David Delcourt calls himself Chief of Flavor and CEO for the hot sauce brand Seed Ranch Flavor, and now the plant-based Mac and Cheese brand GrownAs*. He means it. His brands start in his own kitchen, and in the case of GrownAs* with his own kids and whether they actually clean their plates of what he tries on them. In short order, the GrownAs* mac and cheese recipe went from clean plates to over 700 stores. But only five or six years ago, David and his co-founder were selling homemade hot sauce to friends at farmers’ markets and on Amazon. As he tells Brand Insider this week, his is a kind of grassroots omnichannel path.
MediaPost: Your hot sauces went from local farmers’ market distribution to grocery stores like Whole Foods and Sprouts. How did you make that leap?
David Delcourt: From the very beginning we were on Amazon, so that if somebody visiting from California or Boulder, they could buy it again somewhere. But in terms of that market approach, it was about building awareness, getting a lot of feedback from customers. The early days was me going to every local grocery store and pitching them in person for the most part. But it was really that local regional focus starting with the Lucky's Markets. Alfalfa is our local grocery with regional outlets where I could go in and demo, and have people experience the actual flavor there. Then in 2017, and in 2018 we launched with King Soopers, which has been a great success. Pretty much in 2017-2020 all those years we doubled in size.
MediaPost: Are there particular lessons that you learned and took away from that experience? It sounds like a 3- or 4-year arc of getting into retail. Many grassroots CPGs argue it costs more to get into major retail than it is worth. How did you learn to do it profitably?
David Delcourt: It is really expensive. I think there are two ways to launch a CPG brand. One is with a lot of cash in the bank, and the other is with a lot of determination, grit, and focus.
You have to have differentiation, the problem to solve, if you will. In terms of the retail launch, what we really did was just said, we're going to focus on anywhere that will support us if we support them without free fills, without marketing agreements, without those big deductions. Now, as we grew, it's kind of part of the system, and its how retailers can charge the prices they do. And distributors are only marking up a certain amount to those retailers. So free fills, for instance, is really the big one for a lot of early CPGs, because it says, okay well, if I'm going to go to Whole Foods national, that's 550 cases of each flavor for those stores. You're getting paid $0 on all those and so you're starting in a hole.
So back to that local and regional side, if you don't have marketing dollars for free fill, for awareness, it's not worth going to 1,000 stores. All of a sudden you can't support them, and the cash flow falls out and you go away. It's really around who's the local grocery store who can support you? Are there any smaller markets where you can spread the word? In-person events work for some brands, for other brands not so much. But it's such a wonderful way to get customer feedback. So when you're going to retail and you're talking with those buyers, you will know that this is your best seller, this is your second and your third. These ones, they do well with this set. But really you want to focus on these three because less is more in a lot of ways.
MediaPost: What's different between your original launch of the hot sauce product and the GrownAs* launch?
David Delcourt: There are two differences. One was, we had an established relationship with a lot of buyers, with distributors, etc. So, leveraging those relationships and those conversations we've been having over the years. The other is the brand, really the brand was both on trend in terms of dairy free and vegan, but also punchy. And there was always a smile and kind of a laugh, and oh, I will taste that. So those were a conscious effort to really make that pop. And we still did a lot of veg fests. We did local vegan festivals as well as ones in Las Vegas and in Miami to get that customer feedback. So, there was still that loop of customers’ opinion. And this is a much different category. Hot sauce is very busy, and Mac and Cheese are busy too, but we have a significant differentiation in terms of clean ingredients, in terms of the brand, and the biggest one is flavor.
So, it took us six years, almost seven, to get into the stores we're in with Seed Ranch right now, and GrownAs* will be in 700+ stores by the end of this month, including Sprouts, Harmon, Heide, King Soopers and City Market, and having a lot of really great conversations with some other retailers.
MediaPost: What is the state of the plant-based market now? It seemed to explode then simmer down.
David Delcourt: If you think about it, the seven percent of the country is self-proclaimed vegan. Then you've got about 30 to 50 million Americans who are lactose-intolerant, so that's a big part of our market, and then you have health and heart conscious. If we look at Paleo, for instance. Paleo was just the craze for the longest time. We don't hear about paleo so much anymore. Now it's still on bags, but it's what I would say, reaching a steady state versus being part of a huge upward trend. So, I think, with vegan, it was very hot, and remains, I would say, in a growth mode, but it's not all the craze. So, I think the reality with that in Keto, I believe, this year, and next year we'll start to see people focused on Keto products, but they're not screaming Keto all over the bag. It's about the high-end good fats, and carb-free, and those types of longer term.
So, for me, when I look at vegan, it's hitting its stride in terms of an everyday item. Okay, here's your winners, and here's your main players.
But I don't think it's going anywhere, and in terms of the feedback I'm getting that dairy-free side and the allergen-free side are equally as important in that vegan market. And then the last piece, I’ll say is I think there's a lot of pushback against the highly engineered vegan foods. So cleaner ingredient vegan foods that people feel like they're eating vegetables instead of eating something that was developed in a lab will win, and will become, I think, more of the staple.
MediaPost: And let's round up by talking about media planning because you've got several channels at work. You have direct sales, even a subscription product, I think, around that. And then, of course, you've got retail. That's quite a mix and quite a mix to maintain. I'm curious what you've discovered about how you allocate for your media?
David Delcourt: The question also leads me to think about what in retail as a CPG brand, I look at as growing brand equity, as company value. It's really tough to be a profitable, scalable CPG company just in retail. Omni-channel is about sustainability, cash flow, and profitability.
In terms of media, the biggest piece for us has been constantly testing in an ever-changing world, where we don't have the margins to go and hire a big agency to run this and spend cash for 6-12 months to really learn. So, we're mainly doing it internally. We do have a small Amazon agency we work with. We have guardrails up on Amazon, on Meta, and anywhere else where we're going to advertise where we say, if we're not hitting these ROIs, then we'll drop the spend. So, we do spend on Amazon ads, we have limited Meta ads, and those really have gone to zero at times, and then come back up. And for us it's about that omni-channel. Okay, we want this to be the cash flow driver to allow us to continue growing in retail and continue growing the brand equity.
So, there are brands, I know especially as we get larger where it is about really brand presence and awareness, because that's the toughest part about the CPG game. How do you shout above the noise?
Back to the omni-channel, food service, direct-to-consumer, I'll put Amazon in its own bucket because I really do feel like it's its own platform, its own beast. You have to play with Amazon's rules, with a limited level of media spend. It's about focus for us. So, if we're having success with a channel, we're going to go deep with that channel, and literally shut everything off otherwise. But very small, because the trends for, there are no longer evergreen ads that are going to deliver a $1 million of value a year. Everything is constantly changing, and the rules are constantly changing.
MediaPost: Are you finding that retail presence is driving your online sales?
David Delcourt: Definitely. The trick with retail is, how do I get somebody to pick up the box the first time around and then maybe if they're ordering on Instacart. Then maybe it's all right it’s part of my Amazon cart. So, if it's not there immediately but you're on Amazon, buying a 24-pack of your favorite beverage, why not just add it to the cart. And it’s really circular so it works both ways, because if somebody has purchased us before and then they see us on the shelf in the store, it's a real aha moment for a lot of folks.