'Protect the Margins': Spread The Love Masters Amazon CPG Channel With A Simple Mantra

One of the most popular organic peanut butter brands on Amazon started as guest favors that Val and Zach Fishbain whipped up in a Vitamix for their DIY wedding. It is a classic “you-oughta-market-this” story.

Seven years later, Spread the Love, a full line of nut and fruit spreads, is a hit both as an ingredient in the wholesale channel and on Amazon. As Zach tells Brand Insider, the founding couple believes in business models that are as sustainable as their ingredients. It turns out that eschewing VC funding and focusing on B2B as well as that single Amazon consumer channel paid off big when the COVID-19 crisis strained their competitors’ omnichannel distribution networks.

Spread the Love had the nutrient-dense nut butters consumers wanted. And the Amazon ecosystem had the engine that helped the brand surface. Our interview with Zach covered a lot of ground, only highlighted here.



Our Brand Insider podcast this week includes the full talk. There we covered the quirky history of Share the Love, explored its success as a wholesale ingredient, and got a little nerdy about the pure peanut butter experience. Spread the Love will also share what it has learned as a successful CPG brand within the Amazon ecosystem at our virtual Search and Performance Insider Summit on June 8-9.    

MP: While a substantial share of Spread the Love’s sales have been B2B, much of your consumer-facing brand-building has been on Amazon. How has that channel evolved for you? 

Fishbain: We first got involved with Amazon through Vendor Express. That was when Amazon was essentially placing purchase orders and then selling them. So Amazon owned that inventory. After that sunset, we went where we still are, with Seller Central, where we have real-time control of every aspect of this.

Now, we don't own the relationship with the customer, but we have pretty valuable insight at the same time — what these customers are buying and if they bought from us previously. And so we're learning a lot, like, this person started off buying a single jar and then they bought a three pack and then they bought a six pack and now they're buying our curated gift sets. So we're really learning a lot about these customers. We're learning about some of the the trendy aspects of what customers are doing, if they are going more online from brick-and-mortar retail.

MP: But what are you learning about their profiles, about who your customers really are?

Fishbain: It's a good question. We're certainly not learning as much about them as I'd like to know. The interactions that we've had, the demographic that we're really learning the most about are people who take the time to reach out. So if somebody orders a jar of our almond butter, it arrives and the lid is cracked and they don't want to eat it because they feel like with the COVID pandemic, they don't want to take any unnecessary risks. 

MP: We should point out that your pricing on a single jar of peanut butter is $7 to $9.

Fishbain: [On] Amazon, it's $12.99. It's not cheap. But they're going to get top-class customer service. So they're going to reach out, if they have a problem, they know they're going to get this problem solved. The customer feels like they're confident in being transparent with us because we know that they know that we're being transparent with them. They leave knowing that they're a valued customer. This is one of the positive experiences that they end up sharing with the people in their immediate network.

MP:  Before the current crisis how did people discover you on Amazon, and what was the marketing plan there?

Fishbain: The initial discovery had to do with the fact that we had a clean-label product, which is still rare in a popular category. We had a clean-label category which we already knew customers were demanding from our own experience, and we happen to have had something that is a household staple. So I really attribute it to just the product attributes within a popular category.

MP: So COVID hits early March. Take us inside that Amazon ecosystem from the perspective of a CPG. You're suddenly seeing a huge amount of new interest in ecommerce across a much broader set of categories, CPG among them. You've got a very hot marketplace with a lot of different choices. What are some of the ways that you experienced and saw those changes in the marketplace?

Fishbain: For us, it's bottom line. We needed to protect our margins as we grow. We knew that customers were already trending towards the e-commerce, going online, making purchases. That was one thing in our favor. We did not spread ourselves so thin in the conventional distributor retail paradigm. We steered clear of that, mainly because we wanted to not pursue top-line growth at the expense of bottom-line growth. 

So when COVID hit, we were already leaning heavy into ecommerce. That was where we knew we were going to be growing. We were ready and we were prepared when there was a surge in demand from online shoppers to buy something in a hot category that was nutrient dense, that people are panic buying, they're buying these other things. 

And while some of our competitors were out of stock for days and weeks, we captured that market share. Whether or not they've gone back to some of those other brands, I'm not sure.

But I can tell you from some of our more recent customers … we can see their first purchases were made during March and April. So when other brands were unavailable, who are they going to turn to? They're going to turn to Amazon's choice for organic peanut butter, Spread the Love. They're turning to ours using the keyword searches. 

The way that we have our attributes on our page lined up, that's all very deliberate. So that when people look for something with no added sugar and no palm oil, we're coming right to the top. We were able to focus our efforts on ecommerce without the distraction of making sure that grocery chains in this and that part of the country were adequately stocked. Given that we're building our business around profitability and we want to protect our margins and we didn't want to necessarily see those two distributors in different parts of the country. 

MP: What were the main challenges?

Fishbain: There were some issues. Even getting something out and picked up by an LTL carrier. It was still sitting in Amazon Live for three or four days. We had to use all of our resources. We had to call the dockworkers. Honestly, I don't even remember how we got those emails, but we were communicating with the inbound and the receiving dockworkers for Amazon Stockton terminal and we were saying, "Listen, this trailer has essential goods on it. This needs to get in." 

We had a direct line of communication with some of the people that were in control of how quickly something was going to be received and checked in. Everything from sourcing to logistics to becoming an expert in commodities, like, all hands were on deck. Everyone did a fantastic job. 

MP: How important is it for you to create some kind of migratory path for an Amazon customer to ordering on your site where you can have that direct relationship and capture much richer data?

Fishbain: I don't necessarily want to have everybody migrating to our site, and I'll tell you why. First of all, the customer is going to get more value when their shopping cart values are below a certain dollar threshold. On our website, for example, you get free shipping if you purchase $25 or more of product. If you want just a jar of peanut butter or you want just a jar of almond butter, it's better to buy it off Amazon. If you have a Prime membership, you're not going to pay for shipping, you're going to get it quickly, you're going to get it delivered in two days. It's going to be with a bunch of other stuff. It's easy, it's simple. 

With our website, it's absolutely worth buying from us if you're going to be buying $25 or more of product. But I love how Amazon has allowed us to grow and there's a place in our world for Amazon. The third-party fulfillment is really what we love so much about Amazon. Our funnel is not getting people to convert from Amazon to direct off our website. We're out there marketing in the world, not on Amazon. We position ourselves in social media. How can we get more personal with them when they're on either? Their regular lives isn't spent on 

We don't have a conversion strategy to get people from Amazon to our site, nor do we necessarily want one at this point in time. It would present a lot of obstacles and challenges for us to fulfill so many orders that are smaller anyway. 

MP: What are the biggest lessons you've learned from the last two months about anything: the supply chain, your own company, your own marketing efforts, or customers or all of them?

Fishbain: Sure. Well, first of all, you really learn what you are made of and what your team is made of. I've studied business in school and it's common wisdom that it's all about the people that you surround yourself with. You really test that wisdom when you're in such a high-pressure and high-intense situation.

You need to be absolutely confident with what each person's role is within the company. Are they going to really be able and willing to put on different hats? Our decision with the key personnel that we brought on was absolutely validated. That thought was very refreshing.  

I also think that you have to protect your margins. If you are spread too thin and you have too much inventory allocated, too low of a margin, it's going to hurt you when there is such a spike in the math. We really learned that protecting your margins and making sure that whatever you're doing to grow is sustainable is incredibly important because that capital is going to dry out in an economy like this. 

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