An emerging brand’s strategy for achieving rapid growth

A challenging decision organizational leaders can face is when to grow, and by how much. In this episode of the Toughest Call podcast, Suzie Yorke, Founder of Love Good Fats, talks about her decision to “go big” in launching her products across the United States with a major retailer. Additionally, she talks about the expansion process that took place while making the leap from an emerging brand in the natural goods channel to a CPG brand working with big retailers.

Suzie Yorke: On paper we could scale to over 100 million bars, no problem. But then the timing of it when you had two large banners coming on the same month is a different conversation than if you can scale over a year.

Chaz Thorne: Welcome back, or welcome to Toughest Call, a podcast for organizational leaders where we hear stories from your leadership colleagues about career defining decisions. I'm your host, Chaz Thorne.

In this episode, I'm talking with Suzie Yorke about her decision to go big in launching her products across the United States with a major retailer. Suzie is the Founder of Love Good Fats, a wildly successful line of snacks with good fats, plenty of fiber and nearly no sugar.

A challenging decision we can face as leaders is when to grow, and by how much. Too slow and opportunities are missed as your competitors gain ground. Too fast, and a company can flame out as you're unable to fulfill the promises you made to your customers.

Suzie talks about being offered an unprecedented opportunity to rapidly scale her relatively new company, how her and her team weighed the decision, and the impossible-to-predict wrench that will ultimately be thrown into the works.

Suzie Yorke: So, Love Good Fats is a brand of snacks that I created three years ago now. And the idea was to have a very low carb, very low sugar, high fat, clean snack food option. So, therefore the name Love Good Fats. And really, really low sugar. So, it's on the insight that fat is back and sugar is out.

Chaz Thorne: If you can just share with us a bit how a company like yours grows from essentially an emerging brand, to a really large, well known CPG brand.

Suzie Yorke: If you're not a big CPG, you're a start-up you're just a small, small, you know, founder who has an idea, you really start with your idea. And you know, you knock on some doors within a couple of miles of your home, usually you go to the natural health food stores because they're much more welcoming to try new products. And that's been the model for for years and years, from Annie's to other great natural brands that really started that way Lera, Annie's etc.

Now it's really, really popular to have food start-ups because there's quite a few, the doors are kind of much, it's much easier than in the old days to start-up. The industry is open to making it easier and easier for founders to get their ideas on the shelves. And, there's more founders with ideas and more importantly, the consumers, the millennial consumers in particular, basically kind of forced to shift and said, you know, we want to eat, local and clean and free of this and free of that and free of this. And founders are the way that all of these great products can get to market really quickly and in the natural health food stores. The big national brands, retailer brands, they started saying well wait a minute, you know, we'd love for these small emerging brands to come and talk to us because we don't want to be you know, 2, 3, 4 or five years later and missing the party really. So, there's been a shift in the last couple years to just have the big retailers say, you know, please call us, you know, call us first. Also don't you know, don't leave us in the last position to get on the shelf.

Chaz Thorne: When you're looking at making that jump because it's, I wouldn't even say it's a jump. It's a leap. Let's be honest, when you're looking at making that leap from looking at the natural channel and then going to a big retailer. What are some of the barriers for you as a founder in terms of being ready to actually fulfill a partnership like that?

Suzie Yorke: One of the big decisions is going to be when do I expand out of my small amount of stores to more natural stores and then the next big decision is going to be when do I move to the bigger retailers, either regionally, and a lot of them. It's hard to be regional, some of them in Canada, you can but in the US, it's hard to just say I just want this region of this big national banner, it's really hard. So, both moving to the banner, and it has the implication of going national. So, those two things are connected.

Going national is different from a big banner regionally. So it's kind of like stepping stones, like going national at a big banner is kind of the last decision. And the biggest because then you have other implications. First, you have to have your whole network, your freight and logistics network to be able to go across the country, and do it cost efficiently. Second, you have to have the confidence that your product is going to turn, because if it doesn't turn, you know, high stakes, high reward. You're not gonna wind up staying on the shelf, you're gonna have all this cost, you're gonna actually lose money versus not going national. And then third, you have to be ready to spend marketing dollars and you know, invest in people and invest in order, like there's just costs, including marketing, by the time you want to go national.

Chaz Thorne: Tell us a little bit about what the opportunity was that was presented to you.

Suzie Yorke: What happened with us as I was still a small brand in the US, we were just in a regional, we were just in a test store at Whole Foods where they were really excited about the results we had in Canada and they supported us by listing us in their all of their stores in the in the US and early 2019. And then I was getting more and more contacts and invitations to the big retailers innovation shows. And then this situation was that we had a few of the larger banners like two of them, the Walmart banner and the Kroger banner that were really excited and wanted to list us in their stores. So, we're kind of starting that down. So, for the shows, they're interested and we're interested in that leads to needing to make a decision as to whether you want to go that fast to a big national banner. And again, we're talking about, you know, six months after being at our start-up, our launch in the US, which was at Whole Foods. Some brands, many brands will take 10 years in food and natural products before going to a Walmart, for example. And we were in conversations within six like with potentially being on the shelves within six months.

Chaz Thorne: What was the process that you had to go through to make this “go/ no-go” decision of whether or not you would work with one of these big, big banners, retail banners in the US?

Suzie Yorke: Prior to COVID, the larger retailers started to put on innovation shows. So the process starts with them casting a wider net and saying we'd like to invite you to spend a day or two. You know, come over, have a little booth, bring your samples, just the founder, another employee, maybe. It's very casual, low cost because they know we're all bootstrapping. And then they have their most senior executives doing presentations, like the second most senior person in the merchandising and in their marketing group and their digital group are speaking to the entire audience and kind of sharing how the vision of their retailer banner and how they want to support emerging brands. So, that's a whole new step that didn't exist even prior to two years, or I guess three years ago now, a whole year’s gone by with COVID. And after that the steps are pretty similar where if you have the attention of a buyer, then the steps are the, the process where a buyer has to assess all of the different brands that they could bring on.

And then you're deciding that you will want to present and submit your brand to that buyer. And then you both kind of dance, learning more information about each other. You have meetings, you share info, and then you're in this dance to try to assess like first you know, usually the brands want to get listed because distribution can be a big game-changer when once you're going down that hallway. And then the buyer is assessing whether he or she makes a decision to list their product, well, whether it will be a win for them. So, it's a dance through that funnel to get your products listed.

Chaz Thorne: What was the outcome of that dance for Love Good Fats in this situation?

Suzie Yorke: You're still trying to figure out, you know, we had such tremendous success in Canada, and we're at all the banners with all the stores. And that's opened up all the way to Costco. And that opened up like explosive growth for the brand.

So that model worked really well for Canada and for 16 months, we were everywhere from natural to club, with guild going through, in between going through all the food, we large food retailers, even large drug retailers, and then Walmart and club. So boom, 16 months.

But the US market is different and even though our results were really strong, now we're starting to get phone calls from the US to kind of go down that dance. So, I'm coming back from these meetings and it's like, okay, well, first, you know, you're not going to know until you get the phone call saying you're listed. And so those two or three months, while you're kind of doing that dance, you're also assessing, you know, what if, what if, what if, and you're running a few models, and you're kind of mapping this out, and you're trying to kind of balance out like your head will explode if you try to overthink it. But you're juggling all this? What if this banner says yes, this banner says no, what if this banner says yes, but only in a quarter of their stores, you're working through all of that back at the ranch, you know, back home. So, it's quite a kind of mind warp exercise to balance all of that stuff.

Chaz Thorne: I hope you're enjoying this episode of Toughest Call. At OnePagePlans.ca, my team and I get organizations aligned in just two days with strategic plans that fit on a single page. And since strategy is all about making decisions, we created a suite of free decision-making tools for organizational leaders like you. So, to get some assistance with your next tough call access these complimentary resources at ToughestCall.com.

Chaz Thorne: What was the final thing that made you go, alright, we're gonna jump into this and list with Walmart in the US?

Suzie Yorke: You know, we've been going through that exercise, like I started the company in 2016, formally in 17. But I had, you know, the advisors, the Board of Directors a little raised in '16, we had a strategic plan articulated by OGSM. So we, you know, working through our three-year plans or goals or numbers or targets or strategies, and that was, you know, that was at the forefront, like the first meeting, a national launch in the US would be when and would be depending on which criteria? And would it follow, you know, it was supposed to follow a regional launch.

And that all changed when the US changed to national for a lot of banners. And then how would we support it? By then it was ‘19. So since ‘16, that was a broad topic. But now it's getting real so the management team is really kind of going through and there were a lot of pros and cons. There were barriers like scaling that quick on paper, we could scale to, you know, over 100 million bars, no problem. But then the timing of it when you had two large banners coming on the same month is a different conversation than if you can scale over a year. So we had to kind of work through all of that was a very high pace, high, I guess, stress environment, because we had realized we had to reformulate the products for the US to be compliant with FDA 2020 that new rules on fiber, which we didn't know about when we first started meeting the US retailers. Then we found out that some of the US retailers said you know, you can't launch without a non-GMO project verified. So we were in the process, but we certainly weren't planning to have that ready for launch so now you had two big left curves thrown at you. And you had very kind of real time constraints and are like whoa, can we change the formula? Can we get non-GMO? Can you get all the paperwork? Can you do the production in the months of August and September, etc? And the packaging, etc, etc. And then you know, if we do and we jump through all these hoops, like will we be successful on the shelf? So that's, you know, you're making me relive probably the worst couple months. Well, you know, they were best because they were exciting, but they were certainly, you know, a challenging couple of months of the brand's life.

Chaz Thorne: So you go through all of this analysis, what finally got you to make the decision?

Suzie Yorke: Well, I think in the end you know, the Canadian results and my prior experience at Walmart, because I'd worked on a brand that at scale from that I’d help scale from 10 to 100 million. And then checking off the boxes of just the logistics, you know, elements that yeah, we can make it in this and that. And then we had, you know, I had some pretty good confidence in our ability to talk to the consumer to kind of pull some POS once we're on their shelf, you know, how do we really get her to know about our brand and be motivated to try it.

Chaz Thorne: So, after you made this decision to really go big with Walmart, US what ended up happening in the implementation of that very large rollout across all of their stores in the US?

Suzie Yorke: So the implementation went really well and the execution went really well. Like it was down to the finish line. But you know, we hit the target dates, we had the right forms, the right packaging, the right formulas, the right FDA, regulatory clear, like, all of the things we had to do, but it was like, it was crazy, like, we were just approving artwork on weekends, and go-go-go. But we managed to pull all that off. So that could have just blown up and gone sideways, like time is your enemy and marketing and that could have blown up. But that was really well executed. So we were able to do that and we were able to manage the supply and scale. We didn't manage the forecast too much. So we had forecasts that were way, way higher than you know, logic would make sense. So we wind up making too many bars. So that kind of played against us. And now you have a bit too much inventory as you're closing the year, etc. So we had some good, good decisions and good project management to do kind of the basics, and then oh, you know, supply and you're making too much. How do you adjust? And then and then we started rolling. Like so we're on the shelves in November, December, and we have a pretty good January, we're just you know, across the US, but then, you know, COVID, hit in Q1. So it got, you know, pretty challenging for us where, you know, we're kind of listed everywhere. And then oh, you know, you're kind of getting hit with, with the pandemics.

So lots of changes in our plans. And we kind of had to pull back a lot of our marketing and kinda we're not benefiting from, you know, a new brand getting discovery. So it got, you know, the plans kind of got pretty, pretty hairy. And we had to add the management team, we had another set of tough decisions to work through as we're now juggling, we're now juggling the pandemic.

Chaz Thorne: Where did the relationship end up evolving to with Walmart given this fallout? Because of COVID?

Suzie Yorke: Yeah, so we're seeing you know, we're very fortunate that we had a great relationship with the buyer, and the buyer was very supportive of an emerging brand. We're all kind of trying to work through the challenges of a category that got hit really hard in COVID. So performance brands, nutritional brands, and stuff. So we all work together to kind of have a good first year and then work into a second year, where we have a few more stores. So we kind of decided to expand the brand in the stores and we're doing really well. So we got more of our flavors listed and a few less stores so that we could kind of focus. So that worked out really well. In retrospect, you know, we probably should have launched that way but we got there, you know, a year later. So as you know, we're all grateful for that and now we're you know, we're you know, we're pleased of all the retailers support that we have. We're just trying to kind of get through the pandemic with the brand, the listings, the support we have and we're eager to get back to growth again,

Chaz Thorne: What do you feel you've learned as a leader from this, from making this call?

Suzie Yorke: Well, there's been a few calls that I've had to make, and you're under the pressure of time and can be your enemy. And I think the biggest learning is to just make sure you have a chance to step back. And then just pause a little bit on making sure that you've thought through all of the options and sometimes fear so you know, the pushing back saying no, can get in the way. So if you can just make sure that all those big decisions, even though you've had months of discussions, and debates and planning and getting more information to help make an educated decision, you know, when it comes down to making the call, just allow yourself to have that couple of days, because you always will have a couple days, and I really believe in my gut, my instinct, my inner voice, whatever she's called in there, and then just allow yourself the time to, to reconnect, because most founders will tell you and I can certainly attest that your instinct, your gut, your inner soul, in there usually is right. So but you have all of these pressures, you're overworked, you know, my days started at 4:30, every day for two years. Just allow yourself on the big decisions to do one more, let me take a step back and kind of process all this.

The other learning is: at the end of the day, you have to make a decision. And leaders that don't make decisions are worse off and you find less of these in the founders because they happen to be successful, fast brands and brands that have done something that no one's done before, because the founder is able to make big bold decisions. So make a decision, give yourself a little bit of that time to check in but make the decision because not making the decision and then it can be worse off.

So, we move super quick with COVID. Super, super quick. We had a management team meeting, you know, March 6, on a Sunday, like whatever that March was, like right away, and like had, you know, four strategic pillars boom, made big decisions right away, and then again, a month from after and a month after. So, you just have to balance both. But you want to be swift when you need to be swift and, and you want to take a step back when your gut needs a bit of time to process.

Chaz Thorne: This story that Suzie York shares in this episode of Toughest Call about making that “go/ no-go” decision when it comes to expansion is something that a lot of leaders struggle with and will likely come upon, on other episodes of Toughest Call as well. And it can be very overwhelming in terms of what are the things that matter, the few decisions that matter.

She really emphasizes that you have to make choices, which is very in line with how we operate at OnePagePlans.ca in terms of creating these processes that ensure that you and your team make clear definitive choices.

Sanjay Khosla, Mohanbir Sawhney, they are both at Northwestern. Great, guys. I actually studied with them there. They wrote this great book called “Fewer, Bigger, Bolder.” And what's excellent about this is they break down when, when and how to approach that process of expansion and make the point that when it comes to growing revenue, not all dollars are equal.

Mohanbir has been at Northwestern, the Kellogg School of Management, for a while as a professor and Sanjay was the President, Developing Markets at Kraft Foods, and took their revenue growth from 5 billion to 16 billion in six years, so he has some very hands-on experience with this. And what they've done in this book is they break it down into this seven step program called the Focus Seven, which is about really, it reflects the title of the book. How to focus on a few bigger and bolder steps, instead of being overwhelmed by a bunch of smaller initiatives that may not be strategically aligned and also may not actually move the needle on your growth. And really, their framework shows how you can drive growth by targeting resources against priorities, simplifying your operations, and unleashing the potential of your people.

It does challenge conventional wisdom, a little bit about organizational growth. It's also just a very quick read. And I love the fact that they're thinking on this stuff very much so well aligns with ours as well as strategic planners, in terms of simplifying and breaking it down into a easily defined process, which is their Focus Seven. So again, that book is “Fewer, Bigger, Bolder” by Sanjay Khosla and Mohanbir Sawhney. And I think you will find it a very instructive read in terms of helping you with deciding what really matters when it comes time to look at growth of your department or your organization.

If you'd like to learn more about Suzie and Love Good Fats, you can check out their website, LoveGoodFats.ca. And if you'd like some assistance with your own tough calls, we've compiled a collection of free tools just for you. Go to toughestcall.com to check them out. If you're not yet a subscriber to Toughest Call, please add us wherever you listen to your podcasts. Thanks for listening. I hope this conversation helps you when faced with your next tough call.

Guest

Suzie Yorke

Suzie Yorke is the Founder of Love Good Fats, a disruptive food start-up that has achieved unprecedented growth by exceeding $100 million in revenue in three years. She is the winner of the 2021 Globe & Mail Report on Business #1 Top Growing Company in Canada and 2020 RBC Canadian Women Entrepreneur Award.