that every brand struggles with, and it's an area that I plan to dig more into in my courses, in my podcasts, and all my other content.

Thank you again for listening, and I look forward seeing you the next show.

Daves Gourmet http://www.davesgourmet.com

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