Whether you’re thinking of launching a new CPG brand, or just finding ways to differentiate a product that’s already on the shelves, today’s guest is a wealth of knowledge in the natural foods startup space.
We’re talking with Pete Truby, founder of Salazon Chocolate. From working at Mrs. Meyer’s when it was in its early stages, to being one of the first employees at Honest Tea, Pete has been a sponge – soaking up knowledge and information when it comes to startups, entrepreneurship, and the natural foods industry.
Today, you’ll get to hear how he’s applied that knowledge in bootstrapping Salazon into a brand with national distribution.
In our interview, you’re going to learn:
- Why Pete believes branding is equally, or more, important than product value for CPG marketing
- What the pros and cons are of taking outside investment money
- How to compete in-store with competitors that have deeper pockets than you
And a whole lot more…
Pete teaches at a local university, so I think you’ll really appreciate the way he approaches my questions.
Pete: The reason why I love consumer products, in particular, food and beverage, is because it’s so creative, and the branding is so strong, and the packaging is so strong. You’ll notice I don’t actually talk about the products themselves. I’m assuming that all taste great. The problem is you can’t patent a recipe and you can’t patent a food. Obviously, the emphasis has to go to branding.
Alex: What’s up, ladies and gents? This is Alex Oesterle and thanks for tuning in to another episode of “Food Marketing Nerds.” Now, whether you’re thinking about launching a new CPG brand or looking for ways to differentiate a product that’s already on the shelves, today’s guest is a wealth of knowledge in the natural foods startup space. We’re talking with Pete Truby, who’s the founder of Salazon Chocolate. From working at Mrs. Meyers when it was in its early stages to being one of the first employees at Honest Tea, he has been a sponge just soaking up information and knowledge when it comes to startups, entrepreneurship, and the natural foods industry.
So, today, you’re gonna get to hear how he’s applied that knowledge to bootstrap Salazon into a brand with national distribution. In our interview, you’re gonna learn why Pete believes branding is equally or more important than product value, what the pros and cons of taking outside investments are, how to compete in store with competitors who have deeper pockets than you, and plenty more. And as you’ll hear about in a minute, Pete teaches at a local university. So I think you guys are really gonna enjoy the way that he approaches my questions. So let’s get after it.
Voiceover: Welcome to the “Food Marketing Nerds” podcast where we talk marketing, branding, and social media with the smartest minds in the business. Here’s your host, Alex Oesterle.
Alex: Pete, thanks so much for coming on to the “Food Marketing Nerds.”
Pete: Happy to be here, Alex.
Alex: So can you tell me a little bit more about yourself and your background that led you to starting Salazon Chocolate?
Pete: Sure. I’ve always been pretty interested in being an entrepreneur, but I didn’t have a particular area that I knew I would start a business or try to be successful. What I did know about myself was that I was not a math and science or tech person. So when I grew up, you know, I graduated high school in ’95, in case you don’t know, that was the internet boom. So, like, when I was in high school and college and right out of college, like, any startup that anybody had ever heard of that was doing anything was in tech. And I wasn’t a tech guy, but I’m, like, highly interested in startups. So what do I do?
So I was just kind of, like, looking around and was in a natural food store. And I tell everybody in natural foods, I wasn’t a natural foods person. But I picked up a bottle of Honest Tea, and it really struck me. I, like, really liked the branding. I liked that it was so different. And I turned it over, and the bottle says Bethesda, Maryland. I was in Annapolis at the time, which is…I don’t know. It’s probably a good hour away from Bethesda. But I was so shocked that…I thought it would say Colorado or Vermont or Maine or something. I didn’t think it was gonna say Maryland. And I said, “Well, this is my one chance…” you know? And it was obvious they had just started the company and that you could tell it was, like, a year or two old or whatever. And I was like “Wow, so this is a startup.”
And it just dawned on me. I’m like “Wait a minute, there weren’t a whole lot of consumer products starting up around then, and I happened on this bottle of Honest Tea, and I saw that it was in Maryland. And then I just told myself that, one way or another, I was gonna find my way into that company, because I knew that if I could get into that startup, then I could just learn. And I didn’t wanna know about tea. I didn’t wanna know about food. I didn’t care about natural foods. I didn’t care that it was organic. I liked the branding, and I liked that it was a startup that wasn’t tech. And that kind of, like, led me down this whole rabbit hole.
Alex: And so what were some of the biggest takeaways that you picked up that helped you succeed in your current business?
Pete: So this is a good story for people that are ever interested in, like, how to find a job, you know, because a lot of people ask me now and sort of “You know, I wanna work at this. What do I do when I get out of…” because, as you know, I also teach in college, you know, “how do I get this job or that job?” Well, I like to tell my Honest Tea story because, in my opinion, that’s the best way to get a job is find a place you wanna work and find a way in there rather than going, you know, applying online, you know, where you’re competing against… To be honest, people there probably have better resumes than you. Don’t even get into that fight because you’re most likely gonna lose, unless your resume is just off the charts. Rather than that, you just find a way into a company that you think is really cool or you think fits.
And there’s a number of ways to do that. I’ll just tell you the way that I found my way in Honest Tea. So I emailed them. And I said, “I love the product. I’ll work for free,” which you can do when you’re young, also called internships. But at the time, I wasn’t asking for an internship. I was just saying I’ll work for free. To his credit, he wrote back, Seth wrote back. It was like “I appreciate the enthusiasm. We don’t really have anything here. Occasionally, we have a need for people to do demos,” which, at the time, I didn’t really know what that was. And I did need a job. This is post-college. So while I’m keeping up this sort of email relationship with Seth, the founder of Honest Tea, and occasionally doing demos for them on the weekend, I worked free for a PR firm. So I kind of, you know, figured out what PR was all about, figured out I didn’t wanna do it. And then I had a job in marketing for an Australian wine company. And again, I’m emailing Seth, because that’s my dream job is demoing for Seth, apparently, at this stage of my life.
But I did get this job at marketing for an Australian wine company, which is really cool. They’re called BRL Hardy & Sons. They’re now owned by Constellation Brands. This was the actual wine company, U.S. operations, and they didn’t know where to go, so they setup an office in D.C. They were looking somebody in marketing. I joined them. And I did that, I don’t know, maybe, like, four or five months. I really enjoyed it and could have actually seen myself in wine. But it dawned on them after that amount of time, number one, Constellation Brands was getting interested in buying them, and, two, they were like “What are we doing in D.C.?” So they moved to California.
Right about the time they moved to California, Seth, who had known my way over the top exuberance about doing demos, which nobody likes to do demos, said, “We may have something for you in sales.” I wasn’t necessarily a sales guy. I’m more of a marketing guy. But, again, for me, I was trying to get into a company. I was trying to learn a non-tech startup. I was sort of willing to do whatever that took. Then right after that Australian wine company, I joined Seth in sales where they needed. And, again, this is kinda how life works.
But, you know, as a beverage company, you either have regular beverage, what they call DST[SP], or you have distributor or natural side beverage. And he needed help on the natural side. So then that sort of put me down this path working with him on the natural side and another lady that sort of ran their natural foods sales. So when I started with Honest Tea, they had five people in the office. Last time I went and saw them, I think there was 105. This is all way, way before they sold to Coke. He was in distribution. But it was a struggle.
So first of all, I learned the food industry. I also learned, you know, the startup industry. And I learned sort of different ways to sort of try to get your business off the ground. And the Honest Tea way is one way. It’s not the only way. In the end, it wasn’t the way that I did with Salazon. What I learned from Seth that I like to tell people is that he was relentlessly optimistic. You could have his house falling around him, and he would still think that “This thing’s standing. It’s not falling. You know, you guys are wrong.” He was crazy optimistic, also a very bright guy. That can’t help but rub off on you, particularly when you’re interested in startups like I was and interested in entrepreneurship.
And there were rough areas where, you know, we’d have to go back to his cofounder and borrow money. And, you know, we were down to the last dime. And he’d have to run out and raise more money. We had a recall one time where there was actual shards of glass sealed inside the bottles. And he wouldn’t mind me telling this because it was a public recall, because we had to do an FDA recall on it. I mean, these are some of the challenges you get. It was a crazy time. So it was almost, you know, intensive learning.
And the other trick was that I knew going in was I was going to… For people that are interested in startups, and it’s not for everybody, but one of the pluses is that you will invariably get chances to do things that you have no experience in and no right trying to do, like, you know, product development, you know, or design when you’re not a designer or, in my case, managing in the Midwest region for a natural foods brand when, you know, I think I’d been there for, like, six months or something. You know, we ended up losing a regional sales manager. And we’re still in Maryland. So I was managing the Midwest, like, way early than anybody would get a chance to. But that in turn helps you get the experience. Eventually, you either figure it out or you don’t, and you can go on and use that to your advantage. I learned a lot, and I enjoyed myself.
And then I did, I will admit it, at that point, did really fall in love with the natural foods industry and the foods industry in general because there was so much creativity in it and so much branding. It turned out that it’s really the place to be in consumer products, if you’re interested in startups and branding. And then I ended up, like, really liking just the food and the people too.
Alex: And so something that you said kinda caught my interest that there are multiple ways to start up a natural foods company. Honest Tea did it in one way. You did it a different way with Salazon. Can you kinda explain the differences between the Honest Tea startup method versus Salazon, and why you went the direction you did?
Pete: Yeah. Well, they couldn’t be any more different, but it’s not that one is better than the other. And Coke can sit around and not argue that. What I saw mainly was he was forced to spend, from me watching, I don’t know the whole truth, we can ask him, but it looked like 90% of his time raising money, you know? And it was super stressful, because he was trying to grow really big. You know, I wouldn’t say really big really fast. I would say he was trying to grow really big as fast as possible. And I can get into more why I do think that that’s sometimes really needed in food. So I got it. But, you know, it was constantly about raising money.
And then here’s the trick, when you’re always raising money, you’re always going to have to deal with investors. And there’s variations between it. But to be honest, I would say that Honest Tea is on the far end of the spectrum of the highly leveraged with equity, always trying to raise money, always dealing with investor all the way down to me where I’m bootstrapped and all the way in between. And it really depends on how fast you wanna grow, what do you actually want to spend your time on, you know, 9 to 5 or, you know, whatever, 9 to 2 a.m., it’s a personal thing, and how big you think the brand could be, how big you think the exit opportunity could be, when the exit opportunity could be. You know, there’s any number of different ways to do it. It didn’t fit my personality to do it the Seth way. Obviously, it fit his.
And, again, I don’t know if there’s a right or wrong. Maybe I will sell to Hershey and make a bunch of money. Maybe I won’t. But I don’t know if I did it the wrong way. And you’d have to ask Seth if he thought, in the end, would he do anything different, you know?
Alex: Yeah, that’s interesting. And it’s an interesting industry as far as the profit margins and the way that you grow when you’re a younger company. If you are going for that rapid expansion and, hopefully, large exit, you do have to show those high percentages in growth rate. And to do that, you need outside money. So it’s tough.
Pete: I’ve been in the industry for a long time, and I’ve seen a lot of new companies. I mean, I’m way the outlier on that. And this is not me bragging. I don’t know anybody that had as much distribution as I’ve had without taking outside money. Everybody else I know, I mean, everybody has taken some, either sophisticated or institutional money, like you imagine, just because of the pressures of the industry are so tough and, you know, the margins are bad, you know, particularly bad when you start up.
But if we get to my next job, which was at Mrs. Meyers, you’ll see that she is one of those in-betweeners. It wasn’t Seth, and it’s wasn’t me. And to be honest, that’s probably the best success case of something I’ve seen somebody just come in, you know, make a mark, change a category, exit, do really well. Mrs. Meyers is a good example of an in-between.
Alex: Aside from your learnings working at Mrs. Meyer, at Honest Tea, what have been some of the catalysts to you being able to bootstrap and still have that broad distribution?
Pete: Bootstrap is just because I’m stubborn, to be honest with you. And by bootstrap, I mean I’ve taken a very small friend and family raise, basically, my brother. Again, there was no sophisticated and no outside money and no money since I started in 2009. Well, some of it was because I was okay with growing slow. Some of it was because I knew what I was doing in natural foods. And I knew enough people. You know, some of these guys that have a great idea, you know, I will say, “Okay, we’ve got grandma’s sauce recipe, and it’s great, right? There’s two lawyers in New York, and they have grandma’s sauce recipe, and they’re gonna take over the natural foods world, you know, and be the next Rao’s or something.”
The problem is they most likely didn’t come from natural foods or even food or probably even consumer packaged goods. So they’re going to have to pay more just because of the steep learning curve of how to get into distribution, you know, how to get some sales. Okay, I can save some money there, because, you know, I was a natural sales manager. I’ve been regional sales manager. I’ve done marketing. Okay, so I don’t need to, you know, either hire those people or pay the learning fee, if you will, and I can kinda figure it out. You know, I know some buyers. So it was sort of a combination of being stubborn, knowing the industry really well before I start it, not just sort of well, and having a product that at the time was quite different, so it was easy to add. Now, you know, not so much, but, you know, welcome to food and beverage.
Alex: So as far as learnings that you took away from your past experience to what actually led you to start Salazon, what are some of the main things that you focused on when you were first deciding to start the company?
Pete: Well, first, I needed an idea. I was comfortable working, you know, for these others startups. I basically worked for three consecutive startups before starting Salazon, trying to learn the industry and just kinda waiting for the right idea to hit, you know? So I was just comfortable learning and waiting, because you really can’t do it without the right idea. And by the right idea, I mean you have to have the right differentiation from competitors, or it’s just not gonna work. You have to be able to walk into a buyer’s office, and they’re gonna say, “Okay, well, what makes your product different?” Call it an elevator spiel or call it whatever you want, but, you know, that’s the main thing.
And I’ve had some ideas before, but, you know, I don’t know. And this is the other thing. It’s like you’ll know you have the right idea when there’s not even like a choice. You know, all the other ideas, I’d be like “Oh, that’s a good idea. Maybe I’ll do it, maybe I won’t.” But then it’s not the right idea, you know? When I came up with the idea for salted chocolate, like, I just knew it, and, like, I knew I was gonna try it. I didn’t know if there’d be a market for it, but I just knew that was the one.
So to take you back, you know, so I’m in and out of grocery stores kinda for my living, right? And the areas that I like the most in food is I like cold beverages, like ready to drink, like Honest Tea’s category, and I like chocolate. They were the two most interesting categories to me. So when I worked at Mrs. Meyers, okay, she did a great job, but it’s cleaning. And she really changed the cleaning set. But I didn’t love the set, you know? So I’d go, you know, “Make sure Mrs. Meyers is good.”
And then, but for inspiration on sort of who was doing really creative stuff and what was different, well, beverages is number one. Beverages, a lot of times you’ll find the newest, the most creative, the most competitive set in the natural foods grocery store is the beverage set. So I liked to look at what’s happening there because those people are going for broke, and it’s competitive, and it’s hard to maintain, and it’s creative. So I kinda would just go check that out, trying new drinks. But I also liked chocolate, because I felt like it was heading that way. So those were the two sets I kept an eye on. In the back of my head, I’m like “Oh my God, I never wanna do a beverage. You know, it’s just brutal.” And I’ll tell anybody that, including my buddies at Bmore.
Beverages is the worst category. It’s also the best in some way, you know, in the ways that I was just explaining. But I really like chocolate, and I felt like it was gonna turn into something. So I’m taking you back to, like, 2008 now. So don’t think of the chocolates that you just saw last week, you know? This is a little while ago. And I was a fan of chocolate too. I used to take dark chocolate with me hiking. I just traveled with it. So, you know, the thing that I would buy when I left the store after checking on an account was usually chocolate or beverage, and that’s it. I wasn’t really buying anything else.
So at the same time, there was this salted caramel craze. This is right around ’08. You know, ’07, ’08, salted caramels became a thing, popularized by France and the United States. Salted caramels actually come from France, but they’re not super old, more like the ’80s. And they were like literally the square caramels, you know, 98% sugar, and topped with a little sea salt. And so that became a trending flavor. Well, that’s fine. There’s a lot of trending flavors, like chili lime, blah-blah-blah.
But what happens with ideas is that it can kinda fester in your brain or whatever. I liked the idea of a salted confection. What I didn’t like with salted caramel is it’s too sweet. It’s not for me. And so I just kinda, like, mulled that over, and I had chocolate. You know, I’m also kind of a salty guy. So, you know, I eat pretzels or whatever. And salted chocolate-covered pretzels do exist. And there is some salt there. But that’s not what I was talking about. After mulling it over and over, I’m like “Why isn’t there just like the salted caramels, just chocolate with a little bit of sea salt?” which to me was so, like, not to sound corny, but it was so, like, beautiful in its simplicity. I wasn’t coming up with some crazy products. You know what I mean?
Pete: Yeah, crickets. It was just a chocolate bar with salt. And it wasn’t there. It didn’t exist. And I’ll go to my grave saying this. Not only did I like the idea, I loved the simplicity of it. That’s just what attracts me to, you know, the best ideas. And then I was like “Okay, well, I love this idea. You know, I love chocolate, but I don’t know anything about it.” So I had to figure that out. But it wasn’t a choice. I knew it. When I looked for salted chocolate and it wasn’t there, so, you know, I had this idea, I’m like “Wait a minute, I’m gonna brand around salted chocolate. I’m not gonna come up with a chocolate bar and have it salt.” I’m like “It’s going to be a salted chocolate brand.” So that was in the idea. So when I launched, the first salted chocolate bar was just chocolate and salt. And I’m still the only brand, and that’s all I do, but that’ll probably stay that way.
So coming into the buyers, and I’m like “Okay, well, you can tell me you have a million chocolates, and I know you will. But you can’t tell me you have salted chocolate, because it wasn’t there. And I know you don’t have a brand that that’s all they do.” I knew some people in the industry, and I was able to get in the door, and I had a product that I thought was different. So they certainly gave it a chance, to their credit. But that allowed me to sort of get the distribution. I had some core. I know the margins are horrible, but I could kinda deal. And I was okay with growing slow. So that allowed me to not have to raise money. I won’t say that I was making a ton, but I also know how to sort of run it lean. But that allowed me to sort of do what I was able to do.
Alex: That’s crazy to hear that you had the first salted chocolate bar, because you look at the shelves now, and there’s 20. I don’t know if there’s that many, but there’s a lot.
Pete: There’s a lot. And that’s what I love and hate about the industry. The reason why I love consumer products, in particular, food and beverage, is because it’s so creative, and the branding is so strong, and the packaging is so strong. And you’ll notice I don’t actually talk about the products themselves, like the actual taste of blah, blah, blah. I’m assuming that all taste great. The problem is you can’t patent a recipe, and you can’t patent a food, and I can’t patent salted chocolate. So that’s one reason why you’d talk to a whole group of people, you know, out in California, and they’re gonna hate this industry because you can’t protect anything, and anybody can copy anything. And guess what, if salted chocolate tastes good, there’s gonna be 50 salted chocolate SKUs. The number one SKU in the natural foods is Chocolove salted almond. It’s not my salted SKU. And it was certainly launched after I did. But I’m kinda proud to say the number one SKU in the chocolate industry in natural foods is salted.
So, again, that’s kinda what I love and hate about it. So you can’t protect it. So what becomes most important for all these companies if you can’t protect any of your recipes or ideas, which you can’t, then, obviously, the emphasis has to go to branding, because you know what you can protect? You can protect trademarks. You can protect logos. You can certainly protect your brand. You can certainly grow your brand and brand equity. And that’s in the end what is valuable, but almost has nothing to do with the product itself, which is why, like, some people have a hard time, you know, getting their head around this industry. But it’s also kinda why I love it. And in the end, people with much bigger pockets kinda pushing me around in the chocolate space and coming out with all their salted…you know, that’s fine. It’s still why I love the industry. It’s who can make a better product. But it’s more, you know, who can make a better brand.
Alex: As far as approaching building a brand, are there any key fundamentals that you make sure that you focus on or that you focused on to make sure that Salazon had a lasting brand?
Pete: Yeah, don’t make as many mistakes as I did. That’s it. That’s my number one advice. The weird thing is, Alex, branding is, like, what I consider myself good at, but I made a ton of mistakes, you know? So if somebody comes to me and they wanna get into natural foods and then…so, you know, they have grandma’s sauce, right? Immediately, they want to talk to me for hours about the sauce, right? And immediately, I tell them I don’t care about the sauce. I’m assuming the sauce is good. Otherwise, why would you be trying to create a company? Like, I don’t know. I don’t wanna try it. I don’t wanna talk about the sauce, because what happens is they end up going down the wrong road where they’re too product-focused and not brand-focused enough.
You know, “Who’s gonna do your design?” “Oh, my cousin is a designer?” “Okay, well, you got to stop from there. Don’t go to your cousin, the designer, you know? Find somebody that knows how to do packaging design. And not only that, there’s a bunch of different houses that specialize in consumer packaged goods design. But is that who you want? Maybe you hire, you know, somebody that’s in the outdoor industry to do your design. But just find the right professional designer. Don’t go to your cousin.”
And then think long and hard if there’s any way that the package can be different, the jar itself. Okay, we got the sauce. Are you gonna put it in, you know, just a regular jar, a tall jar, plastic, glass. Maybe the top can be different, anything that could be different. It’d be helpful if you could make it more useful. But that’s part of the brand. Okay, then once we have, you know, a professional designer, hopefully, you can come up with some kind of a package that’s different that’s gonna make it stand out a little bit. And then, of course, you have to tell a story. And I’m not going to go on and on, because anybody that knows anything about branding knows you’re trying to tell a story and create an emotional connection. And that’s really what you’re looking for with a brand is somebody attaches emotion to a name or symbol, right?
So, really, where the value is is focusing on sort of how to get that branding to communicate what kind of emotion you want that person to have about the product. And I know all that, and I’ve taught it, and I still made a ton of mistakes. But, really, what I was trying to do was create a brand that somebody felt like was really trying to just be itself and own its small little place in the world, if you will. I don’t even make milk chocolate. All I do is salted dark chocolate and all that brand is. So I wanted them to know the story of, like, this little company that’s still little actually, you know, that started this trend. So it almost helps me that all these people came in and jumped on it, because I want people to see, “Oh, you know, this little company that, you know, kinda gets beaten around, they were actually the first person to do the salted chocolate, and here’s how they came up with it. And, really, they don’t do anything else. They’re just, like, happy doing one thing.”
And it may not be good for somebody that’s trying to invest in me, because, you know, that’s what I want the brand to be about is almost, like, proud of how niche it is. But that’s what I was going for with the branding. I just made some mistakes along the way with packaging and whatnot. But, you know, there is emotion in the brand. And I did some things correctly. I did some things poorly. But, you know, we all learn, right?
Alex: So could you tell maybe what are your bigger mistakes that you can point to and say, “I wish I had done that differently, and it would have made my life a ton easier”?
Pete: Yeah. It’s just I tinkered too much with the design. Well, number one, I used my brother. It’s my cardinal rule, right? He’s a good designer. But don’t use your brother, just don’t. I don’t care how good the family is. Just don’t do it. And then I just tinkered with the design too much. And I struggled with the fact that I really didn’t wanna be like every other chocolate bar out there. And, like, if it’s cherry, guess what they have on the label. Like, a giant cherry. And if it’s almond, guess what they have on the label. A bunch of almonds. Like, I was trying to just make it different.
So I knew what I was fighting against. But I think I just went too far and confused too many consumers. And then when I sort of went back and forth with the packaging, well, you know what that does? It just confuses it more, because even if you have the worst design in the world, there can be a point when consumers just are attached to that, and you should just stick with it, because that’s what they’ve come to know. You know what I mean?
Alex: So as far as the branding goes and getting the message out to your consumers or to potential consumers, outside of the packaging, what have you seen to be the most effective throughout your…not just Salazon, but with the past companies that you’ve worked with?
Pete: I mean, obviously, everybody you talk to will say demos. To me, demos help, but they’re also super expensive. And by now, you know that I’m cheap. And, you know, it’s really hard to have a payoff the way that you would want. What is more important is merchandising. So that’s where you are on the shelf, you know? So for me, okay, I wanna be on the chocolate set. I wanna be at eye level. And, you know, I want sort of a brand block. So I’d like to have maybe, like, four, five cases together.
Or, say, Mrs. Meyers was a good example. So it’s eco-friendly, helpful cleaning. And her sort of claim to fame, what she really brought to the set, was a high-end option. You know, she was using high-end essential oils on this makeup or, you know, cosmetic quality essential oils and putting them in cleaning products. Nobody had ever done that. In fact, it was crazy to do it, because they’re really expensive. So she would use these high-end essential oils’ sort of great aromas and put them into cleaning products. Again, it’d never been done. You know, the user experience was just off the charts because people would go to wash their dishes, and it never sort of had that before. And there would be emotion attached to it, you know, “I used to hate, you know, doing the dishes, and that changed that for me,” or blah, blah, blah, you know? This is how people would come attached to it. So she had product innovation, which was great.
And then on top of that, you know, design was good, kind of like an old school brandy design, kind of text heavy, named after a mom. Okay, I get that. That was strong too. And she hired a very strong designer. And really she did to grow the brand at a retail level, which was more what you’re talking about, is, in the past, the set had always been dishwashing liquid goes with dishwashing liquid, and the laundry soap goes with the laundry soap, and the countertop cleaner goes in a different aisle. Your brand is all spread out.
Well, Monica was way more stubborn than I would and just would not put into a store unless they put all of Mrs. Meyers stuff together in what’s called a brand block. And they’re like “Well, you know, we don’t do that. You know, the cleaning supplies go down here,” and blah, blah, blah, “and you’ll basically all be separated.” But if you ever saw Mrs. Meyers all together, it comes across as a super strong brand when they’re all next to each other. The colors fit really nicely.
So she said, “Okay, well, we don’t do that. You know, we’re trying to grow this brand. And people need to see it as a brand because it’s new.” So then she was like “Okay, fine. Well, we can’t go in a set. We’ll do a display.” So then they would do these freestanding displays separate from the cleaning set, but at least, she could be brand-blocked. Well, the risk there is that, okay, you’re not in the cleaning set. But the plus is it really does seem like its own brand. And then when you have your own display, okay, well, that can have a header card, and that’s growing the brand. And that’s the importance of merchandising.
You know, so somebody needs to run across it, and you just see it, “Wait a minute, this is a new brand that I’ve never seen before. And what is it doing? Okay, well, it’s got lavender, you know, this, lemon verbena countertop spray.” They’ll quickly put two and two together that, you know, this is what this is. It’s a premium option in the cleaning set with great aromas. “Okay, now, I know what this brand is.” Whereas, before, I don’t know if they would have known that.
So merchandising is key, any off-shelf placement. Really, that’s what you have to fight for, because if I can get a display of Salazon that’s off the regular set…and I don’t wanna lose my place in chocolate, right? So I wanna keep that. But any off-shelf placement where you’re trying the break up the concentration of the consumer, because, otherwise, you just kinda get faded into the background, but off-shelf breaks up their concentration. Then all of a sudden, if you see, you know, a fall display that the stores will do and, you know, maybe my pumpkin bars is part of that, they might have been to Whole Foods once a week and bought chocolates once a week and still had never seen Salazon, but if I make it into that pumpkin display, they’d be like “Oh, what’s this brand?” So just to give you a different answer than probably some of the other ones you hear. I mean, I like to focus on merchandising a lot and how that can affect it. And then, of course, it’s a, you know, just social media.
Alex: And, yeah, that is a different perspective. A lot of people will say demoing is the way to go if you wanna get your brand out there.
Pete: And I figured you would hear that. And it’s good. It’s just…I don’t know…the ROI on it is tough for me.
Alex: Speaking of which, social media is often really difficult to quantify ROI. Are you guys able to? Is there something that you’re measuring to gauge the effect of social media?
Pete: No. But we also don’t spend a ton of money on it. So, you know, that’s the key. It’s free. Well, it’s not free, you know? But, you know, we don’t spend a ton on SEO. And it’s not like we’re spending a ton on Facebook ads, and Facebook ads aren’t that expensive anyway. So, no, I’m like everybody else. Do I really know the ROI on it? No, other than if you’re going by likes or follows or whatnot. And you can’t see, you know, where traffic is being driven to your website. But I do know and I’m confident in saying that it’s an important part or growing the brand.
I also like events. I think event sponsorships can sometimes be really cheap, sometimes just be in kind. You know, we’ve done a lot of things where I think it’s my target market. And target market is a whole ‘nother conversation. But, you know, if you’re confident in your target market and you trust it, if you think your target market’s at this concert and they’re willing to put you on the display for just donating, let’s say, bars for, you know, the VIPs or… You know, there are very few times I really had to do cash. I’ll do free chocolate for a lot of things, you know, events and aspects where I think you could get the word out or I think those people might in turn tweet about it or Instagram it.
Alex: So with the chocolate’s face getting, especially the salted chocolate, that niche, obviously, there’s some bigger players that are coming in and producing a similar product. It’s not the original. But is there any way, aside from social media and doing these events, that you do now to differentiate and get the word out there that you guys are different and were the original?
Pete: Product-wise? For a while, I was really stressing “the original salted chocolate.” I don’t really stress it that much just because, to be honest, it’s kinda wordy to put on the bar, to say “the original salted chocolate.” We’ll put it on the back somewhere. But I’m telling you every person that you may interview will have this same issue. All of these products, if they can’t be copied directly, you know, they can be really easily copied close and indirectly. It’s just a challenge in the food industry. And it’s our challenge to, you know, either just grow the loyalty…
I mean, there are still differences. If we wanna get down to the product, our bars are all still hand-sprinkled with sea salt. I’m pretty sure nobody else can do that or would do that, because it doesn’t make a whole lot of sense. And the reason we do that is because, in my opinion, it tastes better. So when you have the salt in the chocolate, number one, you have to use more salt to taste it, and if you don’t quite get the texture and the sort of combination of when salt is used on it. It’s just like salt when it’s used in your household. It’s generally considered best as a finishing ingredient, meaning like a little bit, you know, right before you plate the dish or right when you plate the dish, many ideas to bring out flavors, and that’s the way you do it is as a finishing ingredient. So that’s how we use it on the chocolate.
Also, the chocolate itself I maintain is very good. So, like, I’m still confident in that if I can get people, if, you know, they tried two salted chocolate or it’s right by each other, I think they would like mine better. The problem is, again, yeah, like you said, I’m going up against, you know, really tough competitors with deeper pockets and more shelf space. And, you know, it’s just easier for them to get that loyalty first. And it’s always hard to win that back.
But there are still things I can do on the products. You know, I came out with a pumpkin IPA-spice salted chocolate. And we’re all small companies in natural foods compared to, like, Hershey and whatnot. But I’m small in natural foods. So one thing I can do is just be more creative with the flavors, and I could still stand out. And I am still the only, like, all salted brand. So if I can, you know, still have creative flavors… Really, what we’re focusing on now from the product side is more seasonal offerings that are kind of off the wall. So I think that can grow the brand and still be different enough.
And then, of course, you know, I need to fight to be known as the salted chocolate brand. And that’s an everyday, all day, in the store, online… You know, whether or not you like it or not, I should be known as “Oh, that’s the salted chocolate brand.” You know, whether or not you like Uggs or not, and somebody can easily copy Uggs, you know, Ugg the boots. I like to bring them up because, you know, they are what they are. And can other companies make furry boots? Yeah, you’re damn right, other companies can make furry boots. But, you know, they’re known for what they’re known for, and that’s kind of what I want Salazon to be.
I’m certainly okay if you can take this away from the interview is that I’m okay being like a one-trip pony in that all we do is salted chocolate, because I think in a low-barrier-entry, you know, industry like we’re in, in my opinion, that’s the best way to succeed, to be good at one thing and, you know, make it your thing and do it the best. And I still say we have the best salted chocolate. There’s just a lot of it out there now.
Alex: You obviously have your hands full with Salazon. You teach at a university. Is there anything that you do on a regular basis to help you stay productive and on top of your stuff?
Pete: I really try to do the, you know, don’t check your email thing, because emails will derail you. You know, finding good people to help, that’s also important, people that I trust.
Alex: Is there anything, any books that you recommend to people that you know in marketing or your students?
Pete: Yeah, my standard ones, I do like “The 4-Hour Work Week.” Tim Ferriss has some good stuff, and he’s very prolific. But the first half of “The 4-Hour Work Week” really helped me a lot. One of my favorite marketing books is called “The 22 Immutable Laws of Marketing.” Al Ries, I believe, is the author. I like “The Five Dysfunctions of a Team” for management style. That’s about it off the top of my head. Blue Ocean Strategy is the strategy I like.
Alex: So as a business owner, do you subscribe to the four-hour work week? Do you think that’s ever possible?
Pete: No, I don’t. And that’s my point that I tell people. It’s like don’t read it like that. But what he’s trying to do is get you to think about things in a different way.
Alex: Pete, thank you so much for coming on to the show. I can definitely tell that you have that teaching side, because there’s a lot of things that you taught me, and I’m sure our listeners gained a lot of knowledge from you as well.
Alex: So where can people go to find out more about Salazon and what you guys have going on?
Pete: Salazon Chocolate or salazonchoc.com, Facebook, Salazon Chocolate, Instagram, @salazonchoc. So it’s kinda short for chocolate, so S-A-L-A-Z-O-N-C-H-O-C. And if you just do contact at salazonchoc, that goes to me. So if anybody has any questions or anything, feel free to reach out.