The internet age delivered success to many online businesses, providing customers with rapid and reliable service at the comfort of their homes. But if one chooses to venture into the brick-and-mortar scene to earn more and increase reach, would that be a profitable idea? Elliot Begoun sits down with Tracy Miedema, Vice-President of Innovation & Brand Development at Presence, to talk about the right preparation needed for the challenging shift from online to retail. She talks about the hefty costs that come with such a business decision, the best people to ask for help from, and the most efficient way to minimize risks. Tracy also talks about maintaining brand recognition from your online business as you transfer it into your physical location and product packaging.

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Shifting From Online To Brick And Mortar With Tracy Miedema

Before I introduce my guest and sometime drinking buddy, I am going to first give a shout-out to a founder who’s doing some cool things in a competitive space. I want to talk about Alan Cohen at Kokomio. Kokomio is a new coconut experience being introduced into the marketplace. Alan has been working at this for years. The intent was to launch it at Expo West 2020.

We all know what happened to Expo West but it’s given him some time to go back to the drawing board, do some more work on packaging, formulation and also on sustainability. He’s done some cool things, including realizing that one of the byproducts of the production of his product is coconut husks, which happened to be fantastic insulators. He’s built an insulation solution with those as well.

It’s one of those founders and brands doing amazing things and trying to look at things holistically. Check out Kokomio and try the product. It’s fantastic. I’m going to turn it over to Tracy. I’m going to let her introduce herself but let me tell you a little bit about my perspective with Tracy. I’m going to try not to embarrass her terribly.

You’ve heard that phrase renaissance woman or renaissance man. Tracy is a renaissance woman. She does amazing things from making wine to being incredibly educated in all things like cannabis and what’s going on in the space. It’s very attuned to what’s happening in the natural products industry. It happens to also be an awesome human being, a good friend. If you’re in New York City and tired of walking Fancy Food Show, a hell of a bar crawl partner works well. Tracy, tell everybody a little bit more about you, what you do with Presence and then we’ll start having fun.

I’m glad to be here and talk about brands and food. First of all, I want you to know that Presence Marketing is the largest broker of natural, organic, clean products in the country. I have the great privilege and pleasure of looking at new brands for potential representation and investment. I say privileged because folks across the country who are entrepreneurs see this as their baby. This is what they’re pouring their heart and soul into.

We have incredible visibility getting to see this range of new brands and new products entering the marketplace. My role is selecting brands and directing resources toward them whether it is part of our wonderful team. I have about over 500 people across the country that are out there commercializing food beverage and personal care brands or directing capital to resource these brands from that direction.

It’s wonderful to have that deal flow but even more so wonderful to meet such inspiring people. I get to interact with the conjurers of the world, people who have an idea, a vision and can literally bring it to life for the world. My personal bent is I don’t like gimmicky stuff. I like products with a ton of integrity that have real value to humankind and thankfully get to see a whole lot of it.

I’ll tell you a little bit about Tracy too. She also gives the kindest no I’ve ever known. I’ve had brands walkway go, “That was a great meeting.” “What did she say?” “I guess she said no but it was still a great meeting.” There’s a lot of feedback, compassion and advice. The reality of a company with the size of Presence, they have to be extraordinarily selective. There are a lot more nos than yeses.

I had the opportunity, Bill Weiland and Tracy had me to the Bellagio once to one of their new product review meetings. I walked into the room with Bill and Tracy. There are hundreds of brands with their products spread across the table. Bill and Tracy walk through, take notes and then at the end of the process, comparing.

Out of 100 that day, there were less than three that they wanted to follow up on. It’s tough to say no and to do it. It’s a reflection that this industry isn’t easy. You have to be able to carve out your white space and discernment. That’s what we want to talk about. When Tracy and I were brainstorming what to talk about that was socially appropriate, something that we could record and share with the world, that leaves us comparatively to our normal conversations very little to discuss, we came across a topic that we haven’t addressed yet here on the show that is interesting and timely.

That is the jump that some digitally native brands are ready, contemplating or trying to make from eCommerce to brick and mortar, what that looks like and some of the opportunities and pitfalls in doing so. We’re going to do that. Let’s start with this question. “If I’m a brand that has been digitally native in the natural space and I am contemplating the jump, trying to bridge the gap from digital to brick and mortar, what are some of the things I need to be asking myself to ascertain if I’m ready?”

This is a huge question that more and more companies are facing and it’s a new one. This is a whole new pathway to the market where you’ve started out in the world of total accessibility through somebody’s phone. You’ve got a tribe perhaps that has hunted you down. They’ve used keyword searches, come up with features and benefits of your brand. They’ve found you and ordered you.

It’s a new world where a brand is created online and it’s a new common starting point to be a digitally native brand. With that over the years, we have suddenly started meeting a lot of folks that have had slamming success or to do beautiful business online. They have quite a loyal established consumer-based, maybe even subscription model. They hear the sirens call of retail.

There’s something about retail that they feel is critically important that they enter. The very first question is whether you do in fact need retail in your business plan. The more specialized you are, the more niche, the more you should ask that hard question of whether retail is appropriate. We’re going to talk about someone who has definitively discerned that going to retail is the right thing to do and that there’s an audience there.

I can share observations for these brands that are making the crossing. I would call them choppy waters to navigate. I’ve seen a lot of challenges in that navigation and have picked up some advice for brands. The number one thing that brands encounter who are digitally native is the cost of entering the retail environment.

Online, you’re not paying for an entire layer of cost and that path to market that you will pay at retail. The number of brands I meet who are digitally native, who feel that those are negotiable and can be negotiated a way, I would say the majority and the answer is no. You cannot make these costs go away. They are as follows. You must provide free cases to retail.

That’s one huge cost of entering the market. Sometimes you can shave those down a bit like the overall cost but for brands who have been selling direct to consumers, the very first thing is you’re going to have to plan the rules of the game. Free case is one. You’re going to get charged back, usually the cost that the distributor sells that case to the retailer for. It’s only going to have freight and a distributor markup on it. That’s what you’re going to get charged back. You’re also going to encounter things like warehouse setup fees. You’re going to be having to promote your product, pay fees to promote and introduce your brand to the marketplace.

It’s quite hefty in the first year to drive trial. Your number one tool to activate a consumer base is giving them that little yellow tag that points out that you’ve got a discounted price and incentivizes trial. We’ve got a free fill bucket and a promotional bucket that’s hefty. Quite likely, you’re going to be using a sales agency or a brokerage to go out and sell your product where you may not have had to do that before. You’re going to have costs associated with that.

Those are three of the biggies just for starting. There’s another bucket I’m going to get to but those three costs alone are upwards of 20% plus of your topline revenue getting plowed into taking a brand to retail. I usually encounter that it can’t possibly be that high. That’s more margin than I throw off. It’s like, “A-ha. That is why retail for starters is so punishing and why those waters are choppy as you’re suddenly encountering this entire cost structure that wasn’t there for retail.”

The other entire realm of cost in there where this gets into a bit of a blank check situation is what does it take to activate consumers and drive them into retail? If they were finding you before, you didn’t have to activate them maybe with the same tools. Perhaps you were doing some online advertising or other means of customer acquisition costs to drive them to your site or to Amazon.

Prepare for the same or more at retail that you may need to do a lot of couponing and digital geo-targeting to let people know you have new distribution at the store. As the world opens up, there could be events and demo. Most people don’t realize that to run one demo at one retail store for a couple of hours is about $100. You’re not going to do 1 at 1 store for a couple of hours so put a big old multiplier on that.

In summary, the number one thing I see to start is that people do not realize the layers of cost structure to make that crossover. There are other areas I want to get into but do your homework. Talk to folks who have passed through and made that crossing. Make sure you’re working with your investor based on this. I’d see people not getting a war chest together. This is like, “Get your war chest ready to enter retail beforehand. Budget it properly.”

I don’t know that I’ve encountered anyone yet that has budgeted it properly. What happens is they’ve raised the funds. They go to retail. It wasn’t enough. They get trapped in a fundraising cycle. They’re highly distracted by fundraising right at that moment when they need to be laser-focused on the executional aspects of entering retail. What could be a pretty cool opportunity of taking this amazing digitally native brand to a whole new consumer-based be fraught with some backroom challenges by being ill-prepared?

Be sure you need to go to retail. We talk about this a lot that a consumer shop is a continuum. They don’t shop in channels. We all talk on channels but most people don’t wake up and go, “I’m going to shop in the Natural & Specialty channel. Tomorrow, I’m going to shop at eCommerce. By this afternoon, I might shop in mass.” It’s not the way we work. We just buy shit. We go out and do it. It’s understanding where you can intersect with your shoppers along that continuum because on one end is where they discover and try new things and on the other end is where they replenish the things that they love.

The best brands meet their consumers throughout that continuum and intersect with them to get the uptake that they need. What role will retail play in that continuum? Is it replenishment or trial? Understand that the closer you move to beat retail, the drive trial, the more expensive retail is going to be. The more that you move it to be about replenishment, the less.

If you can motivate your tribe and people are looking for you because you’ve established demand and you’ve done all those things for being online then you probably don’t need to spend as much in retail. However, that means time online, a big tribe and all of those things. Also, how big do you need to go? Do you go broadly and quickly? I want to get your feedback on this.

As you’re first going out to doing this, considering making this bridge, do you run some growth hacks, try to open up ADC, hit some strong independence and see if you can execute a strategy that works from a cost perspective? Here’s one of the questions and I’d love to hear your thoughts on this. “If I’m considering a jump to retail, what’s the minimum COGS margin that I need to have in order to have any chance to be successful?”

Most of our brands making this processing that are still relying on heavy subsidizing by their investor-based to do so are counting on economies of scale as they reach retail, get north of $10 million, $20 million of sales revenue to achieve profitability. That’s the most common set of factors that we encounter. In terms of the base cost of goods margin, you want to be pushing into the high 40s, ideally pushing into the 50s to start to get your business to that place of healthy profitability. A lot of the digitally native brands have been able to be successful with a different structure inside of their company. It’s a lot better to fine-tune that in advance if you can.

Sometimes you have such a breakthrough product and the time is right. Maybe you’ve got some insulated benefits that you want to go ahead, get out to retail before those competitors and get some first-mover advantages. There’s a trade-off. If you are tweaking your model, improving your COGS and suddenly the rest of the market passes you by, that doesn’t work either. There’s not one pathway here but getting up into the 40s and 50s is pretty important.

One thing I’ll say on that too is that we’re in a world where the investment community is insisting on these higher margins. Some of the successes years ago of having a business that struggled on that side and still having great outcomes for the exit, we’re not seeing as much of that. Tightening up your model on the backend is more important than ever.

We talk a lot about the importance of capital efficiency. Not all of you are going to be able to bridge that gap when your margins are already pushing 40 and 50 but if you don’t have a clear pathway to get there then you need to pause and think twice because anything less than that, just being brutally honest, it’s every unit when you do your net contribution margin. I encourage everybody to do this.

When you’re looking at retail, take the wholesale price that you’re going to sell either FOB or delivered to your UniFI, KE or whomever. Back out all the things that Tracy was talking about. Free fills, trade spends, brokers expense, all the transactional things to see what your net contribution margin is. In most cases in the earliest days, that net contribution is going to be negative.

If that net contribution is negative then you’re not talking about growth for the sake of growth. You’re talking about an investment strategy. The question you need to ask yourself is, “Why should I be investing in this retail? What’s the upside here? What am I improving? What am I going to do? Is it getting me traction? Is it proving product market fit? Am I going to get to scale as if I can be successful?”

There has to be some tradeoff there. It can’t just be for the topline because if it’s an investment strategy without anything else is costing you money. It’s important to know and be disciplined around that. You’re not being forced to go. You’ve got to have the war chest. You’ve got to understand that, for most of you who want to bridge this gap.

I’ve counseled a few brands who want to be profitable soon or at least break even. I can’t show them a path to get there until they get to that $10 million, $20 million, $30 million in revenue. It’s not just economies of scale from MOQ. It’s from the volume on COGS, it’s all those things. Don’t con yourself into believing that volume will solve a multitude of sins because it won’t. As your volume grows, you may realize improvement to your COGS but a lot of the reason your volume is growing is that you’re expanding maybe into more conventional, mass or club.

Simultaneously, you’re going to get price compression. Most of the COGS improvement you’re going to get, you’re eventually going to give back in price concessions and price compression. You don’t get to hold where you are for perpetuity. There’s always going to be doubt. There’s nowhere to go from where you start your pricing. I promise you this. There is nowhere to go but down. You’re never going to get your prices anywhere but down. I want people to understand that it’s a fabulous business and a great opportunity. There’s a huge upside but it’s hard as hell.

The sobering advice is the steps are tough to hear and especially tough for people to soak in because they’ve had this incredible success online. It feels like the table is all set to go jamming into retail but what Elliot’s saying is important. There is a sobering side. We say it for the benefit of our brands. The last thing you want to do is take this wonderful success and parlay it into something that takes your company down by not anticipating what’s coming around the bend.

In conjunction with that, there’s this enthusiasm about, “I’ve got consumers all across the country that love my stuff. I’m going to be national with retail.” It’s a question about, “How far to go? How fast? How targeted? How broad?” I’ll let you know that in the digital environment, the data component for where a product is selling changes dramatically in the retail world.

Think of yourself as very much on display inside the data from the moment you dip your toes in that water. What you want right out of the gate is velocity. Velocity per retail unit is critical. It’s the metric that everybody has their eye on because that shows how fast your product soars and how fast it flies at any one location. It’s the true measure of consumer adoption in the retail environment.

Another pitfall here is broad distribution feels like success. What broad distribution can bring is all of those costs we were talking about but if you’re not turning then the data will show it. If you come out of the gate and here are 1,000 store chains that wants you and I’ll make this up, the category norm is eight units per SKU, per store, per week. That’s what the category demands.

Suddenly, you enter your new brands and you’re turning it 2 or 3. That’s on display for every other retailer that you’re going to approach next. They’re going to be able to peek under the tent and see. You got your shot. You gave it a try but it doesn’t look like you perform and deserve the realist state in my store.

What you want to do is walk before you run, be extremely selective in finding where your tribe shops for your types of products, your features and benefits. Make sure that you understand in advance what the metrics are whether that’s dollars per SKU, per store, per week or units. I prefer to look at dollars. A lot of the digitally native brands are higher price so they can handle being a little bit lower velocity and still be very productive SKUs. Make sure that you get your whole playbook dialed in with a small group of retailers and then apply that playbook after you’ve fine-tuned it to more retailers.

Here’s what the playbook needs to include. What is the correct price point where my product turns? How often do I promote? What is the number of SKUs I should have? Am I in the right category? Make sure that you find two and corrected all of those things at a small scale while you can correct it, preferably with retail that’s friendly to your concept or maybe a buyer that’s going to show some patience with you over the first year while you potentially make these tweaks.

Once you’ve got this playbook dialed in, you take that to the next retailer or two that are also very well-known. You’re overlaying your consumer strategy with that so you’re driving people to that retailer. You’ve got the investment you need to work the consumer side and the demand. At the same time, you’re pushing the supply side and the distribution. I’ll pause there but I want to make sure that we get into this whole idea of the product itself because that’s one thing that can change a lot during that first year of crossing over.

The danger is starting with the conclusions. The right thing to do is starting with, what are your questions that you need to answer in order to feel confident, to continue to scale in this example in retail? Tracy outlined some of those. “Is my pricing going to work? How often do I promote? Are my promotions more effective by frequency or by depth? Where do I need to be merchandised? What’s the right category? What’s the right kind of retailer?”

You’ve got all of these questions. If you do a spray and pray and you find yourself in a bunch of stores then it’s almost impossible to isolate the variables enough to ask those questions and get real answers. If you stay narrow, be disciplined and say, “My eCommerce business is humming along. I’m good. I’m going to continue to do that, be patient and smart here,” that’s hard.

It’s hard for a few reasons. One is you see the success you’re having online and you expect that immediately to translate to eCommerce or into a brick and mortar. You start saying, “I’m doing millions online and $50,000 retail. Why?” That’s hard. Secondly, it’s like the drums of Jumanji. You just hear the store count, all these opportunities you want to go and you lose that discipline.

You’re fearful too especially where category reviews are so far in advance, sad and so infrequent that you’re like, “If I don’t submit for this category review, I’m going to go wait another year.” Wait, be disciplined. Ask questions, learn. I promise you that all the costs that Tracy outlined are as if you don’t fuck up but you will. If you do, it’s going to exacerbate and amplify those costs. Make your mistakes in a much smaller amount of stores. Get your learning there so that you can move forward instead of having hundreds of mistakes costing you huge dollars. I’m off my soapbox. I am a wet blanket.

The other challenge that we see with crossing over from digitally native to brick and mortar is the package itself. A lot of times that product offering is right on point in terms of what’s in the package. It’s delicious. It’s got the functionality that the consumer is looking for because there is all this communication that happens on a screen. It shows up in a box on your front porch, gets ripped open and consumed. There’s a lot less involvement in what’s wrapped around the product.

You don’t have that luxury at all at retail. All of that online communication that the brand may have leaned on before has to happen right there on the shelf or the boiled down, sugared down version of it. This is where we help brands to understand that sacrifices are the essence of strategy. A lot of the digitally native brands will have that NASCAR look about them because they’ve been able to say so much online and they want to say it all when they get to retail. It’s too much. You’re going to have to pick out what the key messages are that belong on a primary display panel. We also see a lot of very right-brain looking package that’s descriptive but not necessarily emotive.

When you’re in that retail environment with 30,000 to 50,000 little entities called products that are shouting at a consumer, they’re competing for the attention of the brain. It’s not enough to be purely descriptive. You have to be emotive. You may not have focused as much on what are those images, the symbols, the color that helps a brand speak to a consumer and say, “This is for me.” You have a lot of luxury online to be wordy, maybe even have links and all kinds of stuff that sell your product for you.

This is an area where maybe people had a lot of do-it-yourself success. May need to get and very likely do need to get professionals involved. People who are experts in those areas are visual identity experts. They know how to create the complete trappings of a package that will also be legally appropriate to sell. There are required information on the package that sometimes had been able to get away within the digital environment that needs to be upgraded, professionalized and adapted to this completely new jungle.

Sometimes we struggle so much with message hierarchy that reads like the closing credits in a movie. We make all these claims, statements and so forth. Online, you have the time to talk about it and the other way to do it. In a brick and mortar, it’s 3 seconds for 3 feet of shelf space and they’re making decisions. It is emotional. It’s got a pop. You got to decide what is the one thing you’re going to fall on the sword for in terms of claim? The other thing to think through is that there’s a big difference between how to configure a product to ship online versus how to configure a product to work in retail.

Thinking about things like retail pack-out, how many units are on a shelf? What’s my case size? Getting back to Tracy’s earlier point, you’re going to give away free cases. If you make your cases too big, it’s going to cost you even more. Thinking about all of that stuff, it’s a different way to do go-to-market. It’s a different business that has completely different requirements, understanding those and meeting with people. Talk to other founders. Reach out to Tracy. She’s always great. Even if you’re not a fit for Presence, I promise you that she will give you coaching that will help you immensely and be the kindest no.

Elliot, I’m so glad you brought up that tactical concern, even things like dimensions, their shelves height. There are these very mundane concerns of retail that can be real issues. We see products come through the review all the time that are flat-out misconfigured for the retail environment. It seems obvious but it’s not. You’re doing your thing. You’re shipping it online. It’s working great and suddenly it doesn’t fit on a retail shelf.

There’s everything from the various strategic concerns to the highly practical concerns. We’ve seen it all. There are so many digitally native brands. I’m glad we’re talking about this because I haven’t heard a lot of conversating around making this crossing. That’s one of the reasons why we’re seeing many of these choppy crossings. That book diving headlong from one environment to the other flat out not ready.

We suck all of you into it. We, being the industry globally. We talk about the importance of omnichannel and all those things. You’re the founders. You’re the entrepreneurs. You install your own discipline. You decide what makes sense for you. Don’t get me wrong. eCommerce costs a lot of money too. It’s getting more and more expensive as a larger percentage of consumers are finding what they want in grocery and in supplements online. It’s driving up the costs of what it takes to be a successful online business.

I’ll talk about another continuum. Let’s call it the acquisition continuum. Think of it this way. The acquisition continuum is how much of the acquisition activity you own as the brand versus how much activity the platform or the retailer owns. When you go to brick and mortar, you slide that continuum. You meet in the middle maybe a little bit to the retailer side because they own more of the acquisition. Their job is to bring the consumer into the store. Your job is then more so to get the consumer to purchase it once there. You share in that acquisition.

Online, for the most bases especially if it’s your own website, you own 100% percent of both. You have to get them both in the door and to buy the product. As the in-the-door expenses go up, your expenses are going to go up. Either way, it’s looking at channel and unit economics, understanding all of this, what the right mix is and all of those things. The thing that I promote and talk about a lot as it relates to being a tardigrade versus a unicorn is it’s fine to experiment, stay controlled and capital efficient.

If it were me and I’m thinking about making this jump, I’m going to look at a heat map first and say, “Where am I over-indexing? Where is a good solid cluster of my customers? What geography?” Maybe I go work there for a while and see what I can do in brick and mortar since I’ve already got a fair amount of tribe there. I then build some experiments around what activities I can do to cast a net to bring that tribe and motivate them outward, see if I can do it and then learn from there. It’s a great opportunity. You should be asking yourself the question, “Am I ready?” You should also give yourself, in my opinion, the room to say, “I’m not,” then stop.

I was going to add that this idea of very tailored food that has been accelerated by online shopping behavior is truly a wonderful thing for humanity. Here’s what we’re talking about. Food became all about the murky middle. What the Farm Bill was supporting in terms of generally nutritionally, worthless subsidies becoming middling, nutritionally worthless products that the American diet was chock full of and that grocery stores are still by large overly indexing in their sales.

I’m talking about every conceivable combination of flour, sugar, a plastic liner and a cardboard box. That was called food for about 4 or 5 decades. With all this incredible innovation, tailoring of food and the return to the whole idea of real food by all of the entrepreneurs that we work with, it’s putting food in the proper place of its life-giving role in our lives, enjoyment and vitality.

The online space is so vibrant, highly tailored and highly specialized variety. It’s the absolute spice of life out there. Where grocery retail has the edges is in these temp channels of the refrigerated, frozen and some of that. Challenge is being solved and that last called the last mile of distribution online, getting these temp sensitive products to us, that’s wonderful to see those solutions coming about.

Overall, to me, the wonderful thing that’s happening in food is fragmentation. We’d had mass consolidation centered around big commodities that didn’t drive vitality. In fact, it drives a lot of disease states of obesity, diabetes and even cancer. What we have is the complete blowing up of that rubric and the creation of all these wonderfully innovative products that return us to real food. I want to make sure and highlight what is the real positive influence that online retailing is ultimately going to have on the brick-and-mortar retail environment of giving the range of choices that consumers deserve. Ultimately, behind that changing agriculture because it’s putting consumers back in charge of what we all eat.

We talk about the COVID pandemic but there are some other major pandemics that are human cause clearly. One of them is the obesity pandemic and the other one is the close type 2 diabetes pandemic. An amazing stat on 42% of our population is either overweight or clinically obese. Over 1/3 of our population could be either pre-diabetic or type 2 diabetics. What we’re all doing is trying to solve that problem. There are so many ways to do it. We’re trying to figure out what your best way is. Two questions here that I want to make sure we get in. One is for the brands that you’ve seen do this well, bridge that from digitally native to brick and mortar. What are some of the things that you’ve seen them do that led to success?

I’ll highlight one brand that we’ve been involved in the last couple of years that has done a nice job with that crossing. It’s a brand called Fat Snax that comes to mind. We met them when their packaging was not suitable for retail. Both from the perspective of visual identity and from the perspective of product could get beat up if it needed to move through the whole system of being retail.

It’s a highly coachable team that completed a beautiful rebrand. They got their packaging tightened up and suitable for that environment. They expanded the product lineup to be tailored with both the assortment and the sizes so that we had an approachable price then and we had the right products. There was very little changing the tires while we were going down the road. They got their brand sent to bootcamp, ready to penetrate the retail environments in advance, enjoying some nice retail success and building that retail tribe. It was pretty clutch that they embarked on some of these big get-ready market readiness initiatives in advance rather than having a swing and a miss.

Sometimes I see brands do like, “I’m just going to give it a try. I’ll change everything if I have to.” By then, perhaps you’ve spent your war chest or maybe you’ve poisoned a well with retailers by having a miss on your first go-round. Not that there aren’t going to be those tweaks that we talked about as you fine-tune your playbook but if there are big things that you need to change, it’s good to do before you make the big push.

The other thing that’s simple and this is for everybody whether you’re in brick and mortar or contemplating. Make a friend at your local store. Get to know the store director. Being able to walk into a local store and have some of the tactical questions, the things that you don’t do like, “Can I put this product on the shelf just to see what it looks like, get feedback and see how it works? Can I show you this case if it works for pack out?”

You never know the little bit of information that you can get. Also, make sure you’re there in stores because watching and trying to separate consumers from their cash is one of the greatest places to learn about what’s working and what’s not working. You are a trend watcher and a signal spotter. You always have been. What’s going on that you see that’s exciting you and what’s going on that’s concerning you?

I want to stick to the exciting stuff. Since a lot of what we talked about was in this realm of challenges and crossing over, I’ll talk about sometimes that what I’m super excited about is the world of mushrooms. They are hitting the tipping point as an entire species of life on earth. The documentary Fantastic Fungi hit Netflix and is trending at number one.

I haven’t seen that movie. Do yourself a favor and watch it. First of all, it’s fantastically interesting but the cinematography is mind-blowing as well. It’s wonderful.

What we’re seeing is the medicinal aspects and the investment that’s pouring in on the seller side of things. We’ve seen regulation changing very rapidly at many places around the country like Denver, Oakland and Oregon. We’re starting to see some of the same earlier barriers come down that we saw with cannabis years ago.

What’s happening is some of that similar influence that dispensaries had in paving the way for CBD and hemp to have the taboo removed. What we’re seeing is the open-mindedness that’s starting to happen around silicide with a greater understanding of the role that mushrooms play. The great connectors out there in nature are having an influence on functional mushrooms and culinary mushrooms in food.

Years ago, a lot of people thought of mushrooms as something you pick off pizza. The dramatic change in consumer mindset over these decades has been wonderful to see but in particular, it feels that the tipping point is here for our mushrooms to play a proper role in the human diet. We’re at our absolute infancy understanding the role that they play in fighting disease, even being these connectors in nature.

The entire mushroom world is how nutrients get redistributed constantly through the forest and believe that they create protections inside the human body. The fun part of being somebody who helps develop businesses is it opens up incredible commercial opportunities. For those of you who have maybe been working away in the wilderness with your little mushroom project, you should expect a whole new day of donning.

My colleagues are called the Fungi Finders at our local farmer’s market. I’m so happy to see them and they’re excited because they find something special for me to try. It’s such a cool thing. I’ll share my thing of excitement. With all the angst and everything that’s come out of COVID, at least for that subset of those 50 million consumers who are self-identified as the natural product shoppers. The stakeholder mentality of the role that we all play in our own health and the health of our planet has only increased. The awareness of the impact that we have with what we put in and on our bodies, the impact it has on us and on our planet has grown to the level of consciousness that it’s no longer something that people can put aside and that’s going to lead to great change.

For all the founders reading, be the impetus for continued innovation. You need to recognize that what consumers are expecting is radical transparency, what they put in and on their bodies is good for them and for the planet. Thank you very much for joining me. It sucks that this is the way we get to hang out and see each other. Hopefully, we get to fix that. Hopefully, Expo East happens. Thanks for joining. We’ll see you next time on the next episode.

Thanks, Ell.

Important Links

• Kokomio

• Presence

• Bill Weiland

• Fat Snax

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