Food Business Innovation Beyond Flavors: How CVT Soft Serve Turned Regional Loyalty and Packaging Innovation into a Multi-Channel Business
(Listen on Apple or Spotify. Full transcript below.)
When Joe Nicchi moved from upstate New York to Los Angeles, he brought one major complaint: where was the good soft serve ice cream?
After hearing "McDonald's" one too many times as the only answer, his food business innovation journey began. Eleven years later, CVT Soft Serve operates in 3,000 stores nationwide, proving that the best opportunities often come from solving problems you experience personally.
What makes Joe's journey particularly compelling for emerging food brands isn't just his success—it's how he achieved it through food business innovation focused on packaging rather than product reinvention, and how strategic thinking at every growth stage enabled sustainable growth without the typical trade spend burdens that crush many new brands.
Build Deep Regional Loyalty Before Going Wide
Joe's initial $150,000 investment in vintage 1961 trucks wasn't just about aesthetics—though in image-conscious LA, the visual branding certainly helped. More importantly, those trucks became the foundation for building deep, cult-like brand loyalty throughout Los Angeles over nearly a decade.
This regional focus proved crucial when CVT eventually moved into retail. At their Gelson's launch, the brand achieved 120 units per store per week versus the category average of 7-10 units. That's not luck—that's the result of years building authentic connections with customers who were already craving the product.
For emerging food brands, this reinforces a critical lesson: resist the urge to go wide too quickly. Deep regional loyalty creates leverage in retail negotiations and provides the velocity data that makes retailers take notice. When you can walk into a meeting with proof that customers are calling stores asking for your product by name, you're negotiating from a position of strength.
CVT's exceptional launch performance at Gelson's created a domino effect. Bristol Farms, seeing the spins data, quickly brought the brand in. Then Kroger's Western division offered 700 doors across multiple banners. Within two years, CVT expanded from 27 stores to 3,000—with minimal traditional trade spend because strong performance data spoke for itself.
Food Business Innovation Through Packaging, Not Product
The turning point for CVT came through an unexpected moment: Jeff Bezos requesting a soft serve machine for his home. Rather than seeing this as a niche luxury market, Joe recognized a broader opportunity. If someone with unlimited resources chose CVT, how could they democratize access to quality soft serve for everyone?
Joe's solution was revolutionary in its simplicity: soft serve in a pouch. No expensive machines, no special storage requirements, just authentic soft serve that customers could enjoy anywhere. The innovation wasn't in creating new flavors—CVT still only offers chocolate, vanilla, and twist. The breakthrough was in the delivery method.
Food business innovation doesn't require reinventing your core product. Sometimes the most impactful innovations come from reimagining how customers access what you're already making exceptionally well. Joe spent two years developing the pouching technology, even beta-testing with breast milk storage bags, because he understood that solving the delivery challenge would unlock exponential growth. This type of food business innovation thinking—focusing on access rather than product reformulation—enabled CVT to expand rapidly without the typical development costs of creating new flavors or formulations.
Protect Your Margins Like Your Life Depends on It
One of Joe's most emphatic pieces of advice centers on protecting margins from day one. When developing the pouches, he worked backward from his target retail price of $4.99, ensuring everyone in the supply chain—retailer, distributor, and CVT—could maintain healthy margins.
This strategic approach to pricing enabled CVT to launch at Gelson's without promotional support, selling at full price from day one. When your margins are protected through smart food business innovation and pricing strategy, you have flexibility to invest in growth, weather economic challenges, and make strategic decisions without constant financial pressure.
For emerging brands, this means doing the math before you set your pricing, not after. Understand what retailers and distributors need to make, then build your costs and pricing structure to support sustainable margins for everyone involved. If the numbers don't work at your desired retail price, address the cost structure rather than accepting thin margins and hoping volume will save you.
Stay Nimble, Share Your Vision, and Let Data Guide Decisions
As CVT expanded across multiple channels—trucks, retail, food service, event venues—Joe emphasized the importance of remaining nimble and letting data guide decisions. When family-oriented concerts showed higher sales, CVT leaned into that market. When barrel freezers at self-checkout drove impulse purchases, they invested in more units.
This adaptability extends to recognizing opportunities you didn't initially consider. CVT found success through DoorDash and Instacart, channels Joe hadn't originally planned for, because they remained open to how customers wanted to engage with their product. Successful food business innovation often means staying flexible about distribution channels and customer behavior.
Perhaps most importantly, Joe advocates for being open about what you're working on, even in early stages. A casual conversation with a pizzeria owner friend about his pouch concept led to an introduction to Live Nation, which ultimately resulted in venture backing and national expansion into amphitheaters. Many entrepreneurs keep their ideas close to the vest, missing opportunities for introductions, feedback, and partnerships that could accelerate their growth. This openness is a crucial but often overlooked element of food business innovation strategy.
The Power of Solving Your Own Problem
Joe's journey proves that emerging food companies can build sustainable businesses by staying true to core principles: protect your margins, build deep customer connections before expanding, and remain open to unexpected opportunities.
The food industry rewards brands that demonstrate clear differentiation and strong unit economics. Sometimes the most powerful innovations aren't about reinventing the product—they're about reimagining how customers experience what you're already making perfectly.
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Episode Timeline
00:00 Introduction to CVT Soft Serve and Its Origins
06:43 The Journey of Building a Brand in LA
12:06 Innovative Approaches to Product Delivery
17:22 The Process of Creating Soft Serve Pouches
21:39 Navigating Retail and Trade Spend Challenges
23:54 Building a Regional Brand
27:43 Navigating Retail Expansion
31:13 Lessons in Margins and Pricing Strategy
33:28 Data-Driven Decisions and Customer Insights
37:12 The Importance of Flexibility and Trends
40:00 Embracing Luck and Networking
Full Episode Transcript
you're listening to the Good Food CFO podcast. I'm your host, Sarah Delevan, and with us as always is our producer, Chelsea Stier. Hey, Chelsea. Hey, Sarah. We have got a brand new BABOYOT episode for our listeners today. They are going to hear your conversation with Joe Nicchi, who is the founder of Los Angeles Cult Favorite Ice Cream, CVT Soft Serve. Yeah. I loved my conversation with Joe.
He is originally from the East Coast, as am I. I used to see the CVT soft serve truck in my old neighborhood of Sherman Oaks. And it was just really interesting to get to talk to him and hear the story of not only like how the trucks got started and why, but then like their expansion and what that has looked like over the years. If anyone is listening and you don't know what CVT stands for or even what soft serve is, like maybe you're not from the East Coast where it's like extremely popular.
CVT stands for chocolate vanilla twist and soft serve. Maybe you've had it at McDonald's or something like that. You know what I mean? Is that soft ice cream comes out of the machine into a cone, you know what I mean? Kind of twists up to the top into a nice little peak. But we both kind of reminisce about this childhood favorite of ours from the East Coast and how when Joe moved to the West Coast, it didn't exist here and he missed it he wanted to bring it. And it's really fun to see how this nostalgic item really
met a need and has continued to kind of fill a gap in the marketplace. Yeah, I thought your conversation with Joe, you know, was really interesting. It checked a lot of those BABOYOT boxes, right? You guys talked about really focusing on building that kind of deep regional brand loyalty before moving to expansion or growth as you're talking about. And then you also talk about
margins, surprise, surprise, spoiler alert, and protecting them, I think as he says, like your life depends on it. And these are things that we've talked to many of our BABOYOT founders about before. And I think that it's something that is always good to reinforce every time we have these conversations. But there was something else that you guys talked about in this conversation that I think we haven't heard much here on the podcast and I thought was really interesting.
and that was around innovation. Yeah. I think what's interesting is we've talked about innovation once before pretty in depth on the podcast when we had Sarah Nathan, the founder of Newish, her innovation was around the product itself, Freeze-dried matzo balls and turning that into a quick soup, really changing.
that part of the industry and how people can get matzo ball soup. Joe, on the other hand, is more focused on packaging innovation. As I mentioned, his product is nostalgic. Soft serve ice cream is not a new thing. He has not recreated that product in a new way, but he's delivering it to people in a new way that has enabled him to grow.
specifically into national retailers, right? And what I think is really interesting and I hope people take away from this conversation is how at different points throughout the business, the life of the business, when Joe had opportunities for growth and people were asking him for his product, he wasn't just thinking about, how do I replicate what I'm already doing?
He was really thinking about how do I efficiently deliver this product? What are the new ways that I can deliver this product? I want people to listen and really kind of hear from him what that innovation is and how he did it what that process was. I think no matter what type of product you have, that way of thinking can be really beneficial because we sometimes think, this is the way I'm doing it, so if I'm going to grow, I need to keep on doing it.
this same way. And he wasn't doing that. He was saying, okay, how can I make this possible without big investment into another truck or whatever might be a typical way of growing his business? think it's reminding me of Emily from Boichik Bagel as well, right? They're building bagel factories now in Los Angeles, but she's also thinking about, can I do this differently?
Can I make this more efficient so that each time I build a new location, it's not that same big investment every time, but the product that I am delivering has that same exceptional outcome? Yeah, and like fresh baked. Yeah. Yeah. Yeah. So innovation, I think you're right, Chelsea, is a very big part of this story, but I don't want it to be lost. It's not just that.
product innovation that is helping him land on retail shelves, but it's been the innovation and the way he's been thinking throughout the life of his business. We also talk at the end of the episode about luck, and I hope that people will stick around to hear what he has to say about that and my take on luck as well. Yeah, I love that. All right. Well, should we get to it? Yeah, let's do it. Hey there, it's Sarah.
If you're enjoying the podcast, I want to invite you to become a BABOYOT member. It stands for building a business on your own terms and your membership directly supports the continued production of this podcast and helps us reach our goal of supporting 1 million food founders. As a member, you'll get access to our live coaching events, have your brand featured right here on the podcast, be the first to test our new tools and receive a 10 % discount on all of our tools and services when you choose an annual plan.
Join fellow successful founders at thegoodfoodcfo.com slash BABOYOT. That's spelled B-A-B-O-Y-O-T. Together, we're changing the way that food business is done. Now, back to the show. Joe, welcome to the podcast. I'm really excited to talk to you today because I have seen the CVT ice cream truck in Sherman Oaks. I live in Los Angeles. I've sadly never eaten from your truck because I…
Thanks for having me.
don't eat a lot of ice cream, sadly, but I know friends that are like really like rabid fans. So why don't you share with our audience a little bit of background about your business, like how you started, kind of what your mission was and what you're up to today.
cool, I love hearing that. Yeah.
Absolutely. So I started CVT 11 years ago, March 2014 in LA. I'm from upstate New York where I grew up with soft serve ice cream. And when I moved to Los Angeles a lifetime ago, I was complaining to people, you know, there's no soft serve in LA. It's all frozen yogurt. It's a very health conscious image conscious town. And I want the good stuff. So I'd ask people that grew up in LA, I would say, you know, where do get soft serve? And they'd say McDonald's. I'm like, that's garbage. Where's the good stuff?
So I can say I joke about it, but in all seriousness, I opened out of frustration. I had this thing that I wanted. It didn't exist. So we brought it back to LA. So that was the original start for the trucks. And then pretty quickly we were known as a TV film catering trucks. We had to get a second truck. I've had a lot of success in LA, any press in LA that's been about food trucks, the LA Times, LA Weekly, you name it.
LA Magazine, best food truck, best soft serve, best ice cream. We've been on all the lists. So that was about 11 years of my life was the tribe and still is the trucks in Los Angeles. that was a little background on the brand. And then we started wholesaling jugs of ice cream where you pour them into soft serve machines to colleges and restaurants. And then about, let's see, four years ago, we got a residential install and it was Jeff Bezos.
When Jeff put our ice cream in his house, it was this light bulb moment for me of how can we get soft serve to everyone that can't afford a very expensive machine in their kitchen. So I spent a couple of years of my life doing some R and D of can we make soft serve to go. And that's where we're at today. We launched the CVT pouches that are now in retail, close to 3000 stores now and just over two years. Wow. So.
So I'm from Pennsylvania originally and it just like dawning on me that yeah, there is no outside of your company, Soft Serve in LA. Like to this day, I really don't know any other like kind of higher end, if you will brand, right? Like not McDonald's. When I was in grade school, there was a truck called Dairy Dan.
And it was an annual treat that the truck would come to the school and we would get soft serve as a treat every single year.
Yeah, we, that's so cool. We did a lot of that in LA, a lot of school treats. It's definitely been, it's weird, like doing it for 11 years now. I've got kids that were like in kindergarten that are now in high school or high schoolers that are out of college. It's just, it's fun to be a part of that community the whole way.
Yeah. So, okay, you launch initially as a truck or you're parking on streets or like driving around. What does that look like initially?
was horrendous. So I went all in on this thing and not know having a clue what I was doing. You know, my first day in business, I think I made about $60 I parked outside of pinks hot dogs in Hollywood. I was like, those people are concerned about their nutrition. So I'm gonna park there. And people walked out of pinks holding their stomachs like, oh, I'm so full. This is terrible. Like, I'd love to have just I'm so full. I can't eat it. So then my wife and I we used to frequent Mendocino farms in Sherman Oaks.
I was like, well, there's a place we could try. know, people are eating salads or sandwiches. Maybe there's an opportunity there. So we went there close to 11 years ago and we never looked back. It was like our top place. was just positioning the trucks in places where we think people are going to like it. And then very quickly Hollywood came knocking for TV, film catering. And then I, this is before the whole influencer culture took off, just getting celebrities to talk about it with their colleagues. And then it just blew up. So we had to get a second.
So how many trucks, is it just two then at this point or do you have like a bunch?
have more, there's two that are currently operating in LA, yeah.
Okay. But at the height of like catering and stuff still too. Just the two. Yep. That's awesome. Yeah. relatively low overhead.
Yes, except for the fact that I wanted a 1961 truck, which had to be completely overhauled to be in LA County. The LA County Health Department was a challenge to say the least. So I was, mean, the trucks probably cost me well, like $150,000 just to get in, which would ship. Well, thank you. And it's funny because I get going back to LA being so image conscious. My, one of my first events was a wedding and I asked this guy, I was like, how'd you hear about us? And he said, oh, I saw you all was sitting in traffic.
cute.
So like, here's a guy who's gonna use our, he's never even tried the ice cream. He's gonna use our truck because he liked how cute the truck looked for his guests to see it when they come into the.
Yeah, that branding, man, and that image, it's important. For sure. Absolutely. Okay, because this is a food-focused podcast. I want to dig into some of the details. Are you making your ice cream in a commissary kitchen? What does the sort of the back of the house kind of process look like?
Personally making it we have a dairy that makes our recipe so formulation and they make the dairy makes up the recipe in large batches and then we it's then poured in the machines
Okay, are they in California? They are. Amazing.
Yeah, so then we have a comb man as well that fills the pouches. Okay.
That's awesome. Okay, so you've got a partner who's making the product for you, then coming to the truck and you're delivering it in the various ways that you're getting it out there. What prompted you to make the move into food service?
Exactly.
It was all inbound from other schools reaching out to us saying, how can we get your ice cream here? yeah, the food service just spiraled from people reaching out to us.
Gotcha. Okay. And then from there, the next move, sorry, I'm just like making sure I remember properly, the next move was into homes, but then, and then after that retail.
Truly that wasn't part of homes. was was colleges. It was restaurants. One of the first ones was the Queen Mary ship was a hotel. breweries we places that wanted to dessert item. They love the trucks. Well, now you can have this ice cream. Just have to buy the machine. And it was the putting in his house moment where I was like, my God, you know, this guy, you can say what you want about him. That's fine. I don't care. But like he could have anything he wants truly.
The fact that he's choosing our brand meant so much to me and that like, wow, this we're we're onto something here. Clearly, this guy has tried a lot of food in his life and all of us restaurants, maybe we're onto something here. So we have to figure out how to make this to go.
Yeah, one more question around the like schools and things like that. Did you have to work with the distributor for that part of the business?
Yes, we had a local distributor in Los Angeles. We just not national, not a national broadliner at the time. Yeah, I have two trucks from 1961. They max out at 35 miles per hour. I've got places that are asking me when can you come to San Diego? When you come to Palm Springs, Ojai, Santa Barbara. I was like, we can't do that. So like, well, I guess we could just sell them the jugs if they have a machine. So I said, if you want to get a software machine, we'll come in and brand it. And we had a company that would vinyl wrap the machines to look like trucks. call them CVT knees.
And it was a huge hit. then COVID hit and people started to veer away from the machines just because it was an add-on item. And they were just getting down to the bare bones of what they needed to have on their menu. So that was kind of what started getting, or what influenced me to move towards food service with the jugs. And then I would never in a million years would have imagined, forget Jeff Bezos, just that anyone would put a soft serve machine in their house. And after Jeff, all these top one percenters started asking, they wanted the Bezos machine in their house.
Yeah.
So I got some very well known people in Hollywood that now have these machines in their houses. like, this is so cool. But at the same time, I'm like, we're like a brand for the people. Not everyone can afford an ice cream machine. How can we get this to everyone?
Yeah. Yeah. Well, I love a couple of things about what you just shared. like one is like, there's, it's a great product. It's unique to the area, right? And so you've got people who are like, we want what you are selling, but you weren't like, we need more trucks, right? Cause some people might go, we need to grow this fleet of trucks. They're an expensive truck. That's a lot of logistics. That's a lot of people. So going with the machine is so smart.
you just hit the nail on the head. Truly the hardest part of the restaurant business. Any restaurant operator will tell you is staffing, trying to get enough staffing, reliable staffing, LA staffing of people that are creative, that just want to audition and go and write their script. And like, they're so flaky, not, not everyone, but a lot of people. I've actually had one employee for eight years on my trucks. It's truly like it's, um, so it's staffing. Why don't you franchise it? I didn't have the money to franchise it. I didn't want to deal with like people putting just not,
having a nice presentation of their truck, it just wasn't worth it to me. Yeah. There's got to be another way to get this product out there. Yeah.
Yeah. So something else that I read was that you are at like event venues as well. Can you talk a little bit about that and how that came to be? okay.
Okay, so that's all with the pouches. We're skipping. Yeah, so ice cream itself, the machines, that's event. All the event venues are with the pouches now. Okay. We launched the pouches in grocery. Okay. That was at Gelson's 27 stores in Los Angeles was really excited about it. and pretty quickly I met with some people. They said, Hey, you should talk to live nation. I thought it was a, you know, a total blow off meeting. Sure. I'll talk to them.
Okay.
Head of food and beverage stopped the meeting. He said, you just solved my dessert problem. I can't sell ice cream at concerts. It's too messy. So they came in and they tested our ice cream at a handful of venues to see how would go. We blew it out of the water and they came in and venture backed us and we're the official ice cream alive nation amphitheaters now. That was a very short Cliff Notes version of how it all went down. yeah, so food service, yes, we're in retail and grocery with the pouches and it's great, but we're also in like SoFi stadium, Lego land, Hershey park.
That's amazing.
Six Flags. There are so many places that outside of grocery where this product is just the verticals. We're talking to airlines, we're talking to pools that in Vegas, like just the idea of having true innovation like soft serve to go is just not the norm.
Yeah. Okay, let's dive into that innovation time. So obviously we've heard from you that like the idea that Jeff Bezos is like, give me a machine in my house. You start to think about how can we get this ice cream to everybody? Sure. Talk us through that process. Yeah, what that was like.
Okay, so I had customers after Jeff was like, how can we do this? And I would have customers that would come to the truck and they'd buy a soft serve to go and they put a, we put a dome lid on it and they take it home. And I would say, how does it taste? Like, you know, if you take it out of the freezer, it tastes like Ben and Jerry's like a pint. Or if you let it melt for a little bit, it starts to taste like the truck again. So it was like, so I need to sell a melting product. How can I sell this in a form where they can just, it can melt.
I went down a crazy rabbit hole. My wife, we have four kids, we had empty breast milk storage bags at my house. I started filling breast milk storage bags in my truck to beta test it. And I'd hand it out to people. They didn't know what to do with it. They're like, like, no, you just eat soft serve to go like it's it just let it melt and eat it. And like, this tastes so good. I was like, yeah, that's what we're trying to do here. So it was okay. I have this idea. I think I can do this. Well, who's gonna make it for me? No one's doing this. So
I guess I'll go after baby food manufacturers or applesauce where they already have pouches and teach them how to make ice cream. And that was a disaster because they don't have the space to do that. They didn't have, they want high volume, which we didn't have. We were new to the space. They didn't have freezers. So I was like, well, maybe I can teach someone who already makes ice cream, how to fill pouches. So that's what we did. We had to source a machine. was, it was again, it was a crazy, crazy time, about two years of figuring out how to do this whole thing. In the meantime, I'm selling this product in.
I had a breast milk pouch full of product and I had a prototype of what the pouches would look like that I had a prop master in Hollywood make for me. So I went into these pitch meetings and I was like, this is what it looks like. This is what it tastes like. And we were getting customers before we even produced a single pouch off of the production line. Build the plane as you fly it. Truly terrifying. Like, no, what have I painted myself into a corner here? I have this thing that people want and I can't make it yet. Hopefully. So that was scary.
We see.
So did you require investment, whether it's like your own funds or outside funds, in order to get this product line off the ground, the machine?
So I found someone that was willing to rent me a machine, but I still had to buy tens of thousands of pouches up front. I had to invest in the machinery and all, you know, boxes, all legal getting anyway. So I went and did a family friends round. I went and it wasn't, it was so weird. I was, the worst person for investing. I would approach these people and they were, would tell them what I was working on and like, Oh, can I invest? And I would like say, if this is going to break the bank, if you're going to refile your house,
If this is going to burn like this could all go away tomorrow. I need to know that this is just extra fun money that you want to and that's what happened. I was like, I was like, it wasn't weird, like reverse psychology or being passive aggressive. I was like, look, I, of course I'd love your investment, but I don't know. No one's done this before. have no idea how this is going to pan out. And, yeah. So I got about, I got a handful of people that came in with big checks and we raised a, on a safe and,
Really great of you. Yeah.
We're off to the races with our first batch. And then after the test happened with live nation, they came back and said, Hey, we'd love to venture back you and make this thing national. we got a significant check. sent the value. They set the valuation, all the safes converted and the rest is history.
So, okay, I'm going to go back a little bit in time to… I want to balance out the timeline here. So, did you get the product ready to launch into Gelsens, which was the first store prior to going with Live Nation, or did that happen sort of simultaneously?
lot simultaneously actually. So I took the pitch meetings with prototypes. They all said we want it. This was in late 2022, like November, December of 22. Live Nation was trying it as well. And they really liked the product. then early January Live Nation came in and they said, when can we have it? I hadn't had the machine ready yet. I said, we'll be ready in May, which was the plan ready in April or May. And so I was taking POs from people without having the product. I this is you're making me sweat right now. I'm having major
major PTSD here. yeah, it was, it was terrifying to like, I knew I could do it. I just hadn't done it yet. So it was definitely a lot of like, take the leap and hopefully land kind of thing.
Sorry.
Yeah, amazing. So, okay, I love to dive into some of the distributor and like retail ins and outs. And something we talk a lot about here on the podcast is trade spend. And I know that if you're typically, you're a new product, you're a young brand, you don't have velocity data, it can cost you a lot in promos and slotting fees and intro allowances and all of that stuff to get on shelf. I'm familiar with what Gelsens typically asks for.
I also know that if you are in high demand, if you have a brand that carries some level of cachet with it, you can avoid some of those things. So I'm curious if you can share a little bit about what your journey onto shelf looked like in terms of trade spend.
Sure. So to start, told Gelson, exactly what you said, we're a young brand. They were so impressed by the innovation and the live nation aspect of it that they took us without promotion to start. They just brought us in. made an exception. We were selling at full price. There was no discount. Let's just see what happens. If it's not working, we'll forward invest 50 cents off a pouch or whatever it was. Well,
Yeah.
The, they, was told early on the average USW in the category was seven to 10 units per store per week. We started our USW at Gelsens was 120 when we, when we launched. week? A week.
So were you doing promotion, like were you doing social media? Were you talking about your audience like here in Los Angeles?
here's why I think it was perfect storm. also, I mean, the president of Gelson's reached out and he's like, we've never seen anything like this. People were calling the stores and buying it by the case it was even hitting the shelf. So what I think what happened was, we had created such brand loyalty for eight, nine years in LA. And the only place to buy it was in Southern California, that it just spiraled people would buy it was almost like beanie babies or cabbage patch kids, like people were trying to, and they would send me photos and I'd repost it and it would just snowballed.
my God, have you tried it? And they loved it. was, was so incredible. I, the USW has since come down obviously, cause we're in way more than 27 doors, but to start, it was just like overwhelming. So, and that was at full price. I think that was a tangent. It was full price. No, promotions whatsoever.
That tangent I think is really important though because another thing we talk about a lot here is the value in building a regional brand or even like a hyper local brand where you have a deep connection with your audience, with your customer. And oftentimes people are concerned, okay, if I'm only in let's just say Southern California and now I'm putting my product in store in SoCal, am I going to erode?
know, the brand, am I going to like lose sales in one place for the sake of somewhere else?
I thought about that with the trucks. was like, the pouches going to kill my truck business? And it didn't. was like the perfect storm. People can have it at their house or on the weekend, or they can visit the truck. It's two different experiences.
I was going to say it's like very different experience. Yeah. And so, okay, so you're with a distributor, you're on shelf at Gelsen's, you're able to get on without promo, things are going really well. Do you expand pretty quickly to more retailers?
So yes, Bristol Farms was probably one of the top competitors to Gelson's. came quickly. saw it. People had access to the spins data. I didn't know anything about the data at the time. Very quickly, Northern California came in with interest and then Kroger's Western KMA. it's Seattle with QFC, Fred Meyer, Ralph's in LA, Smith's, King Super. They gave us 700 doors like quickly, really quickly. Wow.
because they all saw that Gelson's data. And I was like, you know, there's no way we're going to maintain it 120 units. That was just a crazy launch. USW came down, but it was still above average.
All with the same distributor.
all with the same distributor and then then we quickly got some DSD distributors and other distributors because other people wanted it. Honestly, it wasn't like I wasn't going to sign an exclusive with a distributor because I leave it up to the retailer. If certain grocery store wants to use a certain distributor, I have to go with them. It's not.
Yeah. And then did you have to go into trade spend and sliding fees and things with the expansion? know Kroger, you know, typically has a requirement in their stores or?
I think there was a minimal, but it wasn't that bad. we had, it was, I don't want to like get people excited if they have an innovative product, but it worked for us. So you have an innovative product and they're seeing the sales and we're driving business to your grocery store. They'll definitely make exceptions.
Yeah. We see a lot of people rush to retail, as I like to say, right? They think like, okay, we're going to grow. sorry, the garbage truck is picking up outside. Our listeners could hear that. I'm a CF fractional CFO outside of doing this podcast. I work with a lot of brands and oftentimes there's that rush to retail, a rush to onboard with the distributor. And I talk a lot about
you know, the position that you're putting yourself in, right? Who really has the control? Who really has the sort of the power, for lack of a better word, in the relationship? And I think the more regional support you have from your customers, the more data you can bring to the table about how your product is moving and innovation, like all of those things help to make it a more favorable launch and expansion for a brand. You know, it's, I don't believe that it should be as expensive as it typically is.
Yeah, it shouldn't be, but unfortunately that's the name of the game and I get that they figured out a way like they want to get paid for that real estate and that's just how it is. Unfortunately, again, we had a little bit of leverage because we had a product that was flying and we had the data to support it.
for a brand to get on shelf.
Yeah, that's really fascinating. I love that. You mentioned, we do a little questionnaire before we get on. You mentioned that the biggest lesson, financial lesson that you learned is to make sure you're selling a product with a healthy margin. Because if margins are thin, you're going to struggle to stay afloat. Can you share a little insight into how you learned this and if you had to kind of make adjustments with your margins along your journey?
Yes.
Sure, I knew where I wanted the SRP to be. I wanted this to be a $5 or less item, $4.99 max. And I thought, you know, even with Galstens in my mind, was like, if $4.99 is too much, we'll drop the price. And it was selling at full price, $5 every day. Right. Okay. So how do we back into that? Okay. I know that the retailer needs to make this much margin. I know the distributor needs to make this much. Well, I need to make a profit myself for my company. So it was making sure.
I wanted the end result for that retail price to work. And sometimes distributors are willing to compress as well. So that I've learned that too. But again, if you have an item that's selling, they're willing to, there's always exceptions to the rule, but yeah. So we have a very healthy margin. There are actually certain grocery stores now. It's incredible. They brought us in direct to warehouse so we don't have a distributor. So, and you'll see that some people say, how come you're only this much? So how come you're 50 cents cheaper at that store? I was like, well, because we're not using a distributor that distributor compressed.
yeah, it's, it's, it's interesting to learn that if you, if you don't know this in CPG, you ha you need to know that the distributor and the retailer need to make a nice margin. So you got to make sure you leave yourself room. Otherwise you're not going to have enough money to make payroll or buy more product or any of that.
Yeah. How many servings are in one of your pouches?
One. mean, it's the size. It's six ounces. So it's the size of a typical cone off of our trucks. I had an ice cream distributor tell me he said, one of the most popular novelty ice cream products in the market is Nestle dibs, which just comes in that red box like the little chocolate movie theater. And he goes, Do you know why? And I said, No, he goes, because it's resealable. You can have a couple and put it away. It's like that's also with your pouches, you can put the cap back on it. And no one does but you could if you wanted to save some for later.
Yes. Interesting. Just thinking price strategy, is that somewhat comparable to the price of a cone at the truck? I love that. Yes. I love that.
Yeah, so it's six ounces.
It's the exact same price.
Yeah, so I mean, you're getting, yes, you're getting a cone in the experience, but also you're getting the experience of having a no-mass ice cream in your car is pretty cool too, so.
my gosh, that's a great way to spend drive time. You're like in LA traffic, but you have a CVT soft serve pouch and it's meant to be a little bit melty. Like, yes.
genius. I know I people that are putting in their coffee and making affogato on the way to work or coke float or whatever.
That's amazing. I love that. the business over the years, it's been several years, but the expansion, the growth, the reach of the product has really, I mean, it's blown up, right?
Yeah, we went from, like I said, okay, so we launched in May of 23 at 27 stores. We're probably in a few hundred stores by the end of the year than last year. Now we're in 3,000 stores across the country. just, yeah, it's crazy, crazy fast expansion.
What does your team look like now?
We're very lean. There's myself and I have three other full-time employees. have some contractors as well. I would say we're a team of maybe seven to eight people max.
I love a lean team. And then do you work with brokers or merchandisers or anything?
All of you but never an exclusive. That's what we told them. They all want exclusive. And we're just like, we're not going to do it. You go get us business, we'll give you your commission, but we're not going to sign an exclusive. It's just not, doesn't not make sense for us.
What is one of the, aside from the financial lesson around margin, what's one of the biggest or some of the biggest lessons you've learned as you've like navigated this industry and all the different ways that you can sell a food product?
That's a great question. guess I think we have a product that works. I hate to say everywhere, but it truly, a lot of these VCs or investors come in and they're looking at our product with like a certain multiple. And I'm like, you're giving us the same multiple that you're going to give a novelty ice cream that's only here. Like we're talking to 10 different branches of opportunity here. So it's challenging in that we're getting pulled in a million directions right now, which is a great problem to have. know.
But it's like, okay, should we solely be focusing on groceries? Should we only be focusing on live event spaces, on food service, on hospitals? So we're getting pulled in a million directions. Yeah, it's really trying to figure out our strategy and okay, we know what's working and what's not working and then we just have to dump fuel on the fire of what is working. And the first two years have been a lot of A-B testing. I'll give you another example. We have these barrel freezers, they're on wheels. You probably see them at convenience stores and they're not easy.
Yeah.
to place in terms of you have to get a lot of sign-offs from grocery stores, but Galstons has put them at their self checkouts and our velocity has gone through the roof. It's a very much an impulse buy. So like, okay, great. We're just going to dump money into more barrel freezers. That's how we're going to, and it's, it's worked, but it's also like, there's a lot of corporate red tape in all of this. Another example is, they call it category review where they're, you know, they're looking at the ice cream set. They're looking right now. I can't name who it is, but someone just said yes to us in category review.
for next February. I'm like, here I am, I have product now, this is prime season. But they move at a snail's pace, a lot of these grocery chains, unfortunately. So I'm thrilled that we're gonna be in their stores, but it's not until February, March of 26. So it's like, it's just a slow pace. The smaller independents can move a lot faster than the big guys.
Yeah.
So yeah, just really learning about the corporate world of how this all, it's just been, I'm learning every day. I have no problem raising my hand in a room or telling people I'm new to CPG. I'm here to learn. Yeah.
Yeah. You mentioned A-B testing and sort of, you one of the things I love to also talk about is like the data, you know, like what are you, not specifically like what are you observing about your customers, but what are the things you're looking at perhaps to like understand what do we focus on or, you know, what should we try out? What does that look like for your brand?
So for us, we have an item that's $5 for a pouch and you're going to throw a birthday party and you want to buy 20 of them. Maybe you're not going to spend a hundred dollars on ice cream. I'm like, and we're seeing our demos like, okay, so maybe we should consider doing a smaller pouch in a multi-pack. we're looking at that now we're talking with Costco and the other club places. So yeah, looking at the data and seeing how much people are buying, who's buying it, where they're buying it. Also with live nation, it's been really helpful to see like
who are our strongest performers musically? Like, okay, who typically watches that band? Okay, now we know. Or why are we so popular in this state or this city? Okay, well, we need to flood that city's grocery stores around that amphitheater. So it's been healthy to see what's working and what's not working and sort of pivot where we need to pivot. I would tell anyone listening to this, you have to be nimble. If you're like set in your ways of like, this is how it's gonna be, the data will prove otherwise and you have...
Another example is I've told myself, like, I know this is in a pouch. I know that's traditionally baby food, but I did not put like little kid branding on them. Like this is not a kid's product. This is for everyone. And truly we learned from the data, there were certain shows that are more family oriented at Live Nation that we just crushed it. And I was like, well, I guess the data said otherwise, maybe we are more for younger people, but also to defend myself.
People at concerts with families are not drinking as much, but they still want to have some sort of treat, so that's why I think those numbers were high.
Yeah. Well, and families, there's more people to feed, right? Mom and dad or whoever, they want some ice cream, we'll get some for the kids too. Yeah, absolutely. I love it.
I was also going to say, don't use a lot of mobile apps, but we've had a lot of success with DoorDash and Instacart. And I just wasn't even thinking about that space when we were doing it, that people would just get on their phone and have ice cream sent to their house.
Yeah, it makes sense. Yeah, it's funny. You can't possibly imagine all the ways that people are going to interact with and consume your product. So I think that point that you made, like being open-minded and being willing to pivot, especially like we're one person, right? I also don't use like DoorDash and stuff like that, but how many people, especially in LA, do? So to cut that off, you're like, I guess, you know, we can't be our only customer in our head.
Also in terms of packaging, was thinking about this and I talked to my team. I'm the worst consumer, so it's really hard for me. If I'm going to the store, I already know what I'm buying. I'm not window shopping in the freezer oil. Right. A lot of people like, Joe, you have to capture their attention with your packaging. like, I get, are people really doing that? They're just like cruising the grocery store. That's not me. Or in social, with social media, it's been a huge success for my company. That's how we grew the brand from Instagram. But I'm like, I'm such a hypocrite because there's tons of products that I buy at the grocery store.
I don't follow their social media accounts. So it's this weird like, I guess we'll try a little bit everything and see what sticks.
Yeah, yeah, I love it. Well, this has been really fun. I don't want to keep you too long. think sharing the insights of your experience are so interesting. And I think that our founders listening can learn a lot. mean, just to kind of rattle off a few things is like reinforcing that the idea of margin and having a healthy margin for your business is so important. Being nimble, looking at the data and being open, I think.
listening to your customer and we didn't like talk about this specifically, but it seems like that was something that, you you start off with a good product and listening to your customer and sort of asking yourself, how can I meet this need in like almost like the most efficient way?
Yeah. Right. And also it's weird because I'm like this old curmudgeon where I don't want to go on trend. I'm like, we're not going to do this. Oh, it's, vegan. It's gluten free. It's this or that we're just basic. Like we are going back to basics that classic Americana ice cream, but like, feel like a lot of CPG brands get stuck in the trend. And when the trend goes south, it's like, what are going to do? So that can be scary. Yeah.
I was just reading an article, James Richardson, whom I love to consume his sort of CPG information. He was talking about how if you are a brand who's following a trend, Or you can have huge initial success, but then when the next trend comes along, you typically will suffer. But if you are a brand like yours, a brand like Siete, for example, right?
It's not trendy, it's innovative, it is meeting a real need. You might not have rocket ship sales, right, in the beginning, but there will be consistency, there will be consistent growth, and there can be longevity.
Yeah, absolutely. Yeah, there's a funny quote from the guys that started Baskin Robbins. They said, Do you know why we have 31 flavors? It's to give people 30 reasons to come in and buy vanilla. It is the it is the number one selling ice cream flavor in the world. People were asking me from the very beginning. Why are you naming your business an acronym? Why are you only? I'm sorry. I I named my business an acronym because it forces conversation. makes me what's t what is that? And then
why are you only selling two flavors? I'm like, I'm selling the two most popular flavors in the world. this is, so yes, I could go on trend and go with all these other ice cream brands that are putting like avocado and olive oil in their ice cream, which is like, let's just avoid the trend and focus on doing something really well, like in and out burger model, just keep it super basic.
Yeah. We have what we call BABOYOTs here is building a business on your own terms. I think sticking with that is so BABOYOT. It's like you establish your business to do something very specific to bring this sort of nostalgia to an area that didn't have it historically, but it clicks, right? There's people love it. by the way, a lot of people who live in LA are from the East Coast like myself, right? We resonate with it immediately as well.
I don't think we want to go to a soft serve truck and have like some wild new flavor, right? I think you and Baskin-Robbins are onto something. like people are going to go for that classic thing they're familiar with. That's what they're going to come back to time and time again. And you have proven that.
Absolutely. Absolutely.
Any last words or things you want to share with other founders who are listening?
Sure, I consider myself an accidental entrepreneur. did not go to business school. I studied theater at USC. Like I'm the furthest thing from, I learn every day. You're gonna learn every day. You're gonna fail every day. And the biggest thing that I try to like tell as many people as possible, especially my kids, is social media is such a highlight reel. For every win that we've had on there, there's been 50 losses. We just don't post the losses. And I think that you need to know there's so,
There's so much work behind the scenes to make it look simple. It's not as easy as it looks. I'm not trying to keep people from going after their passion or their dream. They should do it, but just know that there's a lot of bad days when there are good days too. So for sure. One other thing I wanted to add, and I was just saying like, there's so many founders hide from it. my soapbox moment is I want people to know how lucky I am and how many lucky breaks we got along the way.
I think people look at luck as a weakness and they're like, yeah, we got this. Like, no, the reason we got into that place is because I knew someone that knew someone that got us in. So I worked really hard and we have a great product, but there's definitely an, know no one wants to hear this, but it's true. There's definitely an element of luck and anyone that says otherwise, like I did this, I got here all by myself. They're not telling you the truth. There's definitely something to it where someone gave them a break. Cause like, I mean, I started in Hollywood where there's all these
gatekeepers, but truly in business, in the CPG business, you've got category managers that get to decide if you're going to be on the shelf or not. And having those relationships, I've been really lucky. So I just want everyone out there to know that there is a element of luck involved in this.
Yeah. But even with like, have to have a good product. This is true. to be able to deliver. But I think Oprah used to have some sort of saying about luck, right? It's where like preparation meets opportunity. But I agree with you, know, introductions. I think it could sort of speak to a way to approach business is like, don't believe that you have to do it all yourself. like, you know, create a network, create a community. think, you know, it sort of speaks to the idea of like collaboration.
amongst food founders, collaboration amongst retailers, just whomever can benefit you, even if you have a technically competing product on shelf.
pitched after we got Gelsons, I told my friend in LA who owned a pizzeria, said, Hey, would you sell it here? And he said, you're not thinking big enough. And I was like, what like Dodger Stadium or concerts? He goes concerts, I know a guy at Live Nation, you should talk to him. Had I not had that conversation, we would not be a national brand right now. And he didn't have to do that. He sent an email, they took the meeting like there were so many lucky moments that happened along the way. And I just want people to know that like, I'm not embarrassed to say that I got lucky. It's true. Like, and I think people should be more
open about their luck.
Yeah, open about their luck and I think open about their aspirations, I think is part of it too, you know, like and willing to get feedback from people, you know, because you in my mind, you could have easily been like, my God, that's crazy. Or you could have not taken the connection. Like it could have gone so many different ways, you know, I think there's the something and maybe I'm like, like honing in on this because it's something I'm actively working on is like telling people what I'm working on.
Like this is what I'm working on. It's not going to be ready for months. And I don't know how it's going to turn out, but like I'm working on it. And then they can say like, my gosh, you need to meet so-and-so. They've done this before, whatever. It's like, if I didn't do that, then I would be trying to just do it all myself. And there's no opportunity for luck if we're not open, you know, to sharing.
Before Gelsens, when I had this idea, I did that exact thing. I had a friend who's a regular customer of ours at the truck and I confided in him. I said, I showed him pictures. I'm like, I'm working on this thing. And he goes, I have a friend who helps build brands. He's a consultant. He's now my head of sales. Wow. Because I did exactly what you just said, but normally I'll be really cagey. Like, I don't want to talk about it. I want to wait till it's ready. But that guy, he opened so many doors for us.
I think that's great advice. I love that. On that note, where can people learn more about CVT?
cvtsoftserve.com on our website. There's a locator you can find out where to buy us and then all of our handles on Twitter, Facebook, TikTok, Instagram, it's all at cvtsoftserve.
Awesome. Well, thank you so much, Joe.
Thank you.
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